Ramos v.

Director of Lands

Facts:
Restituto Romero y Ponce gained possession of a considerable tract of land in the year 1882. He
took advantage of the Royal Decree of 1894, to obtain a possessory information title to the land,
registered as such on 1896. Parcel No. 1 was sold in February, 1907, to Cornelio Ramos, the instant
petitioner, and his wife Ambrosia Salamanca. Ramos instituted appropriate proceedings to have his title
registered. Opposition was entered by the Director of Lands on the ground that Ramos had not acquired
a good title from the Spanish government and by the Director of Forestry on the ground that the first
parcel was forest land. And in addition, it was admitted that the petitioner has cultivated only about one
fourth of the entire tract. The trial court agreed with the objectors and excluded parcel No. 1 from
registration.

Issue:
WON the actual occupancy of a part of the land described in the instrument giving color of title
sufficient to give title to the entire tract of land

Ruling:
Yes. The doctrine of constructive possession indicates the answer. The general rule is that the
possession and cultivation of a portion of a tract under claim of ownership of all is a constructive
possession of all, if the remainder is not in the adverse possession of another.
The claimant has color of title; he acted in good faith; and he has had open, peaceable, and
notorious possession of a portion of the property, su9cient to apprise the community on the world that
the land was for his enjoyment. Possession in the eyes of the law does not mean that a man has to have
his feet on every square meter of ground before it can be said that he is in possession. Ramos and his
predecessor in interest fulfilled the requirements of the law on the supposition that the premises
consisted of agricultural public land.
Director of Lands v. Court of Appeals

Facts:
Ibarra and Amelia Bisnar claimed to be the owners in fee simple of Lots 866 and 870. The applicants
alleged that they inherited those parcels of land and they had been paying the taxes thereon. Director of
Lands and the Director of the Bureau of Forest Development, opposed the application on the ground
that: The properties in question are a portion of the public domain belonging to the Republic of the
Philippines, not subject to private appropriation.
The trial court ordered the registration of the title of the lots in the names of the applicants. It found
that applicants and their predecessors-in-interest have been in open, public, continuous, peaceful and
adverse possession of the subject parcels of land under bona fide claims of ownership for more than
eighty (80) years (not only 30) prior to the filing of the application for registration, introduced
improvements on the lands by planting coconuts, bamboos and other plants, and converted a part of
the land into productive fishponds.
The Appellate Court affirmed the trial court's decision. It held that the classification of the lots as
timberland by the Director of Forestry cannot prevail in the absence of proof that the said lots are
indeed more valuable as forest land than as agricultural land. The government alleges that:
1. The classification or reclassification of public lands into alienable or disposable agricultural
land, mineral land or forest land is a prerogative of the Executive Department of the
government and not of the courts;
2. That possession of forest lands, no matter how long, cannot ripen into private ownership; and
3. That an applicant for registration of title has the burden of proving that he meets the
requirements of Section 48 of Com. Act No. 141, as amended.

Issue:
WON the lots may be registered to the private respondent

Ruling:
No.
It bears emphasizing that a positive act of the government is needed to declassify land which is
classified as forest and to convert it into alienable or disposable land for agricultural or other purposes.
Unless and until the land classified as forest is released in an official proclamation to that effect
so that it may form part of the disposable agricultural lands of the public domain, the rules on
confirmation of imperfect title do not apply. A parcel of forest land is within the exclusive jurisdiction of
the Bureau of Forestry and beyond the power and jurisdiction of the cadastral court to register under
the Torrens System. Thus, possession of forest lands, however long, cannot ripen into private
ownership. Section 48 (b) of Commonwealth Act No. 141, as amended, applies exclusively to public
agricultural land. Forest lands or areas covered with forests are excluded.
Pleasantville vs. CA

