Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 194336 March 11, 2013

PILAR DEVELOPMENT CORPORATION, Petitioner,

vs.
RAMON DUMADAG, EMMA BACABAC, RONALDO NAVARRO, JIMMY PAGDALIAN, PAY
DELOS SANTOS, ARMANDO TRILLOS, FELICISIMO TRILLOS, ARCANGEL FLORES, EDDIE
MARTIN, PRESILLA LAYOG, CONRADO CAGUYONG, GINA GONZALES, ARLENE PEDROSA,
JOCELYN ABELINO, ROQUE VILLARAZA, ROLANDO VILLARAZA, CAMILO GENOVE, NILDA
ROAYANA, SUSAN ROAYANA, JUANCHO PANGANIBAN, BONG DE GUZMAN, ARNOLD
ENVERSO, DONNA DELA RAZA, EMELYN HAGNAYA, FREDDIE DE LEON, RONILLO DE
LEON, MARIO MARTINEZ, and PRECY LOPEZ, Respondents.

DECISION

PERALTA, J.:

Challenged in this petition for review on certiorari under Rule 45 of the Rules of Civil Procedure are
the March 5, 2010 Decision1 and October 29, 2010 Resolution2 of the Court of Appeals (CA) in CA-
G.R. CV No. 90254, which affirmed the May 30, 2007 Decision3 of the Las Piñas Regional Trial
Court, Branch 197 (trial court) dismissing the complaint filed by petitioner.

On July 1, 2002, petitioner filed a Complaint4 for accion publiciana with damages against
respondents for allegedly building their shanties, without its knowledge and consent, in its 5,613-
square-meter property located at Daisy Road, Phase V, Pilar Village Subdivision, Almanza, Las

Piñas City. It claims that said parcel of land, which is duly registered in its name under Transfer
Certificate of Title No. 481436 of the Register of Deeds for the Province of Rizal, was designated as
an open space of Pilar Village Subdivision intended for village recreational facilities and amenities
for subdivision residents.5 In their Answer with Counterclaim,6 respondents denied the material
allegations of the Complaint and briefly asserted that it is the local government, not petitioner, which
has jurisdiction and authority over them.

Trial ensued. Both parties presented their respective witnesses and the trial court additionally
conducted an ocular inspection of the subject property.

On May 30, 2007, the trial court dismissed petitioner’s complaint, finding that the land being
occupied by respondents are situated on the sloping area going down and leading towards the
Mahabang Ilog Creek, and within the three-meter legal easement; thus, considered as public
property and part of public dominion under Article 5027 of the New Civil Code (Code), which could
not be owned by petitioner. The court held:

x x x The land title of [petitioner] only proves that it is the owner in fee simple of the respective real
properties described therein, free from all liens and encumbrances, except such as may be
expressly noted thereon or otherwise reserved by law x x x. And in the present case, what is
expressly reserved is what is written in TCT No. T-481436, to wit "that the 3.00 meter strip of the lot
described herein along the Mahabang Ilog Creek is reserved for public easement purposes. (From
OCT 1873/A-50) and to the limitations imposed by Republic Act No. 440. x x x"8

The trial court opined that respondents have a better right to possess the occupied lot, since they
are in an area reserved for public easement purposes and that only the local government of Las
Piñas City could institute an action for recovery of possession or ownership.

Petitioner filed a motion for reconsideration, but the same was denied by the trial court in its Order
dated August 21, 2007.9 Consequently, petitioner elevated the matter to the Court of Appeals which,
on March 5, 2010, sustained the dismissal of the case.

Referring to Section 210 of Administrative Order (A.O.) No. 99-21 of the Department of Environment
and Natural Resources (DENR), the appellate court ruled that the 3-meter area being disputed is
located along the creek which, in turn, is a form of a stream; therefore, belonging to the public
dominion. It said that petitioner could not close its eyes or ignore the fact, which is glaring in its own
title, that the 3-meter strip was indeed reserved for public easement. By relying on the TCT, it is then
estopped from claiming ownership and enforcing its supposed right. Unlike the trial court, however,
the CA noted that the proper party entitled to seek recovery of possession of the contested portion is
not the City of Las Piñas, but the Republic of the Philippines, through the Office of the Solicitor
General (OSG), pursuant to Section 10111 of Commonwealth Act (C.A.) No. 141 (otherwise known
as The Public Land Act).

The motion for reconsideration filed by petitioner was denied by the CA per Resolution dated
October 29, 2010, hence, this petition.

Anchoring its pleadings on Article 63012 of the Code, petitioner argues that although the portion of
the subject property occupied by respondents is within the 3-meter strip reserved for public
easement, it still retains ownership thereof since the strip does not form part of the public dominion.
As the owner of the subject parcel of land, it is entitled to its lawful possession, hence, the proper
party to file an action for recovery of possession against respondents conformably with Articles
42813 and 53914 of Code.

We deny.

An easement or servitude is a real right on another's property, corporeal and immovable, whereby
the owner of the latter must refrain from doing or allowing somebody else to do or something to be
done on his or her property, for the benefit of another person or tenement; it is jus in re aliena,
inseparable from the estate to which it actively or passively belongs, indivisible, perpetual, and a
continuing property right, unless extinguished by causes provided by law.15 The Code defines
easement as an encumbrance imposed upon an immovable for the benefit of another immovable
belonging to a different owner or for the benefit of a community, or of one or more persons to whom
the encumbered estate does not belong.16 There are two kinds of easement according to source: by
law or by will of the owners – the former are called legal and the latter voluntary easement.17 A legal
easement or compulsory easement, or an easement by necessity constituted by law has for its
object either public use or the interest of private persons.18

While Article 630 of the Code provides for the general rule that "the owner of the servient estate
retains the ownership of the portion on which the easement is established, and may use the same in
such a manner as not to affect the exercise of the easement," Article 635 thereof is specific in saying
that "all matters concerning easements established for public or communal use shall be governed by
the special laws and regulations relating thereto, and, in the absence thereof, by the provisions of
this Title Title VII on Easements or Servitudes."
In the case at bar, the applicability of DENR A.O. No. 99-21 dated June 11, 1999, which superseded
DENR A.O. No. 97-0519 dated March 6, 1997 and prescribed the revised guidelines in the
implementation of the pertinent provisions of Republic Act (R.A.) No. 1273 and Presidential Decree
(P.D.) Nos. 705 and 1067, cannot be doubted. Inter alia, it was issued to further the government’s
program of biodiversity preservation. Aside from Section 2.1 above-quoted, Section 2.3 of which
further mandates:

2.3 Survey of Titled Lands:

2.3.1 Administratively Titled Lands:

The provisions of item 2.1.a and 2.1.b shall be observed as the above. However, when these lands
are to be subdivided, consolidated or consolidated-subdivided, the strip of three (3) meters which
falls within urban areas shall be demarcated and marked on the plan for easement and bank
protection.

The purpose of these strips of land shall be noted in the technical description and annotated in the
title.

xxxx

2.3.3 Complex Subdivision or Consolidation Subdivision Surveys for Housing/Residential,

Commercial or Industrial Purposes:

When titled lands are subdivided or consolidated-subdivided into lots for residential, commercial or
industrial purposes the segregation of the three (3) meter wide strip along the banks of rivers or
streams shall be observed and be made part of the open space requirement pursuant to P.D. 1216.

The strip shall be preserved and shall not be subject to subsequent subdivision. (Underscoring
supplied)

Certainly, in the case of residential subdivisions, the allocation of the 3-meter strip along the banks
of a stream, like the Mahabang Ilog Creek in this case, is required and shall be considered as
forming part of the open space requirement pursuant to P.D. 1216 dated October 14, 1977.20 Said
law is explicit: open spaces are "for public use and are, therefore, beyond the commerce of men"
and that "[the] areas reserved for parks, playgrounds and recreational use shall be non-alienable
public lands, and non-buildable."

Running in same vein is P.D. 1067 or The Water Code of the Philippines21 which provides:

Art. 51. The banks of rivers and streams and the shores of the seas and lakes throughout their entire
length and within a zone of three (3) meters in urban areas, twenty (20) meters in agricultural areas
and forty (40) meters in forest areas, along their margins, are subject to the easement of public use
in the interest of recreation, navigation, floatage, fishing and salvage. No person shall be allowed to
stay in this zone longer than what is necessary for recreation, navigation, floatage, fishing or salvage
or to build structures of any kind. (Underscoring supplied)

Thus, the above prove that petitioner’s right of ownership and possession has been limited by law
with respect to the 3-meter strip/zone along the banks of Mahabang Ilog Creek. Despite this, the
Court cannot agree with the trial court’s opinion, as to which the CA did not pass upon, that
respondents have a better right to possess the subject portion of the land because they are
occupying an area reserved for public easement purposes. Similar to petitioner, respondents have
no right or title over it precisely because it is public land. Likewise, we repeatedly held that squatters
have no possessory rights over the land intruded upon.22 The length of time that they may have
physically occupied the land is immaterial; they are deemed to have entered the same in bad faith,
such that the nature of their possession is presumed to have retained the same character throughout
their occupancy.23

As to the issue of who is the proper party entitled to institute a case with respect to the 3-meter
strip/zone, We find and so hold that both the Republic of the Philippines, through the OSG and the
local government of Las Piñas City, may file an action depending on the purpose sought to be
achieved. The former shall be responsible in case of action for reversion under C.A. 141, while the
latter may also bring an action to enforce the relevant provisions of Republic Act No. 7279
(otherwise known as the Urban Development and Housing Act of 1992).24 Under R.A. 7279, which
was enacted to uplift the living conditions in the poorer sections of the communities in urban areas
and was envisioned to be the antidote to the pernicious problem of squatting in the metropolis,25 all
local government units (LGUs) are mandated to evict and demolish persons or entities occupying
danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways,
and other public places such as sidewalks, roads, parks, and playgrounds.26 Moreover, under pain of
administrative and criminal liability in case of non-compliance,27 it obliges LGUs to strictly observe
the following:

