G.R. No.

217194, September 06, 2017

In a Decision11 dated 16 April 2012, the Bureau of Legal Affairs-Intellectual Property Office
SOCIETE DES PRODUITS, NESTLE, S.A., Petitioner, v. PUREGOLD PRICE CLUB, (BLA-IPO) dismissed Nestle's opposition. The BLA-IPO ruled that Nestle's opposition was
INC., Respondent. defective because the verification and certification against forum shopping attached to
Nestle's opposition did not include a board of directors' resolution or secretary's certificate
stating Mr. Dennis Jose R. Barot's (Barot) authority to act on behalf of Nestle. The BLA-IPO
DECISION
ruled that the defect in Nestle's opposition was sufficient ground to dismiss.12
CARPIO, ACTING C.J.: The BLA-IPO held that the word "COFFEE" as a mark, or as part of a trademark, which is
used on coffee and similar or closely related goods, is not unique or highly distinctive. Nestle
The Case combined the word "COFFEE" with the word "-MATE," while Puregold combined the word
"COFFEE" with the word "MATCH." The BLA-IPO ruled that while both Nestle's "-MATE"
Before the Court is a petition for review on certiorari1 assailing the 15 May 2014 Resolution2 and Puregold's "MATCH" contain the same first three letters, the last two in Puregold's mark
and the 14 October 2014 Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. rendered a visual and aural character that makes it easily distinguishable from Nestle's
134592. "COFFEE-MATE."13 Also, the letter "M" in Puregold's mark is written as an upper case
character and the eyes of a consumer would not be confused or deceived by Nestle's
The Facts "COFFEE-MATE" where the letter "M" is written in lower case. Consequently, the BLA-
IPO held that the consumer cannot mistake the mark and the products of Nestle as those of
Petitioner Societe des Produits Nestle, S.A. (Nestle) is a corporation organized and existing Puregold's.14
under the laws of Switzerland which is engaged in the business of marketing and selling of
coffee, ice cream, chocolates, cereals, sauces, soups, condiment mixes, dairy and non-dairy The dispositive portion of the Decision states:chanRoblesvirtualLawlibrary
products, etc.4 Respondent Puregold Price Club, Inc. (Puregold) is a corporation organized WHEREFORE, premises considered, the instant opposition is hereby DISMISSED. Let the
under Philippine law which is engaged in the business of trading goods such as consumer filewrapper of Trademark Application Serial No. 4-2007-006134 be returned, together with
goods on wholesale or on retail basis.5 a copy of this DECISION, to the Bureau of Trademarks for information and appropriate
action.
On 14 June 2007, Puregold filed an application6 for the registration of the trademark
"COFFEE MATCH" with the Intellectual Property Office (IPO). The registration was filed SO ORDERED.15
by Puregold for use on coffee, tea, cocoa, sugar, artificial coffee, flour and preparations made
On 11 June 2012, Nestle filed an appeal16 with the Office of the Director General of the
from cereals, bread, pastry and confectionery, and honey under Class 30 of the International
Intellectual Property Office (ODG-IPO).
Classification of Goods.7

On 5 December 2008, Nestle filed an opposition8 against Puregold's application for The Decision of the ODG-IPO
registration. Nestle alleged that it is the exclusive owner of the "COFFEE-MATE" trademark
In a Decision17 dated 7 February 2014, the Office of the ODG-IPO dismissed Nestle's appeal.
and that there is confusing similarity between the "COFFEE-MATE" trademark and
The ODG-IPO held that Barot's authority to sign the certification against forum shopping
Puregold's "COFFEE MATCH" application.9 Nestle alleged that "COFFEE-MATE" has
was not sufficiently proven by Nestle. The ODG-IPO ruled that Barot's authority, which was
been declared an internationally well-known mark and Puregold's use of "COFFEE
MATCH" would indicate a connection with the goods covered in Nestle's "COFFEE- contained in the power of attorney executed, should not be given weight unless accompanied
MATE" mark because of its distinct similarity. Nestle claimed that it would suffer damages by proof or evidence of his authority from Nestle.18
if the application were granted since Puregold's "COFFEE MATCH" would likely mislead
The ODG-IPO held that the competing marks are not confusingly similar and that consumers
the public that the mark originated from Nestle.10
would unlikely be deceived or confused from Puregold's use of "COFFEE MATCH." The
ODG-IPO ruled that the common feature of "COFFEE" between the two marks cannot be
The Decision of the Bureau of Legal Affairs-Intellectual Property Office
exclusively appropriated since it is generic or descriptive of the goods in question. The ODG-

Page 1 of 106
IPO ruled that there is no visual, phonetic, or conceptual similarity between the two marks. The petitioner filed the Petition beyond the 15-day reglementary period.
Visual similarity is not present in the two marks, as Nestle's mark consists of a hyphenated
word with the paired word being "MATE" while Puregold's mark consists of the paired word Under Rule 43, Section 4 of the Rules of Court, a party may file an appeal to this Court from
"MATCH." While it is true that the first three letters "M," "A," and "T" are common in the quasi-judicial bodies like the Intellectual Property Office, within 15 days from receipt of the
two marks, Puregold's mark, which are two separate words, with the capitalization of the assailed judgment, order, or resolution.
letters "C" and "M," is readily apparent when "COFFEE MATCH" and "COFFEE-MATE"
are compared side by side.19 Petitioner's counsel of record before the Intellectual Property Office ("IPO"), the Sapalo
Velez Bundang & Bulilan Law Offices ("SVBB Law Offices") received a copy of the
The dispositive portion of the Decision states:chanRoblesvirtualLawlibrary assailed Decision on 19 February 2014. Thus, petitioner had until 7 March 2014 to appeal.
WHEREFORE, premises considered, the appeal is hereby DISMISSED. Let a copy of this While the Bengzon Negre & Untalan Law Offices ("Bengzon Law Offices") entered its
Decision and the records of this case be furnished and returned to the Director of Bureau of appearance before the IPO, no evidence was submitted before this Court showing that the
Legal Affairs for appropriate action. Further, let also the Director of the Bureau of Bengzon Law Offices was properly substituted as petitioner's counsel in place of SVBB Law
Trademarks and the library of the Documentation, Information and Technology Transfer Offices (petitioner's counsel of record). Thus, the 15-day reglementary period started to run
Bureau be furnished a copy of this Decision for information, guidance, and records purposes. from the date SVBB Law Offices received a copy of the Decision.

SO ORDERED.20 Clearly, when petitioner filed the Motion for Extension on 27 March 2014, and the Petition
21 on 14 April 2014, the reglementary period had already lapsed.
On 14 April 2014, Nestle filed a Petition for Review with the Court of Appeals.
Further, the petitioner obstinately refuses to cure the procedural infirmities we observed in
The Decision of the CA
the Resolution of 15 May 2014.
In a Resolution dated 15 May 2014, the CA dismissed Nestle's petition for review on
SO ORDERED.25
procedural grounds.
The Issues
The Resolution states:chanRoblesvirtualLawlibrary
A perusal of the Petition for Review shows that: Nestle presented the following issues in this petition:chanRoblesvirtualLawlibrary
1. The Honorable Court of Appeals erred in dismissing petitioner's motion for
1. the title thereof does not bear the name of party respondent Puregold Price Club, Inc. reconsideration upon an erroneous appreciation of certain antecedent facts, and similarly
erred in dismissing the petition for review on procedural grounds.
2. there is no board resolution and/or secretary's certificate to prove the authority of Dennis
Jose R. Barot to file the petition and to sign the Verification/Certification of Non-Forum 2. There is merit to the substantive issues raised by petitioner, which deserves to be given
Shopping on behalf of petitioner-corporation; and due course and a final ruling.26
The Ruling of this Court
3. certified true copies of material [portions] of the record which were mentioned therein
were not attached, such as respondent's trademark application (rollo, p. 12), petitioner's We deny the petition.
Opposition thereto, Reply, the parties' respective position papers, petitioner's appeal,
respondent's Comment, the parties' respective memoranda, etc. Before discussing the substantive issues, we shall first discuss the procedural issues in this
case.
The above considering, the Court RESOLVES to DISMISS the petition outright. 22
On 13 June 2014, Nestle filed a Motion for Reconsideration23 which was denied by the CA Nestle filed its petition for review within the period granted by the Court of Appeals.
on 14 October 2014.24 The Resolution of the CA states:chanRoblesvirtualLawlibrary
We DENY the Motion for Reconsideration because it is without merit. The CA dismissed Nestle's petition for review on the ground that Nestle filed its petition for
review after the 15-day reglementary period required by Section 4, Rule 43 of the Rules of
Page 2 of 106
Court.
The CA is wrong.
Section 4, Rule 43 of the Rules of Court states:chanRoblesvirtualLawlibrary
Section 4. Period of appeal. — The appeal shall be taken within fifteen (15) days from notice
of the award, judgment, final order or resolution, or from the date of its last publication, if
publication is required by law for its effectivity, or of the denial of petitioner's motion for
new trial or reconsideration duly filed in accordance with the governing law of the court or
agency a quo. Only one (1) motion for reconsideration shall be allowed. Upon proper motion
and the payment of the full amount of the docket fee before the expiration of the reglementary
period, the Court of Appeals may grant an additional period of fifteen (15) days only within
which to file the petition for review. No further extension shall be granted except for the
most compelling reason and in no case to exceed fifteen (15) days.
During the proceedings in the ODG-IPO, Nestle substituted its counsel, Sapalo, Velez,
Bundang and Bulilan Law Offices, with Bengzon, Negre and Untalan Law Offices (Nestle's
substituted counsel). On 20 September 2013, Nestle's substituted counsel entered its
appearance in the ODG-IPO.27 In an Order28 dated 1 October 2013, the ODG-IPO noted the
appearance of Nestle's substituted counsel and included their appearance in the records of
the case, to wit:chanRoblesvirtualLawlibrary
Wherefore, the APPEARANCE is hereby noted and included in the records. Accordingly,
let copies of all pleadings, orders, notices and communications, be sent to the aforementioned
address.
SO ORDERED.29
The Decision of the ODG-IPO was received by Nestle's substituted counsel on 14 March
2014. On 27 March 2014, within the 15-day reglementary period provided for by Section 4
of Rule 43, Nestle filed a Motion for Extension of Time to file Verified Petition for Review30
(motion for extension) with the CA. In a Resolution 31 dated 3 April 2014, the CA granted
Nestle's motion for extension and gave Nestle until 13 April 2014 to file its petition for
review. The resolution states:chanRoblesvirtualLawlibrary
The Court GRANTS petitioner's Motion for Extension of Time to File Verified Petition for
Review and gives petitioner until April 13, 2014 within which to do so. 32
Since 13 April 2014 fell on a Sunday, Nestle had until 14 April 2014, which was the next
working day, within which to file the petition for review. Nestle did file the petition for
review with the CA on 14 April 2014. Accordingly, the CA committed a grave error when it
ruled that Nestle's petition for review was filed beyond the prescribed period.
Nestle failed to properly execute a certification against forum shopping as required by
Section 5, Rule 7 of the Rules of Court.
Page 3 of 106
Section 5, Rule 7 of the Rules of Court provides:chanRoblesvirtualLawlibrary
Section 5. Certification against forum shopping. — The plaintiff or principal party shall
certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or
in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has
not theretofore commenced any action or filed any claim involving the same issues in any
court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action
or claim is pending therein; (b) if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should thereafter learn that the same or
similar action or claim has been filed or is pending, he shall report that fact within five (5)
days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been
filed.
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless otherwise provided, upon motion and after
hearing. The submission of a false certification or non-compliance with any of the
undertakings therein shall constitute indirect contempt of court, without prejudice to the
corresponding administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be ground for
summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for
administrative sanctions. (Emphasis supplied)
In Zulueta v. Asia Brewery, Inc.,33 this Court ruled that the requirements under the Rules of
Court involving the certification against forum shopping apply both to natural and juridical
persons, to wit: "[t]he requirement that the petitioner should sign the certificate of non-forum
shopping applies even to corporations, considering that the mandatory directives of the
Circular and the Rules of Court make no distinction between natural and juridical persons." 34
In Fuentebella v. Castro,35 this Court held that the certification against forum shopping must
be signed by the principal party. In case the principal party cannot sign, the one signing on
his or her behalf must have been duly authorized, to wit: "the petitioner or the principal party
must execute the certification against forum shopping. The reason for this is that the principal
party has actual knowledge whether a petition has previously been filed involving the same
case or substantially the same issues. If, for any reason, the principal party cannot sign the
petition, the one signing on his behalf must have been duly authorized." 36
Juridical persons, including corporations, that cannot personally sign the certification against
forum shopping, must act through an authorized representative. The exercise of corporate
powers including the power to sue is lodged with the board of directors which acts as a body
representing the stockholders. For corporations, the authorized representative to sign the
certification against forum shopping must be selected or authorized collectively by the
board of directors. In Eslaban, Jr. v. Vda. de Onorio,37 this Court ruled that if the real party
in interest is a corporation, an officer of the corporation acting alone has no authority to sign authorized by the DBP to file the petition is a "sufficient ground for the dismissal thereof."44
the certification against forum shopping. An officer of the corporation can only validly sign (Emphasis supplied)
the certification against forum shopping if he or she is authorized by the board of directors Accordingly, the CA did not err in ruling that the petition for review should be dismissed
through a board resolution or secretary's certificate. In Gonzales v. Climax Mining Ltd.,38
due to the failure of Nestle to comply with the proper execution of the certification against
this Court ruled that a board resolution authorizing a corporate officer to execute the
forum shopping required by Section 5, Rule 7 of the Rules of Court.
certification against forum shopping is a necessary requirement under the Rules. A
certification signed by a person who was not duly authorized by the board of directors renders
Puregold's mark may be registered.
the petition for review subject to dismissal.39
A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any
The authority of the representative of a corporation to sign the certification against forum
combination thereof, adopted and used by a manufacturer or merchant on his goods to
shopping originates from the board of directors through either a board of directors' resolution
identify and distinguish them from those manufactured, sold, or dealt by others. 45 Section
or secretary's certificate which must be submitted together with the certification against
123 of Republic Act No. 829346 (RA 8293) provides for trademarks which cannot be
forum shopping. In Zulueta, this Court declared invalid a petition for review with a
registered, to wit:chanRoblesvirtualLawlibrary
certification against forum shopping signed by the party's counsel which was not supported Sec. 123. Registrability. -
by a board resolution or secretary's certificate proving the counsel's authority. This Court 123.1 A mark47 cannot be registered if it:chanRoblesvirtualLawlibrary
dismissed the case and held: "[t]he signatory in the Certification of the Petition before the
x x x x
CA should not have been respondents' retained counsel, who would not know whether there
were other similar cases of the corporation. Otherwise, this requirement would easily be
(d) Is identical with a registered mark belonging to a different proprietor or a mark
circumvented by the signature of every counsel representing corporate parties." 40 Likewise,
with an earlier filing or priority date, in respect of:
in Eslaban, this Court held that a certification signed by counsel alone is defective and
constitutes a valid cause for the dismissal of the petition. 41
(i) The same goods or services, or
Nestle, itself, acknowledged in this petition the absence of a board resolution or secretary's
(ii) Closely related goods or services, or
certificate issued by the board of directors of Nestle to prove the authority of Barot to sign
the certification against forum shopping on behalf of Nestle, to wit: "[t]hus, while there is
(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;
no board resolution and/or secretary's certificate to prove the authority of Dennis Jose
R. Barot to file the petition and Verification/Certification of Non-Forum Shopping on (e) Is identical with, or confusingly similar to, or constitutes a translation of a mark which is
behalf of petitioner-corporation, there is a Power of Attorney evidencing such authority." 42
considered by the competent authority of the Philippines to be well- known internationally
The power of attorney submitted by Nestle in favor of Barot was signed by Celine Jorge.
and in the Philippines, whether or not it is registered here, as being already the mark of a
However, the authority of Celine Jorge to sign the power of attorney on behalf of Nestle,
person other than the applicant for registration, and used for identical or similar goods or
allowing Barot to represent Nestle, was not accompanied by a board resolution or secretary's services: Provided, That in determining whether a mark is well-known, account shall be
certificate from Nestle showing that Celine Jorge was authorized by the board of directors taken of the knowledge of the relevant sector of the public, rather than of the public at large,
of Nestle to execute the power of attorney in favor of Barot. In Development Bank of the
including knowledge in the Philippines which has been obtained as a result of the promotion
Philippines v. Court of Appeals,43 this Court held that the failure to attach a copy of a board
of the mark;
resolution proving the authority of the representative to sign the certification against forum
shopping was fatal to its petition and was sufficient ground to dismiss since the courts are
(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark
not expected to take judicial notice of board resolutions or secretary's certificates issued by considered well-known in accordance with the preceding paragraph, which is registered in
corporations, to wit:chanRoblesvirtualLawlibrary the Philippines with respect to goods or services which are not similar to those with respect
What petitioners failed to explain, however, is their failure to attach a certified true copy of
to which registration is applied for: Provided, That use of the mark in relation to those goods
Resolution No. 0912 to their petition for certiorari in CA-G.R. SP No. 60838. Their
or services would indicate a connection between those goods or services, and the owner of
omission is fatal to their case. Courts are not, after all, expected to take judicial notice the registered mark: Provided further, That the interests of the owner of the registered mark
of corporate board resolutions or a corporate officer's authority to represent a are likely to be damaged by such use;
corporation. To be sure, petitioners' failure to submit proof that Atty. Demecillo has been
Page 4 of 106

(g) Is likely to mislead the public, particularly as to the nature, quality, characteristics or
geographical origin of the goods or services;
(h) Consists exclusively of signs that are generic for the goods or services that they seek
to identify;
x x x x (Emphasis supplied)
In Coffee Partners, Inc. v. San Francisco & Roastery, Inc.,48 this Court held that the
gravamen of trademark infringement is the likelihood of confusion. There is no absolute
standard for the likelihood of confusion. Only the particular, and sometimes peculiar,
circumstances of each case can determine its existence. Thus, in infringement cases,
precedents must be evaluated in the light of each particular case.49
In determining similarity or likelihood of confusion, our jurisprudence has developed two
tests: the dominancy test and the holistic test.50 The dominancy test focuses on the similarity
of the prevalent features of the competing trademarks that might cause confusion and
deception. If the competing trademark contains the main, essential, and dominant features of
another, and confusion or deception is likely to result, likelihood of confusion exists. The
question is whether the use of the marks involved is likely to cause confusion or mistake in
the mind of the public or to deceive consumers.51 In McDonald's Corporation v. L.C. Big
Mak Burger, Inc.,52 this Court gave greater weight to the similarity of the appearance of the
product arising from the adoption of the dominant features of the registered mark, to wit:
"[c]ourts will consider more the aural and visual impressions created by the marks in the
public mind, giving little weight to factors like prices, quality, sales outlets and market
segments."53 The dominancy test is now incorporated into law in Section 155.1 of RA 8293
which states:chanRoblesvirtualLawlibrary
SECTION 155. Remedies; Infringement. — Any person who shall, without the consent of
the owner of the registered mark:chanRoblesvirtualLawlibrary
155.1 Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant feature thereof in connection with the
sale, offering for sale, distribution, advertising of any goods or services including other
preparatory steps necessary to carry out the sale of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to deceive;
(Emphasis supplied)
In contrast, the holistic test entails a consideration of the entirety of the marks as applied to
the products, including the labels and packaging, in determining confusing similarity. The
discerning eye of the observer must focus not only on the predominant words but also on the
other features appearing on both marks in order that the observer may draw his conclusion
whether one is confusingly similar to the other. 54
The word "COFFEE" is the common dominant feature between Nestle's mark "COFFEE-
Page 5 of 106
MATE" and Puregold's mark "COFFEE MATCH." However, following Section 123,
paragraph (h) of RA 8293 which prohibits exclusive registration of generic marks, the word
"COFFEE" cannot be exclusively appropriated by either Nestle or Puregold since it is generic
or descriptive of the goods they seek to identify. In Asia Brewery, Inc. v. Court of Appeals,55
this Court held that generic or descriptive words are not subject to registration and belong to
the public domain. Consequently, we must look at the word or words paired with the generic
or descriptive word, in this particular case "-MATE" for Nestle's mark and "MATCH" for
Puregold's mark, to determine the distinctiveness and registrability of Puregold's mark
"COFFEE MATCH."
We agree with the findings of the BLA-IPO and ODG-IPO. The distinctive features of both
marks are sufficient to warn the purchasing public which are Nestle's products and which are
Puregold's products. While both "-MATE" and "MATCH" contain the same first three
letters, the last two letters in Puregold's mark, "C" and "H," rendered a visual and aural
character that made it easily distinguishable from Nestle's mark. Also, the distinctiveness of
Puregold's mark with two separate words with capital letters "C" and "M" made it
distinguishable from Nestle's mark which is one word with a hyphenated small letter "-m" in
its mark. In addition, there is a phonetic difference in pronunciation between Nestle's "-
MATE" and Puregold's "MATCH." As a result, the eyes and ears of the consumer would not
mistake Nestle's product for Puregold's product. Accordingly, this Court sustains the findings
of the BLA-IPO and ODG-IPO that the likelihood of confusion between Nestle's product
and Puregold's product does not exist and upholds the registration of Puregold's mark.
WHEREFORE, we DENY the petition. We AFFIRM the 15 May 2014 Resolution and the
14 October 2014 Resolution of the Court of Appeals in CA-G.R. SP No. 134592.
SO ORDERED.
Peralta, Perlas-Bernabe, Caguioa, and Reyes, Jr., JJ., concur.
Endnotes:
1
Rollo, pp. 12-46. Under Rule 45 of the Rules of Court.
2
Id. at 62. Signed by Division Clerk of Court Atty. Celedonia M. Ogsimer.
3
Id. at 64-67. Penned by Associate Justice Nina G. Antonio-Valenzuela, with Associate
Justices Apolinario D. Bruselas, Jr. and Eduardo B. Peralta, Jr. concurring.
4
Id. at 189.
5 25
Id. at 230. Id. at 65-66.

6 26
Id. at 218-220. Id. at 17-18.

7 27
Id. at 218. Id. at 404-405.

8 28
Id. at 68-76. Id. at 410-411.

9 29
Id. at 70-71. Id. at 410.

10 30
Id. at 72-73. Id. at 419-422.

11 31
Id. at 294-301. Id. at 424. Signed by Division Clerk of Court Atty. Celedonia M. Ogsimer.

12 32
Id. at 299. Id.

13 33
Id. at 300. 406 Phil. 543 (2001).

14 34
Id. Id. at 553.

15 35
Id. at 301. 526 Phil. 668 (2006).

16 36
Id. at 302-331. Id. at 675.

17 37
Id. at 412-418. 412 Phil. 667 (2001).

18 38
Id. at 415. 492 Phil. 682 (2005).

19 39
Id. at 417. Id. at 691.

20 40
Id. at 418. Supra note 33, at 554.

21 41
Id. at 425-455. Supra note 37, at 675.

22 42
Id. at 62. Rollo, p. 23.

23 43
Id. at 480-492. 483 Phil. 216 (2004).

24 44
Id. at 64-67. Id. at 221.

Page 6 of 106
45
Dermaline, Inc. v. Myra Pharmaceuticals, Inc., 642 Phil. 503 (2010). Registration Court, in LRC Case No. N-04-0-97, granting respondent's prayer for the
issuance of a writ of possession in her favor.1
46
AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND
ESTABLISHING THE INTELLECTUAL PROPERTY OFFICE, PROVIDING FOR ITS The assailed Order was issued by the RTC after it rendered a favorable judgment on
POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES. respondent's application for registration in its Decision dated November 3, 1998, and
Original Certificate of Title (OCT) No. P-10053 was issued in her name covering a parcel of
47
A visible sign capable of distinguishing goods (trademark) or services (service mark) of land described as follows:
an enterprise and shall include a stamped or marked container of goods.
A parcel of land (Plan Psu-224228, LR Case No. N-04-0-97, LRA Record No. N-68955),
48
628 Phil. 13 (2010). situated in the Barrio of Barretto, Municipality of Olongapo, Province of Zambales, Island
of Luzon, Bounded on the NW., points 1-3 by Road (6.00 m. wide) (unimproved); on the
49 NE., points 3-4 by Public Land claimed by C. Panaligan; on the E., SE., and SW., points 4-
Id. at 23, citing Philip Morris. Inc. v. Fortune Tobacco Corporation, G.R. No. 158589, 27
19 by Makinaya River (10.00 m. wide); on the SW., points 19-29 by Public Land; and on the
June 2006, 493 SCRA 333.
NW., points 29-1 by Road (6.00 m. wide) unimproved. Beginning at a point marked "1" on
50
plan, being S.84 deg. 47'E., 2644.65 m. from B.L.B.M. 2, Barrio of Matain, Subic, Zambales,
Id. at 23-24. thence
51
Id. at 24. x x x
52
480 Phil. 402 (2004).
beginning; containing an area of TWENTY THOUSAND ONE HUNDRED FORTY NINE
53
(20, 149) SQUARE METERS, more or less. x x x2
Id. at 434.

54
Petitioners opposed respondent's application for the issuance of a writ of possession claiming
Id. that they were not oppositors/parties to the registration case and they have been in actual
physical possession of the property since 1964. The RTC, however, rejected their arguments
55
296 Phil. 298 (1993). and granted respondent's application for the issuance of a writ of possession per herein
assailed Order.

Hence, the present petition.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ

[G.R. NO. 152827 : February 6, 2007]
Petitioners set forth the lone assignment of error that the RTC erred in issuing the writ of
GERARDO MENDOZA, TRINIA and IYLENE all surnamed MENDOZA, Petitioners, possession and acted with grave abuse of discretion amounting to lack and excess of
v. SOLEDAD SALINAS, Respondent. jurisdiction.3 Petitioners reiterate their argument that they cannot be ousted of their
possession of the property, having been in actual possession of the property since 1964, as
DECISION evidenced by petitioner Gerardo C. Mendoza's Sales Application made in January 1986 over
the following property:
AUSTRIA-MARTINEZ, J.:
A parcel of land situated at Burgos St., Bo. Barretto, O.C. Bounded on the North., by
Assailed in the present Petition for Review on Certiorari is the Order dated April 2, 2002 Benjamin Salinas; South., by Gloria Montemayor; East., by Benjamin Salinas & Conrado
issued by the Regional Trial Court (RTC) of Olongapo City, Branch 72, acting as Land Pilapil and West., Burgos St. situated in Bo. Barretto, Olongapo City, Zambales, and
containing an area of 932 square meters x x x. 4
Page 7 of 106
and a Declaration of Real Property for the years 1976 and 1985, 5 among others.
Respondent counters that the present petition should be dismissed, arguing that the petition
should have been initially with the Court of Appeals, based on the principle of hierarchy of
courts, and that the general order of default on October 8, 1998 issued by the RTC binds
them and personal notice was not necessary.
The petition must be granted.
On the procedural issue, it should be pointed out that what petitioners filed with the Court is
a Petition for Review on Certiorari under Rule 45 of the Rules of Court of Court, and not a
special civil action for certiorari under Rule 65. The principle of hierarchy of courts does
not find any application in this case. Under Section 2(c), Rule 41 of the Rules of Court, it is
provided that in all cases where only questions of law are raised, the appeal from a decision
or order of the RTC shall be to the Supreme Court by Petition for Review on Certiorari in
accordance with Rule 45, Section 1 of which provides:
SECTION 1. Filing of petition with Supreme Court. - A party desiring to appeal by certiorari
from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other courts whenever authorized by law, may file with the Supreme
Court a verified Petition for Review on Certiorari . The petition shall raise only questions of
law which must be distinctly set forth.
A question of law exists when the doubt or controversy concerns the correct application of
law or jurisprudence to a certain set of facts; or when the issue does not call for an
examination of the probative value of the evidence presented, the truth or falsehood of facts
being admitted. A question of fact exists when the doubt or difference arises as to the truth
or falsehood of facts or when the query invites calibration of the whole evidence considering
mainly the credibility of the witnesses, the existence and relevancy of specific surrounding
circumstances, as well as their relation to each other and to the whole, and the probability of
the situation.6
The substantive issue posed for resolution in the present case pertains to the propriety of the
issuance of the writ of possession by the RTC. This, obviously, is a question of law;
consequently, direct resort to this Court is proper.
There is no question that the writ of possession granted in this case was made by the RTC
acting as a land registration court, after finality of its Decision dated November 3, 1998 and
the corresponding OCT No. P-10053 was issued in the name of respondent. As the soundness
of the order granting the writ of possession is a matter of judgment, the remedy is ordinary
appeal by way of Petition for Review on Certiorari . An error of judgment committed by a
Page 8 of 106
court in the exercise of its legitimate jurisdiction is not the same as "grave abuse of
discretion." Errors of judgment are correctible by appeal, while those of jurisdiction are
reviewable by certiorari.7
Petitioners, therefore, filed the proper petition before the Court.
On the substantive issue of the propriety of the issuance of the writ of possession, the Court
finds that the RTC committed a reversible error in granting the issuance of the writ of
possession.
A writ of possession may be issued under the following instances: (1) land registration
proceedings under Sec. 17 of Act No. 496; (2) judicial foreclosure, provided the debtor is in
possession of the mortgaged realty and no third person, not a party to the foreclosure suit,
had intervened; and (3) extrajudicial foreclosure of a real estate mortgage under Sec. 7 of
Act No. 3135 as amended by Act No. 4118.
In land registration cases, principles regarding the issuance of a writ of possession are well-
settled. A judgment confirming the title of the applicant in a registration case and ordering
its registration in his name necessarily carries with it the delivery of possession which is an
inherent element of the right of ownership.8 This is sanctioned by existing laws in this
jurisdiction and by the generally accepted principle upon which the administration of justice
rests.9
Also, a writ of possession may be issued not only against the person who has been defeated
in a registration case but also against anyone unlawfully and adversely occupying the land
or any portion thereof during the land registration proceedings up to the issuance of the final
decree,10 and it is the duty of the registration court to issue said writ when asked for by the
successful claimant.11
Based on these tenets, the issuance of a writ of possession, therefore, is clearly a ministerial
duty of the land registration court. Such ministerial duty, however, ceases to be so with
particular regard to petitioners who are actual possessors of the property under a claim of
ownership. Actual possession under claim of ownership raises a disputable presumption of
ownership. This conclusion is supported by Article 433 of the Civil Code, which provides:
Actual possession under claim of ownership raises a disputable presumption of ownership.
The true owner must resort to judicial process for the recovery of the property.
Under said provision, one who claims to be the owner of a property possessed by another
must bring the appropriate judicial action for its physical recovery. The term "judicial
process" could mean no less than an ejectment suit or reinvindicatory action, in which the Endnotes:
ownership claims of the contending parties may be properly heard and adjudicated. 12

It is noted that there already exists a final and executory decision disregarding respondent's
claim for possession over the property. In a Decision dated January 21, 2002, rendered by 1
Rollo, p. 57.
the Municipal Trial Court in Cities (MTCC) of Olongapo City, Branch 3, in Civil Case No.
4643, an action for unlawful detainer filed by respondent and her spouse against petitioners 2
Records, pp. 119-120.
and several other occupants of the property, the case against petitioners was dismissed by
the MTCC for lack of cause of action.13 While the MTCC Decision was appealed by the
3
other defendants, respondent and her spouse manifested that they will not appeal the decision Rollo, p. 7.
and, instead, will file for a writ of possession in LRC Case No. N-04-0-97.
4
Id. at 19.
Note should also be made that petitioners registered their opposition to respondent's
5
application for the issuance of a writ of possession and apprised the RTC of their actual, Id. at 21, 22.
peaceful, physical and uninterrupted possession since 1964,14 including therein documents
supporting their claim, consisting of Gerardo C. Mendoza's Sales Application made on 6
Bukidnon Doctors' Hospital, Inc. v. Metropolitan Bank & Trust Co., G.R. No. 161882, July
January 1986 and a Declaration of Real Property for the years 1976 and 1985, among 8, 2005, 463 SCRA 222, 233.
others.15 The RTC, nevertheless, disregarded their opposition and, instead, relied on the
ruling in Serra Serra v. Court of Appeals [195 SCRA 482],16 that a writ of possession may 7
Philippine National Bank v. Sanao Marketing Corporation, G.R. No. 153951, July 29,
be issued in a land registration proceeding. 2005, 465 SCRA 287, 306.

A reading of the Serra Serra case, however, supports the Court's conclusion that a writ of 8
Heirs of Avila v. Court of Appeals, 229 Phil. 536, 543-544 (1986).
possession should not have been issued in this case. It was ruled by the Court that while a
writ of possession may be issued only pursuant to a decree of registration in an original land 9
registration proceedings, it cannot issue against possessors under claim of ownership, as Vencilao v. Vano, G.R. No. 25660, February 23, 1990, 182 SCRA 491, 505.
actual possession under claim of ownership raises a disputable presumption of ownership,
10
and the true owner must resort to judicial process for the recovery of the property, not Barroga v. Albano, No. L-43445, January 20, 1988, 157 SCRA 131, 134.
summarily through a motion for the issuance of a writ of possession. 17
11
Vencilao v. Vano, supra note 9, at 505.
Thus, it was erroneous for the RTC to have issued the writ of possession against petitioners.
This conclusion, of course, is without prejudice to any case that respondent may file for the 12
Philippine National Bank v. Court of Appeals, 424 Phil. 757, 769-770 (2002).
recovery of the property.
13
Records, pp. 149-150.
WHEREFORE, the petition is GRANTED. The Order dated April 2, 2002 issued by the
Regional Trial Court of Olongapo City, Branch 72, acting as Land Registration Court, in 14
Rollo, p. 55.
LRC Case No. N-04-0-97, is NULLIFIED and SET ASIDE. Respondent's application for
the issuance of a writ of possession is DENIED, without prejudice to any case that she may 15
Id. at 21, 22.
file for recovery of the property.
16
Id. at 57.
SO ORDERED.

Page 9 of 106
17
Serra Serra v. Court of Appeals, G.R. No. 34080, March 22, 1991, 195 SCRA 482, 491- In his petition, Roldan alleged that he is a Filipino Muslim; that he is the registered owner of
492. the lot covered by Transfer Certificate of Title No. 15633; and that Vivencio occupied his
property, depriving him of the right to use, possess, and enjoy it. He prayed that respondent
G.R. No. 188832, April 23, 2014 Fifth Shari’a District Court order Vivencio to vacate his property. 8

Respondent court took cognizance of the case and caused service of summons on Vivencio.
VIVENCIO B. VILLAGRACIA, Petitioner, v. FIFTH (5TH) SHARI’A DISTRICT
However, despite service of summons, Vivencio failed to file his answer. Thus, Roldan
COURT AND ROLDAN E. MALA, REPRESENTED BY HIS FATHER HADJI
KALAM T. MALA, Respondents. moved that he be allowed to present evidence ex parte, which motion respondent Fifth
Shari’a District Court granted in its order9 dated January 30, 2008.10
DECISION In its decision11 dated June 11, 2008, respondent Fifth Shari’a District Court ruled that
Roldan, as registered owner, had the better right to possess the parcel of land. It ordered
LEONEN, J.: Vivencio to vacate the property, turn it over to Roldan, and pay P10,000.00 as moderate
damages and P5,000.00 as attorney’s fees.
Shari’a District Courts have no jurisdiction over real actions where one of the parties is not
a Muslim. On December 15, 2008, respondent Fifth Shari’a Distict Court issued the notice of writ of
execution12 to Vivencio, giving him 30 days from receipt of the notice to comply with the
This is a petition for certiorari with application for issuance of temporary restraining order decision. He received a copy of the notice on December 16, 2008.13
and/or preliminary injunction to set aside the Fifth (5th) Shari’a District Court’s decision 1
dated June 11, 2008 and order2 dated May 29, 2009 in SDC Special Proceedings Case No. On January 13, 2009, Vivencio filed a petition for relief from judgment with prayer for
07–200. issuance of writ of preliminary injunction.14 In his petition for relief from judgment, Vivencio
cited Article 155, paragraph (2) of the Code of Muslim Personal Laws of the Philippines 15
The facts as established from the pleadings of the parties are as and argued that Shari’a District Courts may only hear civil actions and proceedings if both
follows:chanRoblesvirtualLawlibrary parties are Muslims. Considering that he is a Christian, Vivencio argued that respondent Fifth
Shari’a District Court had no jurisdiction to take cognizance of Roldan’s action for recovery
On February 15, 1996, Roldan E. Mala purchased a 300–square–meter parcel of land located of possession of a parcel of land. He prayed that respondent Fifth Shari’a District Court set
in Poblacion, Parang, Maguindanao, now Shariff Kabunsuan, from one Ceres Cañete. On aside the decision dated June 11, 2008 on the ground of mistake. 16
March 3, 1996, Transfer Certificate of Title No. T–15633 covering the parcel of land was
issued in Roldan’s name.3 At the time of the purchase, Vivencio B. Villagracia occupied the Respondent Fifth Shari’a District Court ruled that Vivencio “intentionally [waived] his right
parcel of land.4 to defend himself.”17 It noted that he was duly served with summons and had notice of the
following: Roldan’s motion to present evidence ex parte, respondent Fifth Shari’a District
By 2002, Vivencio secured a Katibayan ng Orihinal na Titulo Blg. P–60192 issued by the Court’s decision dated June 11, 2008, and the writ of execution. However, Vivencio only
Land Registration Authority allegedly covering the same parcel of land. 5 went to court “when he lost his right to assail the decision via certiorari .”18

On October 30, 2006, Roldan had the parcel of land surveyed. In a report, Geodetic Engineer
Dennis P. Dacup found that Vivencio occupied the parcel of land covered by Roldan’s
certificate of title.6
To settle his conflicting claim with Vivencio, Roldan initiated barangay conciliation
proceedings before the Office of the Barangay Chairman of Poblacion II, Parang, Shariff
Kabunsuan. Failing to settle with Vivencio at the barangay level, Roldan filed an action to
recover the possession of the parcel of land with respondent Fifth Shari’a District Court. 7
Page 10 of 106
According to respondent Fifth Shari’a District Court, Vivencio cited the wrong provision of
law. Article 155, paragraph (2) of the Code of Muslim Personal Laws of the Philippines
refers to the jurisdiction of Shari’a Circuit Courts, not of Shari’a District Courts. 19 It ruled
that it had jurisdiction over Roldan’s action for recovery of possession. Regardless of
Vivencio being a non–Muslim, his rights were not prejudiced since respondent Fifth Shari’a
District Court decided the case applying the provisions of the Civil Code of the Philippines. 20
Thus, in its order21 dated May 29, 2009, respondent Fifth Shari’a District Court denied
Vivencio’s petition for relief from judgment for lack of merit. It reiterated its order directing
the issuance of a writ of execution of the decision dated June 11, 2008.
Vivencio received a copy of the order denying his petition for relief from judgment on June
17, 2009.22
On August 6, 2009, Vivencio filed the petition for certiorari with prayer for issuance of
temporary restraining order with this court. 23
In his petition for certiorari , Vivencio argued that respondent Fifth Shari’a District Court
acted without jurisdiction in rendering the decision dated June 11, 2008. Under Article 143,
paragraph (2)(b) of the Code of Muslim Personal Laws of the Philippines, 24 Shari’a District
Courts may only take cognizance of real actions where the parties involved are Muslims.
Reiterating that he is not a Muslim, Vivencio argued that respondent Fifth Shari’a District
Court had no jurisdiction over the subject matter of Roldan’s action. Thus, all the
proceedings before respondent Fifth Shari’a District Court, including the decision dated June
11, 2008, are void.25
In the resolution26 dated August 19, 2009, this court ordered Roldan to comment on
Vivencio’s petition for certiorari . This court subsequently issued a temporary restraining
order enjoining the implementation of the writ of execution against Vivencio. 27
On September 21, 2011, Roldan filed his comment28 on the petition for certiorari . He
allegedly filed the action for recovery of possession with the Shari’a District Court where “a
more speedy disposition of the case would be obtained”: 29
1. That SDC Spl. Case No. 07–200 (Quieting of Title…) was duly filed with
the Fifth (5th) Shariah District Court, Cotabato City at the option of herein
private respondent (petitioner below) who believed that a more speedy
disposition of the case would be obtained when the action is filed with the
Shariah District Court than in the Regional Trial Courts considering the
voluminous pending cases at the Regional Trial Courts[.]30
On Vivencio’s claim that respondent Fifth Shari’a District Court had no jurisdiction to decide
the action for recovery of possession because he is a non–Muslim, Roldan argued that no
provision in the Code of Muslim Personal Laws of the Philippines prohibited non–Muslims
from participating in Shari’a court proceedings, especially in actions where the Shari’a court
applied the provisions of the Civil Code of the Philippines. Thus, respondent Fifth Shari’a
District Court validly took cognizance of his action:chanRoblesvirtualLawlibrary
2. That the Shariah District Court is not a court exclusively for muslim
litigants. No provision in the Code on Muslim Personal Laws which
Page 11 of 106
expressly prohibits non–muslim to participate in the proceedings in the
Shariah Courts, especially in actions which applies the civil code and not
the Code on Muslim Personal Laws;
3. The Shariah District Courts has jurisdiction over action for quieting of title
filed by a muslim litigant since the nature of the action involved mere
removal of cloud of doubt upon one’s Certificate of Title. The laws applied
in this case is the Civil Code and other related laws, and not the Code on
Muslim Personal Laws[.]31
Since respondent Fifth Shari’a District Court had jurisdiction to decide the action for
recovery of possession, Roldan argued that the proceedings before it were valid. Respondent
Fifth Shari’a District Court acquired jurisdiction over the person of Vivencio upon service
on him of summons. When Vivencio failed to file his answer, he “effectively waived his
right to participate in the proceedings [before the Fifth Shari’a District Court]” 32 and he
cannot argue that his rights were prejudiced:chanRoblesvirtualLawlibrary
4. That it is not disputed that herein petitioner (respondent below) was
properly served with summons, notices and other court processes when the
SDC Spl. Case No. 07–200 was filed and heard in the Fifth (5th) Shariah
District Court, Cotabato City, but petitioner (respondent below)
intentionally or without known reason, ignore the proceedings;
5. That the main issue in the instant action for certiorari is whether or not
herein petitioner (respondent below) has effectively waived his right to
participate in the proceedings below and had lost his right to appeal via
Certiorari ; and the issue on whether or not the Fifth (5th) Shariah District
Court has jurisdiction over an action where one of the parties is a non–
muslim;
6. That the Fifth (5th) Shariah District Court, Cotabato City acquired
jurisdiction over the case and that the same Court had correctly ruled that
herein petitioner (respondent) intentionally waived his right to defend
himself including his right to appeal via certiorari ;
7. That it is humbly submitted that when the Shariah District Court took
cognizance of an action under its concurrent jurisdiction with the Regional
Trial Court, the law rules applied is not the Code on Muslim Personal Laws
but the Civil Code of the Philippines and the Revised Rules of Procedure,
hence the same would not prejudice the right of herein petitioner
(respondent below)[.]33
 arising from customary contracts41 wherein the parties involved are
In the resolution dated November 21, 2011, this court ordered Vivencio to reply to Roldan’s Muslims:chanRoblesvirtualLawlibrary
comment. On February 3, 2012, Vivencio filed his manifestation, 34 stating that he would no
longer file a reply to the comment as he had “exhaustively discussed the issue presented for ART 143. Original jurisdiction. – x x x x
resolution in [his petition for certiorari ].”35
(2) Concurrently with existing civil courts, the Shari’a District Court shall have original
The principal issue for our resolution is whether a Shari’a District Court has jurisdiction over jurisdiction over:chanRoblesvirtualLawlibrary
a real action where one of the parties is not a Muslim.
x x x x
We also resolve the following issues:chanRoblesvirtualLawlibrary
(b) All other personal and real actions not mentioned in paragraph 1(d) 42 wherein the parties
1. Whether a Shari’a District Court may validly hear, try, and decide a real action involved are Muslims except those for forcible entry and unlawful detainer, which shall fall
where one of the parties is a non–Muslim if the District Court decides the action under the exclusive original jurisdiction of the Municipal Circuit Court; and
applying the provisions of the Civil Code of the Philippines; and
xxxx
2. Whether a Shari’a District Court may validly hear, try, and decide a real action filed
by a Muslim against a non–Muslim if the non–Muslim defendant was served with When ownership is acquired over a particular property, the owner has the right to possess
summons. and enjoy it.43 If the owner is dispossessed of his or her property, he or she has a right of
action to recover its possession from the dispossessor.44 When the property involved is real,45
such as land, the action to recover it is a real action; 46 otherwise, the action is a personal
We rule for petitioner Vivencio. action.47 In such actions, the parties involved must be Muslims for Shari’a District Courts to
validly take cognizance of them.
I
In this case, the allegations in Roldan’s petition for recovery of possession did not state that
Respondent Fifth Shari’a District Vivencio is a Muslim. When Vivencio stated in his petition for relief from judgment that he
Court had no jurisdiction to hear, is not a Muslim, Roldan did not dispute this claim.
try, and decide Roldan’s action for
recovery of possession When it became apparent that Vivencio is not a Muslim, respondent Fifth Shari’a District
Court should have motu proprio dismissed the case. Under Rule 9, Section 1 of the Rules of
Jurisdiction over the subject matter is “the power to hear and determine cases of the general Court, if it appears that the court has no jurisdiction over the subject matter of the action
class to which the proceedings in question belong.”36 This power is conferred by law,37 which based on the pleadings or the evidence on record, the court shall dismiss the
may either be the Constitution or a statute. Since subject matter jurisdiction is a matter of claim:chanRoblesvirtualLawlibrary
law, parties cannot choose, consent to, or agree as to what court or tribunal should decide
their disputes.38 If a court hears, tries, and decides an action in which it has no jurisdiction, Section 1. Defenses and objections not pleaded. – Defenses and objections not pleaded either
all its proceedings, including the judgment rendered, are void.39 in a motion to dismiss or in the answer are deemed waived. However, when it appears from
the pleadings or the evidence on record that the court has no jurisdiction over the subject
To determine whether a court has jurisdiction over the subject matter of the action, the matter, that there is another action pending between the same parties for the same cause, or
material allegations of the complaint and the character of the relief sought are examined.40 that the action is barred by a prior judgment or by statute of limitations, the court shall
dismiss the claim.
The law conferring the jurisdiction of Shari’a District Courts is the Code of the Muslim
Personal Laws of the Philippines. Under Article 143 of the Muslim Code, Shari’a District
Respondent Fifth Shari’a District Court had no authority under the law to decide Roldan’s
Courts have concurrent original jurisdiction with “existing civil courts” over real actions not
action because not all of the parties involved in the action are Muslims. Thus, it had no
Page 12 of 106
jurisdiction over Roldan’s action for recovery of possession. All its proceedings in SDC
Special Proceedings Case No. 07–200 are void.
Roldan chose to file his action with the Shari’a District Court, instead of filing the action
with the regular courts, to obtain “a more speedy disposition of the case.”48 This would have
been a valid argument had all the parties involved in this case been Muslims. Under Article
143 of the Muslim Code, the jurisdiction of Shari’a District Courts over real actions not
arising from customary contracts is concurrent with that of existing civil courts. However,
this concurrent jurisdiction over real actions “is applicable solely when both parties are
Muslims”49 as this court ruled in Tomawis v. Hon. Balindong.50 When one of the parties is
not a Muslim, the action must be filed before the regular courts.
The application of the provisions of the Civil Code of the Philippines by respondent Fifth
Shari’a District Court does not validate the proceedings before the court. Under Article 175
of the Muslim Code, customary contracts are construed in accordance with Muslim law. 51
Hence, Shari’a District Courts apply Muslim law when resolving real actions arising from
customary contracts.
In real actions not arising from contracts customary to Muslims, there is no reason for Shari’a
District Courts to apply Muslim law. In such real actions, Shari’a District Courts will
necessarily apply the laws of general application, which in this case is the Civil Code of the
Philippines, regardless of the court taking cognizance of the action. This is the reason why
the original jurisdiction of Shari’a District Courts over real actions not arising from
customary contracts is concurrent with that of regular courts.
However, as discussed, this concurrent jurisdiction arises only if the parties involved are
Muslims. Considering that Vivencio is not a Muslim, respondent Fifth Shari’a District Court
had no jurisdiction over Roldan’s action for recovery of possession of real property. The
proceedings before it are void, regardless of the fact that it applied the provisions of the Civil
Code of the Philippines in resolving the action.
True, no provision in the Code of Muslim Personal Laws of the Philippines expressly
prohibits non–Muslims from participating in Shari’a court proceedings. In fact, there are
instances when provisions in the Muslim Code apply to non–Muslims. Under Article 13 of
the Muslim Code,52 provisions of the Code on marriage and divorce apply to the female party
in a marriage solemnized according to Muslim law, even if the female is non–Muslim.53
Under Article 93, paragraph (c) of the Muslim Code, 54 a person of a different religion is
disqualified from inheriting from a Muslim decedent.55 However, by operation of law and
regardless of Muslim law to the contrary, the decedent’s parent or spouse who is a non–
Muslim “shall be entitled to one–third of what he or she would have received without such
disqualification.”56 In these instances, non–Muslims may participate in Shari’a court
proceedings.57
Page 13 of 106
Nonetheless, this case does not involve any of the previously cited instances. This case
involves an action for recovery of possession of real property. As a matter of law, Shari’a
District Courts may only take cognizance of a real action “wherein the parties involved are
Muslims.”58 Considering that one of the parties involved in this case is not a Muslim,
respondent Fifth Shari’a District Court had no jurisdiction to hear, try, and decide the action
for recovery of possession of real property. The judgment against Vivencio is void for
respondent Fifth Shari’a District Court’s lack of jurisdiction over the subject matter of the
action.
That Vivencio raised the issue of lack of jurisdiction over the subject matter only after
respondent Fifth Shari’a District Court had rendered judgment is immaterial. A party may
assail the jurisdiction of a court or tribunal over a subject matter at any stage of the
proceedings, even on appeal.59 The reason is that “jurisdiction is conferred by law, and lack
of it affects the very authority of the court to take cognizance of and to render judgment on
the action.”60
In Figueroa v. People of the Philippines,61 Venancio Figueroa was charged with reckless
imprudence resulting in homicide before the Regional Trial Court of Bulacan. The trial court
convicted Figueroa as charged. On appeal with the Court of Appeals, Figueroa raised for the
first time the issue of jurisdiction of the Regional Trial Court to decide the case. Ruling that
the Regional Trial Court had no jurisdiction over the crime charged, this court dismissed the
criminal case despite the fact that Figueroa objected to the trial court’s jurisdiction only on
appeal.
In Metromedia Times Corporation v. Pastorin,62 Johnny Pastorin filed a complaint for
constructive dismissal against Metromedia Times Corporation. Metromedia Times
Corporation actively participated in the proceedings before the Labor Arbiter. When the
Labor Arbiter ruled against Metromedia Times, it appealed to the National Labor Relations
Commission, arguing for the first time that the Labor Arbiter had no jurisdiction over the
complaint. According to Metromedia Times, the case involved a grievance issue “properly
cognizable by the voluntary arbitrator.”63 This court set aside the decision of the Labor
Arbiter on the ground of lack of jurisdiction over the subject matter despite the fact that the
issue of jurisdiction was raised only on appeal.
There are exceptional circumstances when a party may be barred from assailing the
jurisdiction of the court to decide a case. In the 1968 case of Tijam v. Sibonghanoy,64 the
Spouses Tijam sued the Spouses Sibonghanoy on July 19, 1948 before the Court of First
Instance of Cebu to recover P1,908.00. At that time, the court with exclusive original
jurisdiction to hear civil actions in which the amount demanded does not exceed P2,000.00
was the court of justices of the peace and municipal courts in chartered cities under Section
88 of the Judiciary Act of 1948.
As prayed for by the Spouses Tijam in their complaint, the Court of First Instance issued a
writ of attachment against the Spouses Sibonghanoy. However, the latter filed a counter– become more the general rule than the exception. In Calimlim v. Ramirez,70 this court
bond issued by Manila Surety and Fidelity Co., Inc. Thus, the Court of First Instance said:chanRoblesvirtualLawlibrary
dissolved the writ of attachment.
A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous
After trial, the Court of First Instance decided in favor of the Spouses Tijam. When the writ to cite is that the jurisdiction of a court over the subject–matter of the action is a matter of
of execution returned unsatisfied, the Spouses Tijam moved for the issuance of a writ of law and may not be conferred by consent or agreement of the parties. The lack of jurisdiction
execution against Manila Surety and Fidelity Co., Inc.’s bond. The Court of First Instance of a court may be raised at any stage of the proceedings, even on appeal. This doctrine has
granted the motion. Manila Surety and Fidelity Co., Inc. moved to quash the writ of been qualified by recent pronouncements which stemmed principally from the ruling in the
execution, which motion the Court of First Instance denied. Thus, the surety company cited case of [Tijam v. Sibonghanoy]. It is to be regretted, however, that the holding in said
appealed to the Court of Appeals. case had been applied to situations which were obviously not contemplated therein. x x x. 71