Facts:
Edith Robillo purchased from petitioner a parcel of land designated as Lot 9. In 1975,
respondent Eldred Jardinico bought the rights to the lot from Robillo. At that time, Lot 9 was vacant.
Upon completing all payments, Jardinico secured from the Register of Deeds Transfer Certificate of Title
No. 106367 in his name. It was then that he discovered that improvements had been introduced on Lot
9 by respondent Wilson Kee, who had taken possession thereof.
It appears that on March 26, 1974, Kee bought on installment Lot 8 of the same subdivision
from C.T. Torres Enterprises, Inc. (CTTEI), the exclusive real estate agent of petitioner. Under the
Contract to Sell on Installment, Kee could possess the lot even before the completion of all installment
payments. These amounts were paid prior to Kee's taking actual possession of Lot 8. After the
preparation of the lot plan and a copy thereof given to Kee, CTTEI through its employee, Zenaida
Octaviano, accompanied Kee's wife, Donabelle Kee, to inspect Lot 8. Unfortunately, the parcel of land
pointed by Octaviano was Lot 9. Thereafter, Kee proceeded to construct his residence, a store, an auto
repair shop and other improvements on the lot.
Jardinico's lawyer wrote Kee, demanding that the latter remove all improvements and vacate
Lot 9. When Kee refused to vacate Lot 9, Jardinico filed with the Municipal Trial Court in Cities, Branch 3,
Bacolod City (MTCC), a complaint for ejectment with damages against Kee.
The appellate court ruled that Kee was a builder in good faith, as he was unaware of the "mix-
up" when he began construction of the improvements on Lot 8. It further ruled that the erroneous
delivery was due to the negligence of CITEI, and that such wrong delivery was likewise imputable to its
principal, petitioner herein. The appellate court also ruled that the award of rentals was without basis.

Issue:
Was Kee a builder in good faith?

Ruling:
Yes. Good faith consists in the belief of the builder that the land he is building on is his and his
ignorance of any defect or flaw in his title. And as good faith is presumed, petitioner has the burden of
proving bad faith on the part of Kee. At the time he built improvements on Lot 8, Kee believed that said
lot was what he bought from petitioner. He was not aware that the lot delivered to him was not Lot 8.
Thus, Kee's good faith. Petitioner failed to prove otherwise.
The roots of the controversy can be traced directly to the errors committed by CTTEI, when it
pointed the wrong property to Wilson Kee and his wife. It is highly improbable that a purchaser of a lot
would knowingly and willingly build his residence on a lot owned by another, deliberately exposing
himself and his family to the risk of being ejected from the land and losing all improvements thereon,
not to mention the social humiliation that would follow.
Under the circumstances, Kee had acted in the manner of a prudent man in ascertaining the
identity of his property. Lot 8 is covered by Transfer Certificate of Title No. T-69561, while Lot 9 is
identified in Transfer Certificate of Title No. T-106367. Hence, under the Torrens system of land
registration, Kee is presumed to have knowledge of the metes and bounds of the property with which
he is dealing.
Kasilag v. Rodriguez

Facts:
Marcial Kasilag and Emiliana Ambrosio entered a contract of mortgage of improvements of land
acquired as homestead to secure the payment of the indebtedness of P1,000 plus interest. The parties
stipulated that Emilina Ambrosio was to pay the debt with interest within 4 ½ years, and in such case,
mortgage would not have any effect. They also agreed that Emiliana Ambrosio would execute a deed of
sale if it would not be paid within 4 ½ years and that she would pay the tax on the land. After a year, it
turned out that she was not able to pay the tax. Hence, they entered a verbal agreement whereby she
conveyed to the latter the possession of the land on the condition that they would not collect the
interest of the loan, would attend to the payment of the land tax, would benefit by the fruits of the land,
& would introduce improvement thereof.

These pacts made by the parties independently were calculated to alter the mortgage a contract
clearly entered into, converting the latter into a contract of antichresis.

Issue:
WON the petitioner should be deemed the possessor of the land in good faith because he was
unaware of any flaw in his title or in the manner of its acquisition by which it is invalidated

Ruling:
Yes.

These pacts made by the parties independently, were calculated to alter the mortgage contract
clearly entered into, converting the latter into a contract of antichresis (article 1881 of the Civil Code).
The contract of antichresis, being a real incumbrance burdening the land, is illegal and void because it is
condemned by section 116 of Act No. 2874, as amended, but the clauses regarding the contract of
antichresis being independent and separable from the contract of mortgage, can be eliminated, thereby
leaving the latter in being because it is legal and valid.