Section 29. Resettlement. - Within two (2) years from the effectivity of this Act, the local government
units, in coordination with the National Housing Authority, shall implement the relocation and
resettlement of persons living in danger areas such as esteros, railroad tracks, garbage dumps,
riverbanks, shorelines, waterways, and in other public places such as sidewalks, roads, parks and
playgrounds. The local government unit, in coordination with the National Housing Authority, shall
provide relocation or resettlement sites with basic services and facilities and access to employment
and livelihood opportunities sufficient to meet the basic needs of the affected families.1âw phi 1

Section 30. Prohibition Against New Illegal Structures. - It shall be unlawful for any person to
construct any structure in areas mentioned in the preceding section. After the effectivity of this Act,
the barangay, municipal or city government units shall prevent the construction of any kind or illegal
dwelling units or structures within their respective localities. The head of any local government unit
concerned who allows, abets or otherwise tolerates the construction of any structure in violation of
this section shall be liable to administrative sanctions under existing laws and to penal sanctions
provided for in this Act.

Yet all is not lost for petitioner. It may properly file an action for mandamus to compel the local
government of Las Piñas City to enforce with reasonable dispatch the eviction, demolition, and
relocation of respondents and any other persons similarly situated in order to give flesh to one of the
avowed policies of R.A. 7279, which is to reduce urban dysfunctions, particularly those that
adversely affect public health, safety, and ecology.28

Indeed, as one of the basic human needs, housing is a matter of state concern as it directly and
significantly affects the general welfare.29

WHEREFORE, the petition is DENIED. The March 5, 2010 Decision and October 29, 2010
Resolution of the Court of Appeals in CA-G.R. CV No. 90254, which affirmed the May 30, 2007
Decision of the Las Piñas RTC, Branch 197, dismissing petitioner's complaint, is hereby AFFIRMED.

SO ORDERED.
CASE TITLE: PILAR DEVELOPMENT CORPORATION vs. RAMON DUMADAG

GR # & DATE: G.R. No. 194336 , March 11, 2013

TOPIC: EASEMENTS - (Rights of owner of servient estate)

FACTS:

The petitioner owned Pillar Village Subdivision at Las Piñas where the respondents
allegedly built their shanties without the petitioner’s knowledge or consent. Thus, a
Complaint for accion publiciana was filed against the respondents. The respondents
denied the material allegations of the Complaint asserting that it’s the local government
and not the petitioner, which has jurisdiction and authority over them.

RTC dismissed the complaint saying that the land in question is situated on the sloping
area leading down a creek and within the three-meter legal easement and thus, it’s
considered as public property and part of public dominion under Article 502 of the New
Civil Code. With this, only the local government of Las Pinas City could insititute an
action for recovery of possession or ownership. CA dismissed the case but noted that
the proper party to seek recovery of the property is not the City of Las Pinas but the
Republic of the Philippines, through the OSG pursuant to Section 101 of the
Commonwealth Act (C.A.) No. 141 otherwise known as the Public Land Act.

Petitioner argues that although the portion of the subject property occupied by
respondents is within the 3-meter strip reserved for public easement, it still retains
ownership thereof since the strip does not form part of the public dominion. As the
owner of the subject parcel of land, it is entitled to its lawful possession, hence, the
proper party to file an action for recovery of possession against respondents
conformably with Articles 428 and 539 of Code.

ISSUE: Could a registered owner of a tract of land evict informal settlers occupying the
3-meter legal easement leading to a creek?

HELD: NO.

An easement or servitude is a real right on another's property, corporeal and

immovable, whereby the owner of the latter must refrain from doing or allowing
somebody else to do or something to be done on his or her property, for the benefit of
another person or tenement; it is jus in re aliena, inseparable from the estate to which it
actively or passively belongs, indivisible, perpetual, and a continuing property right,
unless extinguished by causes provided by law. The Code defines easement as an
encumbrance imposed upon an immovable for the benefit of another immovable
belonging to a different owner or for the benefit of a community, or of one or more
persons to whom the encumbered estate does not belong. There are two kinds of
easement according to source: by law or by will of the owners – the former are called
legal and the latter voluntary easement. A legal easement or compulsory easement, or
an easement by necessity constituted by law has for its object either public use or the
interest of private persons.

While Article 630 of the Code provides for the general rule that “[t] owner of the servient
estate retains the ownership of the portion on which the easement is established, and
may use the same in such a manner as not to affect the exercise of the easement,
“Article 635 thereof is specific in saying that “all matters concerning easements
established for public or communal use shall be governed by the special law and
regulations relating thereto, and in the absence thereof, by the provisions of this Title
[Title VII on Easements and Servitudes].

“As to the issue of who is the proper party entitled to institute a case with respect to the
3-meter strip/zone, We find and so hold that both the Republic of the Philippines,
through the OSG and the local government of Las Piñas City, may file an action
depending on the purpose sought to be achieved. The former shall be responsible in
case of action for reversion under C.A. 141, while the latter may also bring an action to
enforce the relevant provisions of Republic Act No. 7279 (otherwise known as the
Urban Development and Housing Act of 1992).
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 163118 April 27, 2007

DORIS CHIONGBIAN-OLIVA, Petitioner,

vs.
REPUBLIC OF THE PHILIPPINES, THE DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES AND THE REGISTER OF DEEDS OF CEBU CITY, Respondents.

DECISION

QUISUMBING, J.:

This petition for certiorari assails (1) the Decision1 dated August 7, 2003 of the Court of Appeals in
CA-G.R. CV. No. 74409, reversing the Decision2 dated December 13, 2001 of the Regional Trial
Court of Cebu City, Branch 12 in SP. Proc. No. 10746-CEB, and (2) the Resolution3 dated March 17,
2004, denying the motion for reconsideration.

The following facts are undisputed.

Petitioner Doris Chiongbian-Oliva is the registered owner of a parcel of land in Talamban, Cebu City,
as evidenced by Transfer Certificate of Title (TCT) No. 5455.4 This title originated from Original
Certificate of Title (OCT) No. 1066 from a free patent granted on September 11, 1969 under
Commonwealth Act No. 141,5 as amended. The free patent, OCT No. 1066, and TCT No. 5455
contained the condition that a forty-meter legal easement from the bank of any river or stream shall
be preserved as permanent timberland.6

On October 1, 2001, petitioner filed a petition for reduction of legal easement docketed as SP. Proc.
No. 10746-CEB before the Regional Trial Court of Cebu City, Branch 12. Petitioner alleged that the
property is residential as shown by the tax declaration7 and the Certification8 of the Office of the City
Assessor. Thus, the applicable legal easement is only three meters pursuant to Department of
Environment and Natural Resources (DENR) Administrative Order No. 99-21,9 and not forty meters,
which applies to timberlands and forest lands. Petitioner also alleged that enforcing the forty-meter
legal easement would virtually deprive her of the use and enjoyment of the property since it consists
only of 1,000 square meters.

The DENR countered that the property is inalienable. It also claimed that the applicant agreed on the
forty-meter legal easement when the free patent was applied for.

The trial court ruled in favor of petitioner. It said that there is no longer any reason for the forty-meter
legal easement because the property had been transformed into residential land and the area where
it is located has been reclassified as urban. Applying DENR A.O. No. 99-21, the applicable legal
easement is only three meters. The decision’s decretal portion states:

WHEREFORE, premises considered, it is hereby ordered that the legal encumbrance of forty (40)
meters for river bank protection annotated on Petitioner’s Transfer Certificate of Title No. 5455 be
reduced to the applicable legal easement of three (3) meters in accordance with law.
Accordingly, the Register of Deeds of Cebu City is hereby directed to cancel the above legal
encumbrance of forty (40) meters annotated on Petitioner’s Transfer Certificate of Title No. 5455 and
in lieu thereof, annotate the applicable legal encumbrance of three (3) meters for river bank
protection.

SO ORDERED.10

On appeal, the Court of Appeals reversed the trial court’s decision. It upheld the DENR’s claim that
the property was inalienable. Accordingly, a positive act of the government was necessary to
declassify it from forest land to alienable land. Declaration of the property as residential in the tax
declaration and reclassification of the area where it is located as urban were insufficient bases to
reclassify the property. The fallo of the appellate court’s decision reads:

WHEREFORE, premises considered, the Decision dated December 13, 2001, of the Regional Trial
Court, 7th Judicial Region, Branch 12, Cebu City, in SP. PROC. NO. 10746-CEB, is hereby
REVERSED and SET ASIDE. No pronouncement as to costs.

SO ORDERED.11

The appellate court later denied petitioner’s motion for reconsideration.

Petitioner now raises the following issues:

I.

WHETHER OR NOT PETITIONER’S LOT COVERED BY THE LEGAL ENCUMBRANCE IS A

PUBLIC LAND/LAND OF THE PUBLIC DOMAIN (AND THUS, CANNOT BE RECLASSIFIED
EXCEPT BY THE EXECUTIVE DEPARTMENT) OF THE GOVERNMENT, OR A PRIVATE LAND.

II.