The Court of Appeals sustained the Court of First Instance’s decision. Five days after
Thus, the court reiterated the “unquestionably accepted”72 rule that objections to a court’s
receiving the Court of Appeals’ decision, Manila Surety and Fidelity Co., Inc. filed a motion
jurisdiction over the subject matter may be raised at any stage of the proceedings, even on
to dismiss, arguing for the first time that the Court of First Instance had no jurisdiction over
appeal. This is because jurisdiction over the subject matter is a “matter of law” 73 and “may
the subject matter of the case. The Court of Appeals forwarded the case to this court for
not be conferred by consent or agreement of the parties.”74
resolution.
In Figueroa,75 this court ruled that the Tijam doctrine “must be applied with great care;”76
This court ruled that the surety company could no longer assail the jurisdiction of the Court
otherwise, the doctrine “may be a most effective weapon for the accomplishment of
of First Instance on the ground of estoppel by laches. Parties may be barred from assailing
injustice”:77
the jurisdiction of the court over the subject matter of the action if it took them an
unreasonable and unexplained length of time to object to the court’s jurisdiction.65 This is to
x x x estoppel, being in the nature of a forfeiture, is not favored by law. It is to be applied
discourage the deliberate practice of parties in invoking the jurisdiction of a court to seek
rarely — only from necessity, and only in extraordinary circumstances. The doctrine must
affirmative relief, only to repudiate the court’s jurisdiction after failing to obtain the relief
be applied with great care and the equity must be strong in its favor. When misapplied, the
sought.66 In such cases, the court’s lack of jurisdiction over the subject matter is overlooked
doctrine of estoppel may be a most effective weapon for the accomplishment of injustice. x
in favor of the public policy of discouraging such inequitable and unfair conduct. 67
x x a judgment rendered without jurisdiction over the subject matter is void. x x x. No laches
will even attach when the judgment is null and void for want of jurisdiction x x x.78
In Tijam, it took Manila Surety and Fidelity Co., Inc. 15 years before assailing the
jurisdiction of the Court of First Instance. As early as 1948, the surety company became a
party to the case when it issued the counter–bond to the writ of attachment. During trial, it In this case, the exceptional circumstances similar to Tijam do not exist. Vivencio never
invoked the jurisdiction of the Court of First Instance by seeking several affirmative reliefs, invoked respondent Fifth Shari’a District Court’s jurisdiction to seek affirmative relief. He
including a motion to quash the writ of execution. The surety company only assailed the filed the petition for relief from judgment precisely to assail the jurisdiction of respondent
jurisdiction of the Court of First Instance in 1963 when the Court of Appeals affirmed the Fifth Shari’a District Court over Roldan’s petition for recovery of possession.
lower court’s decision. This court said:chanRoblesvirtualLawlibrary
Thus, the general rule holds. Vivencio validly assailed the jurisdiction of respondent Fifth
x x x x Were we to sanction such conduct on [Manila Surety and Fidelity, Co. Inc.’s] part, Shari’a District Court over the action for recovery of possession for lack of jurisdiction over
We would in effect be declaring as useless all the proceedings had in the present case since the subject matter of Roldan’s action.
it was commenced on July 19, 1948 and compel [the spouses Tijam] to go up their Calvary
once more. The inequity and unfairness of this is not only patent but revolting.68 II

That respondent Fifth Shari’a

After this court had rendered the decision in Tijam, this court observed that the “non–
District Court served summons on
waivability of objection to jurisdiction” 69 has been ignored, and the Tijam doctrine has
petitioner Vivencio did not vest it
with jurisdiction over the person of
Page 14 of 106
petitioner Vivencio recover the title to or possession of a parcel of land “is an action in personam, for it binds a
particular individual only although it concerns the right to a tangible thing.”94 Also, in Muñoz
Roldan argued that the proceedings before respondent Shari’a District Court were valid since v. Yabut, Jr.,95 this court said that “a judgment directing a party to deliver possession of a
the latter acquired jurisdiction over the person of Vivencio. When Vivencio was served with property to another is in personam. It is binding only against the parties and their successors–
summons, he failed to file his answer and waived his right to participate in the proceedings in–interest by title subsequent to the commencement of the action.” 96
before respondent Fifth Shari’a District Court. Since Vivencio waived his right to participate
in the proceedings, he cannot argue that his rights were prejudiced. This action being in personam, service of summons on Vivencio was necessary for
respondent Fifth Shari’a District Court to acquire jurisdiction over Vivencio’s person.
Jurisdiction over the person is “the power of [a] court to render a personal judgment or to
subject the parties in a particular action to the judgment and other rulings rendered in the However, as discussed, respondent Fifth Shari’a District Court has no jurisdiction over the
action.”79 A court acquires jurisdiction over the person of the plaintiff once he or she files subject matter of the action, with Vivencio not being a Muslim. Therefore, all the
the initiatory pleading.80 As for the defendant, the court acquires jurisdiction over his or her proceedings before respondent Shari’a District Court, including the service of summons on
person either by his or her voluntary appearance in court81 or a valid service on him or her Vivencio, are void.
of summons.82
III
Jurisdiction over the person is required in actions in personam83 or actions based on a party’s
personal liability.84 Since actions in personam “are directed against specific persons and seek The Shari’a Appellate Court and the
personal judgments,”85 it is necessary that the parties to the action “are properly impleaded Office of the Jurisconsult in Islamic
and duly heard or given an opportunity to be heard.” 86 With respect to the defendant, he or law must now be organized to effectively
she must have been duly served with summons to be considered properly impleaded; enforce the Muslim legal system in the
otherwise, the proceedings in personam, including the judgment rendered, are void. 87 Philippines

On the other hand, jurisdiction over the person is not necessary for a court to validly try and We note that Vivencio filed directly with this court his petition for certiorari of respondent
decide actions in rem.88 Actions in rem are “directed against the thing or property or status Fifth Shari’a District Court’s decision. Under the judicial system in Republic Act No. 9054, 97
of a person and seek judgments with respect thereto as against the whole world.”89 In actions the Shari’a Appellate Court has exclusive original jurisdiction over petitions for certiorari
in rem, the court trying the case must have jurisdiction over the res, or the thing under of decisions of the Shari’a District Courts. He should have filed his petition for certiorari
litigation, to validly try and decide the case. Jurisdiction over the res is acquired either “by before the Shari’a Appellate Court.
the seizure of the property under legal process, whereby it is brought into actual custody of
the law; or as a result of the institution of legal proceedings, in which the power of the court However, the Shari’a Appellate Court is yet to be organized. Thus, we call for the
is recognized and made effective.”90 In actions in rem, summons must still be served on the organization of the court system created under Republic Act No. 9054 to effectively enforce
defendant but only to satisfy due process requirements. 91 the Muslim legal system in our country. After all, the Muslim legal system – a legal system
complete with its own civil, criminal, commercial, political, international, and religious
Unlike objections to jurisdiction over the subject matter which may be raised at any stage of laws98 – is part of the law of the land,99 and Shari’a courts are part of the Philippine judicial
the proceedings, objections to jurisdiction over the person of the defendant must be raised at system.100
the earliest possible opportunity; otherwise, the objection to the court’s jurisdiction over the
person of the defendant is deemed waived. Under Rule 9, Section 1 of the Rules of Court, Shari’a Circuit Courts and Shari’a District Courts created under the Code of Muslim Personal
“defenses and objections not pleaded either in a motion to dismiss or in the answer are Laws of the Philippines shall continue to discharge their duties.101 All cases tried in Shari’a
deemed waived.” Circuit Courts shall be appealable to Shari’a District Courts. 102

In this case, Roldan sought to enforce a personal obligation on Vivencio to vacate his The Shari’a Appellate Court created under Republic Act No. 9054 shall exercise appellate
property, restore to him the possession of his property, and pay damages for the unauthorized jurisdiction over all cases tried in the Shari’a District Courts.103 It shall also exercise original
use of his property.92 Thus, Roldan’s action for recovery of possession is an action in jurisdiction over petitions for certiorari , prohibition, mandamus, habeas corpus, and other
personam. As this court explained in Ang Lam v. Rosillosa and Santiago,93 an action to auxiliary writs and processes in aid of its appellate jurisdiction. 104 The decisions of the
Page 15 of 106
Shari’a Appellate Court shall be final and executory, without prejudice to the original and
appellate jurisdiction of this court.105 3
Id. at 42.

This court held in Tomawis v. Hon. Balindong106 that “until such time that the Shari’a 4
Id. at 6.
Appellate Court shall have been organized,”107 decisions of the Shari’a District Court shall
be appealable to the Court of Appeals and “shall be referred to a Special Division to be 5
Id. at 43.
organized in any of the [Court of Appeals] stations preferably composed of Muslim [Court
of Appeals] Justices.”108 However, considering that Tomawis was not yet promulgated when 6
Id. at 19.
Vivencio filed his petition for certiorari on August 6, 2009, we take cognizance of
Vivencio’s petition for certiorari in the exercise of our original jurisdiction over petitions 7
Id.
for certiorari .109
8
Id. at 38–41.
Moreover, priority should be given in organizing the Office of the Jurisconsult in Islamic
law. A Jurisconsult in Islamic law or “Mufti” is an officer with authority to render legal 9
Id. at 44.
opinions or “fatawa”110 on any questions relating to Muslim law.111 These legal opinions
should be based on recognized authorities112 and “must be rendered in precise accordance 10
Id. at 18.
with precedent.”113 In the Philippines where only Muslim personal laws are codified, a legal
officer learned in the Qur’an and Hadiths is necessary to assist this court as well as Shari’a 11
Id. at 18–19.
court judges in resolving disputes not involving Muslim personal laws.
12
Id. at 28.
All told, Shari’a District Courts have jurisdiction over a real action only when the parties
involved are Muslims. Respondent Fifth Shari’a District Court acted without jurisdiction in 13
Id. at 33.
taking cognizance of Roldan E. Mala’s action for recovery of possession considering that
14
Vivencio B. Villagracia is not a Muslim. Accordingly, the proceedings in SDC Special Id. at 33–36.
Proceedings Case No. 07–200, including the judgment rendered, are void.
15
MUSLIM CODE, Art. 155, par. (2) provides:chanRoblesvirtualLawlibrary
WHEREFORE, the petition for certiorari is GRANTED. Respondent Fifth Shari’a District
Court’s decision dated June 11, 2008 and order dated May 29, 2009 in SDC Special ART. 155. Jurisdiction. — The Shari'a Circuit Courts shall have exclusive original
Proceedings Case No. 07–200 are SET ASIDE without prejudice to the filing of respondent jurisdiction over:chanRoblesvirtualLawlibrary
Roldan E. Mala of an action with the proper court.
x x x x
SO ORDERED.
(2) All civil actions and proceedings between parties who are Muslims or have been married
Velasco, Jr., (Chairperson), Peralta, Abad, and Mendoza, JJ., concur. in accordance with Article 13 involving disputes relating to:
(a) Marriage;
(b) Divorce recognized under this Code;
Endnotes: (c) Betrothal or breach of contract to marry;
(d) Customary dower (mahr);
(e) Disposition and distribution of property upon divorce;
1 (f) Maintenance and support, and consolatory gifts, (mut'a); and
Rollo, pp. 18–19.
(g) Restitution of marital rights.
2
Id. at 22–23.

Page 16 of 106
16
Rollo, p. 33.
33
Id. at 28–29.
17
Id. at 23.
34
Id. at 33–36.
18
Id. at 22.
35
Id. at 33.
19
Id. at 23.
36
Reyes v. Diaz, 73 Phil. 484, 486 (1941) [Per J. Moran, En Banc].
20
Id.
37
Francel Realty Corporation v. Sycip, 506 Phil. 407, 415 (2005) [Per Acting C.J.
21
Id. at 22–23. Panganiban, Third Division].
22 38
Id. at 4. Calimlim v. Ramirez, 204 Phil. 25, 34–35 (1982) [Per J. Vasquez, First Division].
23 39
Id. at 2–44. Figueroa v. People, 580 Phil. 58, 78 (2008) [Per J. Nachura, Third Division], citing Heirs
of Julian Dela Cruz and Leonora Talaro v. Heirs of Alberto Cruz, G.R. No. 162890,
24
MUSLIM CODE, Art. 143, par. (2)(b) provides:chanRoblesvirtualLawlibrary November 22, 2005, 475 SCRA 743 [Per J. Callejo, Second Division].

ART. 143. Original jurisdiction – x x x x 40

Id.
41
(2) Concurrently with existing civil courts, the Shari'a District Court shall have original MUSLIM CODE, Art. 175 provides:chanRoblesvirtualLawlibrary
jurisdiction over:
x x x x ART. 175. How construed. – Any transaction whereby one person delivers to another any
real estate, plantation, orchard, or any fruit–bearing property by virtue of sanda, sanla,
(b) All other personal and real actions not mentioned in paragraph 1(d) wherein the parties arindao, or similar customary contract, shall be construed as a mortgage (rihan) in
involved are Muslims except those for forcible entry and unlawful detainer, which shall fall accordance with Muslim law.
under the exclusive original jurisdiction of the Municipal Circuit Court.
42
25 Muslim Code, Art. 143, par. 1(d) provides:chanRoblesvirtualLawlibrary
Rollo, pp. 8–10.
26 ART. 143. Original jurisdiction. – (1) The Shari’a District Court shall have exclusive
Id. at 45–46.
original jurisdiction over:
27
Id. at 70–72. x x x x

28 (d) All actions arising from customary contracts in which the parties are Muslims, if they
Id. at 27–30.
have not specified which law shall govern their relations[.]
29
Id. at 27.
xxxx
30 43
Id. CIVIL CODE, Art. 428.
31 44
Id. at 27–28. CIVIL CODE, Art. 428.
32 45
Id. at 28. CIVIL CODE, Art. 415 provides:chanRoblesvirtualLawlibrary

Page 17 of 106
 of the municipality or city wherein the real property involved, or a portion thereof, is situated.
Art. 415. The following are immovable property:chanRoblesvirtualLawlibrary
47
RULES OF COURT, Rule 4, Sec. 2 provides:chanRoblesvirtualLawlibrary
(1) Land, buildings, roads and constructions of all kinds adhered to the soil;
SEC. 2. Venue of personal actions. – All other actions may be commenced and tried where
(2) Trees, plants, and growing fruits, while they are attached to the land or form an integral the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the
part of an immovable; principal defendants resides, or in the case of a non–resident defendant where he may be
found, at the election of the plaintiff.
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be
48
separated therefrom without breaking the material or deterioration of the object; Rollo, p. 27.
49
(4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings Tomawis v. Hon. Balindong, G.R. No. 182434, March 5, 2010, 614 SCRA 354, 369 [Per J.
or on lands by the owner of the immovable in such a manner that it reveals the intention to Velasco, Jr., En Banc].
attach them permanently to the tenements;
50
G.R. No. 182434, March 5, 2010, 614 SCRA 354 [Per J. Velasco, Jr., En Banc].
(5) Machinery, receptacles, instruments or implements intended by the owner of the
51
tenement for an industry or works which may be carried on for an industry or works which MUSLIM CODE, Art. 175.
may be carried on in a building or on a piece of land, and which tend directly to meet the
52
needs of the said industry or works; MUSLIM CODE, Art. 13, par. (1) provides:
ART. 13. Application. – (1) The provisions of this Title shall apply to marriage and divorce
(6) Animal houses, pigeon–houses, beehives, fish ponds or breeding places of similar nature, wherein both parties are Muslims, or wherein only the male party is a Muslim and the
in case their owner has placed them or preserves them with the intention to have them marriage is solemnized in accordance with Muslim law or this Code in any part of the
permanently attached to the land, and forming a permanent part of it; the animals in these Philippines.
places are included; 53
B. I. Arabani, Sr., Commentaries on the Code of Muslim Personal Laws of the Philippines
258 (2011).
(7) Fertilizer actually used on a piece of land;
54
MUSLIM CODE, Art. 93 provides:
(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and
ART. 93. Disqualifications to succession. – The following shall be disqualified to
waters either running or stagnant;
succeed:chanRoblesvirtualLawlibrary
(9) Docks and structures which, though floating, are intended by their nature and object to x x x x
remain at a fixed place on a river, lake, or coast;
(c) Those who are so situated that they cannot inherit under Islamic law.
(10) Contracts for public works, and servitudes and other real rights over immovable
55
property. Under Islamic law, a Muslim may not inherit from a non–Muslim, and a non–Muslim may
not inherit from a Muslim. This is based on the Hadith of Muhammad that “the people
46
RULES OF COURT, Rule 4, Sec. 1 provides:chanRoblesvirtualLawlibrary belonging to two (different) faiths do not inherit from each other.” See B. I. Arabani, Sr.,
Commentaries on the Code of Muslim Personal Laws of the Philippines 608 (2011).
SEC. 1. Venue of real actions. – Actions affecting title to or possession of real property, or
interest therein, shall be commenced and tried in the proper court which has jurisdiction over 56
MUSLIM CODE, Art. 107 provides:chanRoblesvirtualLawlibrary
the area wherein the real property involved, or a portion thereof, is situated.
ART. 107. Bequest by operation of law. – Should the testator die without having made a
Forcible entry and detainer actions shall be commenced and tried in the municipal trial court
Page 18 of 106
bequest in favor of any child of his son who predeceased him, or who simultaneously dies
71
with him, such child shall be entitled to one–third of the share that would have pertained to Id. at 34–35.
the father if he were alive. The parent or spouse, who is otherwise disqualified to inherit in
72
view of Article 93(c), shall be entitled to one–third of what he or she would have received Id. at 34.
without such disqualification.
73
Id.
57
MUSLIM CODE, Arts. 155 (2) and 143 (1)(b).
74
Id. at 34–35.
58
MUSLIM CODE, Art. 143 (2)(b).
75
Figueroa v. People of the Philippines, 580 Phil. 58 (2008) [Per J. Nachura, Third Division].
59
Ibrahim v. Commission on Elections, G.R. No. 192289, January 8, 2013, 688 SCRA 129,
76
145 [Per J. Reyes, En Banc], citing Republic v. Bantigue Point Development Corporation, Id. at 77.
G.R. No. 162322, March 14, 2012, 668 SCRA 158 [Per J. Sereno, Second Division];
77
Figueroa v. People of the Philippines, 580 Phil. 58, 76 (2008) [Per J. Nachura, Third Id.
Division]; Mangaliag v. Catubig–Pastoral, 510 Phil. 637, 648 (2005) [Per J. Austria–
78
Martinez, Second Division]; Calimlim v. Ramirez, 204 Phil. 25, 35 (1982) [Per J. Vasquez, Id at 77–78.
First Division].
79
Macasaet v. Co, Jr., G.R. No. 156759, June 5, 2013, 697 SCRA 187, 198 [Per J. Bersamin,
60
Francel Realty Corporation v. Sycip, 506 Phil. 407, 415 (2005) [Per Acting C.J. First Division].
Panganiban, Third Division].
80
Id. at 201.
61
580 Phil. 58, 76 (2008) [Per J. Nachura, Third Division].
81
RULES OF COURT, Rule 14, Sec. 20.
62
503 Phil. 288 (2005) [Per J. Tinga, Second Division].
82
Macasaet v. Co, Jr., G.R. No. 156759, June 5, 2013, 697 SCRA 187, 201 [Per J. Bersamin,
63
Id. at 294. First Division].

64 83
131 Phil. 556 (1968) [Per J. Dizon, En Banc]. Id. at 198.

65 84
Id. at 563. Id. at 199, citing DOMAGAS V. JENSEN, 489 Phil. 631, 641 (2005) [Per J. Callejo, Sr.,
Second Division].
66
Id. at 564.
85
ANG LAM V. ROSILLOSA AND SANTIAGO, 86 Phil. 447, 451 (1950) [Per J. Ozaeta,
67
Id. at 563–564. En Banc].

68 86
Id. at 565. Id. at 450, citing PATRIARCA V. ORATE, 7 Phil. 390, 393–394 (1907) [Per C.J.
Arellano, En Banc].
69
Calimlim v. Ramirez, 204 Phil. 25, 35 (1982) [Per J. Vasquez, First Division].
87
DOMAGAS V. JENSEN, 489 Phil. 631, 645 (2005) [Per J. Callejo, Sr., Second Division].
70
204 Phil. 25 (1982) [Per J. Vasquez, First Division].
Page 19 of 106
88 104
Macasaet v. Co, Jr., G.R. No. 156759, June 5, 2013, 697 SCRA 187, 198 [Per J. Bersamin, Republic Act No. 9054, Art. VIII, Sec. 9.
First Division].
105
Republic Act No. 9054, Art. VIII, Sec. 10.
89
Ang Lam v. Rosillosa and Santiago, 86 Phil. 447, 451 (1950) [Per J. Ozaeta, En Banc],
106
citing 1 C.J.S., 1148. G.R. No. 182434, March 5, 2010, 614 SCRA 354 [Per J. Velasco, Jr., En Banc].

90 107
Macahilig v. Heirs of Magalit, 398 Phil. 802, 817 (2000) [Per J. Panganiban, Third Id. at 361.
Division].
108
Id.
91
Macasaet v. Co, Jr., G.R. No. 156759, June 5, 2013, 697 SCRA 187, 198 [Per J. Bersamin,
109
First Division]. Const., art. VIII, sec. 5 (1).

92
Rollo, p. 40. 110
The singular form is “fatwa”.

93 111
86 Phil. 447 (1950) [Per J. Ozaeta, En Banc]. MUSLIM CODE, Art. 166 (1).

94 112
Id. at 451. MUSLIM CODE, Art. 166 (1).

95 113
G.R. No. 142676, June 6, 2011, 650 SCRA 344 [Per J. Leonardo–de Castro, First B. I. Arabani, Sr., Commentaries on the Code of Muslim Personal Laws of the Philippines
Division]. 855 (2011)

96
Id. at 367. G.R. No. 76217 September 14, 1989
97
An Act to Strengthen and Expand the Organic Act for the Autonomous Region in Muslim GERMAN MANAGEMENT & SERVICES, INC., petitioner,
Mindanao, Amending for the Purpose Republic Act No. 6734, entitled “An Act Providing vs.
for the Autonomous Region in Muslim Mindanao,” as amended. HON. COURT OF APPEALS and ERNESTO VILLEZA, respondents.

98
B. I. Arabani, Sr., Commentaries on the Code of Muslim Personal Laws of the Philippines G.R. No. L-76216 September 14, 1989
245 (2011).
GERMAN MANAGEMENT & SERVICES, INC., petitioner,
99
MUSLIM CODE, Art. 2. vs.
HON. COURT OF APPEALS and ORLANDO GERNALE, respondents.
100
MUSLIM CODE, Art. 137.
Alam, Verano & Associates for petitioner.
101
Republic Act No. 9054, Art. VIII, Sec. 5.
Francisco D. Lozano for private respondents.
102
MUSLIM CODE, Art. 144 (1).

103
Republic Act No. 9054, Art. VIII, Secs. 7 and 9.

Page 20 of 106
FERNAN, C.J.:
Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose, residents of Pennsylvania,
Philadelphia, USA are the owners of a parcel of land situated in Sitio Inarawan, San Isidro,
Antipolo, Rizal, with an area of 232,942 square meters and covered by TCT No. 50023 of
the Register of Deeds of the province of Rizal issued on September 11, 1980 which canceled
TCT No. 56762/ T-560. The land was originally registered on August 5, 1948 in the Office
of the Register of Deeds of Rizal as OCT No. 19, pursuant to a Homestead Patent granted
by the President of the Philippines on July 27, 1948, under Act No. 141.
On February 26, 1982, the spouses Jose executed a special power of attorney authorizing
petitioner German Management Services to develop their property covered by TCT No.
50023 into a residential subdivision. Consequently, petitioner on February 9,1983 obtained
Development Permit No. 00424 from the Human Settlements Regulatory Commission for
said development. Finding that part of the property was occupied by private respondents and
twenty other persons, petitioner advised the occupants to vacate the premises but the latter
refused. Nevertheless, petitioner proceeded with the development of the subject property
which included the portions occupied and cultivated by private respondents.
Private respondents filed an action for forcible entry against petitioner before the Municipal
Trial Court of Antipolo, Rizal, alleging that they are mountainside farmers of Sitio Inarawan,
San Isidro, Antipolo, Rizal and members of the Concerned Citizens of Farmer's Association;
that they have occupied and tilled their farmholdings some twelve to fifteen years prior to
the promulgation of P.D. No. 27; that during the first week of August 1983, petitioner, under
a permit from the Office of the Provincial Governor of Rizal, was allowed to improve the
Barangay Road at Sitio Inarawan, San Isidro, Antipolo, Rizal at its expense, subject to the
condition that it shag secure the needed right of way from the owners of the lot to be affected;
that on August 15, 1983 and thereafter, petitioner deprived private respondents of their
property without due process of law by: (1) forcibly removing and destroying the barbed
wire fence enclosing their farmholdings without notice; (2) bulldozing the rice, corn fruit
bearing trees and other crops of private respondents by means of force, violence and
intimidation, in violation of P.D. 1038 and (3) trespassing, coercing and threatening to
harass, remove and eject private respondents from their respective farmholdings in violation
of P.D. Nos. 316, 583, 815, and 1028. 1
On January 7,1985, the Municipal Trial Court dismissed private respondents' complaint for
forcible entry. 2 On appeal, the Regional Trial Court of Antipolo, Rizal, Branch LXXI
sustained the dismissal by the Municipal Trial Court. 3
Private respondents then filed a petition for review with the Court of Appeals. On July
24,1986, said court gave due course to their petition and reversed the decisions of the
Municipal Trial Court and the Regional Trial Court. 4
Page 21 of 106
The Appellate Court held that since private respondents were in actual possession of the
property at the time they were forcibly ejected by petitioner, private respondents have a right
to commence an action for forcible entry regardless of the legality or illegality of possession.
5
Petitioner moved to reconsider but the same was denied by the Appellate Court in its
resolution dated September 26, 1986. 6
Hence, this recourse.
The issue in this case is whether or not the Court of Appeals denied due process to petitioner
when it reversed the decision of the court a quo without giving petitioner the opportunity to
file its answer and whether or not private respondents are entitled to file a forcible entry case
against petitioner. 7
We affirm. The Court of Appeals need not require petitioner to file an answer for due process
to exist. The comment filed by petitioner on February 26, 1986 has sufficiently addressed
the issues presented in the petition for review filed by private respondents before the Court
of Appeals. Having heard both parties, the Appellate Court need not await or require any
other additional pleading. Moreover, the fact that petitioner was heard by the Court of
Appeals on its motion for reconsideration negates any violation of due process.
Notwithstanding petitioner's claim that it was duly authorized by the owners to develop the
subject property, private respondents, as actual possessors, can commence a forcible entry
case against petitioner because ownership is not in issue. Forcible entry is merely a quieting
process and never determines the actual title to an estate. Title is not involved. 8
In the case at bar, it is undisputed that at the time petitioner entered the property, private
respondents were already in possession thereof . There is no evidence that the spouses Jose
were ever in possession of the subject property. On the contrary, private respondents'
peaceable possession was manifested by the fact that they even planted rice, corn and fruit
bearing trees twelve to fifteen years prior to petitioner's act of destroying their crops.
Although admittedly petitioner may validly claim ownership based on the muniments of title
it presented, such evidence does not responsively address the issue of prior actual possession
raised in a forcible entry case. It must be stated that regardless of the actual condition of the
title to the property, the party in peaceable quiet possession shall not be turned out by a strong
hand, violence or terror. 9 Thus, a party who can prove prior possession can recover such
possession even against the owner himself. Whatever may be the character of his prior
possession, if he has in his favor priority in time, he has the security that entitles him to
remain on the property until he is lawfully ejected by a person having a better right by accion
publiciana or accion reivindicatoria. 10
Both the Municipal Trial Court and the Regional Trial Court have rationalized petitioner's 8 Baptista vs. Carillo, No. L-32192, July 30,1976, 72 SCRA 214,
drastic action of bulldozing and destroying the crops of private respondents on the basis of
the doctrine of self-help enunciated in Article 429 of the New Civil Code. 11 Such 9 Drilon vs. Guarana, 149 SCRA 342; Supra and Batioco v. Quintero and
justification is unavailing because the doctrine of self-help can only be exercised at the time Ayala, 59 Phil. 312; Pitargo v. Sorilla, 92 Phil. 5.
of actual or threatened dispossession which is absent in the case at bar. When possession has
already been lost, the owner must resort to judicial process for the recovery of property. This
10 Bishop of Cebu vs. Mangaron, 6 Phil. 286, 291.
is clear from Article 536 of the Civil Code which states, "(I)n no case may possession be
acquired through force or intimidation as long as there is a possessor who objects thereto.
He who believes that he has an action or right to deprive another of the holding of a thing, 11 Rollo, p. 38 and p. 70.
must invoke the aid of the competent court, if the holder should refuse to deliver the thing."
[G.R. No. 150327. June 18, 2003.]
WHEREFORE, the Court resolved to DENY the instant petition. The decision of the Court
of Appeals dated July 24,1986 is hereby AFFIRMED. Costs against petitioner. REPUBLIC OF THE PHILS., represented by the Secretary of Department of
Environment and Natural Resources, the Regional Executive Director, (DENR Region
XI) and MARION V. ABUNDO, SR., Conservation Officer (DENR Region XI),
SO ORDERED.
Petitioners, v. MARILYN A. PERALTA, ROSIE A. LAVALAN, GRACE A. REYES,
ALBERTO B. ALONDAY, MERCY B. ALONDAY, RICHELIEU B. ALONDAY,
Bidin and Cortes, JJ., concur. AZUCENA B. ALONDAY AND JANETA A. BALURAN, and the Register of Deeds of
Davao City, Respondents.
Gutierrez, Jr., J., concurs in the result.
DECISION
Feliciano, J., is on leave.

CALLEJO, SR., J.:

Footnotes This is a petition for review on certiorari of the Decision 1 of the Court of Appeals in CA-
G.R. SP No. 53440 which upheld the orders, dated February 5, 1999 and May 6, 1999, of
1 Rollo, pp. 30-31. the Regional Trial Court of Davao City, Branch 13. 2

2 Rollo, p. 37. The Antecedents

3 Rollo, p. 70.
On September 26, 1994, Marilyn A. Peralta, Rosie A. Lavalan, Grace A. Reyes, Alberto B.
Alonday, Mercy B. Alonday, Rochelieu B. Alonday, Azucena B. Alonday, Benedicto B.
4 Penned by J. Luis Javellana, concurred in by Mariano Zosa, Vicente
Alonday, and Janeta A. Baluran filed a complaint for recovery of possession and ownership
Mendoza, Ricardo Tensuan, JJ. Rollo, p. 5.
of real property with the Regional Trial Court of Davao City, Branch 13, against the
defendants Republic of the Philippines, the Regional Executive Director of Region XI of the
5 Reno, p. 19. Department of Environment and Natural Resources (DENR) and the Conservation Officer
in said region. The plaintiffs alleged therein, inter alia, that they are the heirs of Benedicto
6 Rollo, pp. 27-28. B. Alonday who applied for and was granted Homestead Patent No. V-11244 by the then
Secretary of Agriculture and Natural Resources (DENR) over Lot 3561 with an area of
7 Rollo, p. 7. 237,898 square meters; the said lot was a portion of Lot 2988 of the Guiang Cadastre located
Page 22 of 106
in Guiang, Davao City and that on the basis of said patent, Benedicto Alonday was issued
Original Certificate of Title No. P-275 over the said property by the Register of Deeds; they
purchased the said property from their father Benedicto and were issued on April 25, 1988
Transfer Certificate of Title No. T-134231 in their names; the property was allegedly
alienable and disposable property within Project 1-B, certified on January 13, 1931 as per
LC Map No. 1412 approved by the Director of Bureau of Forestry, as confirmed by the letter
of the petitioner Regional Director, dated February 15, 1994; they had been in possession of
the said property as owner thereof since November 1965 and that some time in 1969, officers
of the Bureau of Forest Development (BFD) sought his permission to use a portion of said
property with an area of five hectares; the BFD caused the construction of a big concrete
building on said portion of the property; on June 28, 1971, Benedicto’s lawyer wrote a letter
to the BFD demanding that it vacate the said portion of his property on which the building
was constructed but said letter was ignored; on February 24, 1979, Forest Conservation
Officer Marion Abundio, Sr. asked permission from Benedicto to allow the BFD to install
on a portion of the subject property consisting of twenty-five square meters a small generator
to provide electricity to the existing building and compound of the Philippine Eagles
Acclimatization and Breeding Center; Benedicto did not give his assent to these requests of
the aforenamed government officials despite which they still caused the construction of the
building and installation of the generator unit; the plaintiffs demanded that the defendants
vacate the property on July 14, 1994 but the latter refused. The plaintiffs prayed that after
due proceedings judgment be rendered in their favor and that the defendants be ordered to
vacate the subject property and pay the plaintiffs damages and litigation
expenses.chanrob1es virtua1 1aw 1ibrary
The plaintiffs appended as annexes to their petition copies of the aforesaid title and letters of
the BFD officials. In their answer to the complaint, the defendants, through the Office of the
Solicitor General (OSG), interposed the special and affirmative defenses that: (a) the
complaint did not state a cause of action against them; (b) the building constructed by the
defendants was within the perimeter of the Mt. Apo National Park, a forest reserve under
Proclamation No. 59, as amended, of the President of the Philippines, and not on the
plaintiffs’ property; (c) the installation of a generator unit did not push through; (d) Project
1-B, under which the subject property was declassified as alienable and disposable property
per Land Classification Map No. 1412, should not prevail over Proclamation No. 59, as
amended; (e) the suit was against the State which cannot be sued without its consent; (f) the
plaintiffs failed to exhaust all administrative remedies before filing their complaint. 3 The
defendants prayed that the complaint be dismissed.
The parties filed their respective pre-trial briefs. After the requisite pre-trial conference, the
RTC issued an Order, dated August 29, 1995, constituting a panel of commissioners
composed of Engineer Roderick R. Calapardo, as Team Leader, and Gregorio Cenabre and
Engineer Rogelio Zantua, as members, to conduct a relocation survey and determine if the
respondents’ property is part of the Mt. Apo National Park. After the survey, the panel
submitted its report to the trial court, dated November 7, 1995, stating that: "the land in case
Page 23 of 106
is 92,216 square meters within the certified Alienable and Disposable (A & D) Lands while
the remaining portion of 145,682 square meters is within the Mt. Apo National Park
Reservation." 4
In their comment on the report, the plaintiffs claimed that the survey team altered the
boundary line of their property in the course of the survey and that the team did not take into
account Project 1-B per Land Classification Map No. 1412 approved by the Director of the
Bureau of Forestry. The defendants, on the other hand, insisted that the survey team did not
alter the boundary line of the property and that it took into account Project 1-B and Land
Classification Map No. 1412 in conducting the survey and preparing its report. On motion
of the plaintiffs and with the conformity of the defendants, through Assistant Solicitor
General Aurora P. Cortez, the RTC issued an order on March 7, 1997 declaring that there
were no factual issues involved in the case and that it would decide the case on the basis of
the pleadings and memoranda of the parties as well as the commissioners’ report.
On May 6, 1997, the RTC rendered judgment in favor of the plaintiffs and against the
defendants finding and declaring that the property occupied by the defendants was part of
the plaintiffs’ property. The RTC ordered the defendants to vacate the property, restore
possession thereof to the plaintiffs and remove all the improvements thereon made by them.
The decretal portion of the decision reads:chanrob1es virtual 1aw library
In view of all the foregoing, judgment is hereby rendered sustaining the validity and legality
of the plaintiff’s right of ownership and possession over that parcel of land covered by
Transfer Certificate of Title No. T-134231 of the Registry of Davao City. Defendants are
hereby ordered to vacate the portion of land covered by Transfer Certificate of Title No. T-
134231 of the Registry of Deeds of Davao City alluded to by the plaintiffs and to restore
peaceful possession of the same to them. Defendants are further ordered to remove all the
improvements they have introduced thereon. 5
The RTC declared that the report of the panel did not take into account Property 1-B for LC
Map 1412; hence, the said report had no probative weight. According to the RTC, the torrens
title of the property prevails over the relocation survey of the panel of commissioners and
that the Director of Forestry declassified the respondents’ property pursuant to Section 1827
of the 1987 Revised Administrative Code.
On May 30, 1997, five days before the expiration of the period to file an appeal, the
defendants filed, through registered mail, a motion for the reconsideration of the RTC
decision. On June 11, 1997, the RTC issued ex parte an order expunging the said motion for
reconsideration on the ground that it was a mere scrap of paper for failure of the defendants
to incorporate any notice of hearing as required by Sections 4 and 5, Rule 15 of the Rules of
Court. Unaware of the June 11, 1997 Order of the RTC, the defendants filed on July 14, 1997
a Manifestation with Notice of Hearing on Motion for Reconsideration dated July 7, 1997
appending thereto a notice of hearing of their May 30, 1997 Motion for
Reconsideration.chanrobles.com.ph : red
In the meantime, on July 18, 1997, the defendants received a copy of the June 11, 1997 Order
of the trial court expunging their motion for reconsideration. On July 22, 1997, the
defendants filed their notice of appeal from the decision of the court. The plaintiffs, for their
part, filed a motion to dismiss the appeal of the defendants on the ground that their May 30,
1997 Motion for Reconsideration was a mere scrap of paper; hence, the motion did not toll
the running of the reglementary period for appeal. Thus, the defendants allegedly failed to
perfect their appeal from the decision of the court within the reglementary period. On August
11, 1997, the RTC received the defendants’ notice of appeal.
Meanwhile, the presiding judge of Branch 13 retired, and for a time, the said RTC branch
remained vacant. On January 28, 1999, the RTC, through the newly-appointed judge, issued
an order giving due course to the defendants’ appeal declaring that they still had a period of
five days from July 18, 1997 when they received a copy of the order expunging their notice
of appeal or until July 23, 1997 within which to perfect their appeal from the June 11, 1997
Order. Since the defendants filed their notice of appeal on July 22, 1997, they had perfected
their appeal within the reglementary period. The RTC further declared that although the
defendants’ May 30, 1997 Motion for Reconsideration was defective, the Rules of Court
should be liberally construed. The RTC forthwith directed the branch clerk of court to
forward the records of the case to the Court of Appeals.
On February 5, 1999, however, the RTC issued an ex parte order dismissing the defendants’
appeal on its finding that in light of jurisprudence brought to its attention, they failed to
perfect their appeal within the reglementary period. When the defendants received the
February 5, 1999 Order of the RTC, they filed a motion for reconsideration thereof, set for
hearing on February 19, 1999. On February 8, 1999, the RTC issued an order declaring that
the hearing set on February 19, 1999 was mooted by its Order dated February 5, 1999 which
dismissed the defendants’ appeal. The plaintiffs filed on February 10, 1999 a motion for
execution, claiming that the RTC decision had become final and executory. On February 18,
1999, the RTC issued an order granting the plaintiffs’ motion and ordered the issuance of a
writ of execution. The defendants filed a Motion for Reconsideration dated February 26,
1999 of the February 5, 1999 Order of the RTC dismissing their appeal and their opposition
to the issuance of a writ of execution. The defendants were unaware that in the interim, the
RTC had already granted the plaintiffs’ motion for a writ of execution on February 18, 1999.
The plaintiffs opposed the defendants’ Motion for Reconsideration dated February 26, 1999.
On May 6, 1999, the RTC issued an order denying the defendants’ motion for reconsideration
and at the same time denying the plaintiffs’ motion for execution on the ground that public
policy prohibited the issuance of a writ of execution against the government. The RTC
recalled the writ of execution it earlier issued.
Thereafter, the defendants, now the petitioners, filed with the Court of Appeals a petition for
Page 24 of 106
certiorari under Rule 65 of the 1997 Rules of Court, as amended, for the nullification of the
February 5, 1999 and May 6, 1999 Orders of the RTC alleging that the:chanrob1es virtual
1aw library
I
RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING ITS ORDER
DATED FEBRUARY 5, 1999 AND ORDER DATED MAY 6, 1999.
II
RESPONDENT COURT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN SUSTAINING THE
VALIDITY AND LEGALITY OF OWNERSHIP OF PRIVATE RESPONDENTS OVER
A PARCEL OF LAND COVERED BY TRANSFER CERTIFICATE OF TITLE NO.
134231. 6
On April 27, 2001, the CA rendered its decision denying due course and dismissing the
petition for certiorari. The appellate court held that petitioners’ May 30, 1997 Motion for
Reconsideration of the RTC decision did not comply with Section 5, Rule 15 of the Rules of
Court, as amended; hence, a mere scrap of paper which did not toll the running of the
reglementary period for appeal. Thus, the RTC decision had already become final and
executory. According to the appellate court, the RTC did not commit any grave abuse of
discretion in dismissing the petitioners’ appeal therein. As such, they were not entitled to a
writ of certiorari. The CA further held that the petitioners, through the negligence of the
OSG, failed to perfect their appeal. The CA opined that to nullify the title of respondents
over the subject property, the petitioners should have instituted a petition for reversion, and
not a petition for certiorari under Rule 65 of the 1997 Rules of Court, as amended.
The petitioners filed the instant petition for review on certiorari seeking to reverse and set
aside the decision of the CA. The petitioners allege that the appellate court committed
reversible error in finding and declaring that they failed to perfect their appeal from the
decision of the trial court within the reglementary period. The CA likewise allegedly erred
when it held that the RTC did not commit grave abuse of its discretion amounting to excess
or lack of jurisdiction when it dismissed the petitioners’ appeal via its February 5, 1999
Order. The petitioners contend that by dismissing their petition, the CA thereby sustained
the validity of the respondents’ title despite strong evidence that the said property is part of
the public forest and, therefore, inalienable. The petitioners further argue that even if their
notice of appeal was belatedly filed, the rule on perfection of appeals should be suspended
and that their appeal should be given due course on grounds of equity and substantial justice.
They submit that if their appeal is not reinstated, the Republic of the Philippines will be
deprived of a part of the Mt. Apo National Park consisting of no less than 145,682 square
meters. The petitioners cite the ruling of this Court in Republic v. Court of Appeals. 7
The petition is meritorious.
The Court agrees with the CA that the OSG was negligent when it filed on May 30, 1997 the
defective motion for reconsideration. Section 2, Rule 37 of the Rules of Court provides that
a motion for reconsideration or a motion for a new trial shall be made in writing stating the
ground or grounds therefor, a written notice of which shall be served by the movant on the
adverse party. Such written notice is that prescribed in Sections 4 and 5, Rule 15 of the Rules
of Court. Under Section 4, paragraph 2 of said rule, a notice of hearing on a motion shall be
served by the movant to all the parties concerned at least three days before the date of
hearing. Section 5 of the same rule requires that the notice of hearing shall be directed to the
parties concerned and shall state the time and place of the hearing of the motion. The
requirements, far from being merely technical and procedural as claimed by the petitioners,
are vital elements of procedural due process. 8 In a case of recent vintage, the Court took to task the OSG for its lackadaisical attitude and
Since the Rules of Court do not fix any period within which the said party may file his reply
or opposition, the trial court would have no way of determining whether the adverse party
agrees or objects to the motion and, if he objects, to hear him on his objection. Hence, the
need for the movant to set the time and place of hearing of its motion. 9 The requirements
entombed in Sections 4 and 5 of Rule 15 of the Rules of Court are mandatory and non-
compliance therewith is fatal and renders the motion pro forma; a worthless piece of paper
which the clerk of court has no right to receive and which the court has no authority to act
upon. 10 In cases of motions for a new trial or for the reconsideration of a judgment, the
running of the period for appeal is not tolled by the mere filing or pendency of said motion.
11
In this case, the petitioners, through the OSG, received on May 20, 1997 the decision of the
RTC; hence, they had until June 4, 1997 within which to file their motion for reconsideration
or for a new trial or to perfect their appeal from said adverse decision. Although the
petitioners filed the motion for reconsideration dated May 30, 1997 within the reglementary
period, said motion failed to comply with Sections 4 and 5 of Rule 15. The records show that
there is no proof that the respondents were actually served with a copy of said motion, as
required by Section 10, Rule 13 of the Rules of Court. The OSG did not bother to file an
amended motion for reconsideration containing the requirements of Sections 4 and 5 of Rule
15 of the Rules of Court.
The OSG offered no valid justification for its failure to comply with Sections 4 and 5, Rule
15 of the Rules of Court except the self-serving claim of Solicitor Evaristo M. Padilla that
his omission was sheer inadvertence, caused by heavy pressure of work in preparing
numerous pleadings and in the almost daily attendance in court for naturalization cases and
Page 25 of 106
those for nullity of marriage, among others. Other than the barefaced allegations of Solicitor
Padilla, he offered no specific details as to what pleadings he prepared and the hearings he
attended which prevented him from complying with Sections 4 and 5 of Rule 15 of the Rules
of Court. Moreover, if Solicitor Padilla was able to prepare within the reglementary period
the May 30, 1997 Motion for Reconsideration, he offered no valid justification for his failure
to incorporate in said motion or append thereto a simple one-paragraph notice of hearing
which could have been accomplished in a few minutes. What is so nettlesome is that the May
30, 1997 Motion for Reconsideration of petitioners was signed not only by Solicitor Padilla
but also by Assistant Solicitor General Aurora P. Cortes. Even if Solicitor Padilla, through
his negligence, failed to incorporate in said motion for reconsideration the requisite notice
of hearing, the Assistant Solicitor General should have noticed the omission before she
affixed her signature thereon and sought the immediate rectification thereof by Solicitor
Padilla before said motion was filed. She did not. She offered no valid explanation for her
faux pas either. The general rule is that the clients are bound by the mistakes and negligence
of their counsel. 12
complacency in the handling of its cases for the government and reminded the OSG
that:chanrob1es virtual 1aw library
. . . just like other members of the Bar, the canons under the Code of Professional
Responsibility apply with equal force on lawyers in government service in the discharge of
their official tasks. These ethical duties are rendered even more exacting as to them because,
as government counsel, they have the added duty to abide by the policy of the State to
promote a high standard of ethics in public service. Furthermore, it is incumbent upon the
OSG, as part of the government bureaucracy, to perform and discharge its duties with the
highest degree of professionalism, intelligence and skill and to extend prompt, courteous and
adequate service to the public. 13
Trite to state, this Court is impelled to do so anew in this case. The CA cannot be faulted for
ruling that having lost their right of appeal through the negligence of the OSG the petitioners
are not entitled to a writ of certiorari under Rule 65 of 1987 Rules of Civil Procedure. 14
However, prescinding from all the foregoing, this Court grants not only petitioners’ plea that
it suspend its own rule on the perfection of appeals but also directs the reopening of the trial
of the case for the parties to adduce their respective evidence. The Court excepts this case
from the said rule in the interest of justice, to avert a grave miscarriage of justice to the State
through the negligence of the OSG. The State has the right to adduce its evidence, testimonial
and documentary. Courts should proceed with caution so as not to deprive a party of this
right but, instead, afford every party litigant the amplest opportunity for the proper and just
disposition of its cause, free from the constraints of technicalities. 15 The trial court no less
declared in its January 28, 1999 Order that although the petitioners’ May 30, 1997 Motion
for Reconsideration was defective, the Rules of Court should be liberally construed only to
make a volte face and issue ex parte an order dismissing the appeal of the petitioners and 94 are SET ASIDE. The said Regional Trial Court is DIRECTED to reopen the trial to enable
canceling the hearing on the petitioners’ motion for reconsideration set on February 19, the parties to adduce their respective evidence. The Office of the Solicitor General is hereby
1999.chanrob1es virtua1 1aw 1ibrary directed to represent the petitioners during the trial. No costs.chanrob1es virtua1 1aw 1ibrary

What is involved in this case is a portion of land consisting of no less than 145,682 square SO ORDERED.
meters or less than fifteen hectares which they claim is part of the Mt. Apo National Park as
shown by the relocation survey of the panel of commissioners. The case is one of public Davide, Jr., C.J., Bellosillo, Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago,
interest. If the aforesaid property is, indeed, part of the forest reserve as claimed by the Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales and Azcuna, JJ.,
petitioners but their right to adduce their evidence is foreclosed by the dismissal of the concur.
present petition, the said property would be forever lost to the prejudice of the State. In
Republic v. Imperial, 16 this Court held that:chanrob1es virtual 1aw library Endnotes:

The need, therefore, to determine once and for all whether the lands subject of petitioner’s
reversion efforts are foreshore lands constitutes good and sufficient cause for relaxing
procedural rules and granting the third and fourth motions for extension to file appellant’s 1. Penned by Associate Justice Bienvenido L. Reyes, with Associate Justices Eubulo G.
brief. Petitioner’s appeal presents an exceptional circumstance impressed with public interest
Verzola and Marina L. Buzon, concurring.
and must then be given due course. 17
2. Penned by Judge Isaac G. Rabillo, Jr.
The trial court rendered judgment in favor of the respondents as it ordered the petitioners to
vacate that portion of the subject property occupied by them and to return possession thereof 3. Id. at 94–97.
to the respondents, without requiring the parties to adduce evidence on the factual issues of
(a) whether or not the property covered by the title of the respondents is part of the Mt. Apo
4. Rollo, p. 44.
National Park (a forest reserve); (b) whether or not the building constructed by the petitioners
is inside the forest reserve; and (c) whether or not the petitioners installed a generator unit in
5. Rollo, p. 110.
the respondents’ property.
6. Id. at 66.
It bears stressing that the trial court formed a panel of commissioners to conduct a relocation
survey of the subject property. The panel of commissioners found that 145,682 square meters
7. 292 SCRA 243 (1998).
which is a portion of the Mt. Apo National Park had been included in the respondents’ title
to the subject property. The trial court ignored this and did not even bother to receive the
8. Ibasan v. Republic of the Philippines, 97 SCRA 100 (1980).
parties’ respective evidence on the said report. The panel of commissioners was not even
called to testify on its findings. The appellate court will be able to review on appeal the 9. Manila Surety & Fidelity Co., Inc. v. Bath Construction & Company, 14 SCRA 435
decision of the trial court and ascertain whether there has been a travesty of justice to the
(1965).
gross prejudice of the State.
10. Pallada v. RTC of Kalibo, Aklan, Br. 1, 304 SCRA 440 (1999).
The respondents will not suffer substantial prejudice if the trial is reopened. The records
show that the trial court denied respondents’ motion for a writ of execution although the trial 11. Bank of the Philippine Islands of Kalibo, Aklan, Branch 1 v. Far East Molasses
court had dismissed the appeal of the petitioners. The respondents did not even assail the Corporation, 198 SCRA 689 (1991).
order of the trial court.
12. Adaza v. Barinaga, 104 SCRA 684 (1981).
IN LIGHT OF ALL THE FOREGOING, the decision of the Court of Appeals in CA-G.R.
SP No. 53440 is REVERSED AND SET ASIDE. The Orders of the Regional Trial Court of
13. Far East Shipping Company v. Court of Appeals, 297 SCRA 30 (1998).
Davao City, Branch 13, dated February 5, 1999 and May 5, 1999 in Civil Case No. 23,168-
Page 26 of 106
 "1 – This lease will be for a period of one (1) year only, from January 1, 1989 and will
14. National Irrigation Administration v. Court of Appeals, 318 SCRA 255 (1999). terminate on the 31st of December 1989 at a monthly rental of FOUR THOUSAND PESOS
(P4,000.00)." (Exhibit "1-A-1" De Mesa).
15. Sapad v. Court of Appeals, 348 SCRA 304 (2000).
As regards Lot 2948-B of the Daleon brothers, the Villafuertes were not as lucky. For,
16. 303 SCRA 127 (1999). instead of obtaining a lease renewal, what they received were demand letters from the
brothers' counsel ordering them to vacate the premises. Instead of complying therewith, the
17. Ibid. Villafuertes simply ignored the demand and continued operating the gas station (Exhibits
G.R. No. 134239 May 26, 2005 "3-B", "3-C" and "3-F", Daleon).