From the facts found established by the Court of Appeals we can neither deduce nor presume
that the petitioner was aware of a flaw in his title or in the manner of its acquisition, aside from the
prohibition contained in section 116. This being the case, the question is whether good faith may be
premised upon ignorance of the laws.

Gross and inexcusable ignorance of law may not be the basis of good faith, but possible,
excusable ignorance may be such basis. It is a fact that the petitioner is not conversant with the laws
because he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-
grounded belief that he was not violating the prohibition regarding the alienation of the land. In taking
possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does,
that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that the
latter, as a lien, was prohibited by section 116. These considerations again bring us to the conclusion
that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may, therefore,
be the basis of his good faith.
Banco Filipino Espanyol v. Peterson

Facts:
Bank extended a loan to Francisco Reyes, who in turn, secured the loan with property, including
wines and liquors used as pledge. By agreement of the parties, the goods will be delivered to Garcia y
Planas, Francisco effecting delivery by turning over the keys to the warehouse.
Juan Garcia Planas sued Reyes and was able to get a favorable judgment. Sheriff levied on the
goods to satisfy the judgment.
Banco Filipino filed an action to enjoin levy and sale in execution. TC dismissed. SC granted.

Issue:
There was a perfected contract of pledgee.
The contract in question complies with all the requisites provided in article 1857 of the Civil
Code, such as that the property was pledged to secure a debt, the date of the execution, the terms of
the pledge, and the property pledged, all of which appears in a public document, and the property
pledged was placed in the hands of a third person by common consent of the debtor and creditor, under
the supervision of an agent of the bank. (Arts. 1863, 1865, 1866, 1869, 1871, Civil Code.)
The defect alleged to exist in the said contract is that the debtor, Reyes, continued in possession
of the property pledged; that he never parted with the said property, and that neither the creditor nor
the depositary appointed by common consent of the parties were ever in possession of the property
pledged, and for this reason, and upon the further ground that the contract was fraudulent, the court
below dismissed the complaint with the costs against the plaintiff.
In the motion for a new trial it was alleged by the plaintiff that the judgment of the court below
was contrary to law, and that the findings of fact contained therein were plainly and manifestly against
the weight of the evidence. If plaintiffs contention is correct, then the judgment of the court below
should be reversed.
From the evidence introduced at the trial, both oral and documentary, it appears that a third
person, appointed by the common consent of the debtor and creditor, was in possession of the goods
pledged in favor of the bank under the direct supervision of an agent of the bank expressly appointed
for this purpose, and it has not been shown that the said Reyes continued in the possession of the goods
after they had been pledged to the plaintiff bank.
Exhibit C and the testimony of Francisco Reyes, Luis M.a Sierra, and Mariano Rodriguez
corroborate the existence and authenticity of the contract of pledge recorded in a public instrument and
conclusively and satisfactorily show that the debtor, after the pledge of the property, parted with the
possession of the same, and that it was delivered to a third person designated by common consent of
the parties. For the purpose of giving this possession greater effect, the pledgee appointed a person to
examine daily the property in the warehouse where the same was kept.
The witness Matias Garcia also testified as to the status of these goods, and informed Juan
Garcia of such status before the same were levied upon.
The sheriff's testimony supports the allegation that the depositary, Sierra, was present at the
place where the goods were kept, as well as the representative of the bank, Rodriguez, when he, the
sheriff, went there for the purpose of levying upon the said property. He further testified that
Rodriguez, the representative of the bank, then protested and notified him that the property in question
was pledged to the Spanish-Filipino Bank.
The contract in question was, therefore, a perfect contract of pledge under articles 1857 and
1863 of the Civil Code, it having been conclusively shown that the pledgee took charge and possession
of the goods pledged through a depository and a special agent appointed by it, each of whom had a
duplicate key to the warehouse wherein the said goods were stored, and that the pledgee, itself,
received and collected the proceeds of the goods as they were sold.
The fact that the said goods continued in the warehouse which was formerly rented by the
pledgor, Reyes, does not affect the validity and legality of the pledge, it having been demonstrated that
after the pledge had been agreed upon, and after the depository appointed with the common consent
of the parties had taken possession of the said property, the owner, the pledgor, could no longer
dispose of the same, the pledgee being the only one authorized to do so through the depositary and
special agent who represented it, the symbolical transfer of the goods by means of the delivery of the
keys to the warehouse where the goods were stored being sufficient to show that the depositary
appointed by the common consent of the parties was legally placed in possession of the goods. (Articles
438, 1463, Civil Code.)
The fact that the debtor, Reyes, procured purchasers and made arrangements for the sale of the
goods pledged and that the bills for the goods thus sold were signed by him does not affect the validity
of the contract, for the pledgor, Reyes, continued to be the owner of the goods, (art. 1869, Civil Code),
he being the one principally interested in the sale of the property on the best possible terms.
As to the reservation stipulated in paragraph 13 of the contract executed on the 4th of March, 1905, it
could not affect the contract in question for the reason that reservation referred to the rent from the
property mortgaged, to the bank and the dividends from the shares of stock also pledged to the bank,
and not the merchandise so pledged, and such reservation could not have rendered the contract of
pledge null.
Banco Espanol Filipino v Peterson (1907)