WHETHER OR NOT THE TRIAL COURT IS CORRECT IN TAKING JUDICIAL NOTICE OF THE
FACT THAT PETITIONER’S LOT COVERED BY TCT NO. 5455 IS SITUATED IN AN URBAN
AREA AND NOT IN A FOREST AREA, AND IN THUS CONCLUDING THAT THE LEGAL
EASEMENT APPLICABLE FOR RIVER BANK PROTECTION IS THREE (3) METERS AND NOT
FORTY (40) METERS.

III.

WHETHER OR NOT SECTION 90(i) OF C.A. NO. 141 WHICH PROVIDES FOR A UNIFORM
EASEMENT OF FORTY (40) METERS FROM THE BANK ON EACH SIDE OF ANY RIVER, AND
WHICH PRESERVES THE SAID 40-METER PORTION AS PERMANENT TIMBERLAND
REGARDLESS OF WHETHER IT IS SITUATED IN A FOREST AREA OR AN URBAN AREA, IS
STILL APPLICABLE TO LOTS SITUATED IN AN URBAN AREA IN THE LIGHT OF THE
PROVISIONS OF SUBSEQUENT LEGISLATION, SPECIFICALLY SECTION 51 OF P.D. NO.
1067.12

Simply stated, the issues are: (1) Is the property public or private land? and (2) Is the applicable
legal easement forty or three meters?
On the first issue, C.A. No. 141, as amended, provides that lands of the public domain may be
classified by the President, upon the recommendation of the Secretary of Environment and Natural
Resources, into: (1) alienable or disposable; (2) timber; and (3) mineral lands.13 However, only
alienable or disposable lands may be disposed of through any of the forms of concession
enumerated in the law.14 A free patent is one of such concessions15 and once it is registered and the
corresponding certificate of title issued, the land covered by them ceases to be part of the public
domain and becomes private property.16

Verily, by the issuance of a free patent on September 11, 1969, and the subsequent issuance of
OCT No. 1066 and TCT No. 5455, the property in this case had become private land. It is
inconsistent for an alienable land of the public domain to be covered by a free patent and at the
same time retain its character as public land.

On the second issue, Section 90(i) of C.A. No. 141 requires that a forty-meter legal easement from
the bank of any river or stream shall be preserved as permanent timberland. More specifically, it
provides:

(i) That the applicant agrees that a strip forty meters wide starting from the bank on each side of any
river or stream that may be found on the land applied for, shall be demarcated and preserved as
permanent timberland to be planted exclusively to trees of known economic value, and that he shall
not make any clearing thereon or utilize the same for ordinary farming purposes even after patent
shall have been issued to him or a contract of lease shall have been executed in his favor.
(Emphasis supplied.)

To implement this, the DENR promulgated A.O. No. 99-21 which provides the guidelines in the
processing, verification, and approval of isolated and cadastral surveys. Pertinent to this case are
the following provisions:

2.1 Original Surveys:

2.1.a Public Lands:

All alienable and disposable (A and D) lands of the public domain shall be surveyed pursuant to
Section 1 Par. (1) of R.A. 1273 [C.A. No. 141, Section 90(i)] whereby a strip of forty (40) meters wide
starting from the banks on each side of any river or stream that may be found on the land shall be
demarcated and preserved as permanent timberland.

Likewise, to be demarcated are public lands along the banks of rivers and streams and the shores of
the seas and lakes throughout their entire length and within a zone of three (3) meters in urban
areas, twenty (20) meters in agricultural areas and forty (40) meters in forest area, along their
margins which are subject to the easement for public use in the interest of recreation, navigation,
floatage, fishing and salvage.

xxxx

2.3 Survey of Titled Lands:

2.3.1 Administratively Titled Lands:

The provisions of item 2.1.a and 2.1.b shall be observed as the above. However, when these lands
are to be subdivided, consolidated or consolidated-subdivided, the strip of three (3) meters which
falls within urban areas shall be demarcated and marked on the plan for easement and bank
protection.

The purpose of these strips of land shall be noted in the technical description and annotated in the
title.

xxxx

Running in parallel vein is the Water Code of the Philippines17 which provides:

Art. 51. The banks of rivers and streams and the shores of the seas and lakes throughout their entire
length and within a zone of three (3) meters in urban areas, twenty (20) meters in agricultural areas
and forty (40) meters in forest areas, along their margins, are subject to the easement of public use
in the interest of recreation, navigation, floatage, fishing and salvage. No person shall be allowed to
stay in this zone longer than what is necessary for recreation, navigation, floatage, fishing or salvage
or to build structures of any kind.

Since the property in this case was originally alienable land of the public domain, the application for
free patent contained the condition that a forty-meter legal easement from the banks on each side of
any river or stream found on the land shall be demarcated and preserved as permanent timberland.
However, after the property was administratively titled, it underwent several surveys for purposes of
subdivision, consolidation, or consolidation-subdivision as evidenced by TCT No. 5455. This title
provides that it is a transfer from TCT Nos. 3975 and 436018 and describes the property as Lot 2 of
the consolidation-subdivision plan Pcs-07-002121, being a portion of Lot 6 and 7 Pcs-07-
000974.19 Thus, presently only three meters is required to be demarcated and preserved as
permanent timberland.

In this case, the trial court properly took judicial notice that Talamban, Cebu City is an urban area.
Judicial notice is the cognizance of certain facts which judges may properly take and act on without
proof because they already know them.20 A municipal jurisdiction, whether designated as chartered
city or provincial capital, is considered as urban in its entirety if it has a population density of at least
1,000 persons per square kilometer.21 The City of Cebu was created on October 20, 1934 under
Commonwealth Act No. 58.22 It is a highly urbanized city classified as entirely urban.23 Thus, all its
barangays, including Talamban, are considered urban.

Conformably with the foregoing considerations, the reduction of the legal easement of forty meters
on petitioner’s property covered by TCT No. 5455 to three meters now is in order.

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated August 7, 2003 and
Resolution dated March 17, 2004 of the Court of Appeals in CA-G.R. CV. No. 74409 are
REVERSED, and the Decision dated December 13, 2001 of the Regional Trial Court of Cebu City,
Branch 12 in SP. Proc. No. 10746-CEB is REINSTATED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Baguio City

FIRST DIVISION

G.R. No. 186450 April 14, 2010

NATIONAL WATER RESOURCES BOARD (NWRB), Petitioner,

vs.
A. L. ANG NETWORK, INC., Respondent.

DECISION

CARPIO MORALES, J.:

In issue is whether Regional Trial Courts have jurisdiction over appeals from decisions, resolutions
or orders of the National Water Resources Board (petitioner).

A.L. Ang Network (respondent) filed on January 23, 2003 an application for a Certificate of Public
Convenience (CPC) with petitioner to operate and maintain a water service system in Alijis, Bacolod
City.

Bacolod City Water District (BACIWA) opposed respondent’s application on the ground that it is the
only government agency authorized to operate a water service system within the city.1

By Decision of August 20, 2003, petitioner granted respondent’s CPC application. BACIWA moved
to have the decision reconsidered, contending that its right to due process was violated when it was
not allowed to present evidence in support of its opposition.2

Petitioner reconsidered its Decision and allowed BACIWA to present evidence,3 drawing respondent
to file a petition for certiorari with the Regional Trial Court (RTC) of Bacolod City against petitioner
and BACIWA. Petitioner moved to dismiss the petition, arguing that the proper recourse of
respondent was to the Court of Appeals, citing Rule 43 of the Rules of Court.

The RTC, by Order of April 15, 2005,4 dismissed respondent’s petition for lack of jurisdiction, holding
that it is the Court of Appeals which has "exclusive appellate jurisdiction over all final judgments,
decisions, resolutions, order[s] or awards of . . . quasi-judicial agencies, instrumentalities, boards or
commission[s] . . . except those within the appellate jurisdiction of the Supreme Court . . . ." Thus the
RTC explained:

Art. 89 of P.D. 1067 having been long repealed by BP 129, as amended, which has effectively and
explicitly removed the Regional Trial Courts’ appellate jurisdiction over the decisions, resolutions,
order[s] or awards of quasi-judicial agencies such as [petitioner] NWRB, and vested with the Court of
Appeals, very clearly now, this Court has no jurisdiction over this instant petition.

Its motion for reconsideration having been denied, respondent filed a petition for certiorari at
the Court of Appeals, which, by Decision of January 25, 2008,5 annulled and set aside the RTC April
15, 2005, holding that it is the RTC which has jurisdiction over appeals from petitioner’s decisions.
Thus the appellate court discoursed.
In the analogous case of BF Northwest Homeowners Association, Inc. vs. Intermediate Appellate
Court[,] the Supreme Court . . . categorically pronounced the RTC’s jurisdiction over appeals from
the decisions of the NWRB consistent with Article 89 of P.D. No. 1067 and ratiocinated in this wise:

x x x x.

The logical conclusion, therefore, is that jurisdiction over actions for annulment of NWRC decisions
lies with the Regional Trial Courts, particularly, when we take note of the fact that the appellate
jurisdiction of the Regional Trial Court over NWRC decisions covers such broad and all embracing
grounds as grave abuse of discretion, questions of law, and questions of fact and law (Art. 89, P.D.
No. 1067). This conclusion is also in keeping with the Judiciary Reorganization Act of 1980, which
vests Regional Trial Courts with original jurisdiction to issue writs of certiorari, prohibition,
mandamus, etc. (Sec. 21 [1], B.P. Blg. 129) relating to acts or omissions of an inferior court (Sec. 4,
Rule 65, Rules of Court).

x x x x.