REYNALDO VILLAFUERTE and PERLITA T. VILLAFUERTE, petitioners, On May 9, 1989, in the Office of the Barangay Captain of Barangay Tres, Lucena City, a
vs. complaint for ejectment was filed by Gonzalo Daleon against the Villafuertes (Exhibit "6",
HON. COURT OF APPEALS, EDILBERTO DE MESA and GONZALO DALEON, Daleon). Evidently, no settlement was reached thereat, as shown by a certification to file
respondents. action issued by the lupon.

DECISION
CHICO-NAZARIO, J.:
This is a petition for review on certiorari of the Decision1 of the Court of Appeals in CA-G.R. CV
No. 41871 which affirmed, with modification, the decision2 of the Regional Trial Court, Branch 55,
Lucena City, in Civil Case No. 90-11 entitled, "Reynaldo C. Villafuerte and Perlita Tan Villafuerte
v. Edilberto De Mesa and Gonzalo Daleon."
The facts, as established by the Court of Appeals, follow:
Appelees – the spouses Reynaldo C. Villafuerte and Perlita Tan-Villafuerte – operated a
gasoline station known as Peewee's Petron Powerhouse Service Station and General
Merchandise on the premises of three (3) adjoining lots at the corner of Gomez Street and
Quezon Avenue in Lucena City. One of these lots, Lot No. 2948-A with an area of 575
square meters, is owned by several persons, one of whom is appellant Edilberto de Mesa,
while the other lot, Lot 2948-B with an area of 290 square meters, is owned by appellant
Gonzalo Daleon and his brother Federico A. Daleon. The remaining lot belongs to Mrs.
Anicia Yap-Tan, mother of appellee Perlita Tan-Villafuerte.
Appellants Edilberto de Mesa and Gonzalo Daleon acquired their respective lots subject to
the lease by Petrophil Corporation which had built thereon the gasoline station being
managed by the Villafuerte couple. When the lease of Petrophil Corporation expired on
December 31, 1988, the Villafuertes obtained a new lease on Lot No. 2948-A from appellant
Edilberto de Mesa for a period expiring on December 31, 1989, thus:.
Page 27 of 106
With their problem with the Daleon brothers far from over, the Villafuertes were apt for
another one; their lease contract with Edilberto de Mesa was not renewed when it expired
on December 31, 1989. Nonetheless, and duplicating what they had done in the case of the
property of the Daleon brothers, the spouses continued to operate their gasoline station and
other businesses on the lot of de Mesa despite the latter's demand to vacate.
What transpired next lays at the core of the instant controversy.
It appears that in the early morning of February 1, 1990, appellants Edilberto de Mesa and
Gonzalo Daleon, with the aid of several persons and without the knowledge of the
Villafuertes, caused the closure of the latter's gasoline station by constructing fences around
it.
The following day – February 2, 1990 – the Villafuertes countered with a complaint for
damages with preliminary mandatory injunction against both Edilberto de Mesa and
Gonzalo Daleon. Docketed in the court below as Civil Case No. 90-11, the complaint seeks
vindication for the alleged malicious and unlawful fencing of the plaintiffs' business
premises (Records, pp. 1-6).
Invoking their status as owners of the withheld premises, the defendants admitted in their
respective answers having caused the fencing of the plaintiffs' gasoline station thereat but
reasoned out that they did so on account of the plaintiffs' refusal to vacate the same despite
demands.
After hearing the parties in connection with the plaintiffs' application for a writ of
preliminary mandatory injunction, the lower court, in its order of May 23, 1990, ruled that
with the expiration of the lease on the defendants' property, the plaintiffs have no more right k) Stampitas (Religious Articles) and
to stay thereon and, therefore, cannot pretend to have a clear and unmistakable right to an other
injunctive writ and accordingly denied their application therefore (Rec., p. 186). In a Hermana Fausta Memorial
subsequent order of July 30, 1990, the same court denied the Villafuertes' motion for Foundation, Inc.
reconsideration (Rec., p. 237). printed matters entrusted in my care,
totally damaged by rain and termites 5,000.00
Later, with leave of court, the Villafuertes amended their complaint to allege, among others, l) Products lost in 4 underground
that the complained acts of the defendants cost them the following items of actual damages: tanks 249,805.00
m) Interest payments to RCBC (Rizal
a) Daily Sales (4000-5000 lts.) at Commercial Banking Corporation)
.35¢lt. for additional loan availed of to pay
mark-up, P1,750 x 270 days P472,500.00 off products acquired on credit from
b) Storage Fee of POL (Petroleum, Petron Corp. but were held inside gas
Oil & Lubricants) Recom 4 at 5% for station 172,490.53
100,000 lts. TOTAL -- P2,176,293.44
= 5000 lts. X 3 quarters x P6.00/lt. 90,000.00
c) Tires, Batteries, Accessories The amended complaint thus prayed for the following reliefs:
(TBA) Gen. Merchandise Sales,
P50,000/mo. 20% mark-Up = "WHEREFORE, it is respectfully prayed of this Hon. Court that judgment be rendered in
P10,000 x 9 months 90,000.00 favor of the plaintiffs:
d) Hauling of Petroleum products for
Peewee's Petron Powerhouse, 2 trips A - Immediately ordering the issuance of a writ of preliminary mandatory injunction against
weekly, P1,500 X 8 trips/mo. X 9 the defendants commanding them and any person acting in their behalf to forthwith remove
months 108,000.00 the fence they have constructed around the premises in question, and after trial making the
e) Hauling of Petroleum products for said injunction permanent.
military
7 trips/qtr., P1,500/trip x 21 (3 qtrs.) 31,500.00 B - Ordering the defendants to pay jointly and severally the plaintiffs the following:
f) Balloon Business (Sunshine
Balloons) 1) Moral damages equivalent to not less than P200,000.00;
P50,000.00 capital, P6,000/mo.
Income
2) Exemplary damages in the amount of P50,000.00;
TOTAL LOSS 200,000.00
g) Uncollected Debts 619,030.61 3) Attorney's fee in the amount of P60,000.00 plus twenty-five percent (25%) of the amount
h) Uncollected Checks 37,449.05 of damages to which plaintiffs are entitled; and
i) Merchandise Inventory as of July
25, 1990, 4) Litigation expenses in this instance in the amount of P10,000.00
P141,036.50 value, 50% damaged 70,518.25
j) Damaged Office Equipments 30,000.00

Page 28 of 106
 C - Requiring the defendants to pay jointly and severally actual damages representing their properties in order to remove petitioners from the premises in the light of the clear provision of
unrealized income and profits as well as losses referred to in paragraphs 10 and 12 hereof the Civil Code on the matter, to wit:
in such amount as may be shown in evidence during the hearing.
Art. 536. In no case may possession be acquired through force or intimidation as long as
D - Granting the plaintiffs such other just and equitable remedies to which they may be there is a possessor who objects thereto. He who believes that he has an action or a right to
entitled under the law and equity." (Orig. Rec., pp. 292-293). deprive another of the holding of a thing, must invoke the aid of the competent court, if the
holder should refuse to deliver the thing.
As later events disclosed, the defendants resumed possession of the premises in question on
January 25, 1991 (Rec., p. 333). Four (4) days later, they obtained a judgment by Having disregarded the plain requirement of the law, private respondents were held accountable to
compromise from the Municipal Trial Court in Cities, Lucena City in connection with the petitioners for the various damages prayed for by petitioners in their amended complaint.
suit for ejectment they earlier filed thereat against Petrophil Corporation. In that judgment,
Petrophil bound itself to remove the materials and equipment related to the operation of the In due time, private respondents filed their respective appeals before the Court of Appeals which
gasoline station on the subject premises. (Rec., pp. 355-356). affirmed, with modification, the decision of the trial court. The dispositive portion of the appellate
court's decision reads:
After the parties herein had presented their respective evidence, the lower court came out
with the decision now under review. Dated November 13, 1990, the decision dispositively WHEREFORE, the decision appealed from is MODIFIED by holding the appellants jointly
reads: and severally liable to the appellees for P50,000.00 as exemplary damages and for
P27,000.00 as actual damages, itemized as follows:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and
ordering the defendants Edliberto de Mesa and Gonzalo Daleon to pay, jointly and 1. detention of the records: P7,000.00;
severally, plaintiffs the following:
2. detention of the merchandise: P10,000.00;
1. Actual damages in the total amount of TWO MILLION ONE HUNDRED
SEVENTY SIX THOUSAND AND TWO HUNDRED NINETY THREE PESOS AND
3. value of the damaged merchandise and religious items: P5,000; and
FORTY FOUR CENTAVOS (P2,176,293.44);
4. detention of offices equipment: P5,000.00,
2. Moral damages in the amount of P200,000.00;
and by holding the appellees jointly and severally liable for rental to appellants Edilberto de
3. Exemplary damages in the amount of P50,000.00;
Mesa and Gonzalo Daleon in the amount of P5,500.00 and P39,000.00, respectively.

4. P50,000.00, as and for attorney's fees; and

The deficiency in the payment of the docket fees, to be computed by the clerk of court of the lower
court, shall constitute a lien on this judgment.5
5. Costs of suit.
In adjudging private respondents liable for damages, the Court of Appeals substantially ruled that:
SO ORDERED" (Rec., pp. 408-414).[3]
1. Private respondents could not invoke the doctrine of self-help contained in Article 429 of
The trial court ruled that with the continued occupation by petitioners of the two lots belonging to the Civil Code6 reasoning that the doctrine finds no application when occupation was
private respondents, despite the expiration of the lease contracts over the same, petitioners had effected through lawful means such as in this case where petitioners' possession of the lots
become "undesirable lessees."4 However, it was improper for private respondents to resort to fencing owned by private respondents was effected through lease agreements;

Page 29 of 106
2. Petitioners' continued unauthorized occupation of private respondents' properties may Dissatisfied with the ruling of the Court of Appeals, petitioners are now before us raising, in the
have been illegal, however, it was incumbent upon private respondents to abide by the main, the issue of whether the appellate court erred in substantially reducing the amount of damages
express provision of Article 536 of the Civil Code requiring recourse to the proper court earlier awarded to them by the trial court.
prior to ousting petitioners from their (private respondents') lots;
Petitioners insist that the appellate court "resorted to assumptions, inferences, surmises and
3. On the matter of insufficient docket fees paid by petitioners during the institution of this conjectures in disallowing certain items of actual damages like lost petroleum products valued at
action, the Court of Appeals declared that "whatever deficiency there may be in the docket P249,805.00, loss of value of merchandise detained for a quite a long time (sic) in the fenced premises
fees can be levied from the amount that may be awarded the appellees (petitioners herein)" 7 and uncollected debts as against the positive testimony of petitioner Perlita Villafuerte which
and that private respondents were already estopped from assailing the jurisdiction of the remained unrebutted and uncontested even on appeal." 9 They also allege that the list of unrealized
trial court; income, collectibles and damages prepared by petitioner Perlita was based and ably supported by
documents.
4. Private respondents could not invoke the principle of damnum absque injuria as this
doctrine only applies "when the loss or damage does not constitute a violation of a legal Petitioners also maintain that the Court of Appeals erred in finding that they came to court with
right or amounts to a legal wrong" 8 and not to this case where private respondents clearly "unclean hands," thus, depriving them of entitlement to moral damages. According to petitioners,
violated the law by unilaterally displacing petitioners from the subject premises; their continued occupation of private respondents' properties was based on their belief that their lease
contract with private respondent De Mesa was modified and extended whereas private respondent
5. On the issue of actual damages, the appellate court substantially reduced the amount of Daleon had verbally agreed to allow them to continue with their possession of his lot for as long as
actual damages awarded by the court a quo upon the ground that petitioners failed to the Petron Corporation's equipment remain in the premises.
substantiate their claims thereto except for the detention of petitioners' records of their
receivables, various merchandise, damaged goods, religious items, and office equipment; Finally, petitioners argue that the trial court was correct in awarding in their favor attorney's fees in
the amount of P50,000.00 as they were compelled to engage the services of counsel in order to seek
6. As for the propriety of awarding moral damages to petitioners, the Court of Appeals held vindication from the arbitrary action of private respondents.
that petitioners are not entitled to this form of damage as this case does not fall within Article
2219 of the Civil Code; After a considered review of the records of this case, we resolve to affirm, with modification, the
decision of the Court of Appeals.
7. Although Article 2219 of the Civil Code encompasses incidents which may fall within
the purview of Article 21 of the Civil Code, the latter, being a rule based on equity, Both the trial court and the Court of Appeals concluded that the lease contracts between petitioners
necessitates the claimant to come to court with clean hands which cannot be said of and private respondents over the latter's respective lots had already expired. There was also a
petitioners who continued to occupy the lands belonging to private respondents without the congruence of findings that it was wrong for private respondents to fence their properties thereby
authority of a subsisting lease agreement; putting to a halt the operation of petitioners' gasoline station. To this, we agree.

8. Private respondents are nevertheless liable for exemplary damages for having taken the Article 536 of the Civil Code previously quoted explicitly provides for the proper recourse of one
law into their own hands by fencing the premises of the Petron gasoline station operated by who claims to be entitled to the possession of a thing. When private respondents personally took it
petitioners instead of seeking redress from the proper court as mandated by Article 536 of upon themselves to evict petitioners from their properties, which act was in clear contravention of
the Civil Code; and the law, they became liable "for all the necessary and natural consequences of [their] illegal act." 10

9. Petitioners are liable to pay private respondents for the unpaid rentals from the time the As expected, petitioners instituted this action praying that private respondents be held liable for actual
lease agreements over the subject properties expired until 01 February 1990 when private damages, moral damages, exemplary damages, attorney's fees, and costs of litigation. We shall
respondents constructed the fence. resolve their right to these damages in seriatim.

Page 30 of 106
Actual or compensatory damages are those awarded in order to compensate a party for an injury or
loss he suffered. They arise out of a sense of natural justice and are aimed at repairing the wrong
done.11 Except as provided by law or by stipulation, a party is entitled to an adequate compensation
only for such pecuniary loss as he has duly proven.12 It is hornbook doctrine that to be able to recover
actual damages, the claimant bears the onus of presenting before the court actual proof of the damages
alleged to have been suffered, thus:
A party is entitled to an adequate compensation for such pecuniary loss actually suffered by
him as he has duly proved. Such damages, to be recoverable, must not only be capable of
proof, but must actually be proved with a reasonable degree of certainty. We have
emphasized that these damages cannot be presumed and courts, in making an award must
point out specific facts which could afford a basis for measuring whatever compensatory or
actual damages are borne.13
We have exhaustively perused the records of this case and thus conclude that petitioners have
miserably failed to proffer evidence capable of sustaining their plea for actual damages. We note that
when petitioner Perlita was directly examined with respect to her unrealized income14 for the
following matters, namely: daily sales of various petroleum products; 15 storage fee of RECOM IV's
petroleum, oil, and lubricants;16 sales of tires, batteries, accessories, and general merchandise;17
hauling of petroleum products for Peewee's Petron Powerhouse by the gasoline tankers owned by
petitioners;18 hauling of petroleum products for the military;19 and petitioner Perlita's balloon
business which she conducted within the premises of the fenced gasoline station, 20 she repeatedly
testified that she arrived at these claimed amounts based on the average of her sales for the month of
January 1990, the number of trips undertaken by their tankers, and average volume of the gasoline
deposit for RECOM IV. Her testimony on these matters went as follows:
Atty. CAMALIGAN:
May I ask that this List of Unrealized Income, Collectibles and Damages from
Febrauary 1, 1990 to October 30, 1990 be marked as Exhibit AA.
...
Q: Will you explain to the court why this list you made is up to October 30, 1990?
A: I prepared this list until October 10, 1990 in preparation for our first hearing sometime
in November, sir.
Page 31 of 106
Q: I am calling your attention to No. 1 which is I quote, "Daily Sales (4,000 to 5,000 liters)
at P0.035 per liter mark up – P1,750.00 by 270 days amounting to P472,500.00" will you
explain to the court how you incurred this damage?
(A): After the closure of our gasoline station that was February 1, 1990 and then until
September, 1990 is nine (9) months and that is 270 days. I went thru my sales for January
and the average sales (is) 4,000 to 5,000 liters and so for our daily sales of 4,000 to 5,000
liters sale at P0.35 centavos mark-up, I got P1,750.00 daily so that is times 270 days until
September 1990, the total is P472,500.00, sir.
COURT: That is gross?
A: Yes, your Honor.
COURT: What about the net income to be realized?
A: Your Honor, we will deduct from here the salaries and wages of the gasoline boys and
electric bill, maybe P0.25 centavos per liter.
COURT: Proceed.
Q: Is the mark-up of P0.35 centavos per liter thru (sic), irrespective of amount of gasoline
or value of gasoline per liter?
A: We have different kinds of petroleum products, extra, regular and diesel and the average
mark-up is thirty-five (35) centavos.
...
Q: Calling your attention to No. 2 in the list which refers to storage fee of petroleum, oil
and lubricant from RECOM IV amounting to a total of ninety thousand pesos (P90,000.00)
will you kindly explain how you arrived at this amount?
A: The military, PC/INP RECOM IV which is stationed at Camp Nakar has entered into an
agreement with us to deposit their petroleum, oil and lubricant for every quarter, sir.
Q: Under what condition was that deposit made for?
A: That they will be able to withdraw the said products for a certain storage fee, sir, and the Q: Do you own them?
storage fee is 5% which would cover disposing the products and also certain percent of
evaporation. A: Yes, sir.

COURT: Five percent of what?
A: Five percent of the number of liters deposited with us so that if they deposited one
hundred thousand (100,000) liters we are paid in terms of gasoline also, five thousand
(5,000) liters.
Q: In item No. 6 you listed Balloon Business under Sunshine Balloon, you have given a
total amount of two hundred thousand (P200,000.00) pesos as your losses here, will you
please explain to the Court how you incurred these losses?
...

Q: What was the average volume of deposit made by the RECOM IV? A: Inside the gasoline station we also operate a balloon business and we have invested fifty
thousand capital on this balloon business. This business has been thriving for several years
A: It is on a quarterly basis, that is one hundred thousand (100,000) liters quarterly, sir. and we usually incur six (6) thousand monthly income from said business, sir. Now that the
gasoline station was closed with all the equipments of the balloon business inside also, we
Q: On item 3 referring to tires, batteries, accessories, general merchandise is listed an have totally lost the market for the balloon business and I feel that two hundred thousand
amount of ninety thousand (P90,000.00) pesos as your losses, will you please explain how (P200,000.00) pesos would have to be paid for the total loss of the business. 21
you incurred such losses?
Noticeably, petitioner Perlita's testimony was replete with claims that her unrealized income, as far
A: Aside from petroleum products we also sell accessories for the motoring public and they as these items were concerned, were based on the "average." Except, however, for the record of daily
22
are in kinds like tires, batteries and some additives, how do you realize income out of this? petroleum sales for the month of January 1990, petitioners failed to present any evidence that would
(sic) sufficiently establish their mean income from these business undertakings. In the absence of any
corroborative proof, this Court is not bound to award in petitioners' favor the actual damages for
items a, b, c, d, e, and f of her alleged unrealized income. Nor can we give premium on the summary
A: We have 20% mark-up on the merchandise and last January 1990 I average fifty thousand
of daily petroleum sales for January 1990 prepared by petitioner Perlita as the same is not supported
(P50,000.00) pesos gross income on the general merchandise so for 20% mark-up that is
by any competent evidence; at best, said exhibit is self-serving.
more or less ten thousand (P10,000.00) pesos and for nine (9) months that is ninety thousand
(P90,000.00) pesos, sir.
Anent the actual damages claimed for the deterioration of the items which remained inside
petitioners' office, petitioner Perlita testified that when they were able to retrieve the merchandise
Q: In item No. 4 appearing in your list you listed a total amount of one hundred eight
from the gasoline station, they noticed that most of them were already defective and so they
thousand (P108,000.00) pesos, for hauling of petroleum products for Peewee's Petron
"valued"23 the damages thereto at seventy (70%) of their total value. As for the items entrusted to her
Powerhouse, will you explain to the court this hauling?
by the Hermana Fausta Memorial Foundation of which she was the executive vice president at that
time, petitioner Perlita alleged that the amount of five thousand pesos represents the production cost
A: My husband and I run a fleet of gasoline tankers and they are hauling petroleum products of these materials which the foundation purportedly paid to Imprenta Lucentina. As regards the
for our gasoline stations and for the military accounts. We average two (2) deliveries every amount of P30,000.00 sought as actual damages for the damaged office equipment, petitioner Perlita
week so this is already a net of one thousand five hundred (P1,500.00) pesos per delivery. stated before the trial court that she arrived at this figure after computing the acquisition costs of
It is two thousand eight hundred (P2,800.00) pesos per delivery and deducting the salaries these equipment which she "approximated" 24 to be P35,000.00.
of the drivers, the fuel consumption and the depreciation of the tankers, we incur a net of
one thousand five hundred (P1,500.00) pesos per trip. Every month we incur at least eight
Evidently, in establishing the amount of actual damages for the merchandise inventory, office
(8) trips and that is one thousand five hundred (P1,500.00) pesos times eight (8) trips times
equipment, and materials owned by the Hermana Fausta Memorial Foundation, petitioners relied
nine (9) months and I got one hundred eight thousand (P108,000.00) pesos total.
solely on their own assessment of the prices of these items as well as the damage thereto purportedly
occasioned by the fencing of the gasoline station. This is clearly demonstrated by the inconsistent

Page 32 of 106
stance of petitioner Pertlita with regard to the percentage of damaged merchandise stored in the settle their obligations but were prevented from doing after the 01 February 1990 incident. They
gasoline station, thus: therefore would like to hold private respondents accountable for these receivables. This, we can not
grant.
ATTY. CAMALIGAN:
The records indicate that petitioners filed before the trial court a motion to allow them to enter the
Q: I noticed that the total appearing on page 3 of your merchandize inventory is one hundred gasoline station subject of this dispute in order to make an inventory of their property that were
28
forty one thousand thirty six pesos and fifty centavos (P141,036.50) only while in your list, locked inside and to remove those they needed for their personal use. Among the items removed
29
it is ninety eight thousand seven hundred twenty five pesos and fifty five centavos from the gasoline station were the receipts evidencing petitioners' receivables from their customers
30
(P98,725.55), will you please explain the same? as well as the 17 uncollected checks. Obviously, after the court-approved ocular inspection
conducted on 24 July 1990 and 25 July 1990, petitioners were already in possession of the evidences
of credit of their customers. There was nothing, not even the closure of their gasoline station, which
WITNESS:
stood in the way of petitioners' exerting earnest efforts in going after their debtors.
A: This list with the total amount of one hundred forty one thousand thirty six pesos and
Petitioners likewise seek to be compensated for the value of the petroleum products allegedly lost
fifty centavos (P141,036.50) represent the total value of all the merchandize but then the
from the four underground tanks between the period 01 February 1990 until 25 July 1990 when an
reason why we have the ninety eight thousand seven hundred twenty five pesos and fifty
ocular inspection was conducted within the disputed property. According to petitioners, after they
five centavos (P98,725.55) figure is, this represents seventy percent (70%) of the total
compared the volume of the tanks' contents as of the evening of 31 January 1990 with the dipstick
amount because when we retrieved the merchandize, we noticed that most of them are
already defective, so we valued the damages only seventy percent (70%) of the total value reading on 25 July 1990, they discovered that they had lost thousands of liters of petroleum products.
because some of them could still be sold, sir. On this point, we quote with approval the conclusion of the Court of Appeals, to wit:

ATTY. CAMALIGAN:
Q: I noticed there is a correction in Item No. 9 from ninety percent (90%) to seventy percent
(70%). When did you make that correction?
A: Only last December 30, 1990 after we have retrieved all the merchandize. I prepared this
list on October 31, 1990 not realizing the extent of the real damages to the merchandize but
when we retrieved them last December 29 and upon inspection, most of the motor oil have
already leaked because of the plastics that were exposed to sun and rain, so we changed the
estimate to seventy percent (70%), sir.25
Such arbitrary estimations run afoul with our consistent pronouncement that actual or compensatory
damages cannot be presumed but must be proved with reasonable degree of certainty. 26 A court
cannot simply rely on speculation, conjecture or guesswork as to the fact and amount of damages,
but is required to depend upon competent proof that the claimant had suffered and on evidence of the
actual amount thereof.27 Failing in this regard, we resolve to delete the award of actual damages
rendered by the Court of Appeals with respect to these items.
Similarly, we rule that petitioners are not entitled to the total amount of the 17 checks issued in their
favor by their customers and to the amount of uncollected debts owed to them by their patrons.
Petitioners maintain that their customers were used to coming to their gasoline station in order to
Page 33 of 106
The appellees31 failed to adduce convincing evidence that appellants are the ones
responsible for the loss of the petroleum products in the four (4) underground tanks (item
"1," paragraph 10 of Amended Complaint). Although the premises which were fenced by
the appellants32 adjoin the lot of Perlita's mother and are even secured by appellees' guard,
the appellees did not present anyone to testify on the fact of loss of said gasoline products.
Instead, they chose to rely on Perlita's bare assertion that she lost P249,805.00 in terms of
petroleum products that allegedly disappeared. The sheer volume of the missing fuel makes
it difficult for the pilferer to commit the deed without attracting attention. An
unsubstantiated claim of loss, more so of such a dimension, cannot merit an award
therefor.33
Finally, with respect to the interest payments to the Rizal Commercial Banking Corporation
(RCBC), petitioners maintain that because of the fencing of their gasoline station on 01
February 1990, they were forced to obtain a loan from RCBC in order to pay off their
obligations to different suppliers. This contention was effectively refuted by petitioner
Perlita herself when, during her re-direct examination, she admitted that the loan granted by
the RCBC was intended for all the businesses that she and her husband, petitioner Reynaldo,
were maintaining.34 It would, therefore, be iniquitous to charge private respondents for the
interest payments for this loan the proceeds of which were utilized to finance petitioners'
various businesses and not solely the settlement of petitioners' obligations to the suppliers
of Peewee's Petron Powerhouse. In the absence of actual proof as to how much of the RCBC
loan was really used to pay the creditors of the closed gasoline station, this Court can not
 affirm petitioners' right to be compensated for the amount of interest payments they have
made to the RCBC.
We find, however, that an award of temperate damages to petitioners is in order. In lieu of actual
damages, temperate damages, which are more than nominal but less than compensatory damages,
may be awarded where the court finds that some pecuniary loss had been suffered by the claimant
but its amount cannot be proved with certainty. Undoubtedly, pecuniary loss had been inflicted upon
petitioners in this case, however, due to the insufficiency of evidence before us, we cannot place its
amount with certainty. In this regard, we find the amount of P50,000.00 to be sufficient.
Petitioners also assail the removal by the Court of Appeals of the moral damages previously ordered
by the trial court. They argue that contrary to the findings of the appellate court, they came to court
with "clean hands" as they believed that the lease contract with private respondent De Mesa was
modified and extended. At the same time, they contend that they had a verbal understanding with
private respondent Daleon wherein the latter permitted them to remain in his lot for as long as Petron
Corporation was not removing its equipment. Further, petitioners contend that under Article 2219 of
the Civil Code, this Court had awarded moral damages in instances where the claimants were victims
of capricious, wanton, oppressive, malicious, and arbitrary acts such as petitioners in this case. On
this issue, we agree in the findings of the Court of Appeals that:
The Court must have to disallow the lower court's award of moral damages. The concept of
moral damages, as announced in Article 2217 of the Civil Code, is designed to compensate
the complainant for his physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury
occasioned by the defendant's wrongful act or omission. Article 2219 of the same Code
specifies the cases where moral damages may be awarded, to wit:
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
Page 34 of 106
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34,
and 35.
The parents of the female seduced, abducted, raped or abused, referred to in No. 3
of this article, may also recover moral damages.
The spouse, descendants, ascendants, and brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order named.
Noticeably, none of the foregoing instances has any relevant bearing to the case at bench.
While Article 2219 comprehends the situation in Article 21 of the Code, whereunder "[A]ny
person who willfully causes loss or injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter for the damages," the appellees
cannot benefit from it. The right to recover moral damages under Article 21 is based on
equity, and those who come to court to demand equity must come with clean hands
(Garciano v. Court of Appeals, 212 SCRA 436 citing Padilla, CIVIL CODE
ANNOTATED, Vol. 1, 1975 Ed., p. 87). The appellees knew that their lease had expired.
Yet, despite such awareness, they persisted in their unauthorized occupancy of appellants'
property. Being partly responsible for their present predicament which is very much within
their power to avoid, appellees cannot receive compensation for whatever mental anguish
or suffering they went thru.35
Similarly, we uphold the award of P50,000.00 as exemplary damages in order to deter similarly
minded individuals from pursuing the course of action taken by private respondents. The law on this
matter is clear: "(h)e who believes himself entitled to deprive another of the possession of a thing, so
long as the possessor refuses delivery, must request the assistance of the proper authority."36
Petitioners' arbitrary conduct of fencing their properties under the claim that they own the same
brazenly violates the law and circumvents the proper procedure which should be obtained before the
court.

This Court likewise adopts the conclusion reached by the Court of Appeals that petitioners do not
deserve the award of attorney's fees for it was precisely their unfounded insistence to stay on private
respondents' properties that precipitated this suit.
WHEREFORE, the Decision of the Court of Appeals dated 31 March 1998, which modified the
Decision dated 13 November 1992 of the Regional Trial Court, Branch 55, Lucena City, and its
Resolution of 17 June 1993 denying reconsideration are hereby MODIFIED as follows:
6
Article 429 of the Civil Code provides: "The owner or lawful possessor of a thing has the
right to exclude any person from the enjoyment and disposal thereof. For this purpose, he
may use such force as may be reasonably necessary to repel or prevent an actual or
threatened unlawful physical invasion or usurpation of his property."
7
Rollo, p. 30; citing the case of Pantranco North Express, Inc. v. Court of Appeals, G.R.
No. 105180, 05 July 1993, 224 SCRA 477.

8
1. The award of Twenty-Seven Thousand Pesos (P27,000.00) as actual damages in favor of Ibid.; citing Globe Mackay and Radio Corporation v. Court of Appeals, G.R. No. 81262,
petitioners Reynaldo and Perlita Villafuerte is deleted; and 25 August 1989, 176 SCRA 778.

9
2. Private respondents Edilberto De Mesa and Gonzalo Daleon are held jointly and severally Rollo, p. 10; Petition for Review, p. 8.
liable to pay petitioners the amount of Fifty Thousand Pesos (P50,000.00) as temperate
damages. 10
Municipality of Moncada v. Cajuigan, No. 7048, 12 January 1912, 21 Phil. 194.

The remainder of the same Decision and Resolution of the Court of Appeals are hereby AFFIRMED. 11
Terminal Facilities and Services Corporation v. Philippine Ports Authority, G.R. Nos.
No costs. 135639 and 135826, 27 February 2002, 378 SCRA 82.

SO ORDERED. 12
Article 2199, Civil Code.

Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur. 13

Del Mundo v. Hon. Court of Appeals, et al., G.R. No. 104576, 20 January 1995, 240
Tinga, J., out of the country. SCRA 348.

14
For the period 01 February 1990 up to 30 October 1990.

Footnotes 15
Item a, paragraph 10 of the Amended Complaint; Records, p. 290.

1
Penned by then Associate Justice Cancio C. Garcia (now a member of this Court) with 16
Item b, paragraph 10 of the Amended Complaint; Ibid.
Associate Justices Conchita Carpio Morales (now also a member of this Court) and Portia
Aliño Hormachuelos concurring. 17
Item c, paragraph 10 of the Amended Complaint; Ibid.
2
Penned by Judge Eleuterio F. Guerrero. 18
Item d, paragraph 10 of the Amended Complaint; Ibid.
3
Rollo, pp. 22-27. 19
Item e, paragraph 10 of the Amended Complaint; Ibid.
4
Records, p. 413. 20
Item f, paragraph 10 of the Amended Complaint; Ibid.
5
Rollo, p. 37. 21
TSN, 10 January 1991, pp. 18-28.

Page 35 of 106
 22
Exhibits "P," "P-1," and "P-2." CANDELARIA Q. DAYOT, Petitioner, v. SHELL CHEMICAL COMPANY, (PHILS.),
INC., Respondent.
23
TSN, 11 January, 1991, p. 20.
DECISION
24
TSN, 11 January 1991, p. 62.
AUSTRIA-MARTINEZ, J.:
25
TSN, 11 January 1991, pp. 19-21.
Assailed in the Petition for Review on Certiorari before the Court is the July 30, 2002
1
26
Philippine Airlines, Inc. v. Court of Appeals and Pedro Zapatos, G.R. No. 82619, 15 Decision of the Court of Appeals (CA) in CA-G.R. SP. No. 70696 nullifying the January 8,
September 1993, 226 SCRA 423. 2002 Amended Order,2 January 10, 2002 Alias Writ of Possession,3 January 10, 2002 Notice
to Vacate4 and April 12, 2002 Order,5 which were all issued by the Regional Trial Court
6
27
British Airways, Inc. v. The Honorable Court of Appeals, et al., G.R. No. 92288, 09 (RTC) of Iloilo, Branch 29; and the CA December 23, 2002 Resolution denying herein
petitioner's Motion for Reconsideration.
February 1993, 218 SCRA 699.

28 The facts of the case are as follows:

Motion dated 17 July 1990; Records, p. 228.

29 On April 20, 1982, Panay Railways, Inc. (PRI) executed a real estate mortgage contract over
TSN, 10 January 1991, p. 34.
six parcels of land located in Lapuz District, Iloilo City in favor of Traders Royal Bank
30
(TRB) for purposes of securing its loan obligations to TRB. 7 The subject properties are
TSN, 11 January 1991, p. 16. denominated as follows: Lot No. 3834, covered by Transfer Certificate of Title (TCT) No.
T-45727; Lot No. 1-A, covered by TCT No. T-45728; and Lot Nos. 6153, 6156, 6158 and
31
Petitioners herein. 6159, all covered by TCT No. T-58200. PRI failed to pay its loan. As a consequence, the
mortgaged properties were foreclosed and sold at public auction to TRB as the highest
32 bidder. PRI failed to redeem the foreclosed properties. Hence, TRB consolidated its
Private respondents herein.
ownership over the subject parcels of land and, thereafter, certificates of title were issued in
33
Rollo, p. 34. its name, to wit: TCT No. T-84233, which canceled TCT No. T-45728; TCT No. T-84234,
which canceled TCT No. T-45727; and TCT Nos. T-84235, T-84236, T-84237 and T-84238,
34 all of which canceled TCT No. T-58200.
TSN, 31 January 1991, pp. 58-59.

35 Thereafter, TRB filed a Petition for Writ of Possession with the RTC of Iloilo City, docketed
Rollo, pp. 34-35.
as LRC CAD. REC. NO. 1 ILOILO CITY and LRC CAD. REC. NO. 9616 ILOILO CITY. 8
In its Order dated October 22, 1990, the trial court granted the petition and ordered the
36
Yuson and De Guzman v. Diaz, No. 17557, 22 July 1921, 42 Phil. 27. issuance of a writ of possession in favor of TRB. 9 However, the writ was not fully
implemented.

On November 20, 1990, TRB sold to spouses Edmundo and Candelaria Dayot (Spouses
Dayot), by virtue of a Deed of Absolute Sale, five parcels of land which are portions of Lots
3834, 1-A and 6153.

[G.R. NO. 156542 : June 26, 2007] Subsequently, on February 5, 1991, Candelaria Dayot (petitioner) filed a Supplemental
Pleading before the RTC of Iloilo City, praying that she, being the transferee of all the rights
Page 36 of 106
and interests of TRB over the parcels of land subject of the Petition for Writ of Possession
filed by the latter, be substituted as the new petitioner in LRC CAD. REC. NOS. 1 and 9616,
and that an alias writ of possession be issued in her favor. The trial court granted petitioner's
prayer in its Order dated March 12, 1991.10 On April 1, 1991, the RTC issued an Alias Writ
of Possession in favor of herein petitioner.11
On August 24, 1994, the spouses Dayot filed with the RTC of Iloilo City, a complaint for
Recovery of Ownership and Possession, Annulment of Documents, Cancellation of Titles,
Reconveyance and Damages against TRB, Petron Corporation (Petron) and herein
respondent Shell Chemical Company (Phil.), Inc. (Shell), praying that Shell be directed to
vacate the portion of Lot No. 6153 which it actually possesses and for both Petron and Shell
to surrender ownership and possession of portions of parcels of lands covered separately by
TCT Nos. T-47484 and T-94116. The case was docketed as Civil Case No. 21957.12
On August 21, 1997, while Civil Case No. 21957 was pending resolution, herein petitioner
filed in LRC CAD. REC. NOS. 1 and 9616 an Amended Supplemental Motion for the
Issuance of Writ of Possession, praying that Shell be ejected from the portion of Lot 6153
which it actually possesses.
Shell lodged an Opposition to petitioner's Amended Supplemental Motion arguing, among
others, that petitioner is guilty of forum shopping as it seeks the same relief being sought in
Civil Case No. 21957 and that the parcels of land sold to petitioner do not include the portion
of Lot 6153 being possessed by Shell.13
On May 7, 1999, the RTC of Iloilo, Branch 30 issued an Order denying herein petitioner's
Motion for the Issuance of a Writ of Possession, insofar as Shell is concerned.14
Despite the issuance of the above-mentioned Order, petitioner filed two successive motions
praying for the issuance of an alias writ of possession. Shell opposed these motions.
Subsequently, the petition for the issuance of a writ of possession was re-raffled to Branch
29 of the RTC of Iloilo, as the presiding judge of Branch 30 inhibited himself from hearing
the case.
On January 8, 2002, Branch 29 promulgated an Amended Order, the dispositive portion of
which reads:
Wherefore, let an Alias Writ of Possession issue on the affected portions of Lots 3834, 1-A
and 6153, all situated in the City of Iloilo, with a total land area of 14,940 sq. meters occupied
by Shell and 17,000 sq. meters occupied by Petron and to place and install petitioner
Candelaria Dayot in possession thereof.
Page 37 of 106
Mr. Redentor Rodriguez, Sheriff IV of this Court is hereby directed to implement this order.
SO ORDERED.15
On January 10, 2002, the Branch Clerk of Court of RTC Iloilo, Branch 29, issued an Alias
Writ of Possession.
On even date, the Sheriff served upon Shell a Notice to Vacate.
Thereafter, Shell and Petron moved for the reconsideration of the January 8, 2002 Order of
the RTC but the trial court denied it via its Order dated April 12, 2002.
Shell then filed a Petition for Certiorari and prohibition with the CA praying for the
nullification of the January 8, 2002 and April 12, 2002 Orders of RTC Iloilo, Branch 29, as
well as the Alias Writ of Possession and Notice to Vacate both dated January 10, 2002. The
petition also sought to permanently enjoin the RTC from enforcing the assailed orders and
processes and from acting and conducting further proceedings in the subject case.
On July 30, 2002, the CA promulgated its presently assailed Decision, the dispositive portion
of which reads as follows:
WHEREFORE, premises considered, the Petition is GRANTED and the questioned four (4)
rulings of the court a quo are hereby declared NULL and VOID. No costs.
SO ORDERED.16
Petitioner's Motion for Reconsideration was denied by the CA in its Resolution dated
December 23, 2002.
Hence, herein Petition for Review on Certiorari, anchored on the following grounds:
1. THAT RESPONDENT IS BARRED FROM FILING THE PETITION FOR
CERTIORARI WITH THE COURT OF APPEALS, ASSAILING THE AMENDED
ORDER DATED JANUARY 8, 2002 OF HON. RENE B. HONRADO, PRESIDING
JUDGE, REGIONAL TRIAL COURT, ILOILO CITY, BRANCH 29, AFTER
RESPONDENT LOST ITS RIGHT TO APPEAL BECAUSE A SPECIAL CIVIL ACTION
FOR CERTIORARI IS NOT AND CANNOT BE A SUBSTITUTE FOR A LOST OR
EXPIRED APPEAL THUS, THE DECISION PROMULGATED JULY 30, 2002 AND
THE RESOLUTION PROMULGATED DECEMBER 23, 2002 OF THE HONORABLE
COURT OF APPEALS WERE ISSUED CONTRARY TO PREVAILING
JURISPRUDENCE AND THAT SAID COURT DECIDED A QUESTION OF
SUBSTANCE NOT IN ACCORD WITH LAW AND APPLICABLE DECISIONS OF
THIS HONORABLE SUPREME COURT AND THE ACCEPTED AND USUAL
COURSE OF JUDICIAL PROCEEDINGS.
2. THAT PETITIONER IS ENTITLED TO THE POSSESSION OF THE ENTIRE LOTS
3834, 1-A, 6153, 6156, 6158 AND 6159 INCLUDING THE AREA OF 14,940 SQ.
METERS OCCUPIED BY RESPONDENT WHICH AREAS ARE PORTIONS OF LOTS
6153, 3834 AND 1-A, OCCUPATION THEREOF BY RESPONDENT BEING THAT OF
MERE INTRUDER OR TRESSPASSER.17
In her first assigned error, petitioner argues that respondent should have been barred from
filing a special civil action for certiorari before the CA because this recourse is available
only when there is no speedy and adequate remedy in the course of law. Petitioner further
argues that respondent should have appealed the Amended Order of the RTC dated April 12,
2002, but it did not. Petitioner avers that respondent can no longer resort to the filing of a
Petition for Certiorari because this remedy is not a substitute for a lost appeal.
Anent the second assigned error, petitioner claims that she is not guilty of forum shopping,
as Civil Case No. 21957 involves the issue of ownership while the present case is for the
recovery of possession; and that the subject matter of the present case is different from that
of Civil Case No. 21957. Even granting that the same parcels of land are involved in these
cases, petitioner argues that a writ of possession can still be validly issued and implemented
in consonance with the rule that proceedings incident to extra-judicial foreclosure of
mortgages to resolve the possession of third-party claimants may proceed independently of
the action which said claimants may bring to enforce or protect their claim of ownership over
the property.
Lastly, petitioner asserts that respondent's TCT No. T-47484 refers to a lot which is different
from those being contested in the instant case.
In its Comment, respondent contends that it did not err in resorting to the remedy of filing a
Petition for Certiorari with the CA. It argues that even when appeal is available as a proper
remedy, the Supreme Court will allow a writ of certiorari if the petition appears to be
genuinely meritorious or if filed on the basis of a patent, capricious and whimsical exercise
of discretion by a trial judge, or when an appeal will not promptly relieve petitioner from the
injurious effects of the disputed orders; that the Amended Order of the RTC dated January
8, 2002 collaterally attacked respondent's title over the disputed property; that petitioner is
not a buyer in good faith; that, as a transferee, petitioner merely acquired the rights and
interests that TRB had by reason of the foreclosure of the mortgage made in its favor; that
the contested Alias Writ of Execution is barred by res judicata and litis pendentia; and that
Page 38 of 106
respondent has the right to possess the disputed property as it has satisfactorily shown that it
is the registered owner of and has title over the subject property.
The Court finds the petition bereft of merit.
It bears to emphasize at the outset that the present Petition for Review arose by reason of the
special civil action for certiorari filed by respondent Shell with the CA questioning the
January 8, 2002 Amended Order, Alias Writ of Possession, Notice to Vacate and the April
12, 2002 Order issued by the RTC of Iloilo, Branch 29. Accordingly, any discussions on the
issues raised as well as rulings by this Court in the present petition apply only insofar as the
claim of respondent Shell is concerned.
As to the first assigned error, it is true that as a rule while certiorari as a remedy may not be
used as a substitute for an appeal, especially for a lost appeal, this rule should not be strictly
enforced if the petition is genuinely meritorious.18 It has been held that where the rigid
application of the rules would frustrate substantial justice, or bar the vindication of a
legitimate grievance, the courts are justified in exempting a particular case from the operation
of the rules.19 The Court has given due course to petitions for certiorari although appeal is
the proper remedy where the equities of the case warranted such action, mindful that
dismissals based on technicalities are looked upon with disfavor. 20
In the present case, the Court finds no error on the part of the CA in giving due course to the
Petition for Certiorari filed by respondent as its case is genuinely meritorious for reasons
that will be discussed forthwith.
As to the second assigned error, the Court agrees with petitioner that she is not guilty of
forum shopping.
There is forum shopping when a party avails himself of several judicial remedies in different
courts, simultaneously or successively, all substantially founded on the same transactions
and the same essential facts and circumstances, and all raising substantially the same issues
either pending in or already resolved adversely by some other courts. 21
The test to determine whether a party violated the rule against forum shopping is whether
the elements of litis pendentia are present, or whether a final judgment in one case will
amount to res judicata in another.22 In other words, when litis pendentia or res judicata does
not exist, neither can forum shopping exist.23
The requisites of litis pendentia are: (a) the identity of parties, or at least such as representing
the same interests in both actions; (b) the identity of rights asserted and relief prayed for, the
relief being founded on the same facts; and (c) the identity of the two cases such that
judgment in one, regardless of which party is successful, would amount to res judicata in the
other.24
On the other hand, the elements of res judicata, also known as "bar by prior judgment," are:
(1) the former judgment must be final; (b) the court which rendered it had jurisdiction over
the subject matter and the parties; (c) it must be a judgment on the merits; and (d) there must
be, between the first and second actions, identity of parties, subject matter, and causes of
action.25
It bears to note that the proceedings conducted subsequent to the filing of a petition for the
issuance of a writ of possession are ex parte and summary in nature. The order for the
issuance of the writ is simply an incident in the transfer of title in the name of the petitioner. 26
Hence, such order cannot be said to be a judgment on the merits, i.e., one rendered after a
consideration of the evidence or stipulations submitted by the parties at the trial of the case.
Thus, in the present case, any order or decision of the RTC in LRC CAD. REC. NOS. 1 and
9616 cannot be considered as determinative of the merits of Civil Case No. 21957.
Moreover, the aforementioned cases cannot be said to be identical as the basic issue in LRC
CAD. REC. NOS. 1 and 9616 is possession while in Civil Case No. 21957 the issue raised
is essentially that of ownership of the disputed lots.
Based on the foregoing, there can be no litis pendentia or res judicata. Since neither litis
pendentia nor res judicata exists in the instant case, petitioner may not be held guilty of
forum shopping.
Nonetheless, the Court finds that under applicable laws and jurisprudence, respondent cannot
be ejected from the property by means of an ex-parte writ of possession.
Article 433 of the Civil Code states:
Art. 433. Actual possession under claim of ownership raises a disputable presumption of
ownership. The true owner must resort to judicial process for the recovery of the property.
Under the aforequoted provision, one who claims to be the owner of a property possessed by
another must bring the appropriate judicial action for its physical recovery. The term "judicial
process" could mean no less than an ejectment suit or reivindicatory action, in which the
ownership claims of the contending parties may be properly heard and adjudicated. 27 In the
present case, petitioner had already complied with this procedure by filing Civil Case No.
21957.
Page 39 of 106
The ex-parte petition for issuance of a possessory writ filed by petitioner's predecessor, TRB,
in LRC CAD. REC. NOS. 1 and 9616, strictly speaking, is not the kind of "judicial process"
contemplated above. Even if the same may be considered a judicial proceeding for the
enforcement of one's right of possession as purchaser in a foreclosure sale, it is not an
ordinary suit filed in court, by which one party "sues another for the enforcement or
protection of a right, or the prevention or redress of a wrong." 28
The second paragraph of Section 33, Rule 39, of the Rules of Court relating to the right of
possession of a purchaser of property in an extra-judicial foreclosure sale provides:
Sec. 33. Deed and possession to be given at expiration of redemption period; by whom
executed or given.
xxx
Upon the expiration of the right of redemption, the purchaser or redemptioner shall be
substituted to and acquire all the rights, title, interest and claim of the judgment obligor to
the property at the time of levy. The possession of the property shall be given to the purchaser
or last redemptioner by the same officer unless a third party is actually holding the
property adversely to the judgment obligor. (emphasis supplied)
Thus, in Barican v. Intermediate Appellate Court,29 this Court held that the obligation of a
court to issue a writ of possession in favor of the purchaser in an extra-judicial foreclosure
sale of a mortgaged property ceases to be ministerial once it is shown that there is a third
party in possession of the property who is claiming a right adverse to that of the mortgagor
and that such third party is a stranger to the foreclosure proceedings in which the ex-parte
writ of possession was applied for.
It bears emphasis that an ex-parte petition for issuance of a writ of possession is a non-
litigious proceeding authorized in an extra-judicial foreclosure of mortgage pursuant to Act
3135, as amended.30 It is brought for the benefit of one party only, and without notice to, or
consent by any person adversely interested.31
Furthermore, unlike a judicial foreclosure of real estate mortgage under Rule 68 of the Rules
of Court where an action for foreclosure is brought before the RTC where the mortgaged
property or any part thereof is situated, any property brought within the ambit of Act 3135
is foreclosed by the filing of a petition, not with any court of justice, but with the office of
the sheriff of the province where the sale is to be made. As such, a third person in
possession of an extra-judicially foreclosed property, who claims a right superior to
that of the original mortgagor, is thus given no opportunity to be heard in his claim. 32
It stands to reason, therefore, that such third person may not be dispossessed on the strength
of a mere ex-parte possessory writ, since to do so would be tantamount to his summary
ejectment, in violation of the basic tenets of due process. 33
Besides, as earlier stressed, Article 433 of the Civil Code, cited above, requires nothing less
than ejectment or reivindicatory action to be brought even by the true owner. After all, the
actual possessor of a property enjoys a legal presumption of just title in his favor, which must
be overcome by the party claiming otherwise.
In the case at bar, it is not disputed that herein respondent had been in possession of the
subject lots since 1975 and that it has in its premises bulk plant and fuel storage facilities for
the purpose of conducting its business. In this respect, the Court agrees with the findings of
the CA that petitioner had knowledge of respondent's prior possession of the disputed
properties. Yet, instead of pursuing Civil Action No. 21957 where respondent will be given
a chance to substantiate its claim of ownership, petitioner still insists on obtaining a writ of
possession pursuant to its alleged right as purchaser of the properties which had been extra-
judicially foreclosed. The Court cannot sanction this procedural shortcut. To enforce the writ
against herein respondent, an unwitting third party possessor who took no part in the
foreclosure proceedings, would be tantamount to the taking of real property without the
benefit of proper judicial intervention.
Hence, it was not a ministerial duty of the trial court under Act No. 3135 to issue a writ of
possession for the ouster of respondent from the lot subject of this instant case, particularly
in light of the latter's opposition and claim of ownership and rightful possession of the
disputed properties.
Moreover, the trial court was without authority to grant the ex-parte writ, since petitioner's
right of possession under said Act could be rightfully enforced only against PRI as the
original mortgagor and its successors-in-interest,34 but not against respondent which
possesses the property subject of execution under a claim of ownership, having bought the
same from the Development Bank of the Philippines (DBP).
In the present case, the questioned Amended Order of the RTC Iloilo, Branch 29 dated
January 8, 2002 was issued on the strength of the Writ of Possession issued by the RTC of
Iloilo, Branch 30 dated October 24, 1990. It is clear from the said writ that the sheriff is
directed to eject PRI or any person claiming interest under it from Lot Nos. 3834, 1-A, 6153,
6156, 6158 and 6159 and to place TRB in possession thereof. However, respondent is not a
successor-in-interest of PRI. Instead, respondent claims ownership over the subject lot by
virtue of a Deed of Absolute Sale dated June 30, 1975, wherein the property was sold to it
by the DBP. As a consequence of such sale, respondent obtained TCT No. 47484 on July 28,
1977. Clearly, respondent's right of possession is adverse to that of PRI or TRB.
Page 40 of 106
Furthermore, registration of the lots in petitioner's name does not automatically entitle the
latter to possession thereof.35 As discussed earlier, petitioner must resort to the appropriate
judicial process for recovery of the properties and cannot simply invoke its title in an ex-
parte proceeding to justify the ouster of respondent,36 especially in view of the fact that the
latter also has in its possession a Transfer Certificate of Title over the subject properties. The
court cannot just ignore the claim of herein respondent, who is in actual possession of the
subject properties, that it has been the owner thereof since 1975 and, therefore, has the better
right to possess them. Neither can the RTC rely on the Surveyor's Report dated August 3,
1997 because respondent was not given the opportunity to refute it, the same being submitted
in the ex-parte proceedings for the issuance of a writ of possession in favor of Dayot. Due
process dictates that herein respondent cannot simply be ejected on the strength of the subject
Surveyor's Report without giving it (respondent) the opportunity to present its own evidence.
All of these issues must be ventilated and resolved on the merits after a proper hearing. In
the instant case, the proper forum is Civil Case No. 21957.
Finally, it is expressly stipulated in the Additional Stipulations of Real Estate Mortgage
executed by PRI in favor of TRB that it "excludes those areas already sold to Shell Co., Inc.
with total area of 14,920 sq. meters, known as Lot No. 6153-B and portion of Lot No. 5." 37
Petitioner insists that respondent's TCT No. T-47484 refers to a different parcel of land.
Whether respondent's title refers to the same property subject of the present case and whether
the parcels of land sold to herein petitioner are the same properties foreclosed by TRB are
issues which should properly be resolved in Civil Case No. 21957. This is not the proper
forum to determine who between the parties is entitled to ownership of the disputed lands,
as the issue in the present case is merely limited to the propriety of the issuance of a writ of
possession relating to foreclosure of mortgage.
WHEREFORE, the instant petition is DISMISSED. The Decision and Resolution of the
Court of Appeals dated July 30, 2002 and December 23, 2002 in CA-G.R. SP. No. 70696
are AFFIRMED insofar as respondent Shell Chemical Company (Phils.), Inc. is concerned.
Costs against petitioners.
SO ORDERED.
Endnotes:
1
Penned by Justice Andres B. Reyes, Jr. and concurred in by Justices Conrado M. Vasquez,
Jr. and Mario L. Guariña III; CA rollo, Vol. 2, p. 828.
2 21
CA rollo, Vol. I, p. 46. Navarro Vda. De Taroma v. Taroma, G.R. No. 160214, December 16, 2005, 478 SCRA
336, 345-346.
3
Id. at 49.
22
Arquiza v. Court of Appeals, G.R. No. 160479, June 8, 2005, 459 SCRA 753, 765.
4
Id. at 51.
23
Arquiza v. Court of Appeals, id. at 765.
5
Id. at 52.
24
Panganiban v. Pilipinas Shell Petroleum Corporation, 443 Phil. 753, 766 (2003).
6
Rollo, p. 62.
25
Lugayan v. Tizon, G.R. No. 147958, March 31, 2005, 454 SCRA 488, 490-491.
7
CA rollo, p. 169.
26
Ong v. Court of Appeals, 388 Phil. 857, 867 (2000).
8
Id. at 127.
27
Philippine National Bank v. Court of Appeals, 424 Phil. 757, 769-770 (2002).
9
Id. at 164.
28
Idolor v. Court of Appeals, G.R. No. 161028, January 31, 2005, 450 SCRA 396, 404-405.
10
Rollo, p. 79.
29
G.R No. L-79906, June 20, 1988, 162 SCRA 358.
11
Id. at 80.
30
De Vera v. Agloro, G.R. No. 155673, January 14, 2005, 448 SCRA 203, 215.
12
Id. at 185.
31
Id. at 215.
13
Id. at 178.
32
Capital Credit Dimension, Inc. v. Chua, G.R. No. 157213, April 28, 2004, 428 SCRA 259,
14
Id. at 209. 263.