Facts:
On March 4, 1905, Banco Espanol Filipino (BEP) executed a contract of loan in favor of Francisco
Reyes for P141 702.00. Reyes was already indebted to the bank for P84 415.00. His total debt was
therefore P226 117.38.
To secure payment of the P141k and the P84k, Reyes executed a public instrument
1. Mortgaging several of his properties
2. Pledging part of his personal property to BEP (P90 591.75 worth of wines, liquors and
canned goods), which were stored at a warehouse he rented in Manila
BEP and Reyes agreed that the goods should be delivered to Ramon Garcia (depositary) for
safekeeping. Reyes turned over the goods to R. Garcia by giving him the warehouse keys.
On September 29, 1905, BEP and Reyes substituted Luis Sierra in place of R. Garcia as the
depositary.
On October 19, 1905, Juan Garcia (yes, related to Ramon) brought an action against Francisco
Reyes and Ramon Agtarat. CFI Manila ruled against Reyes and Agtarat for P15 000.00.
On the same day, Sheriff James Peterson entered the warehouse where the goods pledged to
BEP were stored under the custody of the depositary, Sierra. Peterson levied upon P30 000 worth of the
goods pledged to the bank, depriving the latter of possession of the same, as stipulated in the March 4
contract of loan.

Issues:
Was the contract of pledge between BEP and Reyes to secure a loan valid?
Was Reyes still in possession of the pledged property, thereby making the contract defective?

Held:
The contract was valid. Reyes was no longer in possession of the pledged property. BEP had
symbolic possession of the same.
The contract complies with all the requisites of a valid pledge contract, as prescribed by the Civil
Code:
1. The property was pledged to secure a debt
2. The date of execution, the terms of the pledge, and the property pledged appeared in a
public instrument
3. The property pledged was placed in the hands of a third person (in this case, Sierra) by
common consent of the debtor and creditor, under the supervision of an agent (in this
case, Rodriguez) of the bank
Reyes, after the pledge, parted with the possession of his personal property, which was
delivered to a third person (R. Garcia, and subsequently, Sierra) who would take care of them for BEP.
Sierra was the third person appointed by common consent of BEP (creditor) and Reyes (debtor),
to hold possession over the goods pledged in favor of the bank under the direct supervision of
Rodriguez, an agent specifically appointed by the bank.
The contract in question was, therefore, a perfect contract of pledge under articles 1857 and
1863 of the Civil Code, it having been conclusively shown that the pledgee (BEP) took charge and
possession of the goods pledged through a depositary (Sierra) and a special agent (Rodriguez) appointed
by it, each of whom had a duplicate key to the warehouse wherein the said goods were stored, and that
the pledgee (BEP), itself, received and collected the proceeds of the goods as they were sold.
The legality of the pledge was not affected by the fact that the goods remained in the
warehouse formerly rented by Reyes the pledgor. This is because after the pledge had been agreed
upon, and after the depository appointed with common consent of the parties had taken possession of
the said property, Reyes could no longer dispose of the same because BEP was the only party allowed to
do so through Sierra and Rodriguez.
The symbolic transfer of the goods through delivery of the keys to the warehouse where the
goods were stored was sufficient evidence to show that Sierra, the depositary appointed by both BEP
and Rodriguez, was legally placed in possession of the goods.
Since the contract of pledge was valid, BEP had a better right to the goods compared to J.
Garcia. The Court ordered either the return of the improperly levied goods, or the payment of their
value, P30 000.
Macasaet vs Macasaet G.R. 154391 – 92 September 30, 2004