Similarly, in Tanjay Water District vs. Pedro Gabaton, the Supreme Court conformably ruled, viz:

"Inasmuch as Civil Case No. 8144 involves the appropriation, utilization and control of water, We
hold that the jurisdiction to hear and decide the dispute in the first instance, pertains to the Water
Resources Council as provided in PD No. 1067 which is the special law on the subject. The Court of
First Instance (now Regional Trial Court) has only appellate jurisdiction over the case."

Based on the foregoing jurisprudence, there is no doubt that [petitioner] NWRB is mistaken in its
assertion. As no repeal is expressly made, Article 89 of P.D. No. 1067 is certainly meant to be an
exception to the jurisdiction of the Court of Appeals over appeals or petitions for certiorari of the
decisions of quasi-judicial bodies. This finds harmony with Paragraph 2, Section 4, Rule 65 of the
Rules of Court wherein it is stated that, "If it involves the acts of a quasi-judicial agency, unless
otherwise provided by law or these rules, the petition shall be filed in and cognizable only by the
Court of Appeals." Evidently, not all petitions for certiorari under Rule 65 involving the decisions of
quasi-judicial agencies must be filed with the Court of Appeals. The rule admits of some exceptions
as plainly provided by the phrase "unless otherwise provided by law or these rules" and Article 89 of
P.D. No. 1067 is verily an example of these exceptions. (italics and emphasis partly in the original;
underscoring supplied)

Petitioner’s motion for reconsideration having been denied by the appellate court by Resolution of
February 9, 2009,6 petitioner filed the present petition for review, contending that:

THE REGIONAL TRIAL COURT HAS NO CERTIORARI JURISDICTION OVER THE [PETITIONER]
SINCE SECTION 89, PD NO. 1067, REGARDING APPEALS, HAS BEEN SUPERSEDED AND
REPEALED BY [BATAS PAMBANSA BILANG] 129 AND THE RULES OF COURT.
FURTHERMORE, PD 1067 ITSELF DOES NOT CONTEMPLATE THAT THE REGIONAL TRIAL
COURT SHOULD HAVE CERTIORARI JURISDICTION OVER THE [PETITIONER].7 (underscoring
supplied)

Petitioner maintains that the RTC does not have jurisdiction over a petition for certiorari and
prohibition to annul or modify its acts or omissions as a quasi-judicial agency. Citing Section 4 of
Rule 65 of the Rules of Court, petitioner contends that there is no law or rule which requires the filing
of a petition for certiorari over its acts or omissions in any other court or tribunal other than the Court
of Appeals.8
Petitioner goes on to fault the appellate court in holding that Batas Pambansa Bilang 129 (BP 129)
or the Judiciary Reorganization Act did not expressly repeal Article 89 of Presidential Decree No.
1067 (PD 1067) otherwise known as the Water Code of the Philippines.9

Respondent, on the other hand, maintains the correctness of the assailed decision of the appellate
court.

The petition is impressed with merit.

Section 9 (1) of BP 129 granted the Court of Appeals (then known as the Intermediate Appellate
Court) original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus and quo
warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction.10

Since the appellate court has exclusive appellate jurisdiction over quasi-judicial agencies under Rule
4311 of the Rules of Court, petitions for writs of certiorari, prohibition or mandamus against the acts
and omissions of quasi-judicial agencies, like petitioner, should be filed with it. This is what Rule 65
of the Rules imposes for procedural uniformity. The only exception to this instruction is when the law
or the Rules itself directs otherwise, as cited in Section 4, Rule 65.12 The appellate court’s
construction that Article 89 of PD 1067, which reads:

ART. 89. The decisions of the [NWRB] on water rights controversies may be appealed to the [RTC]
of the province where the subject matter of the controversy is situated within fifteen (15) days from
the date the party appealing receives a copy of the decision, on any of the following grounds:
(1) grave abuse of discretion; (2) question of law; and (3) questions of fact and law (emphasis and
underscoring supplied), is such an exception, is erroneous.

Article 89 of PD 1067 had long been rendered inoperative by the passage of BP 129. Aside from
delineating the jurisdictions of the Court of Appeals and the RTCs, Section 47 of BP 129 repealed or
modified:

x x x. [t]he provisions of Republic Act No. 296, otherwise known as the Judiciary Act of 1948, as
amended, of Republic Act No. 5179, as amended, of the Rules of Court, and of all other statutes,
letters of instructions and general orders or parts thereof, inconsistent with the provisions of this
Act x x x. (emphasis and underscoring supplied)

The general repealing clause under Section 47 "predicates the intended repeal under the condition
that a substantial conflict must be found in existing and prior acts."13

In enacting BP 129, the Batasang Pambansa was presumed to have knowledge of the provision of
Article 89 of P.D. No. 1067 and to have intended to change it.14 The legislative intent to repeal Article
89 is clear and manifest given the scope and purpose of BP 129, one of which is to provide a
homogeneous procedure for the review of adjudications of quasi-judicial entities to the Court of
Appeals.

More importantly, what Article 89 of PD 1067 conferred to the RTC was the power of review on
appeal the decisions of petitioner. It appears that the appellate court gave significant consideration
to the ground of "grave abuse of discretion" to thus hold that the RTC has certiorari jurisdiction over
petitioner’s decisions. A reading of said Article 89 shows, however, that it only made "grave abuse of
discretion" as another ground to invoke in an ordinary appeal to the RTC. Indeed, the provision was
unique to the Water Code at the time of its application in 1976.
The issuance of BP 129, specifically Section 9 (Jurisdiction of the Court of Appeals, then known as
Intermediate Appellate Court), and the subsequent formulation of the Rules, clarified and delineated
the appellate and certiorari jurisdictions of the Court of Appeals over adjudications of quasi-judicial
bodies. Grave abuse of discretion may be invoked before the appellate court as a ground for an
error of jurisdiction.

It bears noting that, in the present case, respondent assailed petitioner’s order via certiorari before
the RTC, invoking grave abuse of discretion amounting to lack or excess of jurisdiction as ground-
basis thereof. In other words, it invoked such ground not for an error of judgment.

While Section 9 (3) of BP 12915 and Section 1 of Rule 43 of the Rules of Court16 does not list
petitioner as "among" the quasi-judicial agencies whose final judgments, orders, resolutions or
awards are appealable to the appellate court, it is non sequitur to hold that the Court of Appeals has
no appellate jurisdiction over petitioner’s judgments, orders, resolutions or awards. It is settled that
the list of quasi-judicial agencies specifically mentioned in Rule 43 is not meant to be
exclusive.17 The employment of the word "among" clearly instructs so. 1avvphi1

BF Northwest Homeowners Association v. Intermediate Appellate Court,18 a 1987 case cited by the
appellate court to support its ruling that RTCs have jurisdiction over judgments, orders, resolutions
or awards of petitioner, is no longer controlling in light of the definitive instruction of Rule 43 of the
Revised Rules of Court.

Tanjay Water District v. Gabaton19 is not in point either as the issue raised therein was which
between the RTC and the then National Water Resources Council had jurisdiction over disputes in
the appropriation, utilization and control of water.

In fine, certiorari and appellate jurisdiction over adjudications of petitioner properly belongs to the
Court of Appeals.

WHEREFORE, the challenged Decision and Resolution of the Court of Appeals are REVERSED
and SET ASIDE. The April 15, 2005 Order of the Regional Trial Court of Bacolod City dismissing
petitioner’s petition for lack of jurisdiction is UPHELD.

No costs.

SO ORDERED.
National Water Resources Board (NWRB) vs. A.L. Ang Network, Inc., GR 186450, April
14,2010

Facts: A.L. Ang Network filed on January 23,2003 an application for a Certificate of
Public Convenience (CPC) with the National Water Resources Board (NWRB) to
operate and maintain a water service system in Alijis, Bacolod City which application
was later approved on August 20, 2003 despite opposition by the Bacolod City Water
District (BACIWA).

BACIWA opposed A.L. Ang Network's application on the ground that it is the only
govemment agency authorized to operate awater service system within the city.

BACIWA moved to have the decision reconsidered, contending that its right to due
process was violated when it was not allowed to present evidence in support of its
opposition. The NWRB reconsidered its Decision and allowed BACIWA to present
evidence prompting A.L Ang Network to file a petition for certiorari with the Regional
Trial Court (RTC) of Bacolod City against NWRB and BACIWA.

The NWRB moved to dismiss the petition, arguing that the proper recourse of
respondent was to the Court of Appeals, citing Rule 43 of the Rules of Court.

Lower Court's Ruling: The Regional Trial Court ruled in favor of NWRB and dismissed
A.L. Ang Network's petition for lack of jurisdiction. The RTC held that with Art. 89 of PD
1067 having been long repealed by BP 129, as amended, it is the Court of Appeals
which has exclusive appellate jurisdiction over all decisions of quasi-judicial agencies
except those within the appellate jurisdiction of the Supreme Court.

Appellate Court's Ruling: The Court of Appeals annulled and set aside the decision of
the RTC and held that it is the RTC which has jurisdiction over appeals from NWRB's
decisions. As no repeal is expressly made, Article 89 of P.D. No. 1067 is certainly
meant to be an exception to the jurisdiction of the Court of Appeals over appeals or
petitions for certiorari of the decisions of quasi-judicial bodies. This finds harmony with
Paragraph 2, Section 4, Rule 65 of the Rules of Court wherein it is stated that, "If it
involves the acts of a quasi-judicial agency, unless otherwise provided by law or these
rules, the petition shall be filed in and cognizable only by the Court of Appeals."
Evidently, not all petitions for certiorari under Rule 65 involving the decisions of quasi-
judicial agencies must be filed with the Court of Appeals. The rule admits of some
exceptions as plainly provided by the phrase 'ounless otherwise provided by law or
these rules" and Article 89 of P.D. No. 1067 is verily an example of these exceptions.