33
15
Id. at 48. PNB v. Court of Appeals, supra note 27, at 770.

34
16
CA rollo, Vol. 2, p. 828. PNB v. Court of Appeals, supra note 27, at 771.

35
17
Rollo, pp. 22-23. PNB v. Court of Appeals, supra note 27, at 771.

36
18
China Banking Corporation v. The Board of Trustees, Home Development Mutual Fund, Id. at 771-772.
366 Phil. 913, 921 (1999).
37
Rollo, p. 168.
19
Id.
G.R. No. 170864 February 16, 2010
20
Davao New Town Development Corporation v. Commission on the Settlement of Land
Problems (COSLAP), G.R. No. 141523, June 8, 2005, 459 SCRA 491, 505.
Page 41 of 106
NELSON LAGAZO, Petitioner,
vs.
GERALD B. SORIANO and GALILEO B. SORIANO, Respondents.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court,
praying that the Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 80709,
promulgated on October 28, 2005, granting herein respondents' petition for review, and the
CA Resolution2 promulgated on December 20, 2005, denying herein petitioner's motion for
reconsideration, be reversed and set aside.
The undisputed facts are as follows.
On January 16, 2001, respondents filed with the Municipal Trial Court of Tabuk, Kalinga
(MTC), a complaint for Forcible Entry with Application for Termporary Restraining Order
and a Writ of Preliminary Injunction and Damages against petitioner. Respondents claimed
they were the owners of a parcel of land covered by Original Certificate of Title No. P-665,
Lot No. 816, Pls-93 with an area of 58,171 square meters. They allegedly acquired the same
by purchase from their grandfather, Arsenio Baac, on September 10, 1998, but even prior
thereto, they were already allowed by Arsenio Baac to cultivate said land. They paid real
property taxes for said property from 1990 to 1998 and had been in actual possession from
that time. However, on January 6, 2001, herein petitioner allegedly unlawfully entered the
property by means of force, stealth, and strategy and began cultivating the land for himself.
On the other hand, petitioner insisted in his Answer that he, together with his mother,
brothers, and sisters, were the lawful owners of the land in question, being the legal heirs of
Alfredo Lagazo, the registered owner thereof. They denied that the subject land was sold to
Arsenio Baac, alleging instead that the agreement between Alfredo Lagazo and Arsenio Baac
was merely one of mortgage. Petitioner, likewise maintained that he and his co-heirs had
always been in possession of the disputed land. They allegedly tried several times to redeem
the property, but Baac increased the redemption price from ₱10,000.00 to ₱100,000.00. This
prompted them to bring the matter before the Barangay Lupon of Balong, Tabuk, Kalinga,
but no agreement was reached.
On November 23, 2001, the MTC rendered a Decision, the dispositive portion of which reads
as follows:
WHEREFORE, judgment is hereby rendered as follows:
Page 42 of 106
1. Dismissing the complaint of Forcible Entry filed against defendant Nelson
Lagazo;
2. Ordering the plaintiffs, Gerald B. Soriano and Galileo B. Soriano to surrender
Original Certificate of Title No. P-665 in the name of Alfredo Lagazo to the heirs
of Lagazo which was given to Arsenio Baac by Alfredo Lagazo when the Deed of
Mortgage was executed between them;
3. Ordering the heirs of Alfredo Lagazo to execute the deed of conveyance in favor
of the plaintiffs covering the one (1) hectare portion subject of the mortgage
between Alfredo Lagazo and Arsenio Baac and to segregate the same from property
covered by OCT P-665;
4. Plaintiffs to pay the costs of suit.
SO ORDERED.3
The foregoing Decision was appealed to the Regional Trial Court (RTC) of Tabuk, Kalinga.
Said appellate court ruled that herein respondents failed to prove prior physical possession,
thus, it reversed the MTC Decision and dismissed the complaint against herein petitioner.
Respondents then filed with the CA a Petition for Review under Rule 42 of the Rules of
Court and on October 28, 2005, the CA promulgated the assailed Decision which disposed
thus:
WHEREFORE, premises considered, the petition is GRANTED. Physical possession is
hereby ordered returned to the petitioners, without prejudice to the respondent's right to take
recourse to remedies provided for under the law, if he is so inclined. Actual, moral and
exemplary damages cannot be granted because of lack of substantive evidence to prove the
same. However, we grant the amount of ₱10,000.00 in attorney's fees plus ₱500.00 per
appearance of petitioners' counsel, as well as another ₱10,000.00 in litigation expenses as
prayed for in their complaint, conformably to par. 11 of Art. 2208 of the Civil Code, i.e. it is
just and equitable under the circumstances, and considering that the award is well deserved
by the petitioners who had shown evident good faith in, and respect for, the judicial system.
SO ORDERED.4
Petitioner moved for reconsideration, but the same was denied per CA Resolution dated
December 20, 2005. Hence, this petition where the following issues are raised:
WHETHER THE TRIAL COURT GRAVELY ERRED IN FINDING THAT THERE WAS
IMPLIED ADMISSION ON THE PART OF THE PETITIONER THAT RESPONDENTS
HAD BEEN IN ACTUAL PHYSICAL POSSESSION OF THE LOT IN CONTROVERSY
SINCE 1979.
WHETHER THE TRIAL COURT GRAVELY ERRED IN NOT GIVING CREDENCE TO
THE EVIDENCE ADDUCED BY PETITIONER SUBSTANTIATING HIS PRIORITY IN
POSSESSION OVER THE LOT IN CONTROVERSY.
WHETHER THE TRIAL COURT GRAVELY ERRED IN FINDING THAT THE
RESPONDENTS HAVE BETTER RIGHT OF POSSESSION OVER THE LOT IN
CONTROVERSY.5
The Court finds the petition unmeritorious.
Prior physical possession is an indispensable element in forcible entry cases.6 Thus, the
ultimate question here is who had prior physical possession of the disputed land.
Ordinarily, in a Petition for Review on Certiorari, this Court only considers questions of
law, as it is not a trier of facts. However, there are exceptions to this general rule, such as,
when the findings of fact of the appellate court are contrary to those of the trial court.7 Such
circumstance exists in this case, hence, the Court is compelled to take a closer look at the
records.
In Sudaria v. Quiambao,8 the Court held that:
Ejectment proceedings are summary proceedings intended to provide an expeditious means
of protecting actual possession or right to possession of property. Title is not involved. The
sole issue to be resolved is who is entitled to the physical or material possession of the
premises or possession de facto. On this point, the pronouncements in Pajuyo v. Court of
Appeals are enlightening, thus:
xxxx
x x x Regardless of the actual condition of the title to the property, the party in peaceable
quiet possession shall not be thrown out by a strong hand, violence or terror. Neither is the
unlawful withholding of property allowed. Courts will always uphold respect for prior
possession.
Thus, a party who can prove prior possession can recover such possession even against
the owner himself. Whatever may be the character of his possession, if he has in his favor
Page 43 of 106
prior possession in time, he has the security that entitles him to remain on the property
until a person with a better right lawfully ejects him. To repeat, the only issue that the
court has to settle in an ejectment suit is the right to physical possession. 9 (Emphasis
supplied.)
Moreover, in De Grano v. Lacaba,10 it was explained that:
x x x the word "possession," as used in forcible entry and unlawful detainer cases, means
nothing more than physical possession, not legal possession in the sense contemplated in
civil law. When the law speaks of possession, the reference is to prior physical possession
or possession de facto, as contra-distinguished from possession de jure. Only prior physical
possession, not title, is the issue. Issues as to the right of possession or ownership are not
involved in the action; evidence thereon is not admissible, except only for the purpose
of determining the issue of possession.11 (Emphasis supplied.)1avvphil
Bearing the foregoing in mind, a thorough examination of the evidence revealed that, indeed,
the parties in last peaceable quiet possession of the property in question were herein
respondents.
The most important evidence for respondents was the testimony of Brgy. Capt. Artemio
Fontanilla, who stated that he was born and had continuously resided in Balong, Tabuk,
Kalinga; that the disputed land was only about three kilometers from his house; that for the
longest time, he had always known that it was Arsenio Baac who was cultivating and
occupying said property; and that it was only sometime in January 2001, when the police
asked him to accompany them to the subject land, that he saw petitioner with some other
men working said land. 12
On the other hand, what petitioner's evidence sought to establish was that he and his co-heirs
continued to be the owners of the land, as his predecessor never intended to sell the property
to Arsenio Baac, the true agreement being only one of a mortgage. Petitioner never
established the fact of his physical possession over the disputed land. Ironically, the most
telling pieces of evidence that doomed petitioner's case were the testimonies of petitioner
himself and his sister, Marina Niñalga. Their own admissions on the witness stand proved
that respondents were indeed the ones in physical possession of the subject property.
Petitioner Lagazo himself testified as follows:
Q: So, at that time that you were at Alicia, Isabela and at that time that you staying
thereat, you have no knowledge to what is happening to the land which is now the
subject of this case, Am I correct?
 A: I was only hearing stories from my father and my mother that they want to regain IN VIEW OF THE FOREGOING, the instant petition is dismissed. The Decision and
back the land which was mortgaged, sir. Resolution of the Court of Appeals dated October 28, 2005 and December 20, 2005,
respectively, in CA G.R. SP No. 80709 are AFFIRMED.
xxxx
SO ORDERED.
Q: It is when only on January of 2001 that you allegedly claimed over the parcel of
land in question, am I correct Mr. Witness? Footnotes

1
A: Was not only during that time but that was only the time we entered into the Penned by Associate Justice Renato C. Dacudao, with Associate Justices Lucas P.
land, sir. Bersamin (now Associate Justice of the Supreme Court) and Celia C. Librea-
Leagogo, concurring; rollo, pp. 234-291.
Q: So, you are now admitting Mr. Witness, its only on January 6, 2001, you entered
2
the land in question? Id. at 300.

3
A: Yes, sir. CA rollo, p. 125

4
Q: And, prior to January 6 of 2001, you never possessed or cultivated the land in Rollo, p. 291.
question, Am I correct?
5
Id. at 15.
xxxx
6
Acaylar, Jr. v. Harayo, G.R. No. 176995, July 30, 2008, 560 SCRA 624.
Q: Who was an apparent heir of spouses Alfredo Lagaso, you never personally
cultivated or possessed the land in question prior to January 6, 2001, am I correct? 7
Id. at 641.

A: No, sir because according to them it was mortgaged, Your Honor. 8

G.R. No. 164305, November 20, 2007, 537 SCRA 689.

Q: But you never personally cultivated the land prior to January 6, 2001? 9
Supra note 8, at 697-698.

A: No, sir.13 10
G.R. No. 158877, June 16, 2009, 589 SCRA 148.

Meanwhile, Marina Niñalga also recounted that in 1979, they left the subject property out of 11
Id. at 158-159.
fear because Arsenio Baac allegedly wanted to grab the land for himself. She testified that
after they left in 1979, it was already Arsenio Baac who cultivated said land. Despite such 12
TSN, February 26, 2001, pp. 26, 47-52
claim that Arsenio Baac took their land with force and intimidation, Marina said they never
reported the matter to the police, and never filed any criminal action in court against Arsenio 13
Baac.14 TSN, June 26, 2001, pp. 220-222.

14
Verily, the foregoing leaves no doubt in our mind that it was only on January 6, 2001 that TSN, July 30, 2001, pp. 274-278.
petitioner, believing himself to be the lawful owner of the disputed land, entered the same,
thereby disturbing respondents' peaceful possession thereof. G.R. No. 187944
Page 44 of 106
VARMENCITA SUAREZ, Petitioner, 1907-A-3 T-543461 Cresencio Padilla
vs.
MR. and MRS. FELIX E. EMBOY, JR. and MARILOU P. EMBOY-DELANTAR,
Respondents. 1907-A-4 T-543462 Fructousa Baricuatro

DECISION 1907-A-5 T-543463 Claudia Padilla-Emboy (Claudia)

REYES, J.:
1 2
For review in the instant Petition is the Decision rendered on March 19, 2009 and
Resolution3 issued on May 5, 2009 by the Court of Appeals (CA) in CA-G.R. SP No. 03489.
The CA granted the Petition for Review4 filed by Mr. and Mrs. Felix Emboy, Jr. (Felix) and
Marilou Emboy-Delantar (Marilou) (respondents), seeking to reverse the decisions of the
Regional Trial Court (RTC), Branch 12,5 and Municipal Trial Court in Cities (MTCC),
Branch 3,6 of Cebu City, rendered on February 26, 2008 in Civil Case No. CEB-33328,7 and
on September 25, 2006 in Civil Case No. R-49832, respectively. The RTC affirmed the
MTCC in upholding the claims of Carmencita Suarez (Carmencita) in her complaint for
unlawful detainer instituted against the respondents.
A house, which is occupied by respondents Felix and Marilou, stands in the subject lot. The
respondents claim that their mother, Claudia, had occupied the subject lot during her lifetime
and it was earmarked to become her share in Lot No. 1907-A. They had thereafter stayed in
the subject lot for decades after inheriting the same from Claudia, who had in turn succeeded
her own parents, Carlos and Asuncion.11
In 2004, respondents Felix and Marilou were asked by their cousins, who are the Heirs of
Vicente, to vacate the subject lot and to transfer to Lot No. 1907-A-5, a landlocked portion
sans a right of way. They refused to comply insisting that Claudia’s inheritance pertained to
Lot No. 1907-A-2.12

Antecedents
At the center of the dispute is a 222-square meter parcel of land, designated as Lot No. 1907-
A-2 (subject lot) of the subdivision plan Psd-165686, situated in Barangay Duljo, Cebu City,
and covered by Transfer Certificate of Title (TCT) No. T-174880 issued in the name of
Carmencita on February 9, 2005. The subject lot used to be a part of Lot No. 1907-A,8 which
was partitioned in the following manner among the heirs of Spouses Carlos Padilla (Carlos)
and Asuncion Pacres (Asuncion):9
Not long after, the respondents received from Carmencita’s counsel, Atty. Jufelenito R.
Pareja (Atty. Pareja), a demand letter, dated February 23, 2004, requiring them to vacate the
subject lot. They were informed that Carmencita had already purchased on February 12, 2004
the subject lot from the former’s relatives. However, the respondents did not heed the
demand. Instead, they examined the records pertaining to the subject lot and uncovered
possible anomalies, i.e., forged signatures and alterations, in the execution of a series of
deeds of partition relative to Lot No. 1907-A. On August 13, 2004, they filed before the RTC
of Cebu City a complaint13 for nullification of the partition and for the issuance of new TCTs
covering the heirs’ respective portions of Lot No. 1907-A.14

Lot No. TCT No. Heirs On December 8, 2004, Carmencita filed before the MTCC and against the respondents a
complaint for unlawful detainer, the origin of the instant petition.1âwphi1 She alleged that
1907-A-1 T-543459 Spouses Rogelio and Praxedes Padilla she bought the subject lot from Remedios, Moreno, Veronica and Dionesia, 15 the registered
owners thereof and the persons who allowed the respondents to occupy the same by mere
1907-A-2 T-543460 Heirs of Vicente Padilla (Vicente), namely: (1) tolerance. As their successor-in-interest, she claimed her entitlement to possession of the
Azucena Padilla, married to Felly Carrera; (2) subject lot and the right to demand from the respondents to vacate the same. 16
Remedios Padilla (Remedios), married to Oscar
Dimay; (3) Veronica Padilla (Veronica);10 and The MTCC upheld Carmencita’s claims in its decision rendered on September 25, 2006. The
(4) Moreno Padilla (Moreno), married to respondents were ordered to vacate the subject lot and remove at their expense all the
improvements they had built thereon. They were likewise made solidarily liable to pay
Teresita Curso (Teresita)
Carmencita Php 20,000.00 as attorney’s fees.17

Page 45 of 106
In the Decision dated February 26, 2008, the RTC affirmed in its entirety the MTCC ruling. 18
The respondents challenged the MTCC and RTC judgments through a Petition for Review19
filed before the CA.
The respondents argued that they have been occupying the subject lot in the concept of
owners for several decades. Carmencita, on the other hand, was a buyer in bad faith for
having purchased the property despite the notice of lis pendens clearly annotated on the
subject lot’s title. Even her complaint for unlawful detainer was filed on December 8, 2004
subsequent to the respondents’ institution on August 13, 2004 of a petition for nullification
of the partition. Citing Sarmiento v. CA,20 the respondents emphasized that "even if one is
the owner of the property, the possession thereof cannot be wrested from another who had
been in the physical or material possession of the same for more than one year by resorting
to a summary action of ejectment." 21 The respondents also invoked the doctrine enunciated
in Amagan v. Marayag22 that the pendency of another action anchored on the issue of
ownership justifies the suspension of an ejectment suit involving the same real property. The
foregoing is especially true in the case at bar where the issue of possession is so interwoven
with that of ownership. Besides, the resolution of the question of ownership would
necessarily result in the disposition of the issue of possession.
The respondents also stressed that the deed of sale dated April 1, 2004, which was attached
to the complaint for unlawful detainer, bore tell-tale signs of being spurious. First, Atty.
Pareja’s demand letter sent to the respondents instead referred to a deed of sale dated
February 12, 2004. Secondly, Teresita, who now lives in Luzon and has been estranged from
Moreno since the 1980s, was a signatory in the deed of sale. Thirdly, a certain Veronida
Padilla, a fictitious person, also signed the deed of sale as among the vendors, but she, too,
was impleaded as a co-defendant in the ejectment suit. Fourthly, the deed was only registered
the following year after its supposed execution.
The respondents insisted that the Heirs of Vicente, who had allegedly sold the subject lot to
Carmencita, had never physically occupied the same. Hence, there was no basis at all for
Carmencita’s claim that the respondents’ possession of the subject lot was by mere tolerance
of the alleged owners.
The respondents also presented before the CA a newly discovered evidence, which they
found in an old wooden chest in their ancestral home. A duly notarized document captioned
as an "Agreement,"23 dated February 23, 1957, showed that Vicente and his spouse,
Dionesia, had waived their hereditary rights to Lot No. 1907-A. The document stated that
Vicente obtained a loan from the Philippine National Bank using Lot No. 1907-A as a
collateral. The loan was paid by Carlos and Asuncion and the waiver must have been
executed in order to be fair to Vicente’s siblings. Prescinding from the above, the Heirs of
Vicente no longer had ownership rights over the subject lot to convey to Carmencita.
Page 46 of 106
The respondents also averred that Carmencita’s complaint lacked a cause of action. The
certification to file an action was issued by the officials of Barangay Duljo in the name of
James Tan Suarez, Carmencita’s brother, who had no real rights or interests over the subject
lot. Further, while Carmencita based her claim over the subject lot by virtue of a deed of sale
executed on April 1, 2004, no demand to vacate was made upon the respondents after that
date. The absence of such demand rendered the complaint fatally defective, as the date of its
service should be the reckoning point of the one-year period within which the suit can be
filed.
In support of the respondents’ prayer for the issuance of injunctive reliefs, they argued that
their loss would be irreparable. Moreover, the resolution of the respondents’ petition for
nullification of the partition of Lot No. 1907-A, in which Carmencita was likewise impleaded
as a defendant, would be rendered useless in the event that the latter’s complaint for unlawful
detainer would be granted and the former’s ancestral house demolished.
The Ruling of the CA
On March 19, 2009, the CA rendered the herein assailed Decision reversing the disquisitions
of the courts a quo and dismissing Carmencita’s complaint for unlawful detainer. The CA
explained:
Section 1, Rule 70 of the Rules of Court provides:
Section 1. Who may institute proceedings, and when.—Subject to the provisions of the next
succeeding section, a person deprived of the possession of any land or building by force,
intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against
whom the possession of any land or building is unlawfully withheld after the expiration or
termination of the right to hold possession, by virtue of any contract, express or implied, or
the legal representatives or assigns of any such lessor, vendor, vendee, or other person, may,
at any time within one (1) year after such unlawful deprivation or withholding of possession,
bring an action in the proper Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, or any person or persons claiming under them, for
the restitution of such possession, together with damages and costs.
The distinction between forcible entry and unlawful detainer was lucidly explained in
Sarmiento vs. Court of Appeals,:
Forcible entry and unlawful detainer cases are two distinct actions defined in Section 1, Rule
70 of the Rules of Court. [In] forcible entry, one is deprived of physical possession of land
or building by means of force, intimidation, threat, strategy, or stealth. In unlawful detainer,
one unlawfully withholds possession thereof after the expiration or termination of his right
to hold possession under any contract, express or implied. In forcible entry, the possession
is illegal from the beginning and the basic inquiry centers on who has the prior possession
de facto. In unlawful detainer, the possession was originally lawful but became unlawful by
the expiration or termination of the right to possess, hence the issue of rightful possession is
decisive for, in such action, the defendant is in actual possession and the plaintiffs cause of
action is the termination of the defendant’s right to continue in possession.
What determines the cause of action is the nature of defendant’s entry into the land. If the
entry is illegal, then the action which may be filed against the intruder within one (1) year
therefrom is forcible entry. If, on the other hand, the entry is legal but the possession
thereafter became illegal, the case is one of unlawful detainer which must be filed within one
(1) year from the date of the last demand.
A close perusal of [Carmencita’s] complaint a quo reveals that the action was neither one of
forcible entry nor unlawful detainer but essentially involved an issue of ownership which
must be resolved in an accion reivindicatoria. It did not characterize [the respondents’]
alleged entry into the land: whether the same was legal or illegal. It did not state how [the
respondents] entered the land and constructed a house thereon. It was also silent on whether
[the respondents’] possession became legal before [Carmencita] demanded from them to
vacate the land. The complaint merely averred that their relatives previously owned the lot
[the respondents] were occupying and that after [Carmencita] purchased it[,] she, as its new
owner, demanded [for the respondents] to vacate the land. Moreover, it is undisputed that
[the respondents] and their ancestors have been occupying the land for several decades
already. There was no averment as to how or when [Carmencita’s] predecessors tolerated
[the respondents’] possession of the land. Consequently, there was no contract to speak of,
whether express or implied, between [the respondents], on one hand, and [Carmencita] or
her predecessors, on the other, as would qualify [the respondents’] possession of the land as
a case of unlawful detainer. Neither was it alleged that [the respondents] took possession of
the land through force, intimidation, threat, strategy or stealth to make out a case of forcible
entry. In any event, [Carmencita] cannot legally assert that [the respondents’] possession of
the land was by mere tolerance. This is because [Carmencita’s] predecessors-in-interest did
not yet own the property when [Claudia] took possession thereof. Take note that
[Carmencita’s] predecessors-in-interest merely stepped into the shoes of their parents who
were also co-heirs of [Claudia]. Finally, to categorize a cause of action as one constitutive of
unlawful detainer, plaintiff’s supposed acts of tolerance must have been present from the
start of the possession which he later seek[s] to recover. This is clearly wanting in the case
at bar.
Indeed, when the complaint fails to aver facts constitutive of forcible entry or unlawful
detainer, as where it does not state how entry was effected or how and when dispossession
started, as in the case at bar, the remedy should either be an accion publiciana or an accion
reivindicatoria in the proper RTC. If [Carmencita] is truly the owner of the subject property
Page 47 of 106
and she was unlawfully deprived of the real right of possession or ownership thereof, she
should present her claim before the RTC in an accion publiciana or an accion reivindicatoria,
and not before the municipal trial court in a summary proceeding of unlawful detainer or
forcible entry.
Munoz vs. Court of Appeals enunciated:
For even if he is the owner, possession of the property cannot be wrested from another who
had been in possession thereof for more than twelve (12) years through a summary action
for ejectment. Although admittedly[,] petitioner may validly claim ownership based on the
muniments of title it presented, such evidence does not responsibly address the issue of prior
actual possession raised in a forcible entry case. It must be stated that regardless of actual
condition of the title to the property, the party in peaceable quiet possession shall not be
turned out by a strong hand, violence or terror. Thus, a party who can prove prior possession
can recover such possession even against the owner himself. Whatever may be the character
of his prior possession, if he has in his favor priority in time, he has the security that entitles
him to remain on the property until he is lawfully ejected by a person having a better right
by accion publiciana or accion reivindicatoria. 24 (Citations omitted and underscoring
supplied)
In Carmencita’s Motion for Reconsideration25 filed before the CA, she alleged that the case
of Sarmiento cited by the respondents is not applicable to the present controversy since it
involves a boundary dispute, which is properly the subject of an accion reivindicatoria and
over which the MTCC has no jurisdiction. She claimed that Rivera v. Rivera 26 finds more
relevance in the case at bar. In Rivera, the contending parties were each other’s relatives and
the Court ruled that in an unlawful detainer case, prior physical possession by the
complainant is not necessary.27 Instead, what is required is a better right of possession.
Further, the MTCC cannot be divested of jurisdiction just because the defendants assert
ownership over the disputed property.
In the herein assailed Resolution dated May 5, 2009, the CA denied Carmencita’s Motion
for Reconsideration.
In essence, the instant petition presents the following issues:
I
Whether or not Carmencita’s complaint against the respondents had sufficiently alleged and
proven a cause of action for unlawful detainer.
II
Whether or not the pendency of the respondents’ petition for nullification of partition of Lot
No. 1907-A and for the issuance of new certificates of title can abate Carmencita’s ejectment
suit.
Carmencita’s Allegations
In support of the petition, Carmencita reiterates that she purchased the subject lot from the
Heirs of Vicente, who were then the registered owners thereof. At the time of the sale,
respondents Felix and Marilou were occupying the subject lot. Thus, Atty. Pareja, in
Carmencita’s behalf, demanded that they vacate the property. The respondents’ refusal to
comply with the demand turned them into deforciants unlawfully withholding the possession
of the subject lot from Carmencita, the new owner, whose recourse was to file a complaint
for unlawful detainer.
Further, Carmencita insists that a certificate of title shall not be subject to a collateral attack28
and the issue of ownership cannot be resolved in an action for unlawful detainer. A pending
suit involving the question of ownership of a piece of real property will not abate an
ejectment complaint as the two are not based on the same cause of action and are seeking
different reliefs.29
Additionally, Carmencita invokes the doctrine in Eastern Shipping Lines, Inc. v. CA 30 that
the registered owner of a property is entitled to its possession. In Arcal v. CA, 31 the Court
also explained that the occupation of a property not by its registered owner but by others
depends on the former’s tolerance, and the occupants are bound by an implied promise to
vacate upon demand, failing at which, a suit for ejectment would be proper. 32
The Respondents’Arguments
In their Comment33 to the instant petition, the respondents stress that Carmencita’s complaint
for unlawful detainer was fundamentally inadequate. There was practically no specific
averment as to when and how possession by tolerance of the respondents began. In the
complaint, Carmencita made a general claim that the respondents possessed "the property by
mere tolerance ‘with the understanding that they would voluntarily vacate the premises and
remove their house(s) thereon upon demand by the owners’." 34 In Spouses Valdez, Jr. v.
CA,35 the Court ruled that the failure of the complainants to allege key jurisdictional facts
constitutive of unlawful detainer is fatal and deprives the MTCC of jurisdiction over the
action.
In their rejoinder,36 the respondents likewise argue that the issues of possession and
ownership are inseparably linked in the case at bar. Carmencita’s complaint for ejectment
Page 48 of 106
was based solely on her spurious title, which is already the subject of the respondents’
petition for nullification of partition of Lot No. 1907-A.
Our Disquisition
The instant petition lacks merit.
Carmencita had not amply alleged and proven that all the requisites for unlawful detainer are
present in the case at bar.
"Without a doubt, the registered owner of real property is entitled to its possession. However,
the owner cannot simply wrest possession thereof from whoever is in actual occupation of
the property. To recover possession, he must resort to the proper judicial remedy and, once
he chooses what action to file, he is required to satisfy the conditions necessary for such
action to prosper."37
In Spouses Valdez, Jr.,38 the Court is instructive anent the three kinds of actions available to
recover possession of real property, viz:
(a) accion interdictal; (b) accion publiciana; and (c) accion reivindicatoria.
Accion interdictal comprises two distinct causes of action, namely, forcible entry
(detentacion) and unlawful detainer (desahuico) [sic]. In forcible entry, one is deprived of
physical possession of real property by means of force, intimidation, strategy, threats, or
stealth whereas in unlawful detainer, one illegally withholds possession after the expiration
or termination of his right to hold possession under any contract, express or implied. The two
are distinguished from each other in that in forcible entry, the possession of the defendant is
illegal from the beginning, and that the issue is which party has prior de facto possession
while in unlawful detainer, possession of the defendant is originally legal but became illegal
due to the expiration or termination of the right to possess.
The jurisdiction of these two actions, which are summary in nature, lies in the proper
municipal trial court or metropolitan trial court. Both actions must be brought within one
year from the date of actual entry on the land, in case of forcible entry, and from the date of
last demand, in case of unlawful detainer. The issue in said cases is the right to physical
possession.
Accion publiciana is the plenary action to recover the right of possession which should be
brought in the proper regional trial court when dispossession has lasted for more than one
year. It is an ordinary civil proceeding to determine the better right of possession of realty
independently of title. In other words, if at the time of the filing of the complaint more than
one year had elapsed since defendant had turned plaintiff out of possession or defendant’s
possession had become illegal, the action will be, not one of the forcible entry or illegal
detainer, but an accion publiciana. On the other hand, accion reivindicatoria is an action to
recover ownership also brought in the proper regional trial court in an ordinary civil
proceeding.39 (Citations omitted)
In a complaint for unlawful detainer, the following key jurisdictional facts must be alleged
and sufficiently established:
(1)initially, possession of property by the defendant was by contract with or by
tolerance of the plaintiff;
(2)eventually, such possession became illegal upon notice by plaintiff to defendant
of the termination of the latter’s right of possession;
(3)thereafter, the defendant remained in possession of the property and deprived the
plaintiff of the enjoyment thereof; and
(4)within one year from the last demand on defendant to vacate the property, the
plaintiff instituted the complaint for ejectment.40
In the case at bar, the first requisite mentioned above is markedly absent. Carmencita failed
to clearly allege and prove how and when the respondents entered the subject lot and
constructed a house upon it.41 Carmencita was likewise conspicuously silent about the details
on who specifically permitted the respondents to occupy the lot, and how and when such
tolerance came about.42 Instead, Carmencita cavalierly formulated a legal conclusion, sans
factual substantiation, that (a) the respondents’ initial occupation of the subject lot was lawful
by virtue of tolerance by the registered owners, and (b) the respondents became deforciants
unlawfully withholding the subject lot’s possession after Carmencita, as purchaser and new
registered owner, had demanded for the former to vacate the property. 43 It is worth noting
that the absence of the first requisite assumes even more importance in the light of the
respondents’ claim that for decades, they have been occupying the subject lot as owners
thereof.
Again, this Court stresses that to give the court jurisdiction to effect the ejectment of an
occupant or deforciant on the land, it is necessary that the complaint must sufficiently show
such a statement of facts as to bring the party clearly within the class of cases for which the
statutes provide a remedy, without resort to parol testimony, as these proceedings are
summary in nature. In short, the jurisdictional facts must appear on the face of the complaint.
When the complaint fails to aver facts constitutive of forcible entry or unlawful detainer, as
Page 49 of 106
where it does not state how entry was effected or how and when dispossession started, the
remedy should either be an accion publiciana or accion reivindicatoria. 44
As an exception to the general rule, the respondents’ petition for nullification of the partition
of Lot No. 1907-A can abate Carmencita’s suit for unlawful detainer.
In Amagan, the Court is emphatic that:
As a general rule, therefore, a pending civil action involving ownership of the same property
does not justify the suspension of ejectment proceedings. "The underlying reasons for the
above ruling were that the actions in the Regional Trial Court did not involve physical or de
facto possession, and, on not a few occasions, that the case in the Regional Trial Court was
merely a ploy to delay disposition of the ejectment proceeding, or that the issues presented
in the former could quite as easily be set up as defenses in the ejectment action and there
resolved."
Only in rare instances is suspension allowed to await the outcome of the pending civil action.
One such exception is Vda. de Legaspi v. Avendaño, wherein the Court declared:
"x x x. Where the action, therefore, is one of illegal detainer, as distinguished from one of
forcible entry, and the right of the plaintiff to recover the premises is seriously placed in issue
in a proper judicial proceeding, it is more equitable and just and less productive of confusion
and disturbance of physical possession, with all its concomitant inconvenience and expenses.
For the Court in which the issue of legal possession, whether involving ownership or not, is
brought to restrain, should a petition for preliminary injunction be filed with it, the effects of
any order or decision in the unlawful detainer case in order to await the final judgment in the
more substantive case involving legal possession or ownership. It is only where there has
been forcible entry that as a matter of public policy the right to physical possession should
be immediately set at rest in favor of the prior possession regardless of the fact that the other
party might ultimately be found to have superior claim to the premises involved, thereby to
discourage any attempt to recover possession thru force, strategy or stealth and without
resorting to the courts."
xxxx
Indisputably, the execution of the MCTC Decision would have resulted in the demolition of
the house subject of the ejectment suit; thus, by parity of reasoning, considerations of equity
require the suspension of the ejectment proceedings. We note that, like Vda. de Legaspi, the
respondent’s suit is one of unlawful detainer and not of forcible entry. And most certainly,
the ejectment of petitioners would mean a demolition of their house, a matter that is likely
to create the "confusion, disturbance, inconveniences and expenses" mentioned in the said
exceptional case.
Necessarily, the affirmance of the MCTC Decision would cause the respondent to go through
the whole gamut of enforcing it by physically removing the petitioners from the premises
they claim to have been occupying since 1937. (Respondent is claiming ownership only of
the land, not of the house.) Needlessly, the litigants as well as the courts will be wasting
much time and effort by proceeding at a stage wherein the outcome is at best temporary, but
the result of enforcement is permanent, unjust and probably irreparable.
We should stress that respondent’s claim to physical possession is based not on an expired
or a violated contract of lease, but allegedly on "mere tolerance." Without in any way
prejudging the proceedings for the quieting of title, we deem it judicious under the present
exceptional circumstances to suspend the ejectment case.45 (Citations omitted)
The Court then quoted with favor the following portion of the Decision dated July 8, 1997,
penned by Associate Justice Artemio G. Tuquero in CA-G.R. No. 43611-SP, from which the
Amagan case sprang:
"ONE. Private respondent Teodorico T. Marayag anchors his action for unlawful detainer on
the theory that petitioners’ possession of the property in question was by mere tolerance.
However, in answer to his demand letter dated April 13, 1996 x x x, petitioners categorically
denied having any agreement with him, verbal or written, asserting that they are ‘owners of
the premises we are occupying at 108 J.P. Rizal Street, San Vicente, Silang, Cavite.’ In other
words, it is not merely physical possession but ownership as well that is involved in this
case.["]
"TWO. In fact, to protect their rights to the premises in question, petitioners filed an action
for reconveyance, quieting of title and damages against private respondents, docketed as
Civil Case No. TG-1682 of the Regional Trial Court, Branch 18, Tagaytay City. The issue
of ownership is squarely raised in this action. Undoubtedly, the resolution of this issue will
be determinative of who is entitled to the possession of the premises in question.["]
"THREE. The immediate execution of the judgment in the unlawful detainer case will
include the removal of the petitioners’ house [from] the lot in question.["]
"To the mind of the Court it is injudicious, nay inequitable, to allow demolition of
petitioners’ house prior to the determination of the question of ownership [of] the lot on
which it stands."46 (Citation omitted)
Page 50 of 106
We find the doctrines enunciated in Amagan squarely applicable to the instant petition for
reasons discussed hereunder.
Carmencita’s complaint for unlawful detainer is anchored upon the proposition that the
respondents have been in possession of the subject lot by mere tolerance of the owners. The
respondents, on the other hand, raise the defense of ownership of the subject lot and point to
the pendency of Civil Case No. CEB-30548, a petition for nullification of the partition of
Lot No. 1907-A, in which Carmencita and the Heirs of Vicente were impleaded as parties.
Further, should Carmencita’s complaint be granted, the respondents’ house, which has been
standing in the subject lot for decades, would be subject to demolition. The foregoing
circumstances, thus, justify the exclusion of the instant petition from the purview of the
general rule.
All told, we find no reversible error committed by the CA in dismissing Carmencita's
complaint for unlawful detainer. As discussed above, the jurisdictional requirement of
possession by mere tolerance of the owners had not been amply alleged and proven.
Moreover, circumstances exist which justify the abatement of the ejectment proceedings.
Carmencita can ventilate her ownership claims in an action more suited for the purpose. The
respondents, on other hand, need not be exposed to the risk of having their house demolished
pending the resolution of their petition for nullification of the partition of Lot No. 1907-A,
where ownership over the subject lot is likewise presented as an issue.
IN VIEW OF THE FOREGOING, the instant petition is DENIED.
The Decision rendered on March 19, 2009 and Resolution issued on May 5, 2009 by the
Court of Appeals in CA-G.R. SP No. 03489 are AFFIRMED.
SO ORDERED.
Footnotes
1
Rollo, pp. 10-19.
2
Penned by Associate Justice Amy C. Lazaro-Javier, with Associate Justices
Francisco P. Acosta and Rodil V. Zalameda, concurring; id. at 21-28.
3
Id. at 40.
4
Id. at 65-95.
5 24
With Presiding Judge Estela Alma A. Singco. Id. at 24-27.

6 25
With Presiding Judge Gil R. Acosta. Id. at 29-38.

7 26
Entitled "Carmencita Suarez v. Mr. and Mrs. Felix Emboy, Marilou Emboy- 453 Phil. 404 (2003).
Delantare and Veronica P. Garcia".
27
Id. at 410.
8
A 957-square meter parcel of land covered by TCT No. T-5922.
28
Citing Section 48 of Presidential Decree No. 1529 or The Property Registration
9
Rollo, pp. 30-31. Decree.

10 29
Sometimes referred to in the records as "Veronida". Citing Punio v. Judge Go, 357 Phil. 1, 6 (1998), and Silverio v. CA, 454 Phil.
750, 758 (2003).
11
Rollo, p. 22.
30
424 Phil. 544 (2002).
12
Id.
31
348 Phil. 813 (1998).
13
Docketed as Civil Case No. CEB-30548.
32
Id. at 825; rollo, p. 140.
14
Rollo, p. 22.
33
Rollo, pp. 55-64.
14
Vicente’s spouse.
34
Id. at 59.
16
Rollo, p. 23.
35
523 Phil. 39 (2006).
17
Id.
36
Rollo, pp. 144-151.
18
Id.
37
Corpuz v. Agustin, G.R. No. 183822, January 18, 2012, 663 SCRA 350, 361,
19
Id. at 65-95. citing Carbonilla v. Abiera, G.R. No. 177637, July 26, 2010, 625 SCRA 461.

38
20
320 Phil. 146 (1995). Supra note 35.

39
21
Id. at 156; rollo, p. 76. Id. at 45-46.40Supra note 37, at 363; see also Delos Reyes v. Odones, G.R. No.
178096, March 23, 2011, 646 SCRA 328, 334-335.
22
383 Phil. 486 (2000).
41
Rollo, pp. 25-26.
23
Rollo, p. 121.
42
Id.
Page 51 of 106
 43
Please see Petition, id. at 12-13; Reply, id. at 138-139. properties with a total area of 13 ,904 square meters traversed by the existing Tagoloan-Pulangi 138
kV transmission line.
44
Jose v. Alfuerto, G.R. No. 169380, November 26, 2012, 686 SCRA 323, 341,
citing Serdoncillo v. Spouses Benolirao, 358 Phil. 83, 95 (1998). On November 17, 2006, Transco offered to buy these properties from Oroville to be used for the
construction of the Abaga-Kirahon 230 kV transmission line in Mindanao.
45
Supra note 22, at 495-499.
During the negotiation, Oroville, through its representative Antonio Tiu (Tiu), requested to reroute
46
Id. at 498-499. the Abaga-Kirahon 230 kV transmission line because the Tagoloan-Pulangi 138 kV transmission line
is already traversing its properties. Tiu also informed Transco that Oroville has not been paid just
compensation for the constn1ction of the Tagoloan-Pulangi 138 kV transmission line in its property.
August 1, 2017
Transco, however, refused to reroute the proposed Abaga-Kirahon 230 kV transmission line because
it planned to construct the said transmission line parallel to the existing Tagoloan-Pulangi 138 kV
G.R. No. 223366 transmission line.

NATIONAL TRANSMISSION CORPORATION, Petitioner, Consequently, on April 20, 2007, Oroville filed a complaint for injunction and damages with prayer
vs. for issuance of a temporary restraining order against Transco, seeking to enjoin the construction of
OROVILLE DEVELOPMENT CORPORATION, Respondent the Abaga-Kirahon 230 kV transmission line.

DECISION On May 9, 2007, Transco filed its Answer denying the allegations in Oroville's complaint. It also
manifested that it would file the required expropriation proceedings against Oroville in order to
MENDOZA, J.: acquire the latter's properties for the Abaga-Kirahon 230 kV transmission line project.

This is a petition for review on certiorari seeking to reverse and set aside the September 18, 2015 During trial, the parties agreed to have the subject properties surveyed for purposes of fixing the just
Decision1 and January 25, 2016 Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 03571, compensation. As a result, the trial court suspended the proceedings and directed Transco to conduct
which affirmed with modification the December 12, 2012 Decision 3 of the Regional Trial Court, a survey of the properties.
Branch 17, Misamis Oriental (RTC) in Civil Case No. 2007-85, a case for expropriation.
Subsequently, Oroville filed an omnibus motion to convert the proceedings into an expropriation
The Antecedents case and to require Transco to pay the Bureau of Internal Revenue (BIR) the zonal value of the subject
properties. Transco made no objections to the motion.
The present case involves two (2) parcels of land located in Puerto, Cagayan de Oro City, which
originally belonged to Alfredo Reyes (Reyes) and Grace Calingasan (Calingasan), covered by On May 17, 2010, the trial court directed Transco to make a provisional deposit of ₱7,647,200.00 as
Original Certificate of Title (OCT) No. P-3 and OCT No. P-13, respectively. just compensation for Oroville's properties consisting of 13,904 square meters and affected by the
existing Tagoloan-Pulangi 138 kV transmission line. Transco complied after the trial court denied its
In 1983, petitioner National Transmission Corporation (TransCo) constructed a power transmission objections.
line on these properties, known as the Tagoloan-Pulangi 138 kV transmission line.
On February 4, 2011, the trial court directed the Land Bank of the Philippines, NAPOCOR Branch,
At some point, Reyes sold his land to Antonio Navarette, who later sold the same property to to release the aforesaid deposit to Tiu.
respondent Oroville Development Corporation (Oroville), which is now covered by Transfer
Certificate of Title (TCT) No. T-85121. Likewise, Calingasan sold her land to Oroville, now On March 21, 2011, the trial court issued a writ of possession directing Oroville to surrender
registered under TCT No. T-104365. Thus, in 1995, Oroville became the registered owner of these possession of the properties to Transco.