Facts:
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.
The parents 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 in Banay-banay, Lipa City; that by way of a
verbal lease agreement, their son and his wife occupied these lots in March 1992 and used them as
their residence and the situs of their construction business.
Ismael and Teresita denied the existence of any verbal lease agreement. They claimed that their
parents had invited them to construct their residence and business on the subject lots. They added that
it was the policy of their parents to allot the the land 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-78521 was allegedly given to
petitioners as payment for construction materials used in the renovation of their parent’s house.
On December 10, 1997, the parents filed with the MTCC of Lipa City an ejectment suit against their
children for failure to pay the agreed rental despite repeated demands.
The MTCC ruled in favor of the parents and ordered the children to vacate the premises. It opined
that the children had occupied the lots, not by virtue of a verbal lease agreement but by tolerance of the
parents. As their stay was by mere tolerance, the children were necessarily bound by an implied promise
to vacate the lots upon demand. The MTCC dismissed their contention that one lot had been allotted as
an advance inheritance, on the ground that succcesional rights were inchoate. It disbelieved that the
other parcel had been given as payment for construction material.
On appeal, the RTC upheld the findings of the MTCC. RTC allowed the parents to appropriate the
building and other improvements introduced by the children, after payment by indemnity provided for
bt Article 448 in relation to Article 546 and 548 of the Civil Code.
On an appeal by both parties to the CA which were consolidated, the CA sustained the finding of the
lower courts that the children had been occupying the subject lots only by the tolerance of their parent.
Thus, possession of the subject lots by the children became illegal upon their receipt of letter to vacate
it. 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, the children had the right to be reimbursed for one
half of the value of the improvements made.
Not satisfied with the CA’s ruling, the children brought the case to the Supreme Court.

Issues and Ruling:

1. WON the children were merely tolerated to occupy the land.
No.
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. A summary action for ejectment is the proper
remedy to enforce this implied obligation.
The unlawful deprivation or withholding of possession is to be counted from the date of the demand
to vacate.
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.
 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. 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.
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.

2. WON the children can be ejected

Yes.
Based on the parent’s love reasons for gratuitously allowing the children to use the lots, it can be
safely concluded that the agreement subsisted as long as the parents and the children benefitted from
the arrangement. Effectively, there is a resolutory condition existing between the parties occurs – like a
change of ownership, necessity, death of either party or unresolved conflict or animosity – the
agreement maybe deemed terminated. When persistent conflict and animosity overtook the love and
solidarity between the parents and the children, the purpose of the agreement ceased. The children had
any cause for continued possession of the lots. Their right to use 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.
a. The children had no right to retain possession. The right of the children to inherit from their
parents is merely inchoate and is vested only upon the latter’s demise. Rights of succession
are transmitted only from the moment of death of the decedent. Assuming that there was
an “allotment” of inheritance, ownership nonetheless remained with the parents.
b. The children’s allegation that the indebtness of their parent to them has been paid through
dation cannot be given credence as there were no sufficient proof of a settlement or
contract of dation to settle the alleged debt, and is inconsistent of the separate action by
the children to recover the same debt.
c. As a rule, the right of ownership carries with it the right of possession.

1. Rights of a Builder in Good faith

a. As applied to the present case, accession refers to the right of owner to everything that is
incorporated or attached to the property. Accession industrial – building, planting and
sowing on an immovable – is governed by Articles 445 to 456 of the Civil Code.
b. As the court found that the children possession of the two lots was not by mere tolerance,
the applicable rule would be Article 448. This article has been applied to cases wherein a
builder had constructed improvements with the consent of the owner.