Issue: Whether Regional Trial Courts have jurisdiction over appeals from decisions,
resolutions or orders of the National Water Resources Board.
Supreme Court's Ruling:

The Supreme Court ruled in favor of the NWRB and reversed and set aside the
Decision of the Court of Appeals and upheld the Order of the Regional Trial Court of
Bacolod Citv.

Since the appellate court has exclusive appellate jurisdiction over quasi-judicial
agencies under Rule 43 of the Rules of Court, petitions for writs of certiorari, prohibition
or mandamus against the acts and omissions of quasi-judicial agencies, like the NWRB,
should MDG-F 1919: Enhancing Access to and Provision of Water Seruices with the
Active Participation of the Poor for the Compilation and Analysis of Jurisprudence on
Water Supply Case Digests with Analysis of Development lmplications be filed with it.
This is what Rule 65 of the Rules imposes for procedural uniformity. The only exception
to this instruction is when the law or the Rules itself directs otherwise, as cited in
Section 4, Rule 65. Article 89 of PD 1067 had long been rendered inoperative by the
passage of BP 129. Aside from delineating the jurisdictions of the Court of Appeals and
the RTCs, Section 47 of BP 129 repealed or modified: x x x. [t]he provisions of Republic
Act No. 296, otherwise known as the Judiciary Act of 1948, as amended, of Republic
Act No. 5179, as amended, of the Rules of Court, and of all other statutes, letters of
instructions and general orders or parts thereof, inconsistent with the provisions of this
Act x x x. The general repealing clause under Section 47 "predicates the intended
repeal under the condition that a substantial conflict must be found in existing and prior
acts." In enacting BP I29, the Batasang Pambansa was presumed to have knowledge of
the provision of Article 89 of P.D. No. 1067 and to have intended to change it. The
legislative intent to repeal Article 89 is clear and manifest given the scope and purpose
of BP 129, one of which is to provide a homogeneous procedure for the review of
adjudications of quasijudicial entities to the Court of Appeals. While Section 9 (3) of BP
129 and Section I of Rule 43 of the Rules of Court does not list the NWRB as "among"
the quasi-judicial agencies whose final judgments, orders, resolutions or awards are
appealable to the appellate court, it is settled that the list of quasijudicial agencies
specifically mentioned in Rule 43 is not meant to be exclusive. The employment of the
word "among" clearly instructs so.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 96401 April 6, 1992

NEMESIO N. ATIS, petitioner,

vs.
COURT OF APPEALS, ORLANDO S. DELATINA (DECEASED), SUBSTITUTED BY HIS HEIRS,
NAMELY: MANSUETA BAGON VDA. DE DELATINA & THEIR CHILDREN, DELIA, ELSIE &
ORLANDO, JR., SURNAMED DELATINA, respondents.

SPS. ARTURO M. PACULANANG and ELEUTERIA (LILIAN) B. PACULANANG, Intervenors.

MELENCIO-HERRERA, J.:

This is an appeal by certiorari, under Rule 45 of the Rules of Court, from the judgment of the Court
of Appeals 1 in CA-G.R. CV No. 15534 (Nemesio N. Atis, Plaintiff-Appellant, versus Orlando
Delatina, Defendant-Appellee, Spouses Arturo M. Paculanang and Eleuteria (Lilian) Bobes
Paculanang, Intervenors-Appellees), dated 23 November 1989, affirming "in full" the Resolution
dated 30 July 1987 of the Regional Trial Court, Branch X, Dipolog City, which dismissed the case
"for failure to exhaust administrative remedies, under Presidential Decree No. 1067."

The material allegations of the Complaint for "Judicial Abatement of Nuisance, Mandatory Injunction
and Damages," which the Trial Court dismissed, read:

4. Lot 1 of the plaintiff, together with Lots 2, 3 & 4 of the persons named, have been
devoted primarily, directly and solely for fishpond purposes, the nature of the realty
being for these purposes as there is a natural watercourse, stream, or continuous
water between the banks;

5. Since time immemorial the water flows from these higher estates down to the sea
of Dapitan Bay, passing through a lower estate claimed by one Eleuteria Lilian Bobis,
the wife of Arturo M. Paculanang, municipal trial judge of Liloy and Sindangan,
Zamboanga del Norte;

6. The natural watercourse, since time immemorial, has been freely flowing from the
upper estates aforestated, unimpeded and continuously into the sea, through the
land claimed by the said Eleuteria Lilian Bobis-Paculanang, even as during high tide
of the sea, sea water also goes upwards into the fishpond of plaintiff. This condition
has been by nature, existing since time immemorial and all riparian or littoral estate
owners have recognized it, since as the public and government authorities have also
respected it;
 7. Sometime in the middle of August 1986, without plaintiff's knowledge or
permission, defendant closed the natural waterway by constructing and building a
dike on the land claimed by Eleuteria Lilian Bobis-Paculanang thereby completely
blocking and obstructing the flow of the water from the higher estate of plaintiff and
his relatives, and thus causing the water in plaintiff's fishpond to remain stagnant,
and leading to the poisoning of plaintiff's growing shrimps, prawns, bangus (milkfish)
and others to the great and irreparable damage and injury to plaintiff;

8. When plaintiff knew and realized defendant's tortious acts, the effect of which was
to create a nuisance, plaintiff readily confronted him and asked for an explanation
why he did that, when as a Barangay Captain of San Pedro, Dapitan City, defendant
has always known of the condition of the watercourse that freely empties its water
into the sea, and vice versa, the sea water also goes upwards during high tides, but
defendant merely said that he closed the waterflow because he was making or
constructing a dike for the fishpond which he said, he was authorized to make for
Judge & Mrs. Paculanang; (pp. 36-38, Rollo).

As prayed for in the Complaint and reiterated by Petitioner in his Motion, dated 25 November 1986,
the Trial Court issued, on 27 November 1986, a Temporary Mandatory Restraining Order which
directed Respondent Delatina "to demolish or destroy immediately the dyke he has constructed on
the land of Mrs. Eleuteria Bobis Paculanang and restore the condition of the water way prior to
August, 1986, and to refrain from further acts that may change the contour in the area surrounding
Mrs. Paculanang's fishpond and the plaintiff's fishpond."

In due time, Respondent Delatina (now deceased and substituted by his heirs) filed his Answer
denying the material allegations of the Complaint.

Spouses Arturo and Eleuteria Paculanang filed an Answer-in-Intervention with Counterclaim making
common cause with Respondent Delatina, which Answer the Trial Court admitted in an Order, dated
8 January 1987. Intervenors maintained among others:

2. Defendant (Delatina) is a mere caretaker of the intervenors in this case because

the intervenors are the true owners of the property in question:

3. That the action for nuisance by plaintiff is not actionable because the community is
not affected, as in fact the people around the area are happy with the construction of
intervenors dike because they have utilized the same as their bridge and parthway
which they have not availed in the property of the plaintiff;

4. That the fishpond in question is a titled property of the intervenors;

5. That plaintiff's complaint against defendant and/or intervenors is unfounded and

not true for there was never any moment that they have obstructed completely the
free flow and passage of water which may passed (sic) on their property because of
the construction of an irrigation dike and canal in their property, as shown in the
sketch plan hereto attached as Annex "1" of intervenor and made integral part of this
answer;

In an Order bearing the same date, or on 8 January 1987, the Trial Court directed its Clerk of Court,
who was earlier designated as Commissioner, to supervise the drainage experiment on the
fishponds involved.
In his Report dated 13 April 1987, the Commissioner recommended "the immediate demolition of all
dykes, obstructions and the like introduced in August, 1986 and thereafter by defendant Delatina."

On 30 June 1987, Respondent Delatina filed a Motion to Dismiss the case on the following grounds:
(1) the Trial Court has no jurisdiction over the subject matter or nature of the action, the same being
vested in the National Water Resources Council by Pres. Decree No. 424; 2 and (2) Petitioner failed
to exhaust administrative remedies as no prior recourse was made to said Council.

Acting on said Motion, the Trial Court dismissed the case on 30 July 1987, for Petitioner's "failure to
exhaust administrative remedies under Presidential Decree No. 1067."

As the Court of Appeals, to which Petitioner appealed, affirmed "in full" the Trial Court's order of
dismissal, herein Petitioner availed of this recourse claiming that the Court of Appeals erred: (1) in
failing to consider the main issue raised by the ultimate facts which is whether the acts of Private
Respondents/Intervenors caused damage or injury to the rights of Petitioner, no "dispute as to water
rights" being involved; (2) in applying the general rule on exhaustion of administrative remedies, the
instant case being an exception thereto; and (3) in not ruling that Private Respondents/Intervenors
could no longer question the jurisdiction of the Trial Court after submitting to its jurisdiction and
seeking reliefs from it.

Private Respondents/Intervenors, on the other hand, have taken a contrary position.

The decisive issue pivots around whether or not, under the material allegations of the Complaint, the
case falls under the jurisdiction of the Trial Court.

As earlier stated, the Trial Court and the Court of Appeals entertained a negative view. Both Courts
agreed with the Private Respondents/Intervenors that the case falls under the jurisdiction of the
National Water Resources Council.

Presidential Decree No. 1067 otherwise known as "The Water Code of the Philippines" has spelled
out in Article 3 thereof the underlying principles of the Code, one of which is:

d. The utilization, exploitation, development, conservation and protection of water

resources shall be subject to the control and regulation of the government through
the National Water Resources Council, herein referred to as the Council. (Emphasis
supplied.)