Page 52 of 106
Subsequently, on August 8, 2011, per nomination of the parties, the trial court appointed three (3)
Commissioners, namely, Engr. Marilyn P. Legaspi, Engr. Norberto Badelles and Atty. Avelino
Pakino, to determine the just compensation of the properties affected by the Abaga-Kirahon 230 kV
transmission line.
A summary of the Commissioners' report reads as follows:
1. Engr. Marilyn Legaspi (Court-appointed Commissioner)
Date of Taking: 1983 per Transmission Line Data and Information
(Tagoloan-Pulangi 138 kV Transmission Line)
Valuation of the Property: ₱78.65 per square meter or a total of ₱5,924,772.48 inclusive of
interests4
2. Engr. Norberto Badelles (engaged by Transco)
Date of Taking: 1983 per Transmission Line Data and Information
(Tagoloan-Pulangi 138 kV Transmission Line)
Valuation of the Property: ₱1.20 per square meter or a total of ₱45,716.35 inclusive of
interests5
3. Atty. Avelino Pakino (nominated by Oroville)
Date of Taking: 1983 per Transmission Line Data and Information
(Tagoloan-Pulangi 138 kV Transmission Line)
Valuation of the Property: ₱2,000.00 per square meter or a total of ₱27,808,000.00 inclusive
of interests6
The RTC Ruling In its assailed Decision, dated September 18, 2015, the CA ruled that TransCo's entry into Oroville's
lots in 1983 was made without warrant or color of authority because at the time Transco constructed
In its Decision, dated December 12, 2012, the RTC set aside the Commissioners' report and fixed the the Tagoloan-Pulangi 138 kV transmission line over the disputed properties in 1983, it was made
just compensation at the rate of ₱1,520.00 per square meter with legal interest of 12% per annum
Page 53 of 106
reckoned from April 20, 2007, the date of filing of the complaint. It held that the said amount was
based on the fair market value of lots along the national highway of Barangay Puerto, Cagayan de
Oro City in accordance with the schedule of values under City Ordinance No. 10425-2006 otherwise
known as An Ordinance Prescribing the Revised Schedule of Fair Market Values of Real Property in
Cagayan de Oro and in accordance with the BIR Comparative Value of Zonal Fair Market Values.
The RTC opined that the just compensation should not be reckoned from 1983, the time of taking,
because it was established by the landowners that entry into their property was without their
knowledge. The fallo reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered as follows:
1) FIXING the just compensation of the affected area of 13,904 square meters at ₱1,520.oo
per square meter reckoned from April 20, 2007, the date the complaint was filed, at interest
rate of 12% per annum until the liability is fully paid
2) ORDERING defendant TRANSCO to pay plaintiff the just compensation in the amount
of ₱1,520.00 per square meter for the 13,904 square meters the affected area at the rate of
12% per annum reckoned from April 20, 2007, the data of filing the complaint minus the
amount of ₱7,647,200.oo representing the amount paid by TRANSCO as provisional
payments
3) ORDERING defendant TRANSCO to pay plaintiff the interest of 12% per annum based
on the deficiency amount;
4) ORDERING Plaintiff and Defendant to pay the Commissioners' fee in the amount of
₱10,000.00 each within 15 days from receipt of this Order.
The Court will leave to the parties the correct mathematical computation as to what is due to plaintiff
based on the foregoing premises.
SO ORDERED.7
Aggrieved, Transco elevated an appeal before the CA.
The CA Ruling
without intent to expropriate. It added that Transco constructed the transmission line without construction of the transmission line since it is in plain view, considering its height and the huge
bothering to negotiate with the owner to purchase or expropriate the disputed lots. space that it occupied; that Oroville should not be allowed to benefit from its failure to question such
construction more than a decade after its completion; and that it should not be made to pay 12%
Further, the CA adjudged that the construction of the Tagoloan-Pulangi 138 kV transmission line did interest per annum in the nature of damages for delay as it complied with the RTC's directive to make
not oust or deprive Oroville or its previous owners of the beneficial enjoyment of their properties as provisional deposit for the subject property.
they continued to possess the same. It observed that the previous owners were able to sell the
properties to Oroville; and that after acquiring them, Oroville considered developing the lots for In its Comment,10 dated August 5, 2016, Oroville averred that to sustain the argument of Transco
residential subdivision purposes, but the subject properties were later on classified as agricultural that the basis of the payment for just compensation is the value of the property at the time of taking
lands covered by the Comprehensive Agrarian Reform Program (CARP) of the government. would sow immeasurable injustice; that the P78.65 per square meter valuation as recommended by
Commissioner Legaspi and the ₱1.20 per square meter recommended by Commissioner Badelles
The CA concluded that there was no actual taking of the subject properties in 1983 when Transco would not be enough to reimburse Oroville for the realty taxes it paid from the year 1983 up to the
constructed the Tagoloan-Pulangi 138 kV transmission line.1âwphi1 Accordingly, the computation present; that while it paid these annual taxes, Transco had been earning billions of pesos from
of the just compensation should be reckoned at the time of the filing of the complaint in 2007. The transmission charges; that as held in Napocor v. Campos, Jr., there were instances when Transco
dispositive portion reads: removed transmission lines from the affected properties due to diversion of its lines, thus, upon entry,
Transco did not have intent to expropriate the property because there might be a change of plans; that
Transco would initiate expropriation proceedings only when it was certain of its transmission plans;
WHEREFORE, the Judgment dated 12 December 2012 of the Regional Trial Court, (Branch 17),
that the earlier entry into and/or possession of Transco of the subject properties was patently without
10th Judicial Region, Cagayan de Oro City, is MODIFIED. Appellant National Transmission
any color of legal authority as it did not have the slightest intention to acquire ownership of the
Corporation is hereby ORDERED to pay appellee Oroville Corporation the unpaid balance of the
just compensation in the sum of P13,486,880.oo with legal interest of TWELVE PERCENT (12%) subject properties either by voluntary purchase or by exercise of eminent domain; and that the delay
per annum computed from 21 March 2011 to 30 June 2013 and SIX PERCENT (6%) per annum in the payment of just compensation justified the payment of 12% interest per annum.
from 1 July 2013 until its full payment. Both parties are DIRECTED to pay the Commissioners' fee
in the amount of ₱10,000.00 each within 15 days from notice. In its Reply,11 dated November 25, 2016, Transco contended that this case is not an exception to the
settled rule that just compensation should be based on the property's value at the time of its taking;
SO ORDERED.8 that the value and classification of the subject property at the time of its taking in 1983 should be the
basis for the computation of just compensation; that it informed Oroville of the construction of the
new transmission line over its properties and readily agreed to the conversion of its complaint for
Transco moved for reconsideration, but the same was denied by the CA in its assailed Resolution, injunctive relief into an expropriation case; and that the landowner should also bear the cost of being
dated January 25, 2016. remiss in guarding against the effects of a belated claim.

Hence, this petition. The Court's Ruling

ISSUES The petition is meritorious.

WHETHER THE COMPUTATION OF JUST COMPENSATION FOR THE Eminent domain is the right or power of a sovereign state to appropriate private property to particular
EXPROPRIATED PROPERTY SHOULD BE BASED ON ITS VALUE AT THE TIME OF uses to promote public welfare. It is an indispensable attribute of sovereignty; a power grounded in
THE TAKING OF THE PROPERTY the primary duty of government to serve the common need and advance the general welfare. 12 The
power of eminent domain is inseparable in sovereignty being essential to the existence of the State
WHETHER THE IMPOSITION OF A LEGAL INTEREST OF 12% IS UNJUSTIFIED 9 and inherent in government. But the exercise of such right is not unlimited, for two mandatory
requirements should underlie the Government's exercise of the power of eminent domain, namely:
Petitioner argues that Section 4, Rule 67 of the Rules of Court and applicable jurisprudence are (1) that it is for a particular public purpose; and (2) that just compensation be paid to the property
explicit in saying that just compensation for expropriated property shall be determined based on its
fair market value at the time of its taking; that Oroville could not claim lack of knowledge to the
Page 54 of 106
owner.13 These requirements partake the nature of implied conditions that should be complied with Just compensation is defined as the full and fair equivalent of the property taken from its owner by
to enable the condemnor to keep the property expropriated. 14 the expropriator. The measure is not the taker's gain, but the owner's loss. The word "just" is used to
intensify the meaning of the word "compensation" and to convey thereby the idea that the equivalent
21
Taking of Oroville's property to be rendered for the property to be taken shall be real, substantial, full, and ample.
occurred in 1983 upon construction of
the transmission lines In addition, Section 4, Rule 67 of the Rules of Court provides:

The landmark case of Republic v. Vda. De Castellvi15 provides an enlightening discourse on the Section 4. Order of expropriation. - If the objections to and the defenses against the right of the
requisites of taking. plaintiff to expropriate the property are overruled, or when no party appears to defend as required by
this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right
First, The expropriator must enter a private property; Second, the entrance into private property must to take the property sought to be expropriated, for the public use or purpose described in the
be for more than a momentary period; Third, the entry into the property should be under warrant or complaint, upon the payment of just compensation to be determined as of the date of the taking
color of legal authority; Fourth, the property must be devoted to a public use or otherwise informally of the property or the filing of the complaint, whichever came first. xxxx[Emphasis supplied]
appropriated or injuriously affected; and Fifth, the utilization of the property for public use must be
in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property. 16 The case of Secretary of the Department of Public Works and Highways v. Spouses Tecson (Tecson)22
provides a discussion of cases wherein the Court conformed to the abovementioned rule and held
The Court rules that there is taking of the property for purposes of eminent domain in 1983. that payment of just compensation should be reckoned from the date of taking when such preceded
the filing of the complaint for expropriation, to wit:
The first and fourth requisites are present in this case. Transco took possession of Oroville's property
in order to construct transmission lines to be used in generating electricity for the benefit of the In Forfom Development Corporation [Forlorn] v. Philippine National Railways [PNR], PNR entered
public. the property of Forfom in January 1973 for public use, that is, for railroad tracks, facilities and
appurtenances for use of the Carmona Commuter Service without initiating expropriation
The second requisite is likewise present as there can be no question that the construction of proceedings. In 1990, Forlorn filed a complaint for recovery of possession of real property and/ or
damages against PNR. In Eusebio v. Luis, respondent's parcel of land was taken in 1980 by the City
transmission lines meant an indefinite stay in the property of Oroville. Further, Trans Co's exercise
of Pasig and used as a municipal road now known as A Sandoval Avenue in Pasig City without the
of eminent domain is pursuant to its authority granted under Section 8 of Republic Act (R.A.) No.
appropriate expropriation proceedings. In 1994, respondent demanded payment of the value of the
9136 or the Electric Power Industry Reform Act of 2001. 17
property, but they could not agree on its valuation prompting respondent to file a complaint for
reconveyance and/ or damages against the city government and the mayor. In Manila International
Finally, Oroville has been deprived of the beneficial enjoyment of its property. In several rulings, Airport Authority v. Rodriguez, in the early 1970s, petitioner implemented expansion programs for
notably National Power Corporation v. Spouses Zabala,18 Republic v. Spouses Libunao,19 and its runway necessitating the acquisition and occupation of some of the properties surrounding its
National Power Corporation v. Tuazon20 this Court has already declared that "since the high-tension premises. AB to respondent's property, no expropriation proceedings were initiated. In 1997,
electric current passing through the transmission lines will perpetually deprive the property owners respondent demanded the payment of the value of the property, but the demand remained unheeded
of the nonnal use of their land, it is only just and proper to require Napocor to recompense them for prompting him to institute a case for accion reivindicatoria with damages against petitioner. In
the full market value of their property." Republic v. Sarabia, sometime in 1956, the Air Transportation Office (ATO) took possession and
control of a portion of a lot situated in Aldan, registered in the name of respondent, without initiating
Just compensation reckoned from the expropriation proceedings. Several structures were erected thereon including the control tower, the
date of actual taking Kalibo crash fire rescue station, the Kalibo airport terminal and the headquarters of the PNP Aviation
Security Group. In 1995, several stores and restaurants were constructed on the remaining portion of
The next question to be resolved is whether just compensation should be reckoned from 1983 when the lot. In 1997, respondent filed a complaint for recovery of possession with damages against the
the taking took place. storeowners where ATO intervened claiming that the storeowners were its lessees.

Page 55 of 106
The Court in the above-mentioned cases was confronted with common factual circumstances The rulings in Macabangkit
where the government took control and possession of the subject properties for public use Sangkay and Saludares are
without initiating expropriation proceedings and without payment of just compensation, while mere exceptions
the landowners failed for a long period of time to question such government act and later instituted
actions for recovery of possession with damages. The Court thus determined the landowners' right to The Court is not unaware of the rulings in National Power Corporation v. Heirs of Macabangkit
the payment of just compensation and, more importantly, the amount of just compensation. The Sangkay (Macabangkit Sangkay)27 and National Power Corporation v. Spouses Saludares
Court has uniformly ruled that just compensation is the value of the property at the time of (Saludares) 28 wherein it was held that just compensation should be reckoned from the time the
taking that is controlling for purposes of compensation. In Forlorn, the payment of just property owners initiated inverse condemnation proceedings notwithstanding that the taking of the
compensation was reckoned from the time of taking in 1973; in Eusebio, the Court fixed the just properties occurred earlier.
compensation by determining the value of the property at the time of taking in 1980; in MIAA, the
value of the lot at the time of taking in 1972 served as basis for the award of compensation to the
In Macabangkit Sangkay, NAPOCOR, in the 1970s, undertook the construction of several
owner; and in Republic, the Court was convinced that the taking occurred in 1956 and was thus the
underground tunnels to be used in diverting the water flow from the Agus River to the hydroelectric
basis in fixing just compensation.23 [Citations omitted and emphases supplied]
plants. On November 21, 1997, respondents therein sued NAPOCOR for recovery of property and
damages, alleging that they belatedly discovered that one of the underground tunnels of NPC
As further pointed out in Republic v. Lara, et al.,24 thus: traversed their land.29 In that case, the Court adjudged that the value of the property at the time the
property owners initiated inverse condemnation proceedings should be considered for purposes of
x x x "The value of the property should be fixed as of the date when it was taken and not the date of just compensation for the following reasons, viz:
the filing of the proceedings." For where property is taken ahead of the filing of the condemnation
proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the entry Compensation that is reckoned on the market value prevailing at the time either when NPC entered
by the plaintiff upon the property may have depreciated its value thereby; or, there may have been a or when it completed the tunnel, as NPC submits, would not be just, for it would compound the gross
natural increase in the value of the property from the time it is taken to the time the complaint is filed, unfairness already caused to the owners by NPC's entering without the intention of formally
due to general economic conditions. The owner of private property should be compensated only for expropriating the land, and without the prior knowledge and consent of the Heirs of Macabangkit.
what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. NPC's entry denied elementary due process of law to the owners since then until the owners
And what he loses is only the actual value of his property at the time it is taken x x x. 25 commenced the inverse condemnation proceedings. The Court is more concerned with the necessity
to prevent NPC from unjustly profiting from its deliberate acts of denying due process of law to the
Indeed, the State is only obliged to make good the loss sustained by the landowner, with due owners. As a measure of simple justice and ordinary fairness to them, therefore, reckoning just
consideration of the circumstances availing at the time the property was taken. The concept of just compensation on the value at the time the owners commenced these inverse condemnation
compensation does not imply fairness to the property owner alone. Compensation must also be just proceedings is entirely warranted.30
to the public, which ultimately bears the cost of expropriation. 26
On the other hand, in Saludares, respondents therein filed a complaint for the payment of just
The sequence of events in all of these cited cases as well as in Tecson is similar to that obtaining in compensation against NAPOCOR, averring that it had entered and occupied their property by
the case at bench, that is, the government took possession of private properties without initiating erecting high-tension transmission lines and failed to reasonably compensate them for the intrusion.
expropriation proceedings and later on, the property owners demanded either the return of their For its part, NAPOCOR countered that it had already paid just compensation for the establishment
properties or the payment of just compensation. Thus, pursuant to the Rules of Court and in of the transmission lines by virtue of its compliance with the final and executory decision in National
accordance with prevailing jurisprudence, the Court rules that just compensation must be ascertained Power Corporation v. Pereyras.31 In ruling that the reckoning value of just compensation is that
as of the year 1983 when Transco commenced construction of the transmission lines. Just prevailing at the time of the filing of the inverse condemnation proceedings, the Court declared:
compensation is therefore fixed at ₱78.65 per square meter, which is the fair market value of the
property at the time of taking. As will be discussed later on, the imposition of interest would x x x To reiterate, NAPOCOR should have instituted eminent domain proceedings before it occupied
adequately compensate the property owner for the delay in the payment of just compensation respondent spouses' property.1âwphi1 Because it failed to comply with this duty, respondent spouses
considering that more often than not, the amount of interest to be paid is higher than the increase in were constrained to file the instant Complaint for just compensation before the trial court. From the
the property's market value. 1970s until the present, they were deprived of just compensation, while NAPOCOR continuously
burdened their property with its transmission lines. This Court cannot allow petitioner to profit from
Page 56 of 106
its failure to comply with the mandate of the law. We therefore rule that, to adequately compensate of any compelling reason to deviate from the rulings in the aforecited cases, the Court, in the case at
respondent spouses from the decades of burden on their property, NAPOCOR should be made to pay bench, must adhere to the doctrines established therein.
the value of the property at the time of the filing of the instant Complaint when respondent spouses
made a judicial demand for just compensation.32 Amount of interest to be paid

These rulings, however, are exceptions to the general rule that just compensation must be reckoned The owner's loss, of course, is not only his property but also its income-generating potential.34 Thus,
from the time of taking or filing of the complaint, whichever came first. The special circumstances when property is taken, full compensation of its value must immediately be paid to achieve a fair
of the aforementioned cases called for the valuation of just compensation at the time the landowners exchange for the property and the potential income lost.35 Thus, the rationale for imposing the interest
initiated inverse condemnation proceedings notwithstanding that taking of the properties occurred is to compensate the landowners for the income they would have made had they been properly
first. In Macabangkit Sangkay, NAPOCOR did not even inform the property owners of the compensated for their properties at the time of the taking.36
construction of the underground tunnels. Hence, it could be said that NAPOCOR employed stealth
instead of complying with the legal process of expropriation. Further, considering that the tunnels
The Court, in Republic v. Court of Appeals,37 further enunciated on the necessity of the payment of
were constructed underground, the property owners came to know thereof only when the purchaser interest to compensate for delay in the payment of just compensation, viz:
of the property refused to proceed with the sale upon discovery of the underground tunnels. In this
case, however, the transmission lines are visible, such that Oroville could not deny knowledge of its
construction in 1983. In Saludares, NAPOCOR refused to acknowledge the respondents' claim and The constitutional limitation of "just compensation" is considered to be the sum equivalent to the
insisted that it already paid just compensation because the respondents' property was the same one market value of the property, broadly described to be the price fixed by the seller in open market in
involved in the Pereyra case. Thus, NAPOCOR had no intention to pay just compensation. This the usual and ordinary course of legal action and competition or the fair value of the property as
circumstance does not exist in the case at bench. between one who receives, and one who desires to sell, if fixed at the time of the actual taking by the
government. Thus, if property is taken for public use before compensation is deposited with the court
having jurisdiction over the case, the final compensation must include interest [s] on its just value
The rulings in Macabangkit Sangkay and Saludares are more in consonance with the rules of equity
to be computed from the time the property is taken to the time when compensation is actually
than with the Rules of Court, specifically Rule 67 on expropriation. Indeed, the practice of construct
paid or deposited with the court. In fine, between the taking of the property and the actual
first, expropriate later is reprehensible and must not be countenanced. The Court, however, must not
payment, legal interest [s] accrue in order to place the owner in a position as good as (but not
lose sight of Section 4, Rule 67 which mandates that just compensation must be determined "as of better than) the position he was in before the taking occurred.38 [Emphasis supplied]
the date of the taking of the property or the filing of the complaint, whichever came first." This
provision is, first and foremost, part of the Rules which the Court itself promulgated for purposes of
uniformity, among others. Tecson also clarified the amount of interest due the landowners, to wit:

Further, the doctrine of stare decisis constrains the Court to follow the ruling laid down in Tecson x x x In other words, the just compensation due to the landowners amounts to an effective forbearance
and similar cases. "Time and again, the court has held that it is a very desirable and necessary judicial on the part of the State - a proper subject of interest computed from the time the property was taken
practice that when a court has laid down a principle of law as applicable to a certain state of facts, it until the full amount of just compensation is paid - in order to eradicate the issue of the constant
will adhere to that principle and apply it to all future cases in which the facts are substantially the variability of the value of the currency over time.
same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare
decisis simply means that for the sake of certainty, a conclusion reached in one case should be applied x x xx
to those that follow if the facts are substantially the same, even though the parties may be different.
It proceeds from the first principle of justice that, absent any powerful countervailing considerations, It is important to note, however, that interest shall be compounded at the time judicial demand is
like cases ought to be decided alike."33 made pursuant to Article 2212 of the Civil Code of the Philippines, and sustained in Eastern Shipping
Lines v. Court of Appeals, then later on in Nacar v. Gallery Frames, save for the reduction of interest
39
To reiterate, the facts of the instant case are substantially the same with Tecson and similar cases rate to 6% for loans or forbearance of money. x x x
cited therein. A government agency took possession of private property for the benefit of the public
without, however, initiating expropriation proceedings, which thus, constrained the landowner to file In the case at bench, Transco made a provisional deposit of ₱7,647,200.00 on January 21, 2011.
actions to recover their properties or to demand payment of just compensation. Hence, in the absence Consequently, from 1983 to January 21, 2011, Oroville is entitled to twelve percent (12%) interest
Page 57 of 106
per annum which is the prevailing rate during such period pursuant to Central Bank Circular No. WHEREFORE, the petition is GRANTED. The September 18, 2015 Decision and January 25, 2016
905,40 effective from December 22, 1982 to June 30, 2013. Resolution of the Court of Appeals in CAG.R. CV No. 03571, are REVERSED and SETASIDE.
The valuation of the subject property owned by respondent Oroville shall be ₱78.65 per square meter,
Oroville is also awarded additional compensation by way of exemplary damages and attorney's fees. with interest at twelve percent (12%) per annum from January 1983 until January 21, 2011. Petitioner
In Republic v. CA,41 the Court held that the failure of the government to initiate an expropriation Transco is also ordered to pay respondent Oroville exemplary damages in the amount of
proceeding to the prejudice of the landowner may be corrected with the awarding of exemplary ₱1,000,000.00 and attorney's fees in the amount of ₱200,000.00.
damages, attorney's fees and costs of litigation. Thus:
SO ORDERED.
x x x However, we find it proper to award temperate and exemplary damages in light of NIA's
misuse of its power of eminent domain. Any arm of the State that exercises the delegated power of Footnotes
eminent domain must wield that power with circumspection and utmost regard for procedural
requirements. A government instrumentality that fails to observe the constitutional guarantees *
On Leave.
of just compensation and due process abuses the authority delegated to it, and is liable to the
property owner for damages.42 x x x 1
Penned by Associate Justice Edgardo T. Lloren with Associate Justice Romulo V.
Borja and Associate Justice Maria Filomena D. Singh, concurring; rollo, pp. 23-36.
Hence, considering that Oroville was deprived of beneficial ownership over their property without 2
the benefit of a timely expropriation proceeding, and to serve as a deterrent to the State from failing
to institute such proceedings, a grant of exemplary damages in the amount of One Million Pesos 2
Id. at 38-39.
(₱1,000,000.00) is fair and reasonable. Moreover, an award for attorney's fees in the amount of Two
Hundred Thousand Pesos (₱200,000.00) in favor of Oroville is in order. 3
Penned by Presiding Judge Florencia D. Sealana-Abbu; id. at 61-73.
To recapitulate, Transco is liable to pay Oroville ₱78.65 per square meter representing the fair market 4
value of the property at the time of taking in 1983 and 12% interest per annum on the total fair market Id. at 65.
value, computed from 1983 to January 21, 2011, the date when Transco made a provisional deposit
5
in favor of Oroville. Considering that the actual date of taking cannot be determined from the records Id. at 66.
of the case, the date of taking is pegged on January 1, 1983. Oroville is also awarded exemplary
damages in the amount of ₱1,000,000.00 and attorney's fees in the amount of ₱200,000.00. 6
Id. at 68.

On a final note, there are several cases which reached this Court in which Transco and even other 7
Id. at 72-73.
government agencies constructed transmission lines, tunnels and other infrastructures before it
decided to expropriate the private properties upon which they built the same. The Court reminds the 8
Id. at 35.
government and its agencies that it is their obligation to initiate eminent domain proceedings
whenever they intend to take private property for any public purpose. Before the expropriating power 9
ld. at 8.
enters a private property, it must first file an action for eminent domain 43 and deposit with the
authorized government depositary an amount equivalent to the assessed value of the property. 44
10
Id. at 128-144.
Transco should first file an expropriation case before it proceeds to construct transmission lines or
11
any other infrastructure on any private property. The practice of construct first, expropriate later must Id. at 153-159.
be put to a stop.
12
Heirs of Suguitan v. City of Mandaluyong, 384 Phil. 677, 687 (2000).

Page 58 of 106
13 29
Mac tan-Cebu International Airport Authority v. Lozada, Sr., 627 Phil. 434, 445 Supra note 27, at 579-580.
(2010).
30
Id. at 597.
14
Id.
31
Supra note 28, at 971.
15
157 Phil. 329 (1974).
32
Id. at 979-980.
16
Id. at 345-346.
33
Chinese Young Men's Christian Association of the Philippine Islands v.
17
Section 8. Creation of the National Transmission Company. - x x x Remington Steel Corporation, 573 Phil. 320, 337 (2008).

34
The TRANSCO may exercise the power of eminent domain subject to the Apo Fruits Corporation v. Land Bank of the Philippines, 647 Phil. 251, 276
requirements of the Constitution and existing laws. Except as provided herein, no (2010).
person, company or entity other than the TRANSCO shall own any transmission
facilities. x x x 35
Id.
18
702 Phil. 491, 501 (2013). 36
Secretary of the Department of Public Works and Highways v. Spouses Tecson
(Resolution), G.R. No. 179334, 756 SCRA 389, 413 (2015).
19
611 Phil. 748, 761 (2009).
37
433 Phil. 106 (2002).
20
668 Phil. 301, 310-311 (2011).
38
Id. at 122-123.
21
National Power Corporation v. Diato-Bernal, 653 Phil. 345, 354 (20 10).
39
Supra note 36, at 414-419.
22
713 Phil. 55 (2013).
40
Section 2. The rate of interest for the loan or forbearance of any money, goods or
23
Id. at 71-72. credits and the rate allowed in judgments, in the absence of express contract as to
such rate of interest, shall continue to be twelve per cent (12%) per annum.
24
96 Phil. 170 (1954 ).
41
Supra note 26.
25
Id. at 177-178.
42
Id. at 512-513.
26
Republic v. Court of Appeals, 494 Phil. 494, 510 (2005).
43
Rules of Court, Rule 67, Section l.
27
National Power Corporation v. Heirs of Macabangkit Sangkay, 671 Phil. 569
44
(2011 ). Rules of Court, Rule 67, Section 2.

28
National Power Corporation v. Spouses Saludares, 686 Phil. 967 (2012). G.R. No. 183719 February 2, 2011

Page 59 of 106
MARGARITA F. CASTRO, Petitioner,
vs.
NAPOLEON A. MONSOD, Respondent.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court,
assailing the Decision1 dated May 25, 2007 and the Resolution2 dated July 14, 2008 of the
Court of Appeals (CA) in CA-G.R. CV No. 83973.
The antecedents of the case are as follows:
Petitioner is the registered owner of a parcel of land located on Garnet Street, Manuela
Homes, Pamplona, Las Piñas City, and covered by Transfer Certificate of Title (TCT) No.
T-36071, with an area of one hundred thirty (130) square meters (sq.m.). Respondent, on the
other hand, is the owner of the property adjoining the lot of petitioner, located on Lyra Street,
Moonwalk Village, Phase 2, Las Piñas City. There is a concrete fence, more or less two (2)
meters high, dividing Manuela Homes from Moonwalk Village. 3
On February 29, 2000, respondent caused the annotation of an adverse claim against sixty-
five (65) sq.m. of the property of petitioner covered by TCT No. T-36071. The adverse claim
was filed without any claim of ownership over the property. Respondent was merely
asserting the existing legal easement of lateral and subjacent support at the rear portion of
his estate to prevent the property from collapsing, since his property is located at an elevated
plateau of fifteen (15) feet, more or less, above the level of petitioner’s property. 4 Respondent
also filed a complaint for malicious mischief and malicious destruction before the office of
the barangay chairman.5
In defiance, petitioner filed a complaint for damages with temporary restraining order/writ
of preliminary injunction before the Regional Trial Court (RTC) of Las Piñas City. Petitioner
also prayed that the Register of Deeds of Las Piñas City be ordered to cancel the annotation
of the adverse claim on TCT No. T-36071.6
Prior to the filing of the case before the RTC, there were deposits of soil and rocks about two
(2) meters away from the front door of the house of
petitioner. As such, petitioner was not able to park her vehicle at the dead-end portion of
Garnet Street. When petitioner noticed a leak that caused the front portion of her house to be
slippery, she hired construction workers to see where the leak was coming from. The workers
Page 60 of 106
had already started digging when police officers sent by respondent came and stopped the
workers from finishing their job.7
Petitioner averred that when she bought the property from Manuela Homes in 1994, there
was no annotation or existence of any easement over the property. Respondent neither asked
permission nor talked to her with regard to the use of 65 sq.m. of her property as easement.
Upon learning of the adverse claim, she felt disturbed and experienced sleepless nights for
fear that she would not be able to sell her property. Petitioner admitted that TCT No. 36071
does not cover the open space at the dead-end portion of Garnet Street.8
For his part, respondent claimed that he and his family had been residing in Moonwalk
Village since June 1984. Adjacent to his property is the land of petitioner in Manuela Homes.
When he bought the property in 1983, the land elevation of Moonwalk Village was almost
on the same level as Manuela Homes. However, sometime in 1985 and 1986, Pilar
Development Corporation, the developer of Manuela Homes, bulldozed, excavated, and
transferred portions of the elevated land to the lower portions of Manuela Homes. Thus,
Manuela Homes became lower than Moonwalk Village.9
Before the said excavation, respondent personally complained to Pilar
Development Corporation and was assured that, as provided by the National Building Code,
an embankment will be retained at the boundary of Manuela Homes and Moonwalk Village,
which is more or less fifteen (15) feet higher than Manuela Homes.10
Manuela Homes retained the embankment consisting of soil and rocks. Respondent had the
open space riprapped with stones as reinforcement against any potential soil erosion,
earthquake, and possible digging by any person.
Respondent asserted that the affidavit of adverse claim was for the annotation of the lateral
and subjacent easement of his property over the property of petitioner, in view of the latter’s
manifest determination to remove the embankment left by the developer of Manuela Homes.
On October 11, 2004, the RTC rendered a decision,11 the dispositive portion of which reads:
WHEREFORE, premises considered, this court hereby renders judgment: (1) ordering the
cancellation of [respondent’s] adverse claim at the back of Transfer Certificate of Title No.
T-36071 at the expense of [respondent] Napoleon Monsod; (2) ordering the said [respondent]
to pay the herein [petitioner] the amount of Php50,000.00 as moral damages; and (3)
dismissing [petitioner’s] claim for actual damages, attorney’s fees, litigation costs and costs
of suit and [respondent’s] compulsory counterclaim for lack of merit.
SO ORDERED.12
The trial court ratiocinated that the adverse claim of respondent was non-registrable
considering that the basis of his claim was an easement and not an interest adverse to the
registered owner, and neither did he contest the title of petitioner. Furthermore, the adverse
claim of respondent failed to comply with the requisites provided under Section 70 of
Presidential Decree No. 1529.13
On appeal, the CA reversed the decision of the trial court in a Decision14 dated May 25, 2007,
the fallo of which reads:
WHEREFORE, premises considered, the instant appeal is GRANTED. The Decision of the
Regional Trial Court, Branch 198, Las Piñas City dated October 11, 2004 is REVERSED
and SET ASIDE. The Court hereby orders the retention of the annotation at the back of
Transfer Certificate of Title No. T-36071, not as an adverse claim, but a recognition of the
existence of a legal easement of subjacent and lateral support constituted on the lengthwise
or horizontal land support/embankment area of sixty-five (65) square meters, more or less,
of the property of [petitioner] Margarita Castro. The writ of preliminary injunction issued by
this Court on April 18, 2006 is hereby made permanent. [Petitioner’s] claim for damages is
likewise DISMISSED.
SO ORDERED.15
The CA ruled that while respondent’s adverse claim could not be sanctioned because it did
not fall under the requisites for registering an adverse claim, the same might be duly
annotated in the title as recognition of the existence of a legal easement of subjacent and
lateral support. The purpose of the annotation was to prevent petitioner from making
injurious excavations on the subject embankment as to deprive the residential house and lot
of respondent of its natural support and cause it to collapse. Respondent only asked that
petitioner respect the legal easement already existing thereon.16
On June 15, 2007, petitioner filed a motion for reconsideration. However, the CA denied the
same in a Resolution17 dated July 14, 2008.
Hence, this petition.
The issue in this case is whether the easement of lateral and subjacent support exists on the
subject adjacent properties and, if it does, whether the same may be annotated at the back of
the title of the servient estate.
Page 61 of 106
Article 437 of the Civil Code provides that the owner of a parcel of land is the owner of its
surface and of everything under it, and he can construct thereon any works, or make any
plantations and excavations which he may deem proper. However, such right of the owner
is not absolute and is subject to the following limitations: (1) servitudes or easements, 18 (2)
special laws,19 (3) ordinances,20 (4) reasonable requirements of aerial navigation, 21 and (5)
rights of third persons.22
Respondent filed before the RTC an affidavit of adverse claim, the pertinent portions of
which read:
5. That our adverse claim consists of rights of legal or compulsory easement of
lateral and subjacent support (under the Civil Code) over a portion of the above-
described property of owner Margarita F. Castro, that is, covering the lengthwise or
horizontal land support/embankment area of sixty-five (65) square meters, more or
less.
6. That said registered owner has attempted to destroy and/or remove portions of
the existing lateral/subjacent land and cement supports adjoining the said two
properties. In fact, a portion of the easement was already destroyed/removed, to the
continuing prejudice of herein adverse claimant, and that a formal complaint against
said registered owner was filed by the herein adverse claimant before the Office of
the Barangay Chairman of Talon V, Las Piñas City and the same proved futile. 23
Respondent’s assertion that he has an adverse claim over the 65 sq.m. property of petitioner
is misplaced since he does not have a claim over the ownership of the land. The annotation
of an adverse claim over registered land under Section 70 of Presidential Decree 1529 24
requires a claim on the title of the disputed land. Annotation is done to apprise third persons
that there is a controversy over the ownership of the land and to preserve and protect the
right of the adverse claimant during the pendency of the controversy. It is a notice to third
persons that any transaction regarding the disputed land is subject to the outcome of the
dispute.25
In reality, what respondent is claiming is a judicial recognition of the existence of the
easement of subjacent and lateral support over the 65 sq. m. portion of petitioner’s property
covering the land support/embankment area. His reason for the annotation is only to prevent
petitioner from removing the embankment or from digging on the property for fear of soil
erosion that might weaken the foundation of the rear portion of his property which is adjacent
to the property of petitioner.
An easement or servitude is an encumbrance imposed upon an immovable for the benefit of
another immovable belonging to a different owner.26 There are two kinds of easements
according to source. An easement is established either by law or by will of the owners.27 The SO ORDERED.
courts cannot impose or constitute any servitude where none existed. They can only declare
its existence if in reality it exists by law or by the will of the owners. There are therefore no Footnotes
judicial easements.28
1
Penned by Associate Justice Rosmari D. Carandang, with Associate Justices Jose
Article 684 of the Civil Code provides that no proprietor shall make such excavations upon C. Reyes, Jr. and Mariflor P. Punzalan Castillo, concurring; rollo, pp. 68-79.
his land as to deprive any adjacent land or building of sufficient lateral or subjacent support.
An owner, by virtue of his surface right, may make excavations on his land, but his right is 2
Id. at 81-83.
subject to the limitation that he shall not deprive any adjacent land or building of sufficient
lateral or subjacent support. Between two adjacent landowners, each has an absolute property 3
right to have his land laterally supported by the soil of his neighbor, and if either, in Id. at 69.
excavating on his own premises, he so disturbs the lateral support of his neighbor’s land as
4
to cause it, or, in its natural state, by the pressure of its own weight, to fall away or slide from Id. at 125.
its position, the one so excavating is liable.29
5
Id.
In the instant case, an easement of subjacent and lateral support exists in favor of
respondent.1avvphi1 It was established that the properties of petitioner and respondent adjoin 6
Id.
each other. The residential house and lot of respondent is located on an elevated plateau of
fifteen (15) feet above the level of petitioner’s property. The embankment and the riprapped 7
Id. at 127-128.
stones have been in existence even before petitioner became the owner of the property. It
was proven that petitioner has been making excavations and diggings on the subject 8
Id. at 127, 134.
embankment and, unless restrained, the continued excavation of the embankment could
cause the foundation of the rear portion of the house of respondent to collapse, resulting in
9
the destruction of a huge part of the family dwelling.30 Id. at 127-128.

10
We sustain the CA in declaring that a permanent injunction on the part of petitioner from Id. at 128.
making injurious excavations is necessary in order to protect the interest of respondent.
11
However, an annotation of the existence of the subjacent and lateral support is no longer Penned by Judge Erlinda Nicolas-Alvaro, Regional Trial Court, Branch 198, Las
necessary. It exists whether or not it is annotated or registered in the registry of property. A Piñas City; id. at 125- 134.
judicial recognition of the same already binds the property and the owner of the same,
including her successors-in-interest. Otherwise, every adjoining landowner would come to 12
Id. at 134.
court or have the easement of subjacent and lateral support registered in order for it to be
recognized and respected. 13
Id. at 131.

WHEREFORE, in view of the foregoing, the Decision dated May 25, 2007 and the 14
Supra note 1.
Resolution dated July 14, 2008 of the Court of Appeals in CA-G.R. CV No. 83973 are hereby
AFFIRMED WITH MODIFICATION that the annotation at the back of Transfer Certificate 15
of Title No. T-36071, recognizing the existence of the legal easement of subjacent and lateral Id. at 78-79.
support constituted on the lengthwise or horizontal land support/embankment area of sixty-
16
five (65) square meters, more or less, of the property of petitioner Margarita F. Castro, is Id. at 75-76.
hereby ordered removed.
17
Supra note 2.
Page 62 of 106
18
CIVIL CODE, Art. 437. amount not less than one thousand pesos nor more than five thousand
pesos, in its discretion. Before the lapse of thirty days, the claimant may
19
Id. withdraw his adverse claim by filing with the Register of Deeds a sworn
petition to that effect.
20
Id.
25
Arrazola v. Bernas, 175 Phil. 452, 456-457 (1978).
21
Id.
26
CIVIL CODE, Art. 613.
22
CIVIL CODE, Art. 431.
27
CIVIL CODE, Art. 619.
23
Rollo, p. 131.
28
De Leon, Hector S., Comments and Cases on Property (5th ed.), p. 476.
24
Section 70 of Presidential Decree 1529 provides:
29
Id. at 544.
Section 70. Adverse claim. Whoever claims any part or interest in
30
registered land adverse to the registered owner, arising subsequent to the Rollo, pp. 76-77.
date of the original registration, may, if no other provision is made in this
Decree for registering the same, make a statement in writing setting forth G.R. No. L-43938 April 15, 1988
fully his alleged right or interest, and how or under whom acquired, a
reference to the number of the certificate of title of the registered owner, REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT),
the name of the registered owner, and a description of the land in which petitioner,
the right or interest is claimed. vs.
HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA,
The statement shall be signed and sworn to, and shall state the adverse respondents.
claimant's residence, and a place at which all notices may be served upon
him. This statement shall be entitled to registration as an adverse claim on G.R. No. L-44081 April 15, 1988
the certificate of title. The adverse claim shall be effective for a period of
thirty days from the date of registration. After the lapse of said period, the
BENGUET CONSOLIDATED, INC., petitioner,
annotation of adverse claim may be canceled upon filing of a verified
vs.
petition therefor by the party in interest: Provided, however, that after
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and
cancellation, no second adverse claim based on the same ground shall be
EDUARDO, all surnamed DE LA ROSA, represented by their father JOSE Y. DE LA
registered by the same claimant.
ROSA, respondents.

Before the lapse of thirty days aforesaid, any party in interest may file a
G.R. No. L-44092 April 15, 1988
petition in the Court of First Instance where the land is situated for the
cancellation of the adverse claim, and the court shall grant a speedy
hearing upon the question of the validity of such adverse claim, and shall ATOK-BIG WEDGE MINING COMPANY, petitioner,
render judgment as may be just and equitable. If the adverse claim is vs.
adjudged to be invalid, the registration thereof shall be ordered canceled. HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and
If, in any case, the court, after notice and hearing, shall find that the EDUARDO, all surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA
adverse claim thus registered was frivolous, it may fine the claimant in an ROSA, respondents.
Page 63 of 106

CRUZ, J.:
The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels
of the earth even if the land where the discovery is made be private. 1 In the cases at bar,
which have been consolidated because they pose a common issue, this doctrine was not
correctly applied.
These cases arose from the application for registration of a parcel of land filed on February
11, 1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria,
Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided
into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold
to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto,
respectively, in 1964. 2
The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok
Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic
of the Philippines, through the Bureau of Forestry Development, as to lots 1-9. 3
In support of the application, both Balbalio and Alberto testified that they had acquired the
subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her
father shortly after the Liberation. She testified she was born in the land, which was
possessed by her parents under claim of ownership. 4 Alberto said he received Lots 6-9 in
1961 from his mother, Bella Alberto, who declared that the land was planted by Jaime and
his predecessors-in-interest to bananas, avocado, nangka and camote, and was enclosed with
a barbed-wire fence. She was corroborated by Felix Marcos, 67 years old at the time, who
recalled the earlier possession of the land by Alberto's father. 5 Balbalio presented her tax
declaration in 1956 and the realty tax receipts from that year to 1964, 6 Alberto his tax
declaration in 1961 and the realty tax receipts from that year to 1964. 7
Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold
to it on September 22, 1934, by the successors-in-interest of James Kelly, who located the
claim in September 1909 and recorded it on October 14, 1909. From the date of its purchase,
Benguet had been in actual, continuous and exclusive possession of the land in concept of
owner, as evidenced by its construction of adits, its affidavits of annual assessment, its
geological mappings, geological samplings and trench side cuts, and its payment of taxes on
the land. 8
For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the
Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930,
Page 64 of 106
and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims
were purchased from these locators on November 2, 1931, by Atok, which has since then
been in open, continuous and exclusive possession of the said lots as evidenced by its annual
assessment work on the claims, such as the boring of tunnels, and its payment of annual taxes
thereon. 9
The location of the mineral claims was made in accordance with Section 21 of the Philippine
Bill of 1902 which provided that:
SEC. 21. All valuable mineral deposits in public lands in the philippine
Islands both surveyed and unsurveyed are hereby declared to be free and
open to exploration, occupation and purchase and the land in which they
are found to occupation and purchase by the citizens of the United States,
or of said islands.
The Bureau of Forestry Development also interposed its objection, arguing that the land
sought to be registered was covered by the Central Cordillera Forest Reserve under
Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not
subject to alienation under the Constitutions of 1935 and 1973. 10
The trial court * denied the application, holding that the applicants had failed to prove their
claim of possession and ownership of the land sought to be registered. 11 The applicants
appealed to the respondent court, * which reversed the trial court and recognized the claims
of the applicant, but subject to the rights of Benguet and Atok respecting their mining claims.
12
In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over
the land while at the same time reserving the sub-surface rights of Benguet and Atok by
virtue of their mining claims.
Both Benguet and Atok have appealed to this Court, invoking their superior right of
ownership. The Republic has filed its own petition for review and reiterates its argument that
neither the private respondents nor the two mining companies have any valid claim to the
land because it is not alienable and registerable.
It is true that the subject property was considered forest land and included in the Central
Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and
Atok at that time. The Court of Appeals correctly declared that:
There is no question that the 9 lots applied for are within the June Bug
mineral claims of Benguet and the "Fredia and Emma" mineral claims of
Atok. The June Bug mineral claim of plaintiff Benguet was one of the 16
mining claims of James E. Kelly, American and mining locator. He filed
his declaration of the location of the June Bug mineral and the same was
recorded in the Mining Recorder's Office on October 14, 1909. All of the
Kelly claims ha subsequently been acquired by Benguet Consolidated, Inc.
Benguet's evidence is that it had made improvements on the June Bug
mineral claim consisting of mine tunnels prior to 1935. It had submitted
the required affidavit of annual assessment. After World War II, Benguet
introduced improvements on mineral claim June Bug, and also conducted
geological mappings, geological sampling and trench side cuts. In 1948,
Benguet redeclared the "June Bug" for taxation and had religiously paid
the taxes.
The Emma and Fredia claims were two of the several claims of Harrison
registered in 1931, and which Atok representatives acquired. Portions of
Lots 1 to 5 and all of Lots 6 to 9 are within the Emma and Fredia mineral
claims of Atok Big Wedge Mining Company.
The June Bug mineral claim of Benguet and the Fredia and Emma mineral
claims of Atok having been perfected prior to the approval of the
Constitution of the Philippines of 1935, they were removed from the public
domain and had become private properties of Benguet and Atok.
It is not disputed that the location of the mining claim
under consideration was perfected prior to November
15, 1935, when the Government of the Commonwealth
was inaugurated; and according to the laws existing at
that time, as construed and applied by this court in
McDaniel v. Apacible and Cuisia (42 Phil. 749), a valid
location of a mining claim segregated the area from the
public domain. Said the court in that case: The moment
the locator discovered a valuable mineral deposit on the
lands located, and perfected his location in accordance
with law, the power of the United States Government to
deprive him of the exclusive right to the possession and
enjoyment of the located claim was gone, the lands had
become mineral lands and they were exempted from
lands that could be granted to any other person. The
reservations of public lands cannot be made so as to
include prior mineral perfected locations; and, of course,
if a valid mining location is made upon public lands
afterwards included in a reservation, such inclusion or
reservation does not affect the validity of the former
location. By such location and perfection, the land
Page 65 of 106
located is segregated from the public domain even as
against the Government. (Union Oil Co. v. Smith, 249
U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc.
546).
"The legal effect of a valid location of a mining claim is
not only to segregate the area from the public domain,
but to grant to the locator the beneficial ownership of the
claim and the right to a patent therefor upon compliance
with the terms and conditions prescribed by law. Where
there is a valid location of a mining claim, the area
becomes segregated from the public domain and the
property of the locator." (St. Louis Mining & Milling
Co. v. Montana Mining Co., 171 U.S. 650; 655; 43 Law
ed., 320, 322.) "When a location of a mining claim is
perfected it has the effect of a grant by the United States
of the right of present and exclusive possession, with the
right to the exclusive enjoyment of all the surface ground
as well as of all the minerals within the lines of the
claim, except as limited by the extralateral right of
adjoining locators; and this is the locator's right before
as well as after the issuance of the patent. While a lode
locator acquires a vested property right by virtue of his
location made in compliance with the mining laws, the
fee remains in the government until patent issues."(18
R.C.L. 1152) (Gold Creek Mining Corporation v. Hon.
Eulogio Rodriguez, Sec. of Agriculture and Commerce,
and Quirico Abadilla, Director of the Bureau of Mines,
66 Phil. 259, 265-266)
It is of no importance whether Benguet and Atok had secured a patent for
as held in the Gold Creek Mining Corp. Case, for all physical purposes of
ownership, the owner is not required to secure a patent as long as he
complies with the provisions of the mining laws; his possessory right, for
all practical purposes of ownership, is as good as though secured by patent.
We agree likewise with the oppositors that having complied with all the
requirements of the mining laws, the claims were removed from the public
domain, and not even the government of the Philippines can take away this
right from them. The reason is obvious. Having become the private
properties of the oppositors, they cannot be deprived thereof without due
process of law. 13
Such rights were not affected either by the stricture in the Commonwealth Constitution
against the alienation of all lands of the public domain except those agricultural in nature for
this was made subject to existing rights. Thus, in its Article XIII, Section 1, it was
categorically provided that:
SEC. 1. All agricultural, timber and mineral lands of the public domain,
waters, minerals, coal, petroleum and other mineral oils, all forces of
potential energy and other natural resources of the Philipppines belong to
the State, and their disposition, exploitation, development, or utilization
shall be limited to citizens of the Philippines or to corporations or
associations at least 60% of the capital of which is owned by such citizens,
subject to any existing right, grant, lease or concession at the time of the
inauguration of the government established under this Constitution.
Natural resources with the exception of public agricultural lands, shall not
be alienated, and no license, concession, or lease for the exploitation,
development or utilization of any of the natural resources shall be granted
for a period exceeding 25 years, except as to water rights for irrigation,
water supply, fisheries, or industrial uses other than the development of
water power, in which case beneficial use may be the measure and the limit
of the grant.
Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:
Any provision of existing laws, executive order, proclamation to the
contrary notwithstanding, all locations of mining claim made prior to
February 8, 1935 within lands set apart as forest reserve under Sec. 1826
of the Revised Administrative Code which would be valid and subsisting
location except to the existence of said reserve are hereby declared to be
valid and subsisting locations as of the date of their respective locations.
The perfection of the mining claim converted the property to mineral land and under the laws
then in force removed it from the public domain. 14 By such act, the locators acquired
exclusive rights over the land, against even the government, without need of any further act
such as the purchase of the land or the obtention of a patent over it. 15 As the land had become
the private property of the locators, they had the right to transfer the same, as they did, to
Benguet and Atok.
It is true, as the Court of Appeals observed, that such private property was subject to the
"vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the
private respondents aver, by acquisitive prescription. However, the method invoked by the
de la Rosas is not available in the case at bar, for two reasons.
Page 66 of 106
First, the trial court found that the evidence of open, continuous, adverse and exclusive
possession submitted by the applicants was insufficient to support their claim of ownership.
They themselves had acquired the land only in 1964 and applied for its registration in 1965,
relying on the earlier alleged possession of their predecessors-in-interest. 16 The trial judge,
who had the opportunity to consider the evidence first-hand and observe the demeanor of the
witnesses and test their credibility was not convinced. We defer to his judgment in the
absence of a showing that it was reached with grave abuse of discretion or without sufficient
basis. 17
Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really
been in possession of the subject property, their possession was not in the concept of owner
of the mining claim but of the property as agricultural land, which it was not. The property
was mineral land, and they were claiming it as agricultural land. They were not disputing the
lights of the mining locators nor were they seeking to oust them as such and to replace them
in the mining of the land. In fact, Balbalio testified that she was aware of the diggings being
undertaken "down below" 18 but she did not mind, much less protest, the same although she
claimed to be the owner of the said land.
The Court of Appeals justified this by saying there is "no conflict of interest" between the
owners of the surface rights and the owners of the sub-surface rights. This is rather doctrine,
for it is a well-known principle that the owner of piece of land has rights not only to its
surface but also to everything underneath and the airspace above it up to a reasonable height.
19
Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on
the surface, subject to separate claims of title. This is also difficult to understand, especially
in its practical application.
Under the theory of the respondent court, the surface owner will be planting on the land
while the mining locator will be boring tunnels underneath. The farmer cannot dig a well
because he may interfere with the operations below and the miner cannot blast a tunnel lest
he destroy the crops above. How deep can the farmer, and how high can the miner, go without
encroaching on each other's rights? Where is the dividing line between the surface and the
sub-surface rights?
The Court feels that the rights over the land are indivisible and that the land itself cannot be
half agricultural and half mineral. The classification must be categorical; the land must be
either completely mineral or completely agricultural. In the instant case, as already observed,
the land which was originally classified as forest land ceased to be so and became mineral
— and completely mineral — once the mining claims were perfected. 20 As long as mining
operations were being undertaken thereon, or underneath, it did not cease to be so and
become agricultural, even if only partly so, because it was enclosed with a fence and was
cultivated by those who were unlawfully occupying the surface.
What must have misled the respondent court is Commonwealth Act No. 137, providing as Our holding is that Benguet and Atok have exclusive rights to the property in question by
follows: virtue of their respective mining claims which they validly acquired before the Constitution
of 1935 prohibited the alienation of all lands of the public domain except agricultural lands,
Sec. 3. All mineral lands of the public domain and minerals belong to the subject to vested rights existing at the time of its adoption. The land was not and could not
State, and their disposition, exploitation, development or utilization, shall have been transferred to the private respondents by virtue of acquisitive prescription, nor
be limited to citizens of the Philippines, or to corporations, or associations, could its use be shared simultaneously by them and the mining companies for agricultural
at least 60% of the capital of which is owned by such citizens, subject to and mineral purposes.
any existing right, grant, lease or concession at the time of the inauguration
of government established under the Constitution. WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE
and that of the trial court dated March 11, 1969, is REINSTATED, without any
SEC. 4. The ownership of, and the right to the use of land for agricultural, pronouncement as to costs.
industrial, commercial, residential, or for any purpose other than mining
does not include the ownership of, nor the right to extract or utilize, the SO ORDERED.
minerals which may be found on or under the surface.
Teehankee, C.J., Narvasa, Gancayco and Griño-Aquino, JJ., concur.
SEC. 5. The ownership of, and the right to extract and utilize, the minerals
included within all areas for which public agricultural land patents are
granted are excluded and excepted from all such patents.
Footnotes
SEC. 6. The ownership of, and the right to extract and utilize, the minerals
included within all areas for which Torrens titles are granted are excluded
1 Sec. 4, Commonwealth Act No. 137.
and excepted from all such titles.
2 Original Records, Land Registration Case No. 146, pp. 1-4.
This is an application of the Regalian doctrine which, as its name implies, is intended for the
benefit of the State, not of private persons. The rule simply reserves to the State all minerals
that may be found in public and even private land devoted to "agricultural, industrial, 3 Ibid., pp. 33, 68, 241.
commercial, residential or (for) any purpose other than mining." Thus, if a person is the
owner of agricultural land in which minerals are discovered, his ownership of such land does 4 TSN, May 5, 1966, p. 61.
not give him the right to extract or utilize the said minerals without the permission of the
State to which such minerals belong. 5 TSN, May 3, 1967, pp. 89-115.

The flaw in the reasoning of the respondent court is in supposing that the rights over the land 6 Original Records, Exhs. "J," p. 24, "K," p. 26.
could be used for both mining and non-mining purposes simultaneously. The correct
interpretation is that once minerals are discovered in the land, whatever the use to which it 7 Original Record, Exhs. "I," p. 22, "K," p. 26.
is being devoted at the time, such use may be discontinued by the State to enable it to extract
the minerals therein in the exercise of its sovereign prerogative. The land is thus converted
8 Exhs. "8 (a-e)," "9 (a-e)," "9 (f-g)," "7," and "11."
to mineral land and may not be used by any private party, including the registered owner
thereof, for any other purpose that will impede the mining operations to be undertaken
therein, For the loss sustained by such owner, he is of course entitled to just compensation 9 Exh. "5," Atok; Exh. "6," Atok, Rollo (G.R. No. 44081), Annex "B,"
under the Mining Laws or in appropriate expropriation proceedings. 21 pp. 76-82.

Page 67 of 106
10 Original Records, Land Registration Case No. 146, p, 291. 21 Consolidated Mines Administrative Order, May 17, 1975, Secs. 10 &
11, as amended by Mines Adrministrative Order No. MRD-15.
* Judge Feliciano Belmonte, CFI of Baguio, Benguet.
G.R. No. L-11984 March 10, 1919
11 Ibid., p. 325.
FLORENTINO PAMINTUAN, plaintiff-appellant,
** Leuterio J., ponente, with Vasquez and Escolin, JJ. vs.
TOMAS GARCIA (deceased), ET AL., defendants.
TOMAS GARCIA (deceased) and JOSE M. DIZON, appellants.
12 Rollo (GR No. 43938), pp. 38-51.

13 Ibid., pp. 40-42. Tirso de Irureta Goyena for plaintiff-appellant

14 McDaniel v. Apacible, 42 Phil. 749; Salacot Mining Co. v. Rodriguez,
67 Phil. 97; Salacot Mining v. Apacible, 67 Phil. 110; Benguet, Inc. v.
Republic, 143 SCRA 466.
15 The respondents may claim, however, that inasmuch as a patent has
not been issued to the petitioner, he has acquired no property right in said
mineral claims. But the Supreme Court of the United States, in the cases
of Union Oil Co. v. Smith (249 U.S. 337), and St. Louis Mining &
Milling Co. v. Montana Mining Co. (171 U.S. 650), held that even
without a patent, the possessory right of a locator after discovery of
minerals upon the claim is a property right in the fullest sense, unaffected
by the fact that the paramount title to the land is in the United State.
McDaniel v. Apacible, supra; Salacot Mining Co. v. Rodriguez, supra.
16 Original Records, pp. 1-4.
17 Tan Hong v. Hon. Parades, G.R. No. 78627, Jan. 29, 1988; Pio Padilla
v. CA, G.R. No. 75577, Jan. 29, 1988; Verdant Acres v. Ponciano
Hernandez, G.R. No. 51352, Jan. 29, 1988; People v. Ancheta, 148
SCRA 178; People v. Delavin, 148 SCRA 257; People v. Alcantara, 151
SCRA 326.
Pedro Abad Santos and Crossfield & O'Brien for defendants-appellants.
CARSON, J.:
Limiting ourselves strictly to the question submitted by agreement of counsel for the various
parties to these proceeding dated January 17, 1919, we are of opinion and so hold, that the
language used in the disposing part of our decree entered while the case was pending on
appeal,1 wherein we said " por consiguiente creemos que los frutos naturales o civiles que
dichos bienes han producido, o que hayan podido producir, pertenecen a la sucesion de
Tomas Garcia," is not susceptible of interpretation so as to include "industrial fruits."
The terms "natural," "industrial" and "civil fruits" are highly technical, and are
authoritatively defined in the Civil Code, article 355 (Cf. Escriche, Diccionario de
Legislacion y Jurisprudencia, Vol. II, p. 1102); and there can be no question as to the
meaning which should be given them when they occur in a decree entered by this court.
The decree in question has long since become final, and whether it was or was not error to
omit therefrom a provision recognizing the right of the estate of Tomas Garcia to industrial
as well as natural fruits is not now open to question. Well founded objection to the decree
upon this ground should have been submitted on motion for reconsideration before the decree
became final, and this court is not authorized under the stipulation of the parties above
mentioned to review that question.

18 TSN, Oct. 18, 1966, p. 79. Arellano, C.J., Torres Street, Malcolm and Avanceña, JJ., concur.

19 Article 437, new Civil Code.

20 Sec. 1, Presidential Legislative Act No. 4268.

Footnotes

Page 68 of 106
 1
Decision on motion of August 24, 1918, not published. On appeal, the Court of Appeals reversed the trial court’s decision. The appellate court found
the appellee (herein petitioner) liable for Jasmin’s death, as follows:
G.R. No. 157906 November 2, 2006
Foregoing premises considered, the instant appeal is GRANTED. Appellee Joaquinita
JOAQUINITA P. CAPILI, Petitioner, Capili is hereby declared liable for negligence resulting to the death of Jasmin D. Cardaña.
vs. She is hereby ordered to indemnify appellants, parents of Jasmin, the following amounts:
SPS. DOMINADOR CARDAÑA and ROSALITA CARDAÑA, Respondents.
1. For the life of Jasmin D. Cardaña P50,000.00;
DECISION
2. For burial expenses 15,010.00;
QUISUMBING, J.:
3. For moral damages 50,000.00;
Before us is a petition for review assailing the Decision1 dated October 18, 2002 of the Court
of Appeals in CA-G.R. CV. No. 54412, declaring petitioner liable for negligence that 4. For attorney’s fees and litigation 10,000.00.
resulted in the death of Jasmin Cardaña, a school child aged 12, enrolled in Grade 6, of San expenses
Roque Elementary School, where petitioner is the principal. Likewise assailed is the
Resolution2 dated March 20, 2003 denying reconsideration. SO ORDERED.4

The facts are as follows:
On February 1, 1993, Jasmin Cardaña was walking along the perimeter fence of the San
Roque Elementary School when a branch of a caimito tree located within the school premises
fell on her, causing her instantaneous death. Thus, her parents - Dominador and Rosalita
Cardaña - filed a case for damages before the Regional Trial Court of Palo, Leyte against
petitioner.
The Cardañas alleged in their complaint that even as early as December 15, 1992, a resident
of the barangay, Eufronio Lerios, reported on the possible danger the tree posed to passersby.
Lerios even pointed to the petitioner the tree that stood near the principal’s office. The
Cardañas averred that petitioner’s gross negligence and lack of foresight caused the death of
their daughter.
Petitioner denied the accusation and said that at that time Lerios had only offered to buy the
tree. She also denied knowing that the tree was dead and rotting. To prove her point, she
presented witnesses who attested that she had brought up the offer of Lerios to the other
teachers during a meeting on December 15, 1992 and assigned Remedios Palaña to negotiate
the sale.
3
In a Decision dated February 5, 1996, the trial court dismissed the complaint for failure of
the respondents to establish negligence on the part of the petitioner.
Petitioner’s motion for reconsideration was denied. Petitioner now comes before us
submitting the following issues for our resolution:
I
WHETHER OR NOT THE COURT OF APPEALS VIS-À-VIS THE SET OF
FACTS STATED IN THE CHALLENGED DECISION, ERRED IN FINDING
THE PETITIONER NEGLIGENT AND THEREFORE LIABLE FOR DAMAGES
UNDER ARTICLE 2206 OF THE CIVIL CODE AND IN ORDERING THE
PETITIONER TO PAY DAMAGES TO THE RESPONDENTS; AND
II
WHETHER OR NOT THE COURT OF APPEALS ERRED IN DENYING
PETITIONER’S MOTION FOR RECONSIDERATION.5
On the other hand, respondents posit the following issue:
Whether or not the Decision of the Honorable Court of Appeals, Twelfth Division, in CA
G.R. CV. No. 54412 promulgated on October 18, 2002 … should be affirmed and respected,
thus remain undisturbed.6

Page 69 of 106
Primarily, the issue is whether petitioner is negligent and liable for the death of Jasmin
Cardaña.
Petitioner asserts that she was not negligent about the disposal of the tree since she had
assigned her next-in-rank, Palaña, to see to its disposal; that despite her physical inspection
of the school grounds, she did not observe any indication that the tree was already rotten nor
did any of her 15 teachers inform her that the tree was already rotten; 7 and that moral
damages should not be granted against her since there was no fraud nor bad faith on her part.
On the other hand, respondents insist that petitioner knew that the tree was dead and rotting,
yet, she did not exercise reasonable care and caution which an ordinary prudent person would
have done in the same situation.
To begin, we have to point out that whether petitioner was negligent or not is a question of
fact which is generally not proper in a petition for review, and when this determination is
supported by substantial evidence, it becomes conclusive and binding on this Court. 8
However, there is an exception, that is, when the findings of the Court of Appeals are
incongruent with the findings of the lower court.9 In our view, the exception finds application
in the present case.
The trial court gave credence to the claim of petitioner that she had no knowledge that the
tree was already dead and rotting and that Lerios merely informed her that he was going to
buy the tree for firewood. It ruled that petitioner exercised the degree of care and vigilance
which the circumstances require and that there was an absence of evidence that would require
her to use a higher standard of care more than that required by the attendant circumstances. 10
The Court of Appeals, on the other hand, ruled that petitioner should have known of the
condition of the tree by its mere sighting and that no matter how hectic her schedule was,
she should have had the tree removed and not merely delegated the task to Palaña. The
appellate court ruled that the dead caimito tree was a nuisance that should have been removed
soon after petitioner had chanced upon it.11
A negligent act is an inadvertent act; it may be merely carelessly done from a lack of ordinary
prudence and may be one which creates a situation involving an unreasonable risk to another
because of the expectable action of the other, a third person, an animal, or a force of nature.
A negligent act is one from which an ordinary prudent person in the actor’s position, in the
same or similar circumstances, would foresee such an appreciable risk of harm to others as
to cause him not to do the act or to do it in a more careful manner. 12
The probability that the branches of a dead and rotting tree could fall and harm someone is
clearly a danger that is foreseeable. As the school principal, petitioner was tasked to see to
the maintenance of the school grounds and safety of the children within the school and its
Page 70 of 106
premises. That she was unaware of the rotten state of a tree whose falling branch had caused
the death of a child speaks ill of her discharge of the responsibility of her position.
In every tort case filed under Article 2176 of the Civil Code, plaintiff has to prove by a
preponderance of evidence: (1) the damages suffered by the plaintiff; (2) the fault or
negligence of the defendant or some other person for whose act he must respond; and (3) the
connection of cause and effect between the fault or negligence and the damages incurred. 13
The fact, however, that respondents’ daughter, Jasmin, died as a result of the dead and rotting
tree within the school’s premises shows that the tree was indeed an obvious danger to anyone
passing by and calls for application of the principle of res ipsa loquitur.
The doctrine of res ipsa loquitur applies where (1) the accident was of such character as to
warrant an inference that it would not have happened except for the defendant’s negligence;
(2) the accident must have been caused by an agency or instrumentality within the exclusive
management or control of the person charged with the negligence complained of; and (3) the
accident must not have been due to any voluntary action or contribution on the part of the
person injured.14
The effect of the doctrine of res ipsa loquitur is to warrant a presumption or inference that
the mere falling of the branch of the dead and rotting tree which caused the death of
respondents’ daughter was a result of petitioner’s negligence, being in charge of the school.
In the case of D.M. Consunji, Inc. v. Court of Appeals,15 this Court held:
…As a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the law of negligence
which recognizes that prima facie negligence may be established without direct proof and
furnishes a substitute for specific proof of negligence.
The concept of res ipsa loquitur has been explained in this wise:
While negligence is not ordinarily inferred or presumed, and while the mere happening of
an accident or injury will not generally give rise to an inference or presumption that it was
due to negligence on defendant’s part, under the doctrine of res ipsa loquitur, which means,
literally, the thing or transaction speaks for itself, or in one jurisdiction, that the thing or
instrumentality speaks for itself, the facts or circumstances accompanying an injury may be
such as to raise a presumption, or at least permit an inference of negligence on the part of the
defendant, or some other person who is charged with negligence.
x x x where it is shown that the thing or instrumentality which caused the injury complained
of was under the control or management of the defendant, and that the occurrence resulting
in the injury was such as in the ordinary course of things would not happen if those who had
its control or management used proper care, there is sufficient evidence, or, as sometimes
stated, reasonable evidence, in the absence of explanation by the defendant, that the injury
arose from or was caused by the defendant’s want of care.
The procedural effect of the doctrine of res ipsa loquitur is that petitioner’s negligence is
presumed once respondents established the requisites for the doctrine to apply. Once
respondents made out a prima facie case of all requisites, the burden shifts to petitioner to
explain. The presumption or inference may be rebutted or overcome by other evidence and,
under appropriate circumstances a disputable presumption, such as that of due care or
innocence, may outweigh the inference.16
Was petitioner’s explanation as to why she failed to have the tree removed immediately
sufficient to exculpate her?
culpable act or omission factually established; (3) a wrongful act or omission by the
defendant as the proximate cause of the injury sustained by the claimant; and (4) the award
of damages predicated on any of the cases stated in Article 2219 of the Civil Code. 18
However, the person claiming moral damages must prove the existence of bad faith by clear
and convincing evidence for the law always presumes good faith. It is not enough that one
merely suffered sleepless nights, mental anguish, and serious anxiety as the result of the
actuations of the other party. Invariably, such action must be shown to have been willfully
done in bad faith or with ill motive.19 Under the circumstances, we have to concede that
petitioner was not motivated by bad faith or ill motive vis-à-vis respondents’ daughter’s
death. The award of moral damages is therefore not proper.
In line with applicable jurisprudence, we sustain the award by the Court of Appeals of
₱50,000 as indemnity for the death of Jasmin,20 and ₱15,010 as reimbursement of her burial
expenses.21

As the school principal, petitioner was tasked to see to the maintenance of the school grounds WHEREFORE, the petition is DENIED. The Decision dated October 18, 2002 and the
and safety of the children within the school and its premises. That she was unaware of the Resolution dated March 20, 2003, of the Court of Appeals in CA-G.R. CV. No. 54412 are
rotten state of the tree calls for an explanation on her part as to why she failed to be vigilant. AFFIRMED with MODIFICATION such that the award of moral damages is hereby
deleted.
Petitioner contends she was unaware of the state of the dead and rotting tree because Lerios
merely offered to buy the tree and did not inform her of its condition. Neither did any of her Costs against petitioner.
teachers inform her that the tree was an imminent danger to anyone. She argues that she
could not see the immediate danger posed by the tree by its mere sighting even as she and SO ORDERED.
the other teachers conducted ground inspections. She further argues that, even if she should
have been aware of the danger, she exercised her duty by assigning the disposition of the tree Footnotes
to another teacher.
1
Rollo, pp. 34-40.
We find petitioner’s explanation wanting. As school principal, petitioner is expected to
oversee the safety of the school’s premises.1âwphi1 The fact that she failed to see the 2
Id. at 53.
immediate danger posed by the dead and rotting tree shows she failed to exercise the
responsibility demanded by her position. 3
CA rollo, pp. 67-73.
Moreover, even if petitioner had assigned disposal of the tree to another teacher, she 4
exercises supervision over her assignee.17 The record shows that more than a month had Rollo, p. 39.
lapsed from the time petitioner gave instruction to her assistant Palaña on December 15,
5
1992, to the time the incident occurred on February 1, 1993. Clearly, she failed to check Id. at 152.
seasonably if the danger posed by the rotting tree had been removed. Thus, we cannot accept
her defense of lack of negligence. 6
Id. at 169.

Lastly, petitioner questions the award of moral damages. Moral damages are awarded if the 7
Id. at 156.
following elements exist in the case: (1) an injury clearly sustained by the claimant; (2) a

Page 71 of 106
 8
Heirs of Simeon Borlado v. Court of Appeals, G.R. No. 114118, August 28, Spouses ISMAEL and TERESITA MACASAET, petitioners,
2001, 363 SCRA 753, 756. vs.
Spouses VICENTE and ROSARIO MACASAET, respondents.
9
See Vera Cruz v. Calderon, G.R. No. 160748, July 14, 2004, 434 SCRA 534,
538-539. DECISION

10
Rollo, pp. 192-193. PANGANIBAN, J.:

11
Id. at 11-12. The present case involves a dispute between parents and children. The children were invited
by the parents to occupy the latter’s two lots, out of parental love and a desire to foster family
12
65 C.J.S. § 1(14), p. 462. solidarity. Unfortunately, an unresolved conflict terminated this situation. Out of pique, the
parents asked them to vacate the premises. Thus, the children lost their right to remain on
13 the property. They have the right, however, to be indemnified for the useful improvements
Child Learning Center, Inc. v. Tagorio, G.R. No. 150920, November 25, 2005,
that they constructed thereon in good faith and with the consent of the parents. In short,
476 SCRA 236, 242.
Article 448 of the Civil Code applies.
14
Id. at 244.
The Case
15
G.R. No. 137873, April 20, 2001, 357 SCRA 249, 257-258 citing 57B Am Jur
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the March
2d, Negligence §1819.
22, 2002 Decision2 and the June 26, 2002 Resolution3 of the Court of Appeals (CA) in CA-
16
GR SP Nos. 56205 & 56467. The challenged Decision disposed as follows:
Id. at 260.

17
"WHEREFORE, the assailed Decision is AFFIRMED with the following
See Panuncio v. Icaro-Velasco, A.M. No. P-98-1279, October 7, 1998, 297 MODIFICATIONS:
SCRA 159, 161.

18
‘1. Vicente and Rosario should reimburse Ismael and Teresita
Quezon City Government v. Dacara, G.R. No. 150304, June 15, 2005, 460 one-half of the value of the useful improvements introduced in
SCRA 243, 254. the premises prior to demand, which is equivalent to
₱475,000.00. In case the former refuse to reimburse the said
19
Ace Haulers Corporation v. Court of Appeals, G.R. No. 127934, August 23, amount, the latter may remove the improvements, even though
2000, 338 SCRA 572, 580-581. the land may suffer damage thereby. They shall not, however,
cause any more impairment upon the property leased than is
20 necessary.
See San Miguel Corporation v. Heirs of Sabiniano Inguito, G.R. No. 141716,
July 4, 2002, 384 SCRA 87, 104.
‘2. The award of attorney’s fees is DELETED.
21
See People v. Alcantara, G.R. No. 157669, April 14, 2004, 427 SCRA 673,
684. ‘3. The records of these consolidated cases are REMANDED to
the Court of origin for further proceedings to determine the option
G.R. Nos. 154391-92 September 30, 2004 to be taken by Vicente and Rosario and to implement the same
with dispatch."4

Page 72 of 106
The assailed Resolution denied petitioners’ Motion for Reconsideration.
The Facts
5
Petitioners Ismael and Teresita Macasaet and Respondents Vicente and Rosario Macasaet
are first-degree relatives. Ismael is the son of respondents, and Teresita is his wife. 6
On December 10, 1997, the parents filed with the Municipal Trial Court in Cities (MTCC)
of Lipa City an ejectment suit against the children.7 Respondents alleged that they were the
owners of two (2) parcels of land covered by Transfer Certificate of Title (TCT) Nos. T-
78521 and T-103141, situated at Banay-banay, Lipa City; that by way of a verbal lease
agreement, Ismael and Teresita occupied these lots in March 1992 and used them as their
residence and the situs of their construction business; and that despite repeated demands,
petitioners failed to pay the agreed rental of ₱500 per week.8
Ismael and Teresita denied the existence of any verbal lease agreement. They claimed that
respondents had invited them to construct their residence and business on the subject lots in
order that they could all live near one other, employ Marivic (the sister of Ismael), and help
in resolving the problems of the family. 9 They added that it was the policy of respondents to
allot the land they owned as an advance grant of inheritance in favor of their children. Thus,
they contended that the lot covered by TCT No. T-103141 had been allotted to Ismael as
advance inheritance. On the other hand, the lot covered by TCT No. T-78521 was allegedly
given to petitioners as payment for construction materials used in the renovation of
respondents’ house.10
The MTCC11 ruled in favor of respondents and ordered petitioners to vacate the premises. It
opined that Ismael and Teresita had occupied the lots, not by virtue of a verbal lease
agreement, but by tolerance of Vicente and Rosario.12 As their stay was by mere tolerance,
petitioners were necessarily bound by an implied promise to vacate the lots upon demand. 13
The MTCC dismissed their contention that one lot had been allotted as an advance
inheritance, on the ground that successional rights were inchoate. Moreover, it disbelieved
petitioners’ allegation that the other parcel had been given as payment for construction
materials.14
On appeal, the regional trial court15 (RTC) upheld the findings of the MTCC. However, the
RTC allowed respondents to appropriate the building and other improvements introduced by
petitioners, after payment of the indemnity provided for by Article 448 in relation to Articles
546 and 548 of the Civil Code.16 It added that respondents could oblige petitioners to
purchase the land, unless its value was considerably more than the building. In the latter
situation, petitioners should pay rent if respondents would not choose to appropriate the
building.17
Page 73 of 106
Upon denial of their individual Motions for Reconsideration, the parties filed with the CA
separate Petitions for Review, which were later consolidated. 18
Ruling of the Court of Appeals
The CA sustained the finding of the two lower courts that Ismael and Teresita had been
occupying the subject lots only by the tolerance of Vicente and Rosario.19 Thus, possession
of the subject lots by petitioners became illegal upon their receipt of respondents’ letter to
vacate it.20
Citing Calubayan v. Pascual,21 the CA further ruled that petitioners’ status was analogous to
that of a lessee or a tenant whose term of lease had expired, but whose occupancy continued
by tolerance of the owner.22 Consequently, in ascertaining the right of petitioners to be
reimbursed for the improvements they had introduced on respondents’ properties, 23 the
appellate court applied the Civil Code’s provisions on lease. The CA modified the RTC
Decision by declaring that Article 448 of the Civil Code was inapplicable. The CA opined
that under Article 1678 of the same Code, Ismael and Teresita had the right to be reimbursed
for one half of the value of the improvements made. 24
Not satisfied with the CA’s ruling, petitioners brought this recourse to this Court. 25
The Issues
Petitioners raise the following issues for our consideration:
"1. a) Whether or not Section 17[,] Rule 70 of the Rules of Court on
Judgment should apply in the rendition of the decision in this case;
b) Whether or not the Complaint should have been dismissed;
c) Whether or not damages including attorney’s fees should have
been awarded to herein petitioners;
"2. a) Whether or not the rule on appearance of parties during the Pretrial
should apply on appearance of parties during Preliminary Conference in
an unlawful detainer suit;
b) Whether or not the case of Philippine Pryce Assurance
Corporation vs. Court of Appeals (230 SCRA 164) is applicable
to appearance of parties in an unlawful detainer suit;
 "3. Whether or not Article 1678 of the Civil Code should apply to the case
on the matters of improvements, or is it Article 447 of the Civil Code in
relation to the Article 453 and 454 thereof that should apply, if ever to
apply the Civil Code;
"4. Whether or not the [D]ecision of the Court of Appeals is supported by
evidence, appropriate laws, rules and jurisprudence;
"5. Whether or not Assisting Judge Norberto Mercado of the MTCC Lipa
City should be held accountable in rendering the MTCC [D]ecision;
"6. Whether or not Atty. Glenn Mendoza and Atty. Andrew Linatoc of the
same [l]aw office should be held accountable for pursuing the [e]jectment
case[.]"26
The Court’s Ruling
The Petition is partly meritorious.
First Issue:
Ejectment
Who is entitled to the physical or material possession of the premises? At the outset, we
stress that this is the main issue in ejectment proceedings.27 In the present case, petitioners
failed to justify their right to retain possession of the subject lots, which respondents own.
Since possession is one of the attributes of ownership,28 respondents clearly are entitled to
physical or material possession.
Allegations of the Complaint
Petitioners allege that they cannot be ejected from the lots, because respondents based their
Complaint regarding the nonpayment of rentals on a verbal lease agreement, which the latter
failed to prove.29 Petitioners contend that the lower courts erred in using another ground
(tolerance of possession) to eject them.
In actions for unlawful detainer, possession that was originally lawful becomes unlawful
upon the expiration or termination of the defendant’s right to possess, arising from an express
or implied contract.30 In other words, the plaintiff’s cause of action comes from the expiration
Page 74 of 106
or termination of the defendant’s right to continue possession.31 The case resulting therefrom
must be filed within one year from the date of the last demand.
To show a cause of action in an unlawful detainer, an allegation that the defendant is illegally
withholding possession from the plaintiff is sufficient. The complaint may lie even if it does
not employ the terminology of the law, provided the said pleading is couched in a language
adequately stating that the withholding of possession or the refusal to vacate has become
unlawful.32 It is equally settled that the jurisdiction of the court, as well as the nature of the
action, is determined from the averments of the complaint.33
In the present case, the Complaint alleged that despite demands, petitioners "refused to pay
the accrued rentals and [to] vacate the leased premises." 34 It prayed that judgment be rendered
"[o]rdering [petitioners] and all those claiming rights under them to vacate the properties x
x x and remove the structures x x x constructed thereon." 35 Effectively then, respondents
averred that petitioners’ original lawful occupation of the subject lots had become unlawful.
The MTCC found sufficient cause to eject petitioners. While it disbelieved the existence of
a verbal lease agreement, it nevertheless concluded that petitioners’ occupation of the subject
lots was by mere tolerance of respondents. Basing its conclusion on the fact that the parties
were close relatives, the MTCC ruled thus:
"x x x [T]he parties herein are first degree relatives. Because of this
relationship, this Court takes judicial notice of the love, care, concern and
protection imbued upon the parents towards their [children], i.e., in the
instant case, the love, care, concern and protection of the [respondents] to
the [petitioners]. With this in mind, this Court is inclined to believe the
position of the [petitioners] that there was no such verbal lease agreement
between the parties herein that took place in 1992. x x x.
"From the allegations of the [petitioners], this Court is convinced that their
stay and occupancy of the subject premises was by mere tolerance of the
[respondents], and not by virtue of a verbal lease agreement between
them."36
Having found a cause of action for unlawful detainer, the MTCC (as well as the RTC and
the CA) did not err in ordering the ejectment of petitioners as prayed for by respondents.
There was no violation of Section 17 of Rule 7037 of the Rules of Court. As earlier explained,
unlawful detainer was sufficiently alleged in the Complaint and duly proven during the trial.
Significantly, the issue of whether there was enough ground to eject petitioners was raised
during the preliminary conference.38
Not Merely Tolerated
Possession
Petitioners dispute the lower courts’ finding that they occupied the subject lots on the basis
of mere tolerance. They argue that their occupation was not under such condition, since
respondents had invited, offered and persuaded them to use those properties. 39
This Court has consistently held that those who occupy the land of another at the latter’s
tolerance or permission, without any contract between them, are necessarily bound by an
implied promise that the occupants will vacate the property upon demand. 40 A summary
action for ejectment is the proper remedy to enforce this implied obligation. 41 The unlawful
deprivation or withholding of possession is to be counted from the date of the demand to
vacate.42
Toleration is defined as "the act or practice of permitting or enduring something not wholly
approved of."43 Sarona v. Villegas44 described what tolerated acts means, in this language:
"Professor Arturo M. Tolentino states that acts merely tolerated are ‘those
which by reason of neighborliness or familiarity, the owner of property
allows his neighbor or another person to do on the property; they are
generally those particular services or benefits which one’s property can
give to another without material injury or prejudice to the owner, who
permits them out of friendship or courtesy.’ x x x. And, Tolentino
continues, even though ‘this is continued for a long time, no right will be
acquired by prescription." x x x. Further expounding on the concept,
Tolentino writes: ‘There is tacit consent of the possessor to the acts which
are merely tolerated. Thus, not every case of knowledge and silence on the
part of the possessor can be considered mere tolerance. By virtue of
tolerance that is considered as an authorization, permission or license, acts
of possession are realized or performed. The question reduces itself to the
existence or non-existence of the permission."45
We hold that the facts of the present case rule out the finding of possession by mere tolerance.
Petitioners were able to establish that respondents had invited them to occupy the subject
lots in order that they could all live near one other and help in resolving family problems. 46
By occupying those lots, petitioners demonstrated their acceptance of the invitation. Hence,
there was a meeting of minds, and an agreement regarding possession of the lots impliedly
arose between the parties.
Page 75 of 106
The occupancy of the subject lots by petitioners was not merely "something not wholly
approved of" by respondents. Neither did it arise from what Tolentino refers to as
"neighborliness or familiarity." In point of fact, their possession was upon the invitation of
and with the complete approval of respondents, who desired that their children would occupy
the premises. It arose from familial love and a desire for family solidarity, which are basic
Filipino traits.
Right to Use the Lots Terminated
That Ismael and Teresita had a right to occupy the lots is therefore clear. The issue is the
duration of possession. In the absence of a stipulation on this point, Article 1197 of the Civil
Code allows the courts to fix the duration or the period.
"Article 1197. If the obligation does not fix a period, but from its nature
and the circumstances it can be inferred that a period was intended, the
courts may fix the duration thereof.
"The courts shall also fix the duration of the period when it depends upon
the will of the debtor.
"In every case the courts shall determine such period as may under the
circumstances have been probably contemplated by the parties. Once fixed
by the courts, the period cannot be changed by them."
Article 1197, however, applies to a situation in which the parties intended a period. Such
qualification cannot be inferred from the facts of the present case.
To repeat, when Vicente and Rosario invited their children to use the lots, they did so out of
parental love and a desire for solidarity expected from Filipino parents. No period was
intended by the parties. Their mere failure to fix the duration of their agreement does not
necessarily justify or authorize the courts to do so. 47
Based on respondents’ reasons for gratuitously allowing petitioners to use the lots, it can be
safely concluded that the agreement subsisted as long as the parents and the children
mutually benefited from the arrangement. Effectively, there is a resolutory condition in such
an agreement.48 Thus, when a change in the condition existing between the parties occurs --
like a change of ownership, necessity, death of either party or unresolved conflict or
animosity -- the agreement may be deemed terminated. Having been based on parental love,
the agreement would end upon the dissipation of the affection.
When persistent conflict and animosity overtook the love and solidarity between the parents
and the children, the purpose of the agreement ceased.49 Thus, petitioners no longer had any
cause for continued possession of the lots. Their right to use the properties became untenable.
It ceased upon their receipt of the notice to vacate. And because they refused to heed the
demand, ejectment was the proper remedy against them. Their possession, which was
originally lawful, became unlawful when the reason therefor -- love and solidarity -- ceased
to exist between them.
No Right to Retain
Possession
Petitioners have not given this Court adequate reasons to reverse the lower courts’ dismissal
of their contention that Lots T-78521 and T-103141, respectively, were allegedly allotted to
them as part of their inheritance and given in consideration for past debts.
The right of petitioners to inherit from their parents is merely inchoate and is vested only
upon the latters’ demise. Indisputably, rights of succession are transmitted only from the
moment of death of the decedent.50 Assuming that there was an "allotment" of inheritance,
ownership nonetheless remained with respondents. Moreover, an intention to confer title to
certain persons in the future is not inconsistent with the owners’ taking back possession in
the meantime for any reason deemed sufficient.51 Other than their self-serving testimonies
and their affidavits, petitioners offered no credible evidence to support their outlandish claim
of inheritance "allocation."
We also agree with the lower courts that petitioners failed to prove the allegation that,
through a dation in payment, Lot T-78521 had been transferred to the latter as payment for
respondents’ debts.52 The evidence presented by petitioners related only to the alleged
indebtedness of the parents arising from the latter’s purported purchases and advances.53
There was no sufficient proof that respondents had entered into a contract of dation to settle
the alleged debt. Petitioners even stated that there was a disagreement in the accounting of
the purported debt,54 a fact that disproves a meeting of the minds with the parents.
Petitioners also admitted that a portion of the alleged debt is the subject matter of a collection
case against respondents (Civil Case No. 0594-96).55 Thus, the former’s allegation that the
indebtedness has been paid through a dation cannot be given credence, inconsistent as it is
with their action to recover the same debt.
Despite their protestations, petitioners recognized the right of the parents to recover the
premises when they admitted in their Position Paper filed with the MTCC that respondents
had a title to the lots.
Page 76 of 106
"The [respondents] want to get their property because the title is theirs, the
[petitioners] do not object but what is due the [petitioners] including the
reparation for the tarnish of their dignity and honor must be given the
[petitioners] for the benefits of their children before the premises will be
turned over."56
As a rule, the right of ownership carries with it the right of possession.
Second Issue:
Appearance at the Preliminary Conference
Section 8 of Rule 70 of the Rules of Court requires the appearance of the plaintiff and the
defendant during the preliminary conference. On the basis of this provision, petitioners claim
that the MTCC should have dismissed the case upon the failure of respondents to attend the
conference. However, petitioners do not dispute that an attorney-in-fact with a written
authorization from respondents appeared during the preliminary conference. 57 The issue then
is whether the rules on ejectment allow a representative to substitute for a party’s personal
appearance.
Unless inconsistent with Rule 70, the provisions of Rule 18 on pretrial applies to the
preliminary conference.58 Under Section 4 of this Rule, the nonappearance of a party may be
excused by the showing of a valid cause; or by the appearance of a representative, who has
been fully authorized in writing to enter into an amicable settlement, to submit to alternative
modes of dispute resolution, and to enter into stipulations or admissions of facts and of
documents.59
Section 4 of Rule 18 may supplement Section 8 of Rule 70. Thus, the spirit behind the
exception to personal appearance under the rules on pretrial is applicable to the preliminary
conference. If there are valid reasons or if a representative has a "special authority," a party’s
appearance may be waived. As petitioners are challenging only the applicability of the rules
on pretrial to the rule on preliminary conference, the written authorization from respondents
can indeed be readily considered as a "special authorization."
Third Issue:
Rights of a Builder in Good Faith
As applied to the present case, accession refers to the right of the owner to everything that is
incorporated or attached to the property.60 Accession industrial -- building, planting and
sowing on an immovable -- is governed by Articles 445 to 456 of the Civil Code.
Articles 447 and 1678 of the
Civil Code Inapplicable
To buttress their claim of reimbursement for the improvements introduced on the property,
petitioners cite Article 447.61 They allege that the CA erred in applying Article 1678, since
they had no lease agreement with respondents.
We clarify. Article 447 is not applicable, because it relates to the rules that apply when the
owner of the property uses the materials of another. It does not refer to the instance when a
possessor builds on the property of another, which is the factual milieu here.
In view of the unique factual setting of the instant case, the contention of petitioners
regarding the inapplicability of Article 1678 deserves attention. The CA applied the
provisions on lease, because it found their possession by mere tolerance comparable with
that of a lessee, per the pronouncement in Calubayan v. Pascual, 62 from which we quote:
"x x x. It has been held that a person who occupies the land of another at
the latter’s tolerance or permission, without any contract between them, is
necessarily bound by an implied promise that he will vacate upon demand,
failing which a summary action for ejectment is the proper remedy against
them. The status of defendant is analogous to that of a lessee or tenant
whose term of lease has expired but whose occupancy continued by
tolerance of the owner. In such a case, the unlawful deprivation or
withholding of possession is to be counted from the date of the demand to
vacate."63 (Emphasis in the original.)
As explained earlier, Ismael and Teresita’s possession of the two lots was not by mere
tolerance, a circumstance that negates the applicability of Calubayan.
Article 448 Applicable
On the other hand, when a person builds in good faith on the land of another, the applicable
provision is Article 448, which reads:64
"Article 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate as his
own the works, sowing or planting, after payment of the indemnity
provided for in Articles 546 and 548, or to oblige the one who built or
planted to pay the price of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be obliged to buy the land if
Page 77 of 106
its value is considerably more than that of the building or trees. In such
case, he shall pay reasonable rent, if the owner of the land does not choose
to appropriate the building or trees after proper indemnity. The parties
shall agree upon the terms of the lease and in case of disagreement, the
court shall fix the terms thereof."
This Court has ruled that this provision covers only cases in which the builders, sowers or
planters believe themselves to be owners of the land or, at least, to have a claim of title
thereto.65 It does not apply when the interest is merely that of a holder, such as a mere tenant,
agent or usufructuary.66 From these pronouncements, good faith is identified by the belief
that the land is owned; or that -- by some title -- one has the right to build, plant, or sow
thereon.67
However, in some special cases, this Court has used Article 448 by recognizing good faith
beyond this limited definition. Thus, in Del Campo v. Abesia,68 this provision was applied
to one whose house -- despite having been built at the time he was still co-owner --
overlapped with the land of another.69 This article was also applied to cases wherein a builder
had constructed improvements with the consent of the owner. The Court ruled that the law
deemed the builder to be in good faith.70 In Sarmiento v. Agana,71 the builders were found
to be in good faith despite their reliance on the consent of another, whom they had mistakenly
believed to be the owner of the land.72
Based on the aforecited special cases, Article 448 applies to the present factual milieu. The
established facts of this case show that respondents fully consented to the improvements
introduced by petitioners. In fact, because the children occupied the lots upon their invitation,
the parents certainly knew and approved of the construction of the improvements introduced
thereon.73 Thus, petitioners may be deemed to have been in good faith when they built the
structures on those lots.
The instant case is factually similar to Javier v. Javier.74 In that case, this Court deemed the
son to be in good faith for building the improvement (the house) with the knowledge and
consent of his father, to whom belonged the land upon which it was built. Thus, Article 44875
was applied.
Rule on Useful Expenses
The structures built by petitioners were "useful" improvements, because they augmented the
value or income of the bare lots.76 Thus, the indemnity to be paid by respondents under
Article 448 is provided for by Article 546, which we quote:
 "Art. 546. Necessary expenses shall be refunded to every possessor; but
only the possessor in good faith may retain the thing until he has been
reimbursed therefor.
"Useful expenses shall be refunded only to the possessor in good faith with
the same right of retention, the person who has defeated him in the
possession having the option of refunding the amount of the expenses or
of paying the increase in value which the thing may have acquired by
reason thereof."
Consequently, respondents have the right to appropriate -- as their own -- the building and
other improvements on the subject lots, but only after (1) refunding the expenses of
petitioners or (2) paying the increase in value acquired by the properties by reason thereof.
They have the option to oblige petitioners to pay the price of the land, unless its value is
considerably more than that of the structures -- in which case, petitioners shall pay reasonable
rent.
In accordance with Depra v. Dumlao,77 this case must be remanded to the trial court to
determine matters necessary for the proper application of Article 448 in relation to Article
546. Such matters include the option that respondents would take and the amount of
indemnity that they would pay, should they decide to appropriate the improvements on the
lots. We disagree with the CA’s computation of useful expenses, which were based only on
petitioners’ bare allegations in their Answer.78
Ruling on Improvement Justified
While, ordinarily, the jurisdiction of the MTCC on ejectment proceedings is limited to the
issue of physical or material possession of the property in question, this Court finds it
necessary to abbreviate the issue on the improvements in relation to Article 448. First, the
determination of the parties’ right to those improvements is intimately connected with the
MTCC proceedings in the light of the ejectment of petitioners. Second, there is no dispute
that while they constructed the improvements, respondents owned the land. Third, both
parties raised no objection when the RTC and the CA ruled accordingly on this matter.
Equitable considerations compel us to settle this point immediately, pro hoc vice, to avoid
needless delay. Both parties have already been heard on this issue; to dillydally or equivocate
would not serve the cause of substantial justice.
Other Issues Raised
Page 78 of 106
Given the foregoing rulings, it is no longer necessary to address petitioners’ allegation that
the MTCC judge and respondents’ lawyers should be respectively held personally
accountable for the Decision and for filing the case. 79 The insinuation of petitioners that the
lawyers manipulated the issuance of a false barangay certification is unavailing. 80 Their
contention that respondents did not attend the barangay conciliation proceedings was based
solely on hearsay, which has little or no probative value. 81
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals are
AFFIRMED with the following MODIFICATIONS:
1. The portion requiring Spouses Vicente and Rosario Macasaet to
reimburse one half of the value of the useful improvements, amounting to
₱475,000, and the right of Spouses Ismael and Rosita Macasaet to remove
those improvements (if the former refuses to reimburse) is DELETED.
2. The case is REMANDED to the court of origin for further proceedings
to determine the facts essential to the proper application of Articles 448
and 546 of the Civil Code, specifically to the following matters:
a. Spouses Vicente and Rosario Macasaet’s option to appropriate
-- as their own -- the improvements on the lots, after paying the
indemnity, as provided under Article 546 in relation to Article
448 of the Civil Code; or in requiring Spouses Ismael and Rosita
Macasaet to pay for the value of the lots, unless it is considerably
more than that of the improvements, in which case petitioners
shall pay reasonable rent based upon the terms provided under
the Civil Code
b. The value of the useful expenses incurred by Spouses Ismael
and Rosita Macasaet in the construction of the improvements on
the lots
c. The increase in value acquired by the lots by reason of the
useful improvements
d. Spouses Vicente and Rosario Macasaet’s choice of type of
indemnity to be paid (whether b or c)
e. Whether the value of the lots is considerably more than that of
the improvements built thereon
 14
No pronouncement as to costs. Ibid.

15
SO ORDERED. Presided by Judge Jane Aurora C. Lantion.

16
Sandoval-Gutierrez, Corona, and Carpio Morales, JJ., concur. RTC Decision dated July 15, 1999, pp. 4-5; rollo, pp. 173-174.

17
Footnotes Ibid.

1 18
Rollo, pp. 35-76. Assailed Decision, p. 9; rollo, p. 217.

2 19
Id., pp. 209-229. Ninth Division. Penned by Justice Mariano C. del Id., pp. 10 & 218.
Castillo, with the concurrence of Justices Ruben T. Reyes (Division
chairman) and Renato C. Dacudao (member). 20
Id., pp. 11 & 219.
3
Id., pp. 264-265. 21
128 Phil. 160, September 18, 1967.
4
Assailed Decision, p. 20; rollo, p. 228. 22
Ibid.
5
Also referred to as "Rosita" in some parts of the records. 23
Assailed Decision, p. 13; rollo, p. 221.
6
Id., pp. 2 & 210. 24
The CA computed the total value of the improvements at ₱950,000,
which represented the cost of constructing a one-storey structure
7
Respondents’ Complaint; rollo, pp. 85-88. (₱700,000), the equipment necessary for the construction business
(₱130,000), and the cost of filling materials (₱120,000). See Assailed
8
Assailed Decision, pp. 2-3; rollo, pp. 210-211. Respondents’ Decision, p. 15; rollo, p. 223.
Complaint, pp. 1-2; rollo, pp. 85-86.
25
This case was deemed submitted for resolution on May 13, 2003, upon
9
Id., pp. 3-4 & 211-212. Petitioners’ Answer with Compulsory this Court’s receipt of respondents’ Memorandum signed by Atty. Glenn
Counterclaim, p. 4; rollo, p. 94. P. Mendoza. Petitioners’ Memorandum, signed by Atty. Ismael H.
Macasaet, was filed on April 14, 2003.
10
Ibid.
26
Petitioners’ Memorandum, p. 15; rollo, p. 432.
11
Presided by Assisting Judge Norberto P. Mercado.
27
Rivera v. Rivera, 405 SCRA 466, 471, July 8, 2003; Balanon-Anicete
12 v. Balanon, 402 SCRA 514, 518, April 30, 2003; De Luna v. Court of
Assailed Decision, pp. 5-6; rollo, pp. 213-214. MTCC Decision dated
Appeals, 212 SCRA 276, 278, August 6, 1992.
August 27, 1998, pp. 3-4; rollo, pp. 167-168.
28
13 Co v. Militar, GR No. 149912, January 29, 2004.
Ibid.