Article 88 of the same Code provides that:

Art. 88. The Council shall have original jurisdiction over all disputes relating to
appropriation, utilization, exploration, development, control, conservation and
protection of waters within the meaning and context of this Code. (Emphasis
supplied)

The case at bar does not involve any dispute relating to appropriation or use of waters.
"Appropriation" as used in the Water Code means that "acquisition of rights over the use of waters or
the taking or diverting of waters from a natural source" (Art. 9); while "use of water for fisheries is the
utilization of water for the propagation and culture of fish as a commercial enterprise." In fact,
Petitioner is the holder of: (1) WATER PERMIT NO. 10974 to use water from the San Pedro Creek,
Dapitan City, and (2) WATER PERMIT NO. 10975 to use sea water, "for purposes of Fisheries,"
issued to him by no less than the National Water Resources Council on January 4, 1988 (pp. 93 and
94, Rollo). The issuance of said permits served to grant petitioner water rights or the privilege to
appropriate and use water (Art. 13, Pres. Decree No. 1067) from the San Pedro Creek and sea
water from Dapitan Bay for his fishpond.

Private Respondents/Intervenors do not dispute the water rights petitioner had acquired by reason of
those permits but maintain that said licenses were issued by the National Water Resources Council
to Petitioner only on 4 January 1988, or more than a year after the case was filed in Court. The
crucial point is, however, that "since time immemorial" water had been flowing from the higher
estates down to Dapitan Bay and to the sea passing through the lower estate belonging to the
Intervenors. There is nothing in the records before us controverting this statement of fact.

Obviously, therefore, no dispute lies relative to the use or appropriation by Petitioner of water from
the San Pedro Creek and sea water from the Dapitan Bay. The case does not involve a
determination of the parties' respective water rights, which would otherwise be within the
competence and original jurisdiction of the National Water Resources Council. Rather, the issue is
whether or not the construction of the dike, obstructed the natural water course or the free flow of
water from Petitioner's higher estate to Intervenors' lower estate thereby causing injury to petitioners'
rights and impairing the use of his fishpond. This issue necessitates resort to judicial intervention. As
held in the case of Amistoso v. Ang (L-60219, 29 June 1984, 130 SCRA 228), where there is a grant
existing in favor of the petitioner, and there is a violation of grantee's right by closure of the irrigation
canal, it is the enjoyment of the right emanating from the grant that is in litigation, and the case is not
within the jurisdiction of the National Water Resources Council.

In fine, it is the Regional Trial Court, Branch X, Dipolog City, and not the National Water Resources
Council, that has jurisdiction over the instant case. It follows that the doctrine of exhaustion of
administrative remedies on the basis of which the case was dismissed by both Courts below, does
not come into play.

WHEREFORE, the Decision of the Court of Appeals is SET ASIDE and the case is ordered
REMANDED to the Trial Court for further proceedings, with costs against respondents/intervenors.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 133140 August 10, 1999

JOSE MA. T. GARCIA, petitioner,

vs.
COURT OF APPEALS, SPS. LUISITO & MA. LUISA MAGPAYO AND PHILIPPINE BANK OF
COMMUNICATIONS, respondents.

PUNO, J.:

This is a petition for review under Rule 45 of the Rules of Court to set aside the decision rendered by
the Court of Appeals in CA-G.R. No. 44707 entitled "Jose Ma. T. Garcia, Plaintiff-Appellee versus
Spouses Luisito and Ma. Luisa Magpayo and Sheriff of Makati, Defendants, Philippine Bank of
Communications, Defendant-Appellant".1

The facts are as succinctly summarized by the appellate court, viz.:

Atty. Pedro V. Garcia, in whose name TCT No. S-31269 covering a parcel of land identified
as Lot 17 situated at Bel Air II Village, Makati, was registered, sold with the consent of his
wife Remedios T. Garcia, the same to their daughter Ma. Luisa Magpayo and her husband
Luisito Magpayo (the Magpayos).

On March 5, 1981, the Magpayos mortgaged the land to the Philippine Bank of
Communications (PBCom) to secure a loan, Five Hundred Sixty Four Thousand
(P564,000.00) Pesos according to them, One Million Two Hundred Thousand
(P1,200,000.00) Pesos according to PBCom. 1âwphi1.nêt

On March 9, 1981, Atty. Garcia's Title was cancelled and in its stead Transfer Certificate of
Title No. S-108412/545 was issued in the name of the Magpayos.

The Deed of Real Estate Mortgage was registered at the Makati Register of Deeds and
annotated on the Magpayos title.

The Magpayos failed to pay their loan upon its maturity, hence, the mortgage was
extrajudicially foreclosed and at the public auction sale, PBCom which was the highest
bidder bought the land.

The redemption period of the foreclosed mortgage expired without the Magpayos redeeming
the same, hence, title over the land was consolidated in favor of PBCom which cancelled the
Magpayo's title and Transfer Certificate of Title No. 138233 was issued in its name.

On October 4, 1985, the Magpayos filed at the RTC of Makati a complaint seeking the
nullification of the extrajudicial foreclosure of mortgage, public auction sale, and PBCom's
title docketed as Civil Case No. 11891. This complaint was dismissed for failure to
prosecute.
 On October 15, 1985, PBCom filed at the Regional Trial Court (RTC) of Makati a petition for
the issuance of a writ of possession over the land, docketed as LRC Case No. M-731, which
Branch 148 thereof granted.

Upon service of the writ of possession, Mrs. Magpayo's brother, Jose Ma. T. Garcia (Garcia),
who was in possession of the land, refused to honor it and filed a motion for Intervention in
the above-said PBCom petition, which motion was denied.

Garcia thereupon filed against PBCom, the Magpayos, and the RTC Sheriff the instant suit
for recovery of realty and damages wherein he alleged, inter alia, that he inherited the land
as one of the heirs of his mother Remedios T. Garcia, and that PBCom acquired no right
thereover.

In its answer, PBCom averred, inter alia, that Garcia's claim over the land is belied by the
fact that it is not among the properties owned by his mother listed in the Inventory of Real
Estate filed at the then CFI of Pasay City, Branch 27, in SP Proc. No. 2917-P, "In the Matter
of the Intestate Estate of Remedios T. Garcia Petition for Letters of Administration, Pedro V.
Garcia Petitioner-Administrator.

The Magpayos, on the other hand, asserted that title over the land was transferred to them
by Mrs. Magpayo's parents to enable them (Magpayos) to borrow from PBCom.

Garcia filed a Motion for Summary Judgment praying that judgment be rendered in his favor
to which PBCom counter-motioned that judgment should be rendered in its favor.

The court a quo denied the motion for summary judgment on the ground that PBCom raised
in its answer both factual and legal issues which could only be ventilated in a full-blown trial.

The court a quo, however, later issued a summary judgment.2

In its summary judgment, the lower court held that the mortgage executed by the Magpayo spouses
in favor of PBCom was void. It found that:

. . . [A]t the time that the defendants Magpayo spouses executed the mortgage in favor of the
defendant PBCom on March 5, 1981, the said spouses were not yet the owners of the
property. This finding is evident from the other undisputed fact that a new Torrens title was
issued to the defendants Magpayo spouses only on March 9, 1981 . . . . The Magpayo
spouses could not have acquired the said property merely by the execution of the Deed of
Sale because the property was in the possession of the plaintiff. The vendor, Pedro V.
Garcia, was not in possession and hence could not deliver the property merely by the
execution of the document (MANALILI V. CESAR, 39 PHIL. 134). The conclusion is therefore
inescapable that the said mortgage is null and void for lack of one of the essential elements
of a mortgage as required by Art. 2085 of our Civil Code . . . .3

Thus, it invalidated the foreclosure sale and nullified TCT No. 138233 issued to PBCom.
Dissatisfied, PBCom appealed. In reversing the trial court, the Court of Appeals held:

(P)laintiff-appellee's assertion that ownership over the disputed property was not transmitted
to his sister and her husband-Magpayo spouses at the time of the execution of the Deed of
Sale as he was still in actual and adverse possession thereof does not lie.
 For in his complaint, plaintiff-appellee alleged that he entered into possession of the disputed
property only upon the demise of his mother, from whom he alleges to have inherited it but
who was not the registered owner of the property, that is, on October 31, 1980 (Certificate of
Death, p. 17, Records), by which admission he is bound. Since the execution of the deed of
sale by Atty. Pedro V. Garcia in favor of the Magpayos took place earlier or on August 1,
1980, then contrary to his claim, plaintiff-appellee was not in possession of the property at
the time of the execution of said public instrument.

Furthermore, it appearing that the vendor Atty. Garcia had control of the property which was
registered in his name and that the deed of sale was likewise registered, then the sale was
consummated and the Magpayos were free to exercise the attributes of ownership including
the right to mortgage the land.

When the land is registered in the vendor's name, and the public instrument of sale is also
registered, the sale may be considered consummated and the buyer may exercise the
actions of an owner (Tolentino, Commentaries and Jurisprudence on the Civil Code of the
Philippines, 1992 Ed., p. 55).

That the Magpayos' title, TCT No. S-108412, was issued four (4) days following the
execution of the deed of real estate mortgage is of no moment, for registration under the
Torrens system does not vest ownership but is intended merely to confirm and register the
title which one may already have on the land (Municipality of Victorias v. Court of Appeals,
149 SCRA 32, 44-45 [1987]).

Petitioner Garcia moved for a reconsideration of above decision which was denied. He now comes
before us raising the following errors committed by the Court Appeals:

The respondent Court of Appeals has departed from the accepted and usual course of proceedings
when it decided the appeal subject of this case based on issues which were raised neither in the trial
court nor in the appellant's brief.

II

The Court of Appeals decided the appeal in a manner not in accord with applicable jurisprudence
when it disregarded the admissions of the private respondents and, despite ruling that Summary
Judgment was proper, made its own findings of facts which were contrary to the said admissions.

III

The Decision of the respondent Court of Appeals was not in accord with established jurisprudence
and even contradicts itself, as far as the issue of the propriety of the Summary Judgment is
concerned.

The petition has no merit.

Anent the first assignment of error, petitioner alleged that the Court of Appeals resolved the issues
"ownership" and "possession" though they were not raised by PBCom in its appellant's brief. The
allegation is belied by page 17 of PBCom's appellate brief, viz.:
 Due to the wrong cited case, the trial court opined erroneously that "Magpayo Spouses could
not have acquired the property merely by the execution of the deed of sale because the
property was in the possession of the plaintiff" (Order, p. 10).

Again, the trial court could not distinguish ownership from possession. Ownership and
possession are two entirely different legal concepts.

Plaintiff-appellee's possession as found by the trial court, started only "at the time of the filing
of the complaint in this present case up to the present." (page 2, Summary Judgment).

Assuming that to be true, plaintiff-appellee's possession which started only in 1986 could not
ripen into ownership. He has no valid title thereto. His possession in fact was that of an
intruder, one done in bad faith (to defeat PBCom's Writ of Possession). His possession is
certainly not in the concept of an owner. This is so because as early as 1981, title thereto
was registered in the name of the Magpayo Spouses which title was subsequently cancelled
when the property was purchased by PBCom in a public auction sale resulting in the
issuance of title in favor of the latter in 1985.

Anent the second-assignment of error, petitioner contends that the following facts were admitted by
the parties in the trial court:

1. The petitioner is a compulsory heir of the late spouses Atty. Pedro V. Garcia and
Remedios Tablan Garcia;

2. The property subject of this dispute was previously the conjugal property of the said
spouses;

3. The petitioner and his family have been and are continuously to the present in actual
physical possession of the property. At the time of the alleged sale to the Magpayo spouses,
petitioner was in possession of the property;

4. When his mother Remedios Tablan (sic) Garcia died, sometime in October, 1980, he
became, by operation of law, a co-owner of the property;

5. Atty. Pedro V. Garcia, at the time of the execution of the instrument in favor of the
Magpayo spouses was not in possession of the subject property.4

We reject the contention of petitioner for a perusal of the records shows that these alleged admitted
facts are his own paraphrased portions of the findings of fact listed by the trial court in the summary
judgment.5 Indeed petitioner did not cite any page number of the records or refer to any documentary
Exhibit to prove how and who admitted the said facts.

Petitioner's third assignment of error that he alone as plaintiff in the trial court is entitled to a
summary judgment merits scant attention. A summary judgment is one granted by the court, upon
motion by either party, for an expeditious settlement of the case, there appearing from the pleadings,
depositions, admissions, and affidavits that no important questions or issues of fact are involved
(except the determination of the amount of damages) and that therefore the moving party is entitled
to a judgment as a matter of law.6 Under Rule 34, either party may move for a summary judgment —
the claimant by virtue of Section 1 and the defending party by virtue of Section 2, viz.:
 Sec. 1. Summary judgment for claimant. — A party seeking to recover upon a claim, counter-
claim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in
answer thereto has been served, move with supporting affidavits for a summary judgment in
his favor upon all or any part thereof.

Sec. 2. Summary judgment for defending party. — A party against whom a claim,
counterclaim, or cross-claim is asserted or a declaratory relief is sought may, at any time,
move with supporting affidavits for a summary judgment in his favor as to all or any part
thereof.

It is true that petitioner made the initial move for summary judgment. Nonetheless, PBCom likewise
moved for a summary judgment with supporting affidavit and documentary exhibits, to wit:

COUNTER-MOTION FOR SUMMARY JUDGMENT

PBCom Is Entitled To A Summary Judgment

The procedure for summary judgment may be availed of also by the defending parties who
may be the object of unfounded claims as clearly shown in Sections 1 and 2 of Rule 34.

xxx xxx xxx

WHEREFORE, it is respectfully prayed of this Honorable Court to render summary judgment

in PBCom's favor by DISMISSING plaintiff's Complaint as well as Sps. Magpayo's Cross-
Claim for being sham and frivolous.7

Needless to state, there was no error on the part of the appellate court in resorting to summary
judgment as prayed for by both parties.

We stress again that possession and ownership are distinct legal concepts. Ownership exists when
a thing pertaining to one person is completely subjected to his will in a manner not prohibited by law
and consistent with the rights of others.8 Ownership confers certain rights to the owner, one of which
is the right to dispose of the thing by way of sale.9 Atty. Pedro Garcia and his wife Remedios
exercised their right to dispose of what they owned when they sold the subject property to the
Magpayo spouses. On the other hand, possession is defined as the holding of a thing or the
enjoyment of a right.10 Literally, to possess means to actually and physically occupy a thing with or
without right. Possession may be had in one of two ways: possession in the concept of an owner
and possession of a holder.11 "A possessor in the concept of an owner may be the owner himself or
one who claims to be so."12 On the other hand, "one who possesses as a mere holder acknowledges
in another a superior right which he believes to be ownership, whether his belief be right or
wrong."13 The records show that petitioner occupied the property not in the concept of an owner for
his stay was merely tolerated by his parents. We held in Caniza v. Court of Appeals 14 that an
owner's act of allowing another to occupy his house, rent-free does not create a permanent and
indefeasible right of possession in the latter's favor. Consequently, it is of no moment that petitioner
was in possession of the property at the time of the sale to the Magpayo spouses. It was not a
hindrance to a valid transfer of ownership. On the other hand, petitioner's subsequent claim of
ownership as successor to his mother's share in the conjugal asset is belied by the fact that the
property was not included in the inventory of the estate submitted by his father to the intestate court.
This buttresses the ruling that indeed the property was no longer considered owned by petitioner's
parents. We also uphold the Court of Appeals in holding that the mortgage to PBCom by the
Magpayo spouses is valid notwithstanding that the transfer certificate of title over the property was
issued to them after the mortgage contract was entered into. Registration does not confer
ownership, it is merely evidence of such ownership over a particular property.15 The deed of sale
operates as a formal or symbolic delivery of the property sold and authorizes the buyer to use the
document as proof of ownership.16 All said, the Magpayo spouses were already the owners when
they mortgaged the property to PBCom.17

IN VIEW WHEREOF, the decision of the Court of Appeals in CA-G.R. No. 44707 is AFFIRMED.
Costs against petitioner.
1âw phi 1.nêt

SO ORDERED.
Garcia vs. Court of Appeals – G.R. No. 133140, August 10, 1999

Doctrine: Possession and ownership are distinct legal concepts. Ownership exists
when a thing pertaining to one person is completely subjected to his will in a manner not
prohibited by law and consistent with the rights of others. Ownership confers certain
rights to the owner, one of which is the right to dispose of the thing by way of sale.
Literally, to possess means to actually and physically occupy a thing with or without
right. Possession may be had in one of two ways: possession in the concept of an
owner and possession of a holder. A possessor in the concept of an owner may be the
owner himself or one who claims to be so. On the other hand, one who possesses as a
mere holder acknowledges in another a superior right which he believes to be
ownership, whether his belief be right or wrong.

Facts: Atty. Pedro V. Garcia, in whose name TCT No. S-31269 covering a parcel of land
identified as Lot 17 situated at Bel Air II Village, Makati, was registered, sold with the
consent of his wife Remedios T. Garcia, the same to their daughter Ma. Luisa Magpayo
and her husband Luisito Magpayo (the Magpayos). On March 5, 1981, the Magpayos
mortgaged the land to the Philippine Bank of Communications (PBCom) to secure a
loan. On March 9, 1981, Atty. Garcia’s Title was cancelled and in its stead Transfer
Certificate of Title No. S-108412/545 was issued in the name of the Magpayos.
The Deed of Real Estate Mortgage was registered at the Makati Register of Deeds and
annotated on the Magpayos title. The redemption period of the foreclosed mortgage
expired without the Magpayos redeeming the same, hence, title over the land was
consolidated in favor of PBCom which cancelled the Magpayo’s title and Transfer
Certificate of Title No. 138233 was issued in its name. The Magpayos failed to pay their
loan upon its maturity, hence, the mortgage was extrajudicially foreclosed and at the
public auction sale, PBCom which was the highest bidder bought the land. On October
4, 1985, the Magpayos filed at the RTC of Makati a complaint seeking the nullification of
the extrajudicial foreclosure of mortgage, public auction sale, and PBCom’s title
docketed as Civil Case No. 11891. This complaint was dismissed for failure to
prosecute. On October 15, 1985, PBCom filed at the Regional Trial Court (RTC) of
Makati a petition for the issuance of a writ of possession over the land which was
granted. Upon service of the writ of possession, Mrs. Magpayo’s brother, Jose Ma. T.
Garcia (Garcia), who was in possession of the land, refused to honor it and filed a
motion for Intervention in the above-said PBCom petition, which motion was denied.