Page 79 of 106
29
Petitioners’ Memorandum, p. 16; rollo, p. 433.
30
Varona v. Court of Appeals, GR No. 124148, May 20, 2004;
Sarmiento v. Court of Appeals, 320 Phil. 146, 153, November 16, 1995;
Sumulong v. Court of Appeals, 232 SCRA 372, May 10, 1994.
31
Sarmiento v. Court of Appeals, supra; Sumulong v. Court of Appeals,
supra.
32
Varona v. Court of Appeals, supra; Cañiza v. Court of Appeals, 335
Phil. 1107, 1115, February 24, 1997; Sumulong v. Court of Appeals,
supra, p. 386.
33
Lopez v. David, GR No. 152145, March 30, 2004; Arcal v. Court of
Appeals, 348 Phil. 813, 823, January 26, 1998; Hilario v. Court of
Appeals, 329 Phil. 202, 210, August 7, 1996; Sarmiento v. Court of
Appeals, supra; Sumulong v. Court of Appeals, supra, p. 385.
34
Respondents’ Complaint, p. 2; rollo, p. 86.
35
Id., pp. 3 & 87.
36
MTCC Decision dated August 27, 1998, pp. 3-4; rollo, pp. 167-168.
37
"Section 17. Judgment. — If after the trial the court finds that the
allegations of the complaint are true, it shall render judgment in favor of
the plaintiff for the restitution of the premises, the sum justly due as
arrears of rent or as reasonable compensation for the use and occupation
of the premises, attorney’s fees and costs. If it finds that said allegations
are not true, it shall render judgment for the defendant to recover his
costs. If a counterclaim is established, the court shall render judgment for
the sum found in arrears from either party and award costs as justice
requires."
38
MTCC Order on the Preliminary Conference dated July 30, 1998;
rollo, p. 108.
39
Petitioners’ Memorandum, p. 22; rollo, p. 439.
Page 80 of 106
40
Rivera v. Rivera, 405 SCRA 466, 471, July 8, 2003; Pengson v.
Ocampo Jr., 412 Phil. 860, 866, June 29, 2001; Arcal v. Court of
Appeals, supra, p. 825; Refugia v. Court of Appeals, 327 Phil. 982, 1010,
July 5, 1996; Dakudao v. Consolacion, 207 Phil. 750, 756, June 24,
1983.
41
Ibid.
42
Lopez v. David, supra; Arcal v. Court of Appeals, supra, p. 825;
Villaluz v. Court of Appeals, 344 Phil. 77, 89, September 5, 1997.
43
Black’s Law Dictionary (8th ed., 1999), p. 1525.
44
131 Phil. 365, March 27, 1968.
45
Id., pp. 372-373, per Sanchez, J.
46
MTCC Decision, dated August 27, 1998, p. 3 (rollo, p. 167); RTC
Decision, dated July 15, 1999, p. 2 (rollo, p. 171).
47
Id., p. 198. The term "may" in Article 1197 connotes discretion on the
part of the courts to exercise this power.
48
In an obligation with a resolutory condition, the extinguishment of the
right acquired depends upon the occurrence of the event that constitutes
the condition (Article 1181 of the Civil Code).
49
The records do not disclose the exact date when the conflict between
petitioners and respondents arose. It can be readily assumed to have
transpired not later than June 6, 1996, the date of petitioners’ demand
letter, which became the subject of Civil Case No. 0594-96 (Demand
Letter; rollo, p. 145). At any rate, an animosity between the parties was
confirmed by respondents’ demand letter dated August 13, 1997, asking
petitioners to vacate the subject lots (rollo, p. 89), and the subsequent
filing of this case.
50
Art. 777 of the Civil Code.
51
Cañiza v. Court of Appeals, supra, p. 1118.
52
Petitioners’ Memorandum, pp. 43-44; rollo, pp. 460-461. In a dation in
payment, property is alienated to the creditor in satisfaction of a debt.
Such contract is governed by the law on sales. Art. 1245 of the Civil
Code.
53
Ibid.
54
In the Affidavits submitted with their Position Paper, petitioners
alleged that the execution of the Deed of Assignment did not occur,
because their father had refused to agree to the accounting of the
materials supplied. Petitioners’ Memorandum, pp. 45-46; rollo, pp. 462-
463.
55
Petitioners’ Memorandum, p. 44; rollo, p. 461. The recovery of
₱235,908, which forms a significant part of respondents’ alleged
₱391,338 debt, is the subject matter of Civil Case No. 0594-96.
56
Petitioners’ Position Paper, p. 3; rollo, p. 111.
57
Petitioners’ Memorandum, p. 31; rollo, p. 448. Petitioner challenges
the applicability of Philippine Pryce Assurance Corp. v. Court of Appeals
(230 SCRA 164, 170, February 21, 1994 per Nocon, J.), in which this
Court reiterated the rule that "where a party may not himself be present at
the pre-trial, and another person substitutes for him, or his lawyer
undertakes to appear not only as an attorney but in substitution of the
client’s person, it is imperative for that representative or the lawyer to
have ‘special authority’ to enter into agreements which otherwise only
the client has the capacity to make."
58
§8 of Rule 70 of the Rules of Court.
59
This rule on substitution of a party through a "special authority" can be
traced to jurisprudential pronouncements. See Home Insurance Co. v.
United States Lines Co., 129 Phil. 106, 109, November 15, 1967, in
which this Court held that attorneys needed a "special authority" to
compromise litigation. See also Development Bank of the Phils. v. Court
of Appeals, 169 SCRA 409, 413, January 26, 1989, in which we noted
that a special authority is imperative to make substantive agreements
that, otherwise, only the client has capacity to make.
60
Jose C. Vitug, Civil Law Annotated (2003), Vol. II, p. 23.
Page 81 of 106
61
Petitioners’ Memorandum, pp. 33-37; rollo, pp. 450-454.
62
Supra.
63
Id., p. 163, per Angeles, J.
64
See Depra v. Dumlao, 136 SCRA 475, 481, May 16, 1985, in which
this Court explained the philosophy behind this provision.
65
Pada-Kilario v. Court of Appeals, 379 Phil. 515, 530, January 19,
2000; Chua v. Court of Appeals, 361 Phil. 308, 318, January 21, 1999;
Balucanag v. Francisco, 207 Phil. 433, 438; Floreza v. Evangelista, 96
SCRA 130, 136, February 21, 1980; Quemuel v. Olaes, 111 Phil. 797,
April 29, 1961; Alburo v. Villanueva, 7 Phil. 277, 280, January 2, 1907.
66
Chua v. Court of Appeals, supra; Balucanag v. Francisco, supra;
Quemuel v. Olaes, supra; Alburo v. Villanueva, supra. See also Edgardo
L. Paras, Civil Code of the Philippines Annotated (14th ed., 1999), Vol.
2, p. 212. In Pecson v. Court of Appeals (314 Phil. 313, 322 per Davide,
J.), this Court also ruled that "Article 448 does not apply to a case where
the owner of the land is the builder, sower, or planter who then later loses
ownership of the land by sale or donation."
67
Arturo M. Tolentino, Commentaries and Jurisprudence on the Civil
Code of the Philippines (1992), Vol. 2, p. 111.
68
160 SCRA 379, 383, April 15, 1988.
69
Id., pp. 382-383. Article 448 does not apply where a co-owner builds,
plants, or sows on land owned in common, since such co-owner does not
do so on land that he or she does not own. See also Arturo M. Tolentino,
Commentaries and Jurisprudence on the Civil Code of the Philippines
(1992), Vol. 2, p. 117.
70
De Guzman v. Fuente, 55 Phil. 501, 503, December 29, 1930; Aringo
v. Arena, 14 Phil. 263, 268-269; Javier v. Javier, 7 Phil. 261, 267,
January 2, 1907. [Cited in Edgardo L. Paras, Civil Code of the
Philippines Annotated (14th ed., 1999), Vol. 2, p. 211]; See also Boyer-
Roxas v. Court of Appeals, 211 SCRA 470, 488, July 15, 1992.
71
129 SCRA 122, April 30, 1984.
 72
Id., p. 125. De Jesus Paguio and Manimtim for Petitioner.

73
The RTC observed that petitioners had merely been invited by the M.R. Pamaran Law Offices for Private Respondent.
parents (respondents) to transfer to the premises. Considering that the
parties were living near one other, it was readily assumed that Acebes Del Carmen Cinco & Cordova for Private Respondent.
respondents had known of the structures built and had not opposed their
construction. RTC Decision dated July 15, 1999, p. 4; rollo, p. 173.
SYLLABUS
74
Supra, note 70.

75
1. CIVIL LAW; PROPERTY; POSSESSION; GOOD FAITH, PRESUMED. — When
Then Art. 361 of the Civil Code. petitioner purchased the land from Pariz Industries, the buildings and other structures were
already in existence. The record is not clear as to who actually built those structures, but it
76
Cabangis v. Court of Appeals, 200 SCRA 414, 420, August 9, 1991. may well be assumed that petitioner’s predecessor-in-interest, Pariz Industries, did so.
Article 527 of the Civil Code presumes good faith, and since no proof exists to show that the
77
Supra. Also cited in National Housing Authority v. Grace Baptist encroachment over a narrow, needle-shaped portion of private respondent’s land was done
Church, GR No. 156437, March 1, 2004; and Technogas Philippines in bad faith by the builder of the encroaching structures, the latter should be presumed to
Manufacturing v. Court of Appeals, 335 Phil. 471, 485, February 10, have built them in good faith. It is presumed that possession continues to be enjoyed in the
1997. same character in which it was acquired, until the contrary is proved. Good faith consists in
the belief of the builder that the land he is building on is his, and his ignorance of any defect
78
Assailed Decision, p. 15; rollo, p. 223. This Court also notes that or flaw in his title. Hence, such good faith, by law passed on to Pariz’s successor, petitioner
petitioners merely submitted a list of expenses with their corresponding in this case. Further," (w)here one derives title to property from another, the act, declaration,
costs, without showing any proof (e.g., actual receipts) that these costs or omission of the latter, while holding the title, in relation to the property, is evidence against
had been incurred. Petitioner’s Position Paper, p. 15, rollo, p. 123; the former." And possession acquired in good faith does not lose this character except in case
Itemized List of Materials, rollo, p. 588. and from the moment facts exist which show that the possessor is not unaware that he
possesses the thing improperly or wrongfully. The good faith ceases from the moment
defects in the title are made known to the possessor, by extraneous evidence or by suit for
79
Petitioners’ Memorandum, pp. 49-51; rollo, pp. 466-468.
recovery of the property by the true owner.
80
Id., pp. 51 & 468. 2. ID.; ID.; OWNERSHIP; RIGHT OF ACCESSION; IMMOVABLE PROPERTY;
BUILDER IN GOOD FAITH CAN COMPEL THE LANDOWNER TO EXERCISE HIS
81
This contention was based on information from an alleged barangay councilor of Banay- OPTION UNDER ART. 448; APPLICABLE TO BUYER IN GOOD FAITH. — The builder
banay that no conciliation had transpired on October 14, 1997, the scheduled date. in good faith under Article 448 of the Civil Code, instead of being outrightly ejected from
Petitioner Teresita Macasaet’s Affidavit; rollo, p. 77. In a letter dated October 14, 1997, the land, can compel the landowner to make a choice between the two options: (1) to
addressed to the barangay captain, it appears that petitioners waived their presence at the appropriate the building by paying the indemnity required by law, or (2) sell the land to the
conciliation proceedings. Rollo, p. 103. builder. The landowner cannot refuse to exercise either option and compel instead the owner
of the building to remove it from the land. The same benefit can be invoked by petitioner
[G.R. No. 108894. February 10, 1997.] who is not the builder of the offending structures but possesses them in good faith as buyer.
Petitioner is deemed to have stepped into the shoes of the seller in regard to all rights of
TECNOGAS PHILIPPINES MANUFACTURING CORPORATION, Petitioner, v. ownership over the immovable sold, including the right to compel the private respondent to
COURT OF APPEALS (FORMER SPECIAL SEVENTEENTH DIVISION) and exercise either of the two options provided under Article 448 of the Civil Code.
EDUARDO UY, Respondents.
3. ID.; ID.; ID.; ID.; ID.; ID.; ID. — Petitioner did not lose its rights under Article 448 of the
Page 82 of 106
Civil Code on the basis merely of the fact that some years after acquiring the property in
good faith, it learned about — and aptly recognized — the right of private respondent to a "WHEREFORE, premises considered, the Decision of the Regional Trial Court is hereby
portion of the land occupied by its building. The supervening awareness of the encroachment reversed and set aside and another one entered —
by petitioner does not militate against its right to claim the status of a builder in good faith.
In fact, a judicious reading of said Article 448 will readily show that the landowner’s exercise 1. Dismissing the complaint for lack of cause of action;
of his option can only take place after the builder shall have come to know of the intrusion
— in short, when both parties shall have become aware of it. Only then will the occasion for 2. Ordering Tecnogas to pay the sum of P2,000.00 per month as reasonable rental from
exercising the option arise, for it is only then that both parties will have been aware that a October 4, 1979 until appellee vacates the land;
problem exists in regard to their property rights.
3. To remove the structures and surrounding walls on the encroached area;
4. ID.; ID.; ID.; ID.; ID.; ARTICLE 148; APPLICATION IN CASE AT BAR;
ATTORNEY’S FEES, AWARD OF, UNWARRANTED. — In line with the case of Depra 4. Ordering appellee to pay the value of the land occupied by the two-storey building;
v. Dumlao, this case will have to be remanded to the trial court for further proceedings to
fully implement the mandate of Art. 448. It is a rule of procedure for the Supreme Court to 5. Ordering appellee to pay the sum of P20,000.00 for and as attorney’s fees;
strive to settle the entire controversy in a single proceeding leaving no root or branch to bear
the seeds of future litigation. Petitioner, however, must also pay the rent for the property 6. Costs against appellee."cralaw virtua1aw library
occupied by its building as prescribed by respondent Court from October 4, 1979, but only
up to the date private respondent serves notice of its option upon petitioner and the trial court; Acting on the motions for reconsideration of both petitioner and private respondent,
that is, if such option is for private respondent to appropriate the encroaching structure. In respondent Court ordered the deletion of paragraph 4 of the dispositive portion in an
such event, petitioner would have a right of retention which negates the obligation to pay Amended Decision dated February 9, 1993, as follows: 4
rent. The rent should however continue if the option chosen is compulsory sale, but only up
to the actual transfer of ownership. The award of attorney’s fees by respondent Court against "WHEREFORE, premises considered, our decision of August 28, 1992 is hereby modified
petitioner is unwarranted since the action appears to have been filed in good faith. Besides, deleting paragraph 4 of the dispositive portion of our decision which reads:chanrob1es
there should be no penalty on the right to litigate. virtual 1aw library

‘4. Ordering appellee to pay the value of the land occupied by the two-storey building.’
DECISION
The motion for reconsideration of appellee is hereby DENIED for lack of merit."cralaw
virtua1aw library
PANGANIBAN, J.:
The foregoing Amended Decision is also challenged in the instant petition.

The parties in this case are owners of adjoining lots in Parañaque, Metro Manila. It was The Facts
discovered in a survey that a portion of a building of petitioner, which was presumably
constructed by its predecessor-in-interest, encroached on a portion of the lot owned by
private Respondent. What are the rights and obligations of the parties? Is petitioner The facts are not disputed. Respondent Court merely reproduced the factual findings of the
considered a builder in bad faith because, as held by respondent Court, he is "presumed to trial court, as follows: 5
know the metes and bounds of his property as described in his certificate of title" ? Does
petitioner succeed into the good faith or bad faith of his predecessor-in-interest which "That plaintiff (herein petitioner) which is a corporation duly organized and existing under
presumably constructed the building? and by virtue of Philippine laws is the registered owner of a parcel of land situated in Barrio
San Dionisio, Parañaque, Metro Manila known as Lot 4331-A (should be 4531-A) of Lot
These are the questions raised in the petition for review of the Decision 1 dated August 28, 4531 of the Cadastral Survey of Parañaque, Metro Manila, covered by Transfer Certificate
1992, in CA-G.R. CV No. 28293 of respondent Court 2 where the disposition reads: 3 of Title No. 409316 of the Registry of Deeds of the Province of Rizal; that said land was
Page 83 of 106
purchased by plaintiff from Pariz Industries, Inc. in 1970, together with all the buildings and 3. The costs of this suit."cralaw virtua1aw library
improvements including the wall existing thereon; that the defendant (herein private
respondent) is the registered owner of a parcel of land known as Lot No. 4531-B of Lot 4531 Appeal was duly interposed with respondent Court, which as previously stated, reversed and
of the Cadastral Survey of Parañaque, LRC (GLRO) Rec. No. 19645 covered by Transfer set aside the decision of the Regional Trial Court and rendered the assailed Decision and
Certificate of Title No. 279838, of the Registry of Deeds for the Province of Rizal; that said Amended Decision. Hence, this recourse under Rule 45 of the Rules of Court.
land which adjoins plaintiff’s land was purchased by defendant from a certain Enrile Antonio
also in 1970; that in 1971, defendant purchased another lot also adjoining plaintiff’s land The Issues
from a certain Miguel Rodriguez and the same was registered in defendant’s name under
Transfer Certificate of Title No. 31390, of the Registry of Deeds for the Province of Rizal;
that portions of the buildings and wall bought by plaintiff together with the land from Pariz The petition raises the following issues: 8
Industries are occupying a portion of defendant’s adjoining land; that upon learning of the
encroachment or occupation by its buildings and wall of a portion of defendant’s land, "(A)
plaintiff offered to buy from defendant that particular portion of defendant’s land occupied
by portions of its buildings and wall with an area of 770 square meters, more or less, but Whether or not the respondent Court of Appeals erred in holding the petitioner a builder in
defendant, however, refused the offer. In 1973, the parties entered into a private agreement bad faith because it is ‘presumed to know the metes and bounds of his property.’
before a certain Col. Rosales in Malacañang, wherein plaintiff agreed to demolish the wall
at the back portion of its land thus giving to defendant possession of a portion of his land (B)
previously enclosed by plaintiff’s wall; that defendant later filed a complaint before the
office of Municipal Engineer of Parañaque, Metro Manila as well as before the Office of the Whether or not the respondent Court of Appeals erred when it used the amicable settlement
Provincial Fiscal of Rizal against plaintiff in connection with the encroachment or between the petitioner and the private respondent, where both parties agreed to the
occupation by plaintiff’s buildings and walls of a portion of its land but said complaint did demolition of the rear portion of the fence, as estoppel amounting to recognition by petitioner
not prosper; that defendant dug or caused to be dug a canal along plaintiff’s wall, a portion of respondent’s right over his property including the portions of the land where the other
of which collapsed in June, 1980, and led to the filing by plaintiff of the supplemental structures and the building stand, which were not included in the settlement.
complaint in the above-entitled case and a separate criminal complaint for malicious mischief
against defendant and his wife which ultimately resulted into the conviction in court of (C)
defendant’s wife for the crime of malicious mischief; that while trial of the case was in
progress, plaintiff filed in Court a formal proposal for settlement of the case but said Whether or not the respondent Court of Appeals erred in ordering the removal of the
proposal, however, was ignored by defendant."cralaw virtua1aw library ‘structures and surrounding walls on the encroached area’ and in withdrawing its earlier
ruling in its August 28, 1992 decision for the petitioner ‘to pay for the value of the land
After trial on the merits, the Regional Trial Court 6 of Pasay City, Branch 117, in Civil Case occupied’ by the building, only because the private respondent has ‘manifested its choice to
No. PQ-7631-P, rendered a decision dated December 4, 1989 in favor of petitioner who was demolish’ it despite the absence of compulsory sale where the builder fails to pay for the
the plaintiff therein. The dispositive portion reads: 7 land, and which ‘choice’ private respondent deliberately deleted from its September 1, 1980
answer to the supplemental complaint in the Regional Trial Court."cralaw virtua1aw library
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendant and
ordering the latter to sell to plaintiff that portion of land owned by him and occupied by In its Memorandum, petitioner poses the following issues:jgc:chanrobles.com.ph
portions of plaintiff’s buildings and wall at the price of P2,000.00 per square meter and to
pay the former:chanrob1es virtual 1aw library "A.

1. The sum of P44,000.00 to compensate for the losses in materials and properties incurred The time when to determine the good faith of the builder under Article 448 of the New Civil
by plaintiff through thievery as a result of the destruction of its wall; Code, is reckoned during the period when it was actually being built; and in a case where no
evidence was presented nor introduced as to the good faith or bad faith of the builder at that
2. The sum of P7,500.00 as and by way of attorney’s fees; and time, as in this case, he must be presumed to be a ‘builder in good faith,’ since ‘bad faith
cannot be presumed.’ 9
Page 84 of 106
 allegedly contradicts the ruling of the Hon. Court of Appeals based on the doctrine laid down
B. in Tuason v. Lumanlan case citing also Tuason v. Macalindong case (Supra).

In a specific ‘boundary overlap situation’ which involves a builder in good faith, as in this 2. Assuming that the doctrine in the alleged Co Tao v. Chico case is contradictory to the
case, it is now well settled that the lot owner, who builds on the adjacent lot is not charged doctrine in Tuason v. Lumanlan and Tuason v. Macalindong, the two cases being more
with ‘constructive notice’ of the technical metes and bounds contained in their torrens titles current, the same should prevail."cralaw virtua1aw library
to determine the exact and precise extent of his boundary perimeter. 10
Further, private respondent contends that the following "unmistakably" point to the bad faith
C. of petitioner: (1) private respondent’s purchase of the two lots, "was ahead of the purchase
by petitioner of the building and lot from Pariz Industries" ; (2) the declaration of the General
The respondent court’s citation of the twin cases of Tuason & Co. v. Lumanlan and Tuason Manager of Tecnogas that the sale between petitioner and Pariz Industries "was not
& Co. v. Macalindong is not the ‘judicial authority’ for a boundary dispute situation between registered" because of some problems with China Banking Corporation; and (3) the Deed of
adjacent torrens titled lot owners, as the facts of the present case do not fall within nor square Sale in favor of petitioner was registered in its name only in "the month of May 1973." 16
with the involved principle of a dissimilar case. 11
The Court’s Ruling
D.

Quite contrary to respondent Uy’s reasoning, petitioner Tecnogas continues to be a builder
in good faith, even if it subsequently built/repaired the walls/other permanent structures
thereon while the case a quo was pending and even while respondent sent the petitioner many
letters/filed cases thereon. 12
D. (E.)
The amicable settlement between the parties should be interpreted as a contract and enforced
only in accordance with its explicit terms, and not over and beyond that agreed upon; because
the courts do not have the power to create a contract nor expand its scope. 13
E. (F.)
As a general rule, although the landowner has the option to choose between: (1) ‘buying the
building built in good faith’, or (2) ‘selling the portion of his land on which stands the
building’ under Article 448 of the Civil Code; the first option is not absolute, because an
exception thereto, once it would be impractical for the landowner to choose to exercise the
first alternative, i.e. buy that portion of the house standing on his land, for the whole building
might be rendered useless. The workable solution is for him to select the second alternative,
namely, to sell to the builder that part of his land on which was constructed a portion of the
house." 14
Private respondent, on the other hand, argues that the petition is "suffering from the following
flaws: 15
The petition should be granted.
Good Faith or Bad Faith
Respondent Court, citing the cases of J. M. Tuason & Co., Inc. v. Vda. de Lumanlan 17 and
J. M. Tuason or Co., Inc. v. Macalindong, 18 ruled that petitioner "cannot be considered in
good faith" because as a land owner, it is "presumed to know the metes and bounds of his
own property, specially if the same are reflected in a properly issued certificate of title. One
who erroneously builds on the adjoining lot should be considered a builder in (b)ad (f)aith,
there being presumptive knowledge of the Torrens title, the area, and the extent of the
boundaries." 19chanroblesvirtuallawlibrary:red
We disagree with respondent Court. The two cases it relied upon do not support its main
pronouncement that a registered owner of land has presumptive knowledge of the metes and
bounds of its own land, and is therefore in bad faith if he mistakenly builds on an adjoining
land. Aside from the fact that those cases had factual moorings radically different from those
obtaining here, there is nothing in those cases which would suggest, however remotely, that
bad faith is imputable to a registered owner of land when a part of his building encroaches
upon a neighbor’s land, simply because he is supposedly presumed to know the boundaries
of his land as described in his certificate of title. No such doctrinal statement could have been
made in those cases because such issue was not before the Supreme Court. Quite the contrary,
we have rejected such a theory in Co Tao v. Chico, 20 where we held that unless one is
versed in the science of surveying, "no one can determine the precise extent or location of
his property by merely examining his paper title."cralaw virtua1aw library

1. It did not give the exact citations of cases decided by the Honorable Supreme Court that There is no question that when petitioner purchased the land from Pariz Industries, the
Page 85 of 106
buildings and other structures were already in existence. The record is not clear as to who
actually built those structures, but it may well be assumed that petitioner’s predecessor-in- We answer such question in the affirmative.
interest, Pariz Industries, did so. Article 527 of the Civil Code presumes good faith, and since
no proof exists to show that the encroachment over a narrow, needle-shaped portion of In the first place, there is no sufficient showing that petitioner was aware of the encroachment
private respondent’s land was done in bad faith by the builder of the encroaching structures, at the time it acquired the property from Pariz Industries. We agree with the trial court that
the latter should be presumed to have built them in good faith. 21 It is presumed that various factors in evidence adequately show petitioner’s lack of awareness thereof. In any
possession continues to be enjoyed in the same character in which it was acquired, until the case, contrary proof has not overthrown the presumption of good faith under Article 527 of
contrary is proved. 22 Good faith consists in the belief of the builder that the land he is the Civil Code, as already stated, taken together with the disputable presumptions of the law
building on is his, and his ignorance of any defect or flaw in his title. 23 Hence, such good on evidence. These presumptions state, under Section 3 (a) of Rule 131 of the Rules of Court,
faith, by law, passed on to Pariz’s successor, petitioner in this case. Further," (w)here one that the person is innocent of a crime or wrong; and under Section 3 (ff) of Rule 131, that
derives title to property from another, the act, declaration, or omission of the latter, while the law has been obeyed. In fact, private respondent Eduardo Uy himself was unaware of
holding the title, in relation to the property, is evidence against the former." 24 And such intrusion into his property until after 1971 when he hired a surveyor, following his
possession acquired in good faith does not lose this character except in case and from the purchase of another adjoining lot, to survey all his newly acquired lots. Upon being apprised
moment facts exist which show that the possessor is not unaware that he possesses the thing of the encroachment, petitioner immediately offered to buy the area occupied by its building
improperly or wrongfully. 25 The good faith ceases from the moment defects in the title are — a species of conduct consistent with good faith.
made known to the possessor, by extraneous evidence or by suit for recovery of the property
by the true owner. 26 In the second place, upon delivery of the property by Pariz Industries, as seller, to the
petitioner, as buyer, the latter acquired ownership of the property. Consequently and as
Recall that the encroachment in the present case was caused by a very slight deviation of the earlier discussed, petitioner is deemed to have stepped into the shoes of the seller in regard
erected wall (as fence) which was supposed to run in a straight line from point 9 to point 1 to all rights of ownership over the immovable sold, including the right to compel the private
of petitioner’s lot. It was an error which, in the context of the attendant facts, was consistent respondent to exercise either of the two options provided under Article 448 of the Civil Code.
with good faith. Consequently, the builder, if sued by the aggrieved landowner for recovery
of possession, could have invoked the provisions of Art. 448 of the Civil Code, which Estoppel
reads:jgc:chanrobles.com.ph
Respondent Court ruled that the amicable settlement entered into between petitioner and
"The owner of the land on which anything has been built, sown or planted in good faith, shall private respondent estops the former from questioning the private respondent’s "right" over
have the right to appropriate as his own the works, sowing or planting, after payment of the the disputed property. It held that by undertaking to demolish the fence under said settlement,
indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to petitioner recognized private respondent’s right over the property, and "cannot later on
pay the price of the land, and the one who sowed, the proper rent. However, the builder or compel" private respondent "to sell to it the land since" private respondent "is under no
planter cannot be obliged to buy the land if its value is considerably more than that of the obligation to sell." 28
building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The parties shall agree We do not agree. Petitioner cannot be held in estoppel for entering into the amicable
upon the terms of the lease and in case of disagreement, the court shall fix the terms settlement, the pertinent portions of which read: 29
thereof."cralaw virtua1aw library
"That the parties hereto have agreed that the rear portion of the fence that separates the
The obvious benefit to the builder under this article is that, instead of being outrightly ejected property of the complainant and respondent shall be demolished up to the back of the
from the land, he can compel the landowner to make a choice between the two options: (1) building housing the machineries which demolision (sic) shall be undertaken by the
to appropriate the building by paying the indemnity required by law, or (2) sell the land to complainant at anytime.
the builder. The landowner cannot refuse to exercise either option and compel instead the
owner of the building to remove it from the land. 27 That the fence which serve(s) as a wall housing the electroplating machineries shall not be
demolished in the mean time which portion shall be subject to negotiation by herein
The question, however, is whether the same benefit can be invoked by petitioner who, as parties."cralaw virtua1aw library
earlier stated, is not the builder of the offending structures but possesses them as buyer.
Page 86 of 106
From the foregoing, it is clear that petitioner agreed only to the demolition of a portion of
the wall separating the adjoining properties of the parties — i.e. "up to the back of the
building housing the machineries." But that portion of the fence which served as the wall
housing the electro-plating machineries was not to be demolished. Rather, it was to "be
subject to negotiation by herein parties." The settlement may have recognized the ownership
of private respondent but such admission cannot be equated with bad faith. Petitioner was
only trying to avoid a litigation, one reason for entering into an amicable settlement.
As was ruled in Osmeña v. Commission on Audit, 30
"A compromise is a bilateral act or transaction that is expressly acknowledged as a juridical
agreement by the Civil Code and is therein dealt with in some detail.’A compromise,’
declares Article 2208 of said Code, ‘is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced.’
x x x only if and when he chooses to compel the petitioner to buy the land at a reasonable price
The Civil Code not only defines and authorizes compromises, it in fact encourages them in
civil actions. Art. 2029 states that ‘The Court shall endeavor to persuade the litigants in a
civil case to agree upon some fair compromise.’ . . ."cralaw virtua1aw library
In the context of the established facts, we hold that petitioner did not lose its rights under
Article 448 of the Civil Code on the basis merely of the fact that some years after acquiring
the property in good faith, it learned about — and aptly recognized — the right of private
respondent to a portion of the land occupied by its building. The supervening awareness of
the encroachment by petitioner does not militate against its right to claim the status of a
builder in good faith. In fact, a judicious reading of said Article 448 will readily show that
the landowner’s exercise of his option can only take place after the builder shall have come
to know of the intrusion — in short, when both parties shall have become aware of it. Only
then will the occasion for exercising the option arise, for it is only then that both parties will
have been aware that a problem exists in regard to their property rights.
Options of Private Respondent
What then is the applicable provision in this case which private respondent may invoke as
his remedy: Article 448 or Article 450 31 of the Civil Code?
In view of the good faith of both petitioner and private respondent, their rights and
obligations are to be governed by Art. 448. The essential fairness of this codal provision has
been pointed out by Mme. Justice Ameurfina Melencio-Herrera, citing Manresa and
applicable precedents, in the case of Depra v. Dumlao, 32 to wit:jgc:chanrobles.com.ph
Page 87 of 106
"Where the builder, planter or sower has acted in good faith, a conflict of rights arises
between the owners, and it becomes necessary to protect the owner of the improvements
without causing injustice to the owner of the land. In view of the impracticality of creating a
state of forced co-ownership, the law has provided a just solution by giving the owner of the
land the option to acquire the improvements after payment of the proper indemnity, or to
oblige the builder or planter to pay for the land and the sower to pay the proper rent. It is the
owner of the land who is authorized to exercise the option, because his right is older, and
because, by the principle of accession, he is entitled to the ownership of the accessory thing
(3 Manresa 213; Bernardo v. Bataclan, 37 Off. Gaz. 1382; Co Tao v. Chan Chico, G. R. No.
49167, April 30, 1949; Article applied; see Cabral, Et. Al. v. Ibañez [S.C.] 52 Off. Gaz. 217;
Marfori v. Velasco, [C.A.] 52 Off. Gaz. 2050)."cralaw virtua1aw library
The private respondent’s insistence on the removal of the encroaching structures as the
proper remedy, which respondent Court sustained in its assailed Decisions, is thus legally
flawed. This is not one of the remedies bestowed upon him by law. It would be available
but the latter fails to pay such price. 33 This has not taken place. Hence, his options are
limited to: (1) appropriating the encroaching portion of petitioner’s building after payment
of proper indemnity, or (2) obliging the latter to buy the lot occupied by the structure. He
cannot exercise a remedy of his own liking.
Neither is petitioner’s prayer that private respondent be ordered to sell the land 34 the proper
remedy. While that was dubbed as the "more workable solution in Grana and Torralba v. The
Court of Appeals, Et Al., 35 it was not the relief granted in that case as the landowners were
directed to exercise "within 30 days from this decision their option to either buy the portion
of the petitioners’ house on their land or sell to said petitioners the portion of their land on
which it stands." 36 Moreover, in Grana and Torralba, the area involved was only 87 square
meters while this case involves 520 square meters 37 . In line with the case of Depra v.
Dumlao, 38 this case will have to be remanded to the trial court for further proceedings to
fully implement the mandate of Art. 448. It is a rule of procedure for the Supreme Court to
strive to settle the entire controversy in a single proceeding leaving no root or branch to bear
the seeds of future litigation. 39
Petitioner, however, must also pay the rent for the property occupied by its building as
prescribed by respondent Court from October 4, 1979, but only up to the date private
respondent serves notice of its option upon petitioner and the trial court; that is, if such option
is for private respondent to appropriate the encroaching structure. In such event, petitioner
would have a right of retention which negates the obligation to pay rent. 40 The rent should
however continue if the option chosen is compulsory sale, but only up to the actual transfer
of ownership.
The award of attorney’s fees by respondent Court against petitioner is unwarranted since the
action appears to have been filed in good faith. Besides, there should be no penalty on the
right to litigate. 41 calendar month. The period for the forced lease shall not be more than two (2) years, counted
from the finality of the judgment, considering the long period of time since 1970 that
WHEREFORE, premises considered, the petition is hereby GRANTED and the assailed petitioner has occupied the subject area. The rental thus fixed shall be increased by ten
Decision and the Amended Decision are REVERSED and SET ASIDE. In accordance with percent (10%) for the second year of the forced lease. Petitioner shall not make any further
the case of Depra v. Dumlao, 42 this case is REMANDED to the Regional Trial Court of constructions or improvements on the building. Upon expiration of the two-year period, or
Pasay City, Branch 117, for further proceedings consistent with Articles 448 and 546 43 of upon default by petitioner in the payment of rentals for two (2) consecutive months, private
the Civil Code, as follows:chanroblesvirtuallawlibrary respondent shall be entitled to terminate the forced lease, to recover his land, and to have the
portion of the building removed by petitioner or at latter’s expense. The rentals herein
1. The trial court shall determine:chanrob1es virtual 1aw library provided shall be tendered by petitioner to the trial court for payment to private respondent,
and such tender shall constitute evidence of whether or not compliance was made within the
a) the present fair price of private respondent’s 520 square-meter area of land; period fixed by the said court.

b) the increase in value ("plus value") which the said area of 520 square meters may have c) In any event, petitioner shall pay private respondent an amount computed at two thousand
acquired by reason of the existence of the portion of the building on the area; pesos (P2,000.00) per month as reasonable compensation for the occupancy of private
respondent’s land for the period counted from October 4, 1979, up to the date private
c) the fair market value of the encroaching portion of the building; and respondent serves notice of its option to appropriate the encroaching structures, otherwise up
to the actual transfer of ownership to petitioner or, in case a forced lease has to be imposed,
d) whether the value of said area of land is considerably more than the fair market value of up to the commencement date of the forced lease referred to in the preceding paragraph;
the portion of the building thereon.
d) The periods to be fixed by the trial court in its decision shall be non-extendible, and upon
2. After said amounts shall have been determined by competent evidence, the regional trial failure of the party obliged to tender to the trial court the amount due to the obligee, the party
court shall render judgment as follows:chanrob1es virtual 1aw library entitled to such payment shall be entitled to an order of execution for the enforcement of
payment of the amount due and for compliance with such other acts as may be required by
a) The private respondent shall be granted a period of fifteen (15) days within which to the prestation due the obligee.
exercise his option under the law (Article 448, Civil Code), whether to appropriate the
portion of the building as his own by paying to petitioner its fair market value, or to oblige No costs.
petitioner to pay the price of said area. The amounts to be respectively paid by petitioner and
private respondent, in accordance with the option thus exercised by written notice of the SO ORDERED.
other party and to the court, shall be paid by the obligor within fifteen (15) days from such
notice of the option by tendering the amount to the trial court in favor of the party entitled to Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur.
receive it;
Endnotes:
b) If private respondent exercises the option to oblige petitioner to pay the price of the land
but the latter rejects such purchase because, as found by the trial court, the value of the land
is considerably more than that of the portion of the building, petitioner shall give written
notice of such rejection to private respondent and to the trial court within fifteen (15) days
1. Rollo, pp. 10-17.
from notice of private respondent’s option to sell the land. In that event, the parties shall be
given a period of fifteen (15) days from such notice of rejection within which to agree upon 2. Special Seventeenth Division composed of J. Antonio M. Martinez, ponente, and JJ.
the terms of the lease, and give the trial court formal written notice of the agreement and its
Serafin V.C. Guingona and Salome A. Montoya, concurring.
provisos. If no agreement is reached by the parties, the trial court, within fifteen (15) days
from and after the termination of the said period fixed for negotiation, shall then fix the terms
3. Rollo, pp. 16-17.
of the lease provided that the monthly rental to be fixed by the Court shall not be less than
two thousand pesos (P2,000.00) per month, payable within the first five (5) days of each
Page 88 of 106
4. Ibid., pp. 20-21. 23. Pleasantville Development Corporation v. Court of Appeals, 253 SCRA 10, 18,
February 1, 1996.
5. Ibid., pp. 11-12.
24. Robleza v. Court of Appeals, 174 SCRA 354, 365, June 28, 1989 citing Section 28,
6. Presided by Judge Leonardo M. Rivera. Rule 130, Rules of Court.

7. Rollo, p. 10. 25. Article 528 of the Civil Code.

8. Ibid., pp. 106-107. 26 Ortiz v. Kayanan, 92 SCRA 146, 159, July 30, 1979 citing Article 528, Civil Code.

9. Ibid., p. 392. 27. Ignacio v. Hilario, 76 Phil. 605 (1946); Sarmiento v. Agana, 129 SCRA 122, April 30,
1984.
10. Ibid., p. 399.
28. Rollo, p. 14.
11. Ibid., p. 402.
29. Original Records, p. 179.
12 Ibid., p. 410.
30. 238 SCRA 463, 470-471, November 29, 1994.
13. Ibid., p. 416.
31. Article 450. The owner of the land on which anything has been built, planted or sown
14. Ibid., p. 423. in bad faith may demand the demolition of the work, or that the planting or sowing be
removed, in order to replace things in their former condition at the expense of the person
15. Ibid., p. 247. who built, planted or sowed; or he may compel the builder or planter to pay the price of the
land, and the sower the proper rent.
16. Ibid., pp. 253-255.
32. 136 SCRA 475, 483, May 16, 1985.
17. 23 SCRA 230, April 26, 1968.
33. Ignacio v. Hilario, supra. In Sarmiento v. Agana (129 SCRA 122, 126, April 30, 1984),
18. 6 SCRA 938, December 29, 1962. it was held that:jgc:chanrobles.com.ph

19. Rollo, p. 14.
20. 83 Phil. 543 (1949).
21. U.S. v. Rapiñan, 1 Phil. 294, 296 (1902); City of Manila v. del Rosario, 5 Phil. 277,
231 (1905); Gabriel , Et. Al. v. Bartolome, Et Al., 7 Phil. 699, 706 (1907); Sideco v.
Pascua, 13 Phil. 342, 344 (1909); Arriola v. Gomez De la Serna, 14 Phil. 627, 629 (1909);
Cea v. Villanueva, 18 Phil. 538, 542 (1911); Bondad v. Bondad, 34 Phil. 232, 233 (1916);
Serra v. National Bank, 45 Phil. 907 (1924); Escritor v. Intermediate Appellate Court, 155
SCRA 577, 583, November 12, 1987.
"The owner of the building erected in good faith on a land owned by another, is entitled to
retain the possession of the land until he is paid the value of his building, under Article 453
(now Article 546). The owner of the land, upon the other hand, has the option, under
Article 361 (now Article 448), either to pay for the building or to sell his land to the owner
of the building. But he cannot, as respondents here did, refuse both to pay for the building
and to sell the land and compel the owner of the building to remove it from the land where
it is erected. He is entitled to such remotion only when, after having chosen to sell his land,
the other party fails to pay for the same."cralaw virtua1aw library
34. Rollo, pp. 423-426.

22. Article 529 of the Civil Code. 35. 109 Phil. 260, 264 (1960).

Page 89 of 106
36. at p. 265.
37. In view of the compromise agreement, the encroaching wall was torn down. As
explained in private respondent’s Memorandum, the area encroached by petitioner’s
building is only 520 square meters, no longer the original 770 referred to in the statement
of facts narrated by the two lower courts. (Rollo, p. 467).
38. Supra.
The applicant owns the property immediately adjoining the land sought to be registered. His
registered property is bounded on the east by the Talisay River, on the west by the Bulacan
River, and on the north by the Manila Bay. The Talisay River and the Bulacan River flow
down towards the Manila Bay and act as boundaries of the applicant's registered land on the
east and on the west.
The land sought to be registered was formed at the northern tip of the applicant's land.
Applicant's registered property is bounded on the north by the Manila Bay.

39. Heirs of Crisanta Y . Gabriel-Almoradie v. Court of Appeals, 229 SCRA 15, 29,
The issue: May the land sought to be registered be deemed an accretion in the sense that it
January 4, 1994.
naturally accrues in favor of the riparian owner or should the land be considered as foreshore
land?
40. Grana v. Court of Appeals, supra.

41. Castillo v. Court of Appeals, 205 SCRA 529, 537, January 27, 1992, citing Ilocos
Norte Electric Company v. Court of Appeals, 179 SCRA 5, November 6, 1989 and Espiritu
v. Court of Appeals, 137 SCRA 50, June 19, 1985.
42. Supra, at pp. 483-486.
Before us is a petition for review of: (1) the decision 1 and (2) two subsequent resolutions 2
of the Intermediate Appellate Court 3 (now the Court of Appeals) in Land Registration Case
No. N-84, 4 the application over which was filed by private respondents' predecessor-in-
interest, Sinforoso Pascual, now deceased, before the Court of First Instance 5 (now the
Regional Trial Court) of Balanga, Bataan.

43. Article 546. Necessary expenses shall be refunded to every possessor; but only the There is no dispute as to the following facts:
possessor in good faith may retain the thing until he has been reimbursed therefor.
On October 3, 1946, Sinforoso Pascual, now deceased, filed an application for foreshore
Useful expenses shall be refunded only to the possessor in good faith with the same right of lease covering a tract of foreshore land in Sibocon, Balanga, Bataan, having an area of
retention, the person who has defeated him in the possession having the option of refunding approximately seventeen (17) hectares. This application was denied on January 15, 1953. So
the amount of the expenses or of paying the increase in value which the thing may have was his motion for reconsideration.
acquired by reason thereof.
Subsequently, petitioners' predecessor-in-interest, also now deceased, Emiliano Navarro,
G.R. No. 68166 February 12, 1997 filed a fishpond application with the Bureau of Fisheries covering twenty five (25) hectares
of foreshore land also in Sibocon, Balanga, Bataan. Initially, such application was denied by
HEIRS OF EMILIANO NAVARRO, petitioner, the Director of Fisheries on the ground that the property formed part of the public domain.
vs. Upon motion for reconsideration, the Director of Fisheries, on May 27, 1958, gave due
INTERMEDIATE APPELLATE COURT & HEIRS OF SINFOROSO PASCUAL, course to his application but only to the extent of seven (7) hectares of the property as may
respondents. be certified by the Bureau of Forestry as suitable for fishpond purposes.

The Municipal Council of Balanga, Bataan, had opposed Emiliano Navarro's application.
Aggrieved by the decision of the Director of Fisheries, it appealed to the Secretary of Natural
Resources who, however, affirmed the grant. The then Executive Secretary, acting in behalf
HERMOSISIMA, JR., J.:
of the President of the Philippines, similarly affirmed the grant.
Unique is the legal question visited upon the claim of an applicant in a Land Registration
case by oppositors thereto, the Government and a Government lessee, involving as it does On the other hand, sometime in the early part of 1960, Sinforoso Pascual flied an application
ownership of land formed by alluvium. to register and confirm his title to a parcel of land, situated in Sibocon, Balanga, Bataan,
Page 90 of 106
described in Plan Psu-175181 and said to have an area of 146,611 square meters. Pascual
claimed that this land is an accretion to his property, situated in Barrio Puerto Rivas, Balanga,
Bataan, and covered by Original Certificate of Title No. 6830. It is bounded on the eastern
side by the Talisay River, on the western side by the Bulacan River, and on the northern side
by the Manila Bay. The Talisay River as well as the Bulacan River flow downstream and
meet at the Manila Bay thereby depositing sand and silt on Pascual's property resulting in an
accretion thereon. Sinforoso Pascual claimed the accretion as the riparian owner.
On March 25, 1960, the Director of Lands, represented by the Assistant Solicitor General,
filed an opposition thereto stating that neither Pascual nor his predecessors-in-interest
possessed sufficient title to the subject property, the same being a portion of the public
domain and, therefore, it belongs to the Republic of the Philippines. The Director of Forestry,
through the Provincial Fiscal, similarly opposed Pascual's application for the same reason as
that advanced by the Director of Lands. Later on, however, the Director of Lands withdrew
his opposition. The Director of Forestry become the sole oppositor.
On June 2, 1960, the court a quo issued an order of general default excepting the Director of
Lands and the Director of Forestry.
Upon motion of Emiliano Navarro, however, the order of general default was lifted and, on
February 13, 1961, Navarro thereupon filed an opposition to Pascual's application. Navarro
claimed that the land sought to be registered has always been part of the public domain, it
being a part of the foreshore of Manila Bay; that he was a lessee and in possession of a part
of the subject property by virtue of a fishpond permit issued by the Bureau of Fisheries and
confirmed by the Office of the President; and that be bad already converted the area covered
by the lease into a fishpond.
During the pendency of the land registration case, that is, on November 6, 1960, Sinforoso
Pascual filed a complaint for ejectment against Emiliano Navarro, one Marcelo Lopez and
their privies, alleged by Pascual to have unlawfully claimed and possessed, through stealth,
force and strategy, a portion of the subject property covered by Plan Psu-175181. The
defendants in the case were alleged to have built a provisional dike thereon: thus they have
thereby deprived Pascual of the premises sought to be registered. This, notwithstanding
repeated demands for defendants to vacate the property.
The case was decided adversely against Pascual. Thus, Pascual appealed to the Court of First
Instance (now Regional Trial Court) of Balanga, Bataan, the appeal having been docketed as
Civil Case No. 2873. Because of the similarity of the parties and the subject matter, the
appealed case for ejectment was consolidated with the land registration case and was jointly
tried by the court a quo.
Page 91 of 106
During the pendency of the trial of the consolidated cases, Emiliano Navarro died on
November 1, 1961 and was substituted by his heirs, the herein petitioners.
Subsequently, on August 26, 1962, Pascual died and was substituted by his heirs, the herein
private respondents.
On November 10, 1975, the court a quo rendered judgment finding the subject property to
be foreshore land and, being a part of the public domain, it cannot be the subject of land
registration proceedings.
The decision's dispositive portion reads:
WHEREFORE, judgment is rendered:
(1) Dismissing plaintiff [private respondent] Sinforoso Pascual's
complaint for ejectment in Civil Case No. 2873;
(2) Denying the application of Sinforoso Pascual for land registration over
the land in question; and
(3) Directing said Sinforoso Pascual, through his heirs, as plaintiff in Civil
Case No. 2873 and as applicant in Land Registration Case No. N-84 to pay
costs in both instances." 6
The heirs of Pascual appealed and, before the respondent appellate court, assisted the
following errors:
1. The lower court erred in not finding the land in question as an accretion
by the action of the Talisay and Bulacan Rivers to the land admittedly
owned by applicants-appellants [private respondents].
2. The lower court erred in holding that the land in question is foreshore
land.
3. The lower court erred in not ordering the registration of the land in
controversy in favor of applicants-appellants [private respondents].
4. The lower court erred in not finding that the applicants-appellants
[private respondents] are entitled to eject the oppositor-appellee
[petitioners]. 7
On appeal, the respondent court reversed the findings of the court a quo and granted the
petition for registration of the subject property but excluding therefrom fifty (50) meters from
corner 2 towards corner 1; and fifty meters (50) meters from corner 5 towards corner 6 of
the Psu-175181.
The respondent appellate court explained the reversal in this wise:
The paramount issue to be resolved in this appeal as set forth by the parties
in their respective briefs is — whether or not the land sought to be
registered is accretion or foreshore land, or, whether or not said land was
formed by the action of the two rivers of Talisay and Bulacan or by the
action of the Manila Bay. If formed by the action of the Talisay and
Bulacan rivers, the subject land is accretion but if formed by the action of
the Manila Bay then it is foreshore land.
xxx xxx xxx
It is undisputed that applicants-appellants [private respondents] owned the
land immediately adjoining the land sought to be registered. Their property
which is covered by OCT No. 6830 is bounded on the east by the Talisay
River, on the west by the Bulacan River, and on the north by the Manila
Bay. The Talisay and Bulacan rivers come from inland flowing
downstream towards the Manila Bay. In other words, between the Talisay
River and the Bulacan River is the property of applicants with both rivers
acting as the boundary to said land and the flow of both rivers meeting and
emptying into the Manila Bay. The subject land was formed at the tip or
apex of appellants' [private respondents'] land adding thereto the land now
sought to be registered.
This makes this case quite unique because while it is undisputed that the
subject land is immediately attached to appellants' [private respondents']
land and forms the tip thereof, at the same time, said land immediately
faces the Manila Bay which is part of the sea. We can understand therefore
the confusion this case might have caused the lower court, faced as it was
with the uneasy problem of deciding whether or not the subject land was
formed by the action of the two rivers or by the action of the sea. Since the
subject land is found at the shore of the Manila Bay facing appellants'
[private respondents'] land, it would be quite easy to conclude that it is
foreshore and therefore part of the patrimonial property of the State as the
lower court did in fact rule . . . .
Page 92 of 106
xxx xxx xxx
It is however undisputed that appellants' [private respondents'] land lies
between these two rivers and it is precisely appellants' [private
respondents'] land which acts as a barricade preventing these two rivers to
meet. Thus, since the flow of the two rivers is downwards to the Manila
Bay the sediments of sand and silt are deposited at their mouths.
It is, therefore, difficult to see how the Manila Bay could have been the
cause of the deposit thereat for in the natural course of things, the waves
of the sea eat the land on the shore, as they suge [sic] inland. It would not
therefore add anything to the land but instead subtract from it due to the
action of the waves and the wind. It is then more logical to believe that the
two rivers flowing towards the bay emptied their cargo of sand, silt and
clay at their mouths, thus causing appellants' [private respondents'] land to
accumulate therein.
However, our distinguished colleage [sic], Mr. Justice Serrano, do [sic]
not seem to accept this theory and stated that the subject land arose only
when . . . . Pascual planted "palapat" and "bakawan" trees thereat to serve
as a boundary or strainer. But we do not see how this act of planting trees
by Pascual would explain how the land mass came into being. Much less
will it prove that the same came from the sea. Following Mr. Justice
Serrano's argument that it were the few trees that acted as strainers or
blocks, then the land that grew would have stopped at the place where the
said trees were planted. But this is not so because the land mass went far
beyond the boundary, or where the trees were planted.
On the other hand, the picture-exhibits of appellants [private respondents]
clearly show that the land that accumulated beyond the so- called
boundary, as well as the entire area being applied for is dry land, above
sea level, and bearing innumerable trees . . . The existence of vegetation
on the land could only confirm that the soil thereat came from inland rather
than from the sea, for what could the sea bring to the shore but sand,
pebbles, stones, rocks and corrals? On the other hand, the two rivers would
be bringing soil on their downward flow which they brought along from
the eroded mountains, the lands along their path, and dumped them all on
the northern portion of appellants' [private respondents'] land.
In view of the foregoing, we have to deviate from the lower court's finding.
While it is true that the subject land is found at the shore of the Manila Bay
fronting appellants' [private respondents'] land, said land is not foreshore
 but an accretion from the action of the Talisay and Bulacan rivers. In fact,
this is exactly what the Bureau of Lands found out, as shown in the
following report of the Acting Provincial Officer, Jesus M. Orozco, to wit:
"Upon ocular inspection of the land subject of this
registration made on June 11, 1960, it was found out that
the said land is . . . . sandwitched [sic] by two big rivers
. . . . These two rivers bring down considerable amount
of soil and sediments during floods every year thus
raising the soil of the land adjoining the private property
of the applicant [private respondents]. About four-fifth
[sic] of the area applied for is now dry land whereon are
planted palapat trees thickly growing thereon. It is the
natural action of these two rivers that has caused the
formation of said land . . . . subject of this registration
case. It has been formed, therefore, by accretion. And
having been formed by accretion, the said land may be
considered the private property of the riparian owner
who is the applicant herein [private respondents] . . . .
In view of the above, the opposition hereto filed by the
government should be withdrawn, except for the portion
recommended by the land investigator in his report
dated May 2, 1960, to be excluded and considered
foreshore. . . ."
Because of this report, no less than the Solicitor General representing the
Bureau of Lands withdrew his opposition dated March 25, 1960, and
limited "the same to the northern portion of the land applied for,
compromising a strip 50 meters wide along the Manila Bay, which should
be declared public land as part of the foreshore" . . . . 8
Pursuant to the aforecited decision, the respondent appellate court ordered the
issuance of the corresponding decree of registration in the name of private
respondents and the reversion to private respondents of the possession of the portion
of the subject property included in Navarro's fishpond permit.
On December 20, 1978, petitioners filed a motion for reconsideration of the aforecited
decision. The Director of Forestry also moved for the reconsideration of the same decision.
Both motions were opposed by private respondents on January 27, 1979.
Page 93 of 106
On November 21, 1980, respondent appellate court promulgated a resolution denying the
motion for reconsideration filed by the Director of Forestry. It, however, modified its
decision, to read, viz:
(3). Ordering private oppositors Heirs of Emiliano Navarro to vacate that
portion included in their fishpond permit covered by Plan Psu-175181 and
hand over possession of said portion to applicants-appellants, if the said
portion is not within the strip of land fifty (50) meters wide along Manila
Bay on the northern portion of the land subject of the registration
proceedings and which area is more particularly referred to as fifty (50)
meters from corner 2 towards corner 1; and fifty (50) meters from corner
5 towards corner 6 of Plan Psu-175181. . . . 9
On December 15, 1980, we granted the Solicitor General, acting as counsel for the Director
of Forestry, an extension of time within which to file in this court, a petition for review of
the decision dated November 29, 1978 of the respondent appellate court and of the aforecited
resolution dated November 21, 1980.
Thereafter, the Solicitor General, in behalf of the Director of Forestry, filed a petition for
review entitled, "The Director of Forestry vs. the Court of Appeals." 10 We, however, denied
the same in a minute resolution dated July 20, 1981, such petition having been prematurely
filed at a time when the Court of Appeals was yet to resolve petitioners' pending motion to
set aside the resolution dated November 21, 1980.
On October 9, 1981, respondent appellate court denied petitioners' motion for
reconsideration of the decision dated November 29, 1978.
On October 17, 1981, respondent appellate court made an entry of judgment stating that the
decision dated November 29, 1978 had become final and executory as against herein
petitioners as oppositors in L.R.C. Case No. N-84 and Civil Case No. 2873 of the Court of
First Instance (now the Regional Trial Court) of Balanga, Bataan.
On October 26, 1981, a second motion for reconsideration of the decision dated November
29, 1978 was filed by petitioners' new counsel.
On March 26, 1982, respondent appellate court issued a resolution granting petitioners'
request for leave to file a second motion for reconsideration.
On July 13, 1984, after hearing, respondent appellate court denied petitioners' second motion
for reconsideration on the ground that the same was filed out of time, citing Rule 52, Section
1 of the Rules of Court which provides that a motion for reconsideration shall be made ex-
parte and filed within fifteen (15) days from the notice of the final order or judgment.
Hence this petition where the respondent appellate court is imputed to have palpably erred
in appreciating the fact of the case and to have gravely misapplied statutory and case law
relating to accretion, specifically, Article 457 of the Civil Code.
We find no merit in the petition.
The disputed property was brought forth by both the withdrawal of the waters of
Manila Bay and the accretion formed on the exposed foreshore land by the action
of the sea which brought soil and sand sediments in turn trapped by the palapat and
bakawan trees planted thereon by petitioner Sulpicio Pascual in 1948
Anchoring their claim of ownership on Article 457 of the Civil Code, petitioners vigorously
argue that the disputed 14-hectare land is an accretion caused by the joint action of the
Talisay and Bulacan Rivers which run their course on the eastern and western boundaries,
respectively, of petitioners' own tract of land.
Accretion as a mode of acquiring property under said Article 457, requires the concurrence
of the following requisites: (1) that the accumulation of soil or sediment be gradual and
imperceptible; (2) that it be the result of the action of the waters of the river; and (3) that the
land where the accretion takes place is adjacent to the bank of the river. 11 Accretion is the
process whereby the soil is deposited, while alluvium is the soil deposited on the estate
fronting the river bank 12; the owner of such estate is called the riparian owner. Riparian
owners are, strictly speaking, distinct from littoral owners, the latter being owners of lands
bordering the shore of the sea or lake or other tidal waters. 13 The alluvium, by mandate of
Article 457 of the Civil Code, is automatically owned by the riparian owner from the moment
the soil deposit can be seen 14 but is not automatically registered property, hence, subject to
acquisition through prescription by third persons 15.
Petitioners' claim of ownership over the disputed property under the principle of accretion,
is misplaced.
First, the title of petitioners' own tract of land reveals its northeastern boundary to be Manila
Bay. Petitioners' land, therefore, used to adjoin, border or front the Manila Bay and not any
of the two rivers whose torrential action, petitioners insist, is to account for the accretion on
their land. In fact, one of the petitioners, Sulpicio Pascual, testified in open court that the
waves of Manila Bay used to hit the disputed land being part of the bay's foreshore but, after
he had planted palapat and bakawan trees thereon in 1948, the land began to
rise. 16
Page 94 of 106
Moreover, there is no dispute as to the location of: (a) the disputed land; (b) petitioners' own
tract of land; (c) the Manila Bay; and, (d) the Talisay and Bulacan Rivers. Petitioners' own
land lies between the Talisay and Bulacan Rivers; in front of their land on the northern side
lies now the disputed land where before 1948, there lay the Manila Bay. If the accretion were
to be attributed to the action of either or both of the Talisay and Bulacan Rivers, the alluvium
should have been deposited on either or both of the eastern and western boundaries of
petitioners' own tract of land, not on the northern portion thereof which is adjacent to the
Manila Bay. Clearly lacking, thus, is the third requisite of accretion, which is, that the
alluvium is deposited on the portion of claimant's land which is adjacent to the river bank.
Second, there is no dispute as to the fact that petitioners' own tract of land adjoins the Manila
Bay. Manila Bay is obviously not a river, and jurisprudence is already settled as to what kind
of body of water the Manila Bay is. It is to be remembered that we held that:
Appellant next contends that . . . . Manila Bay cannot be considered as a
sea. We find said contention untenable. A bay is part of the sea, being a
mere indentatiom 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." 17
The disputed land, thus, is an accretion not on a river bank but on a sea bank, or on what
used to be the foreshore of Manila Bay which adjoined petitioners' own tract of land on the
northern side. As such, the applicable law is not Article 457 of to Civil Code but Article 4 of
the Spanish Law of Waters of 1866.
The process by which the disputed land was formed, is not difficult to discern from the facts
of the case. As the trial court correctly observed:
A perusal of the survey plan . . . . of the land subject matter of these cases
shows that on the eastern side, the property is bounded by Talisay River,
on the western side by Bulacan River, on the southern side by Lot 1436
and on the northern side by Manila Bay. It is not correct to state that the
Talisay and Bulacan Rivers meet a certain portion because the two rivers
both flow towards Manila Bay. The Talisay River is straight while the
Bulacan River is a little bit meandering and there is no portion where the
two rivers meet before they end up at Manila Bay. The land which is
 adjacent to the property belonging to Pascual cannot be considered an
accretion [caused by the action of the two rivers].
Applicant Pascual . . . . has not presented proofs to convince the Court that
the land he has applied for registration is the result of the settling down on
his registered land of soil, earth or other deposits so as to be rightfully be
considered as an accretion [caused by the action of the two rivers]. Said
Art. 457 finds no applicability where the accretion must have been caused
by action of the bay. 18
The conclusion formed by the trial court on the basis of the aforegoing observation is that
the disputed land is part of the foreshore of Manila Bay and therefore, part of the public
domain. The respondent appellate court, however, perceived the fact that petitioners' own
land lies between the Talisay and Bulacan Rivers, to be basis to conclude that the disputed
land must be an accretion formed by the action of the two rivers because petitioners' own
land acted as a barricade preventing the two rivers to meet and that the current of the two
rivers carried sediments of sand and silt downwards to the Manila Bay which accumulated
somehow to a 14-hectare land. These conclusions, however, are fatally incongruous in the
light of the one undisputed critical fact: the accretion was deposited, not on either the eastern
or western portion of petitioners' land where a river each runs, but on the northern portion of
petitioners' land which adjoins the Manila Bay. Worse, such conclusions are further eroded
of their practical logic and consonance with natural experience in the light of Sulpicio
Pascual's admission as to having planted palapat and bakawan trees on the northern boundary
of their own land. In amplification of this, plainly more reasonable and valid are Justice
Mariano Serrano's observations in his dissenting opinion when he stated that:
As appellants' (titled) land . . . . acts as a barricade that prevents the two
rivers to meet, and considering the wide expanse of the boundary between
said land and the Manila Bay, measuring some 593.00 meters . . . . it is
believed rather farfetched for the land in question to have been formed
through "sediments of sand and salt [sic] . . . . deposited at their [rivers']
mouths." Moreover, if "since the flow of the two rivers is downwards to
the Manila Bay the sediments of sand and silt are deposited at their
mouths," why then would the alleged cargo of sand, silt and clay
accumulate at the northern portion of appellants' titled land facing Manila
Bay instead of merely at the mouths and banks of these two rivers? That
being the case, the accretion formed at said portion of appellants' titled
[land] was not caused by the current of the two rivers but by the action of
the sea (Manila Bay) into which the rivers empty.
The conclusion . . . . is not supported by any reference to the evidence
which, on the contrary, shows that the disputed land was formed by the
Page 95 of 106
action of the sea. Thus, no less than Sulpicio Pascual, one of the heirs of
the original applicant, testified on cross-examination that the land in
dispute was part of the shore and it was only in 1948 that he noticed that
the land was beginning to get higher after he had planted trees thereon in
1948. . . . .
. . . . it is established that before 1948 sea water from the Manila Bay at
high tide could reach as far as the dike of appellants' fishpond within their
titled property, which dike now separates this titled property from the land
in question. Even in 1948 when appellants had already planted palapat and
bakawan trees in the land involved, inasmuch as these trees were yet small,
the waves of the sea could still reach the dike. This must be so because in
. . . . the survey plan of the titled property approved in 1918, said titled
land was bounded on the north by Manila Bay. So Manila Bay was
adjacent to it on the north. It was only after the planting of the aforesaid
trees in 1948 that the land in question began to rise or to get higher in
elevation.
The trees planted by appellants in 1948 became a sort of strainer of the sea
water and at the same time a kind of block to the strained sediments from
being carried back to the sea by the very waves that brought them to the
former shore at the end of the dike, which must have caused the shoreline
to recede and dry up eventually raising the former shore leading to the
formation of the land in question." 19
In other words, the combined and interactive effect of the planting of palapat and
bakawan trees, the withdrawal of the waters of Manila Bay eventually resulting in
the drying up of its former foreshore, and the regular torrential action of the waters
of Manila Bay, is the formation of the disputed land on the northern boundary of
petitioners' own tract of land.
The disputed property is an accretion on a sea bank, Manila Bay being an inlet or
an arm of the sea; as such, the disputed property is, under Article 4 of the Spanish
Law of Waters of 1866, part of the public domain
At the outset, there is a need to distinguish between Manila Bay and Laguna de Bay.
While we held in the case of Ignacio v. Director of Lands and
Valeriano 20 that Manila Bay is considered a sea for purposes of determining which law on
accretion is to be applied in multifarious situations, we have ruled differently insofar as
accretions on lands adjoining the Laguna de Bay are concerned.
In the cases of Government of the P.I v. Colegio de San Jose 21, Republic v. Court of Appeals
22 23
, Republic v. Alagad , and Meneses v. Court of
24
Appeals , we categorically ruled that Laguna de Bay is a lake the accretion on which, by
the mandate of Article 84 of the Spanish Law of Waters of 1866, belongs to the owner of the
land contiguous thereto.
The instant controversy, however, brings a situation calling for the application of Article 4
of the Spanish Law of Waters of 1866, the disputed land being an accretion on the foreshore
of Manila Bay which is, for all legal purposes, considered a sea.
Article 4 of the Spanish Law of Waters of August 3, 1866 provides as follows:
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
coast-guard service, the Government shall declare them to be the property
of the owners of the estates adjacent thereto and as increment thereof.
In the light of the aforecited vintage but still valid law, unequivocal is the public nature of
the disputed land in this controversy, the same being an accretion on a sea bank which, for
all legal purposes, the foreshore of Manila Bay is. As part of the public domain, the herein
disputed land is intended for public uses, and "so long as the land in litigation belongs to the
national domain and is reserved for public uses, it is not capable of being appropriated by
any private person, except through express authorization granted in due form by a competent
authority." 25 Only the executive and possibly the legislative departments have the right and
the power to make the declaration that the lands so gained by action of the sea is no longer
necessary for purposes of public utility or for the cause of establishment of special industries
or for coast guard services. 26 Petitioners utterly fail to show that either the executive or
legislative department has already declared the disputed land as qualified, under Article 4 of
the Spanish Law of Waters of 1866, to be the property of petitioners as owners of the estates
adjacent thereto.
WHEREFORE, the instant Petition for Review is hereby DENIED and DISMISSED.
Costs against petitioners.
SO ORDERED.
Padilla, Bellosillo and Kapunan, JJ., concur.
Page 96 of 106
G.R. Nos. 175806 and 175810 October 20, 2010
MANUEL ALMAGRO joined by his spouse, ELIZABETH ALMAGRO, Petitioners,
vs.
SALVACION C. KWAN, WILLIAM C. KWAN, VICTORIA C. KWAN, assisted by her
husband, JOSE A. ARBAS, and CECILIA C. KWAN, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 175849
Petitioners,
vs.
WILLIAM C. KWAN, SALVACION C. KWAN, VICTORIA C. KWAN, assisted by her
husband, JOSE A. ARBAS, and CECILIA C. KWAN, Respondents.
MARGARITA PACHORO, DRONICA ORLINA, PIO TUBAT, JR., ANDRES TUBAT,
EDUVIGIS KISKIS, ELSA BIÑALBER, NOELA TUBAT, ELSA TUBAT, and ROGELIO
DURAN,
DECISION
CARPIO, J.:
This is a consolidation of two separate petitions for review, 1 assailing the 4 April 2006 Decision2
and the 31 October 2006 Resolution3 of the Court of Appeals in CA-G.R. SP Nos. 71237 and
71437.
This case involves Lot No. 6278-M, a 17,181 square meter parcel of land covered by TCT No. T-
11397. Lot No. 6278-M is located at Maslog, Sibulan, Negros Oriental and is registered in the
name of spouses Kwan Chin and Zosima Sarana. Respondents are the legitimate children of
spouses Kwan Chin and Zosima Sarana, who both died intestate on 2 November 1986 and 23
January 1976, respectively, in Dumaguete City. Upon the death of their parents, respondents
inherited Lot No. 6278-M through hereditary succession.
On 18 September 1996, respondents filed with the Municipal Trial Court (MTC) an action for
recovery of possession and damages against spouses Rogelio and Lourdes Duran, spouses Romulo
Vinalver and Elsa Vinalver,4 spouses Marte5 Bati-on and Liz E. Bati-on, spouses Pablo Deciar and
Marlyn Deciar, spouses Salvador Palongpalong and Bienvenida Palongpalong, spouses Sabas
Kiskis and Eduvigis Kiskis, spouses Pio Tubat, Jr. and Encarnita Tubat, spouses Andres Tubat and
Leonides Tubat, spouses George Tubat and Noela Tubat, spouses Dodong Go and Alice Go,
spouses Delano Bangay and Maria Bangay,6 spouses Simeon Pachoro and Margarita Pachoro, 4. Sps. Salvador Palongpalong . . . . . inside
spouses Cepriano7 Tubat and Elsa Tubat, spouses Jovito Remolano and Editha Orlina Remolano, ......
spouses Nelson Miravalles and Erlene Miravalles, Dronica Orlina, 8 Clarita Barot Lara, Conchita
Orlina, Antonia Malahay and the Philippine National Police (PNP), 9 Agan-an, Sibulan, Negros
Oriental. Subsequently, spouses Manuel Almagro and Elizabeth Almagro intervened as successors- 5. Sps. Pablo Deciar . . . . . . . . . . . . . inside
in-interest of spouses Delano Bangay and Maria Bangay. ......

During pre-trial, the parties agreed to refer the case to the Chief of the Land Management Services 6. Sps. Sabas Kiskis . . . . . . . . . . . . . . inside
Division, PENRO-DENR, Dumaguete City, to conduct a verification survey of Lot No. 6278-M. ....
When the PENRO personnel failed to conduct the verification survey, the court and the parties
designated Geodetic Engineer Jorge Suasin, Sr. (Engr. Suasin) as joint commissioner to do the task. 7. Sps. Pio Tubat, Jr. . . . . . . . . . . . . . 2 houses, the first house a portion, and the
Engr. Suasin conducted the verification and relocation survey of Lot No. 6278-M on 12-13 ..... second one - inside
September 2000 in the presence of the parties, some of their lawyers, and the MTC Clerk of Court.
Thereafter, Engr. Suasin submitted a written report with the following findings:
8. Sps. Andres Tubat . . . . . . . . . . . . . inside
WRITTEN REPORT .....

Comes now, the undersigned Geodetic Engineer Jorge S. Suasin, Sr., to this Honorable Court, most 9. Sps. George Tubat . . . . . . . . . . . . . portion
respectfully submit the following written report of the verification and relocation survey of the lot .....
6278-M located at Maslog, Sibulan, Negros Oriental with T.C.T. No. T-11397 owned by Salvacion
G. Kwan, et al. 10. Sps. Dodong Go . . . . . . . . . . . . . inside
......
A. That a big portion of the lot is submerged under the sea and only a small portion remain
as dry land. 11. Sps. Delano Bangay-Almagro . . . portion
......
B. That some of the defendants have constructed their buildings or houses inside the dry
land while others have constructed outside or only a small portion of their buildings or
12. Sps. Simeon Pachoro . . . . . . . . . . inside
houses are on the said dry land.
.....
The defendants and their buildings or houses are as follows:
13. Sps. Cipriano Tubat . . . . . . . . . . . inside
.....
1. Sps. Rogelio Duran . . . . . . . . . . . . inside
......
14. Sps. Jovito Remolano . .. . . . . . . . inside
.....
2. Sps. Romulo Vinalver. . . . . . . . . . inside
......
15. Sps. Nelson Miravalles . . . . . . . . cottage and house - outside
......
3. Sps. Marto Bati-on . . . . . . . . . . . . inside
......

Page 97 of 106
 16. Monica Orlina . . . . . . . . . . . . . . . cottage inside and house - portion foreshore land and passes to the realm of public domain. The subject land, being foreshore land,
.... should therefore be returned to the public domain. Besides, Article 420 of the Civil Code provides:

"Art. 420. The following thin[g]s are property of public dominion:

17. Clarita Barot . . . . . . . . . . . . . . . . outside
......
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
18. Conchita Orlina . . . . . . . . . . . . . . outside
......
Plaintiff cannot use the doctrine of indefeasibility of their Torrens title, as property in question is
clearly foreshore land. At the time of its registration, property was along the shores. In fact, it is
19. Antonia Malahay . . . . . . . . . . . . . outside bounded by the Tañon Strait on the NW along lines 2-3-4. The property was of public dominion
...... and should not have been subject of registration. The survey showed that the sea had advanced and
the waves permanently invaded a big portion of the property making the land part of the shore or
the beach. The remaining dry land is foreshore and therefore should be returned to the public
11
The verification and relocation survey was executed last September 12-13, 2000 with the presence domain.
of both parties and of the Clerk of Court. The cost of the survey was FIFTEEN THOUSAND
PESOS (P15,000) shouldered by the plaintiffs and the defendants equally. Respondents appealed to the Regional Trial Court (RTC). The RTC conducted ocular inspections
of Lot No. 6278-M on two separate dates: on 5 October 2001 during low tide and on 15 October
Enclosed are a blue print of the sketch plan and a xerox copy of the land title of the said lot. 2001 when the high tide registered 1.5 meters. All the parties and their lawyers were notified before
the two ocular inspections were conducted. During the ocular inspections, in which some parties
and their lawyers were present, the RTC observed that the small portion referred to by Engr. Suasin
Respectfully submitted by:
as dry land in his report actually remained dry even during high tide.12 Thus, the RTC concluded
that the disputed remaining portion of Lot No. 6278-M is not foreshore land. The RTC stated:
(Sgd) JORGE SUASIN, SR.
Geodetic Engineer10
It is the Court's considered view that the small portion of plaintiff's property which remains as dry
land is not within the scope of the well-settled definition of foreshore and foreshore land as
After the court admitted Engr. Suasin's report and the pleadings of the parties, respondents filed a mentioned above. For one thing, the small dry portion is not adjacent to the sea as the term adjacent
motion for judgment on the pleadings, which the MTC granted. as defined in Webster's Dictionary means "contiguous or touching one another or lying next to."
Secondly, the small dry portion is not alternately wet and dry by the ordinary flow of the tides as it
In its Judgment dated 11 May 2001, the MTC dismissed the complaint on the ground that the is dry land. Granting, as posited by defendants, that at certain times of the year, said dry portion is
remaining dry portion of Lot No. 6278-M has become foreshore land and should be returned to the reached by the waves, then that is not anymore caused by the ordinary flow of the tide as
public domain. The MTC explained: contemplated in the above definition. The Court then finds that the testimony of Engr. Suasin
dovetails with the import and meaning of foreshore and foreshore land as defined above.1avvphil
The term "foreshore" refers to that part of the land adjacent to the sea which is alternately covered
and left dry by the ordinary flow of the tides. "Foreshore lands" refers to the strip of land that lies Anent the case of Republic vs. Court of Appeals, 281 SCRA 639, also cited in the appealed
between the high and low water marks and that is alternately wet and dry according to the flow of judgment, the same has a different factual milieu. Said case involves a holder of a free patent on a
the tide. The term "foreshore land" clearly does not include submerged lands. parcel of land situated at Pinagtalleran, Caluag, Quezon who mortgaged and leased portions thereof
within the prescribed five-year period from the date of issuance of the patent. It was established in
From these definitions, it is safe to conclude that the remaining dry portion of Lot No. 6278-M is said case that the land subject of the free patent is five (5) to six (6) feet deep under water during
now "foreshore land." A big portion of the said lot is presently underwater or submerged under the
sea. When the sea moves towards the estate and the tide invades it, the invaded property becomes

Page 98 of 106
high tide and two (2) feet deep at low tide. Such is not the situation of the "remaining small dry Costs against petitioners.
portion" which plaintiffs seek to recover in the case at bar. 13
SO ORDERED.18
14
On 8 January 2002, the RTC rendered its Decision, the dispositive portion of which reads:
In modifying the RTC Decision, the Court of Appeals explained:
WHEREFORE, all told and circumspectly considered, the appealed judgment is hereby reversed
and set aside insofar as it states that plaintiffs are not entitled to recover possession of the property Lastly, the argument that the RTC decision was "vague and indefinite" is utterly bereft of merit. We
in question. have found no reversible error in the appreciation of the facts and in the application of the law by
the RTC which will warrant the reversal of the questioned decision. However, litigation must end
Plaintiffs-appellants have the right to recover possession of the remaining small dry portion of the and terminate sometime and somewhere, and it is essential to the administration of justice that the
subject property in question. It is further ordered to remand this case to the court of origin for the issues or causes therein should be laid to rest. Hence, in keeping with this principle, We modify the
reception of further evidence to determine who among the defendants-appellees are builders or assailed decision insofar as the dispositive portion is concerned. It is our considered view that there
possessors in good faith and who are not and once determined, to apply accordingly the pertinent is no longer a need to determine who among the petitioners are builders in good faith or not
laws and jurisprudence on the matter. considering that it has been established in the MTC that they knew all along that the subject lot is a
titled property. As such, petitioners should vacate and/or demolish the houses and/or cottages they
SO ORDERED.15 constructed on Lot No. 6278-M as stated in the written report of Geodetic Engineer Jorge S.
Suasin, Sr. Remanding this case to the court of origin would not only unduly prolong the resolution
16
Petitioners moved for reconsideration, which the RTC denied in its Order dated 6 May 2002. of the issues of this case, but would also subject the parties to unnecessary expenses. 19

Hence, these consolidated petitions.

Petitioners filed separate petitions for review with the Court of Appeals, alleging that the disputed
portion of Lot No. 6278-M is no longer private land but has become foreshore land and is now part
of the public domain. The Issue

The Ruling of the Court of Appeals The primary issue in this case is whether the disputed portion of Lot No. 6278-M is still private
land or has become foreshore land which forms part of the public domain.
On 4 April 2006, the Court of Appeals promulgated its decision, affirming with modification the
RTC Decision. The dispositive portion of the Court of Appeals Decision17 reads: The Ruling of the Court

WHEREFORE, the instant petitions for review are DENIED. And the Decision dated January 8, We find the petitions without merit.
2002 of Branch 38 of the Regional Trial Court of Dumaguete City is hereby AFFIRMED with
MODIFICATION as regards the dispositive portion only. Based on the written report of Geodetic Petitioners contend that the disputed portion of Lot No. 6278-M is already foreshore land. In fact,
Engr. Suasin categorically indentifying who among herein petitioners are illegally occupying a most of them allegedly have foreshore lease permits from the Department of Environment and
portion of Lot No. 6278-M, the following petitioners are ordered to vacate the premises and/or Natural Resources (DENR) on the said foreshore land.
remove the houses and/or cottages constructed on Lot No. 6278-M within thirty (30) days from
finality of judgment, namely: 1)Sps. Rogelio Duran, 2) Sps. Romulo Vinalver, 3) Sps. Marto Bati- However, petitioners failed to present evidence to prove their claim that they are holders of
on, 4) Sps. Salvador Palongpalong, 5) Sps. Pablo Deciar, 6) Sps. Sabas Kiskis, 7) Sps. Pio Tubat, foreshore lease permits from the DENR. Thus, the RTC Order dated 6 May 2002 stated:
Jr. (first house – portion, second house– inside), 8) Sps. Andres Tubat, 9) George Tubat (portion),
10) Sps. Dodong Go, 11) Sps. Delano Bangay-Almagro (portion), 12) Sps. Simeon Pachoro, 13)
Defendants-appellees have been harping that they have been granted foreshore leases by DENR.
Sps. Cipriano Tubat, 14) Sps. Jovito Remolano and 15) Monica Orlina (cottage–inside and house–
However, this is merely lip service and not supported at all by concrete evidence. Not even an iota
portion).

Page 99 of 106
of evidence was submitted to the lower court to show that defendants-appellees herein have been SO ORDERED.
granted foreshore leases.20
Footnotes
Although the MTC concluded that the subject land is foreshore land, we find such conclusion
contrary to the evidence on record. * Designated additional member per Special Order No. 905 dated 5 October 2010.

It is undisputed that the subject land is part of Lot No. 6278-M, which is covered by TCT No. T- 1
Under Rule 45 of the 1997 Rules of Civil Procedure.
11397, registered in the name of respondents' parents, Kwan Chin and Zosimo Sarana. In fact, as
found by the Court of Appeals, even the Provincial Environment and Natural Resources Officer 2
Rollo (G.R. Nos. 175806 and 175810), pp. 28-43. Penned by Associate Justice Ramon
(PENRO) declared in May 1996 that Lot No. 6278-M is a private property covered by a Torrens
M. Bato, Jr. with Associate Justices Isaias P. Dicdican and Apolinario D. Bruselas, Jr.,
Title and that petitioners should vacate the disputed property or make other arrangements with
concurring.
respondents.21
3
Id. at 50-51.
Furthermore, from the report of Engr. Suasin, the geodetic engineer designated by the court and the
parties as joint commissioner to conduct the survey, it can be clearly gleaned that the contested land 4
is the small portion of dry land of Lot No. 6278-M. Even in his testimony, Engr. Suasin was Also spelled as Biñalber in the title of the case.
adamant in stating that the remaining portion of Lot No. 6278-M is not foreshore because "it is
5
already dry land" and is "away from the shoreline." 22 Because of this apparent contradiction Also spelled as Marto.
between the evidence and the conclusion of the MTC, the RTC conducted ocular inspection twice,
during low tide and high tide, and observed that the disputed portion of Lot No. 6278-M actually 6
Stated as Sps. Delano Bangay-Almagro in the Written Report of Engr. Suasin.
remained dry land even during high tide. Thus, the RTC concluded that the said land is not
foreshore land. On appeal, the Court of Appeals adopted the findings and conclusion of the RTC 7
Also spelled as Cirpriano.
that the disputed land is not foreshore land and that it remains as private land owned by
respondents. 8
Also spelled as Monica Orlina in the Written Report of Engr. Suasin.
We are in accord with the conclusion of the Court of Appeals and the RTC that the disputed land is 9
The PNP, through its Provincial Director Paneda, filed a manifestation, acknowledging
not foreshore land. To qualify as foreshore land, it must be shown that the land lies between the
and respecting the ownership of respondents over Lot No. 6278-M and stating that
high and low water marks and is alternately wet and dry according to the flow of the tide. 23 The
demolition of its building would be done before the year 1996 ended. Thus, the PNP
land's proximity to the waters alone does not automatically make it a foreshore land. 24
prayed that the case against them be dismissed; rollo (G.R. Nos. 175806 and 175810), p.
63.
Thus, in Republic of the Philippines v. Lensico,25 the Court held that although the two corners of
the subject lot adjoins the sea, the lot cannot be considered as foreshore land since it has not been 10
Rollo (G.R. Nos. 175806 and 175810), pp. 67-68; MTC Judgment dated 11 May 2001,
proven that the lot was covered by water during high tide.
pp. 5-6.
Similarly in this case, it was clearly proven that the disputed land remained dry even during high 11
Rollo (G.R. Nos. 175806 and 175810), pp. 68-69.
tide. Indeed, all the evidence supports the conclusion that the disputed portion of Lot No. 6278-M
is not foreshore land but remains private land owned by respondents.
12
Id. at 80.
WHEREFORE, we DENY the petitions. We AFFIRM the 4 April 2006 Decision and the 31
13
October 2006 Resolution of the Court of Appeals in CA-G.R. SP Nos. 71237 and 71437. Id. at 81. (Underscoring in the original)

Page 100 of 106

 14
Id. at 71-84. On January 2, 1976, spouses Dominador Arbasa and Adelaida Roble (hereinafter referred to as
respondents) purchased from Fidela Roble an unregistered parcel of land located at Poblacion, Isabel,
15
Id. at 84. Leyte.3 As reflected on the deed of sale, the property had a total land area of two hundred forty (240)
square meters. Due to their diligent efforts in reclaiming a portion of the sea, using stones, sand and
16 gravel, the original size of two hundred forty (240) square meters increased to eight hundred eighty
Id. at 85-89.
four (884) square meters,4 described as follows:
17
Id. at 28-43.
"A parcel of residential land with all the improvements thereon; bounded on the North, by
18
Lot Nos. 036 and 037; East, by Roxas Street; South, Seashore and CAD Lot No. 952; and
Id. at. 42. (Emphasis in the original) West, by Lot Nos. 024 and 025. It has an area of 884 sq. meters, more or less, and declared
in the name of plaintiff Adelaida Arbasa under Tax Declaration no. 7068-A and later
19
Id. at 41. superseded by Tax Declaration No. 67. It has an assessed value of P31,870.00."5

20
Id. at 88. Since 1976 and until the present, respondents have been in actual, open, peaceful and continuous
possession of the entire parcel of land in the concept of owners and had it declared for taxation
21 purposes in the name of respondent Adelaida Arbasa. Included in the sale were the improvements
Id. at 37.
found on the land, consisting mainly of the house of Fidela. 6
22
Id. at 79.
Adelaida tolerated her sister Fidela’s continued stay at the house. Living with Fidela in the same
23
Republic v. Leonor, G.R. No. 161424, 23 December 2009, 609 SCRA 75. house were their nieces, petitioners Veronica Roble and Lilibeth Roble as well as the latter’s spouse
Bobby Portugaliza. Veronica and Lilibeth Roble are the daughters of Gualberto Roble, deceased
24 brother of Fidela and Adelaida.
Id.

25 Shortly after Fidela’s death on June 15, 1989, petitioners Veronica and Lilibeth Roble claimed
503 Phil. 967 (2005).
ownership of the house and the southern portion of the land with an area of 644 square meters. Fidela
died intestate and without issue. Meanwhile, Gualberto Roble, petitioners’ father, died sometime in
G.R. No. 130707 July 31, 2001 December 1986.

VERONICA ROBLE, LILIBETH R. PORTUGALIZA, and BOBBY PORTUGALIZA, In January 1990, petitioners had this parcel of land declared for taxation purposes in the names of
petitioners, Fidela Roble under Tax Declaration No. 8141 and of Gualberto Roble under Tax Declaration No.
vs. 8142.
DOMINADOR ARBASA and ADELAIDA ARBASA, respondents.
As efforts to have them vacate the house and desist from claiming the parcel of land failed, respondent
PARDO, J.: spouses Dominador and Adelaida Roble-Arbasa, referred the dispute to the barangay authorities for
conciliation. Nothing happened at the barangay level.7 Hence, on February 27, 1990, spouses Arbasa
1
Petitioners appeal via certiorari from the decision of the Court of Appeals which set aside the filed with the Regional Trial Court, Branch 12, Ormoc City an action for quieting of title with
decision of the trial court and declared respondents lawful owners and possessors of the entire parcel damages.8
of land with a total area of eight hundred eighty four (884) square meters, situated at Poblacion,
Isabel, Leyte, covered by Tax Declaration No. 67 in the name of respondent Adelaida Arbasa.2 On April 4, 1990, petitioner Veronica Roble, Lilibeth Roble and Bobby Portugaliza filed an answer
to the complaint denying its material allegations.9 They said that the total area of the lot which
respondents bought from Fidela consisted only of two hundred forty (240) square meters, located at

Page 101 of 106

the northern portion of the property. This property was originally classified as foreshore land, but in residential house, Tax Declaration No. 22621 cancelled the previous ones and commenced in the year
1957, due to the effort of Ireneo Roble, father of Fidela, Adelaida and Gualberto, a portion of the sea 1989.
was reclaimed and filled up. This was the piece of property where respondents exercised open, public
and continuous possession in the concept of owner, and which had been declared for taxation The two lots located at the southern portion, according to petitioners, were owned by their
purposes in the name of Adelaida Roble in Tax Declaration No. 7068. 10 With the issuance of a new predecessors-in-interest Fidela (322 square meters) and Gualberto Roble (322 square meters) who
tax declaration in the name of Adelaida, Tax Declaration No. 5108-R-5 originally registered in the had open, public and continuous possession in the concept of owner. Like Fidela’s house, the two (2)
name of Fidela Roble, was cancelled.11 parcels of land had been possessed in the concept of owners by their predecessors-in-interest, and
were not included in the deed of sale.
Petitioners attached as an integral part of their answer a copy of the deed of sale dated January 2,
1976, executed by Fidela Roble in favor of Adelaida Arbasa. The property subject of the sale was At the pre-trial conference held on July 4, 1990, the parties defined the issue to be: whether the deed
aptly described as follows: of sale executed on January 2, 1975 by Fidela Roble in favor of respondents conveyed the entire eight
hundred eighty four (884) square meters parcel of land, including the house of Fidela, or it covered
"This is a whole parcel of residential land, located at Poblacion, Isabel, Leyte, per Tax only two hundred forty (240) square meters located at the northern portion of the property. 22
Declaration No. 5108-R-5, under the name of Fidela Roble, being bounded on the North, by
Matilde Evangelista; East, by Harrison now Roxas Street; South, by Seashore; and West, by On July 16, 1991, the trial court rendered a decision finding that the January 2, 1976 deed of absolute
Crestito Manipes, having an area of 240 square meters more or less, with improvements sale executed by Fidela Roble covered only a total area of two hundred forty (240) square meters in
thereon."12 favor of respondents and not the entire eight hundred eighty four (884) square meters claimed by
respondents. Moreover, the house of Fidela was not found on the 240 square meters parcel subject
In the late 1960s, Ireneo, with the help of his son Gualberto reclaimed additional portion of the of the deed of sale, and such improvement was not included in the sale.
seashore at the southern portion adjacent to the 240 square meters land earlier reclaimed and declared
in the name of Fidela Roble. Because of this, the original area of two hundred forty (240) square The trial court held that pursuant to Rule 130, Section 9 of the Revised Rules on Evidence, the deed
meters increased by six hundred forty four (644) square meters and became eight hundred eighty four of sale was the best evidence of the contents of the agreement. Based on the documentary evidence
(884), including the portion sold to Adelaida. The 644 square meters was then divided into two (2) consisting of the deed of absolute sale and tax declarations issued over the property, the house of
lots of equal proportion, evidenced by Tax Declaration Nos. 8141 13 and 814214 in the names of Fidela Fidela Roble was not situated on the part of the property that was sold to respondents. Hence,
and Gualberto, respectively. Payment of taxes on both tax declarations commenced in the year respondents’ claim has no basis. The dispositive portion of the afore-said decision reads:
1980.15
‘WHEREFORE, judgement is hereby rendered finding the plaintiffs the owners in fee
Constructed over the eight hundred eighty four (884) square meters lot were three (3) concrete simple of only TWO HUNDRED FORTY Square Meters (240), more or less, of the parcel
houses. One of the houses was located over the two hundred forty (240) square-meter parcel of land of land subject of the complaint and described in T. D. No. 7068; dismissing the counter-
that spouses Arbasa bought from Fidela. The other houses belonged to Fidela, located at the central claim and ordering the plaintiffs to pay the costs.’" 23
portion, and Gualberto, which was constructed over the southernmost portion of the eight hundred
eighty (884) square meters land.
On August 8, 1991, respondents appealed the decision to the Court of Appeals. 24

The house at the central portion was first declared in the name of Fidela under Tax Declaration No.
On August 15, 1991, petitioners appealed the decision insofar as it denied their claim for damages
3548, commencing with the year 1974.16 This was later cancelled by Tax Declaration No. 5057,
and attorney’s fees.25 Petitioners claimed that they were compelled to hire the services of a lawyer
covering the year 1979, and later was cancelled by Tax Declaration No. 3638, beginning with the
because respondents filed suit against them, which the latter knew was malicious and without basis
year 1985.17 Meanwhile, the house at the southernmost portion of the land was declared in
in law or in fact.
Gualberto’s name under Tax Declaration No. 3549, commencing with the year 1974, later cancelled
18
19 20
by Tax Declaration No. 5060, then by Tax Declaration No. 5662. The latest tax declaration on the

Page 102 of 106

After due proceedings, on January 15, 1997, the Court of Appeals promulgated its decision affirming As the findings of fact of the appellate court are deemed conclusive,30 this Court is not duty-bound
the finding of the trial court that the deed of sale conveyed only 240 square meters of the parcel of to analyze and weigh all over again the evidence considered in the proceedings below.
land existing at the time of the sale.
However, this rule is not absolute.31 There are exceptional circumstances that would compel the Court
The Court of Appeals observed that from the wording of the deed of sale, Fidela Roble sold to to review the findings of fact of the Court of Appeals. 32
respondents the "whole parcel of residential land" bounded on the "south by the seashore." The Court
of Appeals opined that this technical description, as contained in the deed of sale, lent credence to Here, the Court of Appeals’ findings and conclusions are contrary to those of the trial court.
the claim of respondents that they were responsible for reclaiming the 644 square meters claimed by
petitioners. For if at the time of sale the 644 square meters were already in existence, the deed of sale
After an assiduous scrutiny of the evidence, we find reason to reverse the factual findings of the Court
would have described the metes and bounds of the property that was sold in a different way. It would
of Appeals and affirm that of the trial court.
have referred to the boundary at the south as the "remaining portion of the vendor’s property" or
would have mentioned the names of Fidela or Gualberto Roble as the owners of the adjoining
properties, and not described the seashore as the boundary in the south. The dispositive portion of The sale that transpired on January 2, 1976 between vendor Fidela and vendee Adelaida was one of
the decision reads, thus: cuerpo cierto or a sale for lump sum. Pursuant to Article 1542, Civil Code of the Philippines, in the
sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or
number, there shall be no increase or decrease of the price although there be a greater or lesser area
"WHEREFORE, foregoing premises considered, we rule in favor of plaintiffs-appellants
or number than that stated in the contract. Thus, the obligation of the vendor is to deliver everything
and SET ASIDE the judgment of the lower court. Another one is hereby entered declaring
within the boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate
them as lawful owners and entitled to the possession of the entire parcel of land containing object.33
an area of 884 square meters, which is covered by Tax Declaration No. 67 in the name of
plaintiff-appellant Adelaida Roble Arbasa.
However, this rule admits of an exception. A vendee of land, when sold in gross or with the
description "more or less" with reference to its area, does not thereby ipso facto take all risk of
"No pronouncement as to costs.
quantity in the land. The use of "more or less" or similar words in designating quantity covers only a
reasonable excess or deficiency.34 In the case at bar, the parties to the agreement described the land
"SO ORDERED."26 subject of the sale in this wise:

On August 13, 1997, the Court of Appeals denied the petitioners’ motion for reconsideration for lack "This is a whole parcel of residential land, located at Poblacion, Isabel, Leyte, per Tax
of merit. In so ruling, the court said: Declaration No. 5108-R-5, under the name of Fidela Roble, being bounded in the North, by
Matilde Evangelista; East, by Harrison now Roxas Street; South, by Seashore; and West, by
"We have repeatedly ruled that where land is sold for lump sum and not so much per unit Cristito Manipes, having an approximate area of 240 square meters more or less, with all
of measure or number, the boundaries of the land stated in the contract determine the effects improvements thereon:"[emphasis supplied]
and scope of the sale, not the area thereof. Hence, the vendors are obligated to deliver all
the land included within the boundaries regardless of whether the real area should be greater An area of "644 square meters more" is not reasonable excess or deficiency, to be deemed included
or smaller than that recited in the deed. This is particularly true when the area is described in the deed of sale of January 2, 1976.
as ‘humigit kumulang,’ that is, more or less." 27
Moreover, at the time of the sale, the only piece of land existing was 240 square meters, the subject
Hence, this appeal.28 of the deed of sale. This 240 square meters parcel of land was originally foreshore land, hence, not
alienable and disposable. It was only in 1952, that Fidela applied for and was granted a foreshore
We find the appeal meritorious. lease.35 In 1965, the provincial assessor issued a tax declaration in her name. 36 Respondent Adelaida
admitted this fact, thus:
Jurisprudence teaches us that as a rule, jurisdiction of this Court in cases brought to it from the Court
of Appeals is limited to the review and revision of errors of law committed by the appellate court. 29
Page 103 of 106
 "ATTY ESCALON terms are clear and leave no room for doubt as to the intention of the contracting parties, the contracts
are obligatory no matter what their forms may be, whenever the essential requisites for their validity
40
Q Is it not a fact that this land of 280 [sic] square meters was applied by Fidela Roble are present. Sale, by its very nature, is a consensual contract because it is perfected by mere consent.
for foreshore lease way back in 1952? Are you aware of that? The essential elements of a contract of sale are the following: (a) consent or meeting of the minds,
that is consent to transfer ownership in exchange for the price; (b) determinate subject matter; and
(c) price certain in money or its equivalent.41 All these elements are present in the instant case.
A I know, sir.

Q And at that time in 1952, only these 280 square meters was yet existing. Do you Moreover, parol evidence rule forbids any addition to or contradiction of the terms of a written
instrument by testimony or other evidence purporting to show that, at or before the execution of the
agree with me on that?
parties’ written agreement, other or different terms were agreed upon by the parties, varying the
purport of the written contract. When an agreement has been reduced to writing, the parties can not
A Yes, sir. be permitted to adduce evidence to prove alleged practices, which to all purposes would alter the
terms of the written agreement. Whatever is not found in the writing is understood to have been
Q And these 280 [sic] square meters exist because of the diligence of Fidela Roble in waived and abandoned.42
filling this up with boulders, rocks, sand and gravel?
The rule is in fact founded on "long experience that written evidence is so much more certain and
A That is not correct, because that was sold to me under a Deed of sale. accurate than that which rests in fleeting memory only, that it would be unsafe, when parties have
expressed the terms of their contract in writing, to admit weaker evidence to control and vary the
Q Is it not a fact that prior to the sale and prior to the existence of the 280 [sic] square stronger and to show that the parties intended a different contract from that expressed in the writing
meters, this was yet part of the littoral zone or part of the sea? signed by them.43

A Yes, sir.
Q And you caused the reclamation of the original area?
A It was she who did it because it was not yet sold to me." 37
The rule is not without exceptions, however, as it is likewise provided that a party to an action may
present evidence to modify, explain, or add to the terms of the written agreement if he puts in issue
in his pleadings: (a) an intrinsic ambiguity, mistake or imperfection in the written agreement; (b) the
failure of the written agreement to express the true intent and agreement of the parties thereto; (c) the
validity of the written agreement; or (d) the existence of other terms agreed to by the parties or their
successors in interest after the execution of the written agreement. 44

Adela confirmed that when the sale took place in 1976, the houses of Fidela and Gualberto,
None of the aforecited exceptions finds application to the instant case. Nor did respondents raise this
constructed earlier in 1971, were situated on foreshore lands adjacent to the property that Fidela sold
issue at the proceedings before the trial court.
to her. The houses, made of concrete materials and are two-stories high, could be reached by
seawater.38 This lent credence to the claim of petitioners that what was sold to respondents was indeed
only 240 square meters parcel of land. This also explained why in the technical description of the With regard to the ownership over the 644 square meters of land located at the southern portion of
property as embodied in the deed of sale, the property was described as bounded on the south by the the original 240 square meters conveyed to Adela, there is a question regarding the true nature of the
seashore. land, which has the features of a foreshore land.

As held by the trial court, when the terms of an agreement had been reduced to writing, it is Even though respondents claim that they were responsible for reclaiming the portion of the foreshore
considered as containing all the terms agreed upon and there can be, between the parties and their land adjacent to the property they bought from petitioners’ predecessor in interest, there is no
successor-in-interest, no evidence of such terms other than the contents of the written agreement.39 evidence that respondents subsequently filed an application for lease with regard to the 644 square
meters of reclaimed land.
We find no ambiguity in the terms and stipulations of the deed of sale. Contracts are the laws between
the contracting parties. It shall be fulfilled according to the literal sense of their stipulations. If their
Page 104 of 106
 7
Foreshore land is a part of the alienable land of the public domain and may be disposed of only by Ibid., pp. 14-16.
lease and not otherwise.45 It is the strip of land that lies between the high and low water marks and is
alternatively wet and dry according to the flow of tide.46 It is that part of the land adjacent to the sea, 8
Docketed as Civil Case No. 2924-O, entitled "Dominador Arbasa and Adelaida Arbasa,
which is alternately covered and left dry by the ordinary flow of tides. 47 versus Veronica Roble, Lilibeth R. Portugaliza, and Bobby Portugaliza; Annex "A", Rollo,
pp. 30-34; Regional Trial Court Records, pp. 1-4.
There is a need, therefore, to determine whether the lands subject of the action for quieting of title
are foreshore lands. The classification of public lands is a function of the executive branch of 9
Answer, Regional Trial Court Records, pp. 13-15.
government, specifically the director of lands (now the director of the Lands Management Bureau).
Due to the dearth of evidence on this particular issue, we cannot arrive at a conclusive classification 10
Annex "2," Regional Trial Court Records, p. 17.
of the land involved. The instant case has to be remanded to the trial court for that determination.
11
Rollo, p. 13-a.
WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals in CA-G.
R. CV No. 38738 is hereby SET ASIDE. The case is remanded to the Regional Trial Court, Branch 12
12, Leyte for further proceedings. Annex "1," Regional Trial Court Records, p. 16.

13
No costs. Annex "3," Regional Trial Court Records, p. 18.

14
SO ORDERED. Annex "4," Regional Trial Court Records, p. 19.

15
Puno, Kapunan, and Ynares-Santiago, JJ., concur. Exhibits "19" and "20," Folder of Exhibits, pp. 26-27.
Davide, Jr., C.J., on official business.
16
Exhibit "11," Folder of Exhibits, p. 18.

17
Rollo, p. 14.
Footnotes
18
Exhibit "15", Folder of Exhibits, p. 22.
1
In CA-G. R. CV No. 38738, promulgated on January 15, 1997, Jacinto, J., ponente,
19
Montoya and Demetria, JJ., concurring. Rollo, pp. 95-101. Exhibit "16", Folder of Exhibits, p. 23.

20
2
Court of Appeals Decision, Rollo, at pp. 100-101. Exhibit "17", Folder of Exhibits, p. 24.

21
3
Exhibit "A", Folder of Exhibits, p. 1. Exhibit "18", Folder of Exhibits, p. 25.

22
4
TSN, September 6, 1990, pp. 8-10. Regional Trial Court Records, pp. 72-73.

23
5
Complaint, Annex "A", Rollo, pp. 30-34, at pp. 30-31; Regional Trial Court Records pp. Court of Appeals Decision, Rollo, pp. 95-96; Regional Trial Court Records, pp. 172-
1-4, at pp. 1-2. 178.

24
6
TSN, September 6, 1990, p. 11. Regional Trial Court Records, p. 180.

Page 105 of 106

25 38
Regional Trial Court Records, p. 187. TSN, September 7, 1990, pp. 15-16.

26 39
Rollo, pp. 100-101. Rule 130, Section 9, Rules of Court.

27 40
Rollo, pp. 93-94, at p. 93. Salvatierra v. Court of Appeals, 261 SCRA 45, 56-57 [1996].

28 41
Petition for Review on Certiorari, Rollo, pp. 4-27. Coronel v. Court of Appeals, 263 SCRA 15, 26 [1996].

29 42
Castillo v. Court of Appeals, 260 SCRA 374, 380 [1996]. CKH Industrial and Development Corporation v. Court of Appeals, 272 SCRA 333, 346
[1997].
30
Liberty Construction & Development Corporation v. Court of Appeals, 257 SCRA 696
43
[1996]. Inciong, Jr. v. Court of Appeals, 257 SCRA 578, 585 [1996].

31 44
Cuizon v. Court of Appeals, 260 SCRA 645, 657 [1996]. Santiago v. Court of Appeals, 278 SCRA 98, 109 [1997].

32 45
Among the exceptions are: (1) when the factual findings of the Court of Appeals and the Republic v. Imperial, Jr., 303 SCRA 127, 139 [1999].
trial court are contradictory; (2) when the findings are grounded entirely on speculation,
surmises, or conjectures; (3) when the inference made by the Court of Appeals from its 46
Republic v. Court of Appeals, 299 SCRA 199, 228 [1998].
findings of fact is manifestly mistaken, absurd, or impossible; (4) when there is grave
abuse of discretion in the appreciation of facts; (5) when the appellate court, in making its 47
Ibid., at p. 229.
findings, goes beyond the issues of the case, and such findings are contrary to the
admissions of both appellant and appellee; (6) when the judgment of the Court of Appeals
is premised on misapprehension of facts; (7) when the Court of Appeals fails to notice
certain relevant facts which, if properly considered, will justify a different conclusion; (8)
when the findings of fact are themselves conflicting; (9) when the findings of fact are
conclusions without citation of the specific evidence on which they they are based; and
(10) when the findings of fact of the Court of Appeals are premised on the absence of
evidence but such findings are contradicted by the evidence on record; Fuentes v. Court of
Appeals, 268 SCRA 703, 708-709 [1997].

33
Tolentino, Civil Code of the Philippines, Volume V, 1992 Edition, p. 94.

34
Ibid.

35
TSN, September 7, 1990, p. 8.

36
TSN, September 21, 1990, pp. 8-9.

37
TSN, September 7, 1990, pp. 8-9.

Page 106 of 106