Garcia thereupon filed against PBCom, the Magpayos, and the RTC Sheriff the instant
suit for recovery of realty and damages wherein he alleged, inter alia, that he inherited
the land as one of the heirs of his mother Remedios T. Garcia, and that PBCom
acquired no right thereover. In its summary judgment, the lower court held that the
mortgage executed by the Magpayo spouses in favor of PBCom was void. The
Magpayo spouses could not have acquired the said property merely by the execution of
the Deed of Sale because the property was in the possession of the plaintiff. The
vendor, Pedro V. Garcia, was not in possession and hence could not deliver the
property merely by the execution of the document.
On appeal, CA held that Garcia’s assertion that ownership over the disputed property
was not transmitted to his sister and her husband-Magpayo spouses at the time of the
execution of the Deed of Sale as he was still in actual and adverse possession thereof
does not lie. Since the execution of the deed of sale by Atty. Pedro V. Garcia in favor of
the Magpayos took place earlier or on August 1, 1980, then contrary to his claim, Garcia
was not in possession of the property at the time of the execution of said public
instrument. Furthermore, it appearing that the vendor Atty. Garcia had control of the
property which was registered in his name and that the deed of sale was likewise
registered, then the sale was consummated and the Magpayos were free to exercise
the attributes of ownership including the right to mortgage the land.

When the land is registered in the vendor’s name, and the public instrument of sale is
also registered, the sale may be considered consummated and the buyer may exercise
the actions of an owner. That the Magpayos’ title, TCT No. S-108412, was issued four
(4) days following the execution of the deed of real estate mortgage is of no moment, for
registration under the Torrens system does not vest ownership but is intended merely to
confirm and register the title which one may already have on the land.

Issue: Whether Garcia’s possession is in a concept of an owner.

Held: No. Garcia’s possession which started only in 1986 could not ripen into
ownership. He has no valid title thereto. His possession in fact was that of an intruder,
one done in bad faith (to defeat PBCom’s Writ of Possession). His possession is
certainly not in the concept of an owner. This is so because as early as 1981, title
thereto was registered in the name of the Magpayo Spouses which title was
subsequently cancelled when the property was purchased by PBCom in a public
auction sale resulting in the issuance of title in favor of the latter in 1985.

The Court stressed that possession and ownership are distinct legal concepts.
Ownership exists when a thing pertaining to one person is completely subjected to his
will in a manner not prohibited by law and consistent with the rights of others.
Ownership confers certain rights to the owner, one of which is the right to dispose of the
thing by way of sale. Atty. Pedro Garcia and his wife Remedios exercised their right to
dispose of what they owned when they sold the subject property to the Magpayo
spouses. On the other hand, possession is defined as the holding of a thing or the
enjoyment of a right.

Literally, to possess means to actually and physically occupy a thing with or without
right. Possession may be had in one of two ways: possession in the concept of an
owner and possession of a holder. A possessor in the concept of an owner may be the
owner himself or one who claims to be so. On the other hand, one who possesses as a
mere holder acknowledges in another a superior right which he believes to be
ownership, whether his belief be right or wrong.
The records show that petitioner occupied the property not in the concept of an owner
for his stay was merely tolerated by his parents. Consequently, it is of no moment that
petitioner was in possession of the property at the time of the sale to the Magpayo
spouses. It was not a hindrance to a valid transfer of ownership. On the other hand,
petitioner’s subsequent claim of ownership as successor to his mother’s share in the
conjugal asset is belied by the fact that the property was not included in the inventory of
the estate submitted by his father to the intestate court. This buttresses the ruling that
indeed the property was no longer considered owned by petitioner’s parents.

The Court upheld the Court of Appeals in holding that the mortgage to PBCom by the
Magpayo spouses is valid notwithstanding that the transfer certificate of title over the
property was issued to them after the mortgage contract was entered into. Registration
does not confer ownership, it is merely evidence of such ownership over a particular
property. The deed of sale operates as a formal or symbolic delivery of the property sold
and authorizes the buyer to use the document as proof of ownership. All said, the
Magpayo spouses were already the owners when they mortgaged the property to
PBCom.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 130316 January 24, 2007

ERNESTO V. YU and ELSIE O. YU, Petitioners,

vs.
BALTAZAR PACLEB,1 Respondent.

DECISION

CORONA, J.:

The present petition filed under Rule 45 of the Rules of Court originated from an action for forcible
entry and damages filed by petitioners Ernesto and Elsie Yu against respondent Baltazar Pacleb.

The antecedent facts follow.

Sometime in September 1992, Ruperto Javier allegedly offered to sell Lot No. 6853-D to petitioners
for P75 per sq.m. The lot was approximately 18,000 square meters and was located in Barangay
lawphil.net

Langkaan, Dasmariñas, Cavite. Javier supposedly purchased the lot from one Rebecca del Rosario
who, in turn, acquired it from respondent and his wife. The title of the property (Transfer Certificate of
Title [TCT] No. T-118375), however, remained in the names of respondent and his wife. The
instruments in support of the series of alleged sales were not registered.

On September 11, 1992, petitioners accepted the offer and gave Javier P200,000 as downpayment
for the lot. Javier then delivered his supposed muniments of title to petitioners. After the execution of
a contract to sell, he formally turned over the property to petiti oners.

At the time of the turn-over, a portion of the lot was occupied by Ramon C. Pacleb, respondent’s
son, and his wife as tenants. On September 12, 1992, Ramon and his wife allegedly surrendered
possession of their portion to petitioners. Later on, petitioners appointed Ramon as their trustee over
the subject lot.

Aside from taking possession of the property, petitioners also caused the annotation on TCT No. T-
118375 of a decision rendered in their favor in Civil Case No. 741-93.2 This decision attained finality
on April 19, 1995.

Petitioners alleged that they exercised ownership rights as well as enjoyed open, public and
peaceful possession over the property from September 12, 1992 until the early part of September
1995. During this time, respondent was in the United States.

Upon respondent’s return to the Philippines in May 1995, he allegedly entered the property by
means of force, threat, intimidation, strategy and stealth thereby ousting petitioners and their trustee,
Ramon.

Despite repeated demands, respondent, asserting his rights as registered owner of the property,
refused to vacate the premises and surrender its possession to petitioners.
Petitioners filed an action for forcible entry3 in the Municipal Trial Court (MTC) of Dasmariñas, Cavite
on November 23, 1995. Respondent filed an answer with compulsory counterclaim dated December
8, 1995. After the issues were joined, the MTC required the submission of the parties’ position
papers at a preliminary conference on March 11, 1996. Respondent failed to comply.

On June 17, 1996, the MTC ruled:

WHEREFORE, in view of the foregoing, the [respondent] and other persons claiming right under him
are hereby ordered to surrender physical possession of Lot No. 6853-D in favor of the [petitioners]
and to pay the sum of TWENTY-FIVE THOUSAND (P25,000.00) PESOS as attorney’s fees.

SO ORDERED.4

On appeal,5 the Regional Trial Court (RTC) of Imus, Cavite rendered a decision affirming the MTC
decision in toto.6

Respondent elevated his case to the Court of Appeals (CA)7 which rendered the assailed decision
on March 18, 1997:

WHEREFORE, the Petition is GRANTED; the Decision dated October 25, 1996 of the [RTC] of
Imus, Cavite in Civil Case No. 052-96 and the Decision of the [MTC] of Dasmariñas, Cavite in Civil
Case No. 182 are SET ASIDE; and Civil Case No. 182 for Forcible Entry and Damages is hereby
ordered DISMISSED. No pronouncement as to costs.

SO ORDERED.8

In a resolution dated August 20, 1997, the CA denied petitioners’ motion for reconsideration for lack
of merit.

Before us now come petitioners who claim that the appellate court erred in finding that respondent
had prior physical possession of the subject property. l awphil.net

"In an action for forcible entry, the plaintiff must prove that he was in prior possession of the land or
building and that he was deprived thereof by means of force, intimidation, threat, strategy or
stealth."9 The plaintiff, however, cannot prevail where it appears that, as between himself and the
defendant, the latter had possession antedating his own.10 We are generally precluded in a Rule 45
petition from reviewing factual evidence tracing the events prior to the first act of
spoliation.11 However, the conflicting factual findings of the MTC and RTC on one hand, and the CA
on the other, require us to make an exception.

We overrule petitioners’ contentions.

The Civil Code states that possession is the holding of a thing or the enjoyment of a right.12 In the
grammatical sense, to possess means to have, to actually and physically occupy a thing, with or
without right.13 "Possession always includes the idea of occupation x x x. It is not necessary that the
person in possession should himself be the occupant. The occupancy can be held by another in his
name."14 Without occupancy, there is no possession.15

Two things are paramount in possession.16 First, there must be occupancy, apprehension or taking.
Second, there must be intent to possess (animus possidendi).17
Here, petitioners failed to establish that they had prior physical possession to justify a ruling in their
favor in the complaint for forcible entry against respondent.

In the decision in Civil Case No. 741-93 (a case for specific performance and damages against
Javier, the alleged vendor of the lot in question) upon which petitioners based their right to possess
in the first place, the trial court categorically stated:

The [petitioners were never placed] in possession of the subject property on which [was]
planned to be [site of] a piggery, nor [were they] given a clearance or certification from the Municipal
Agrarian Reform Officer.18 (emphasis ours)

The claim that the lot was turned over to petitioners in 1992 was self-serving in the face of this
factual finding. On the other hand, the tax declarations and receipts in the name of respondent in
1994 and 1995 established the possession of respondent.19 The payment of real estate tax is one of
the most persuasive and positive indications showing the will of a person to possess in concepto de
dueño or with claim of ownership.20

"[P]ossession in the eyes of the law does not mean that a man has to have his feet on every square
meter of the ground before he is deemed in possession."21 In this case, Ramon, as respondent’s
son, was named caretaker when respondent left for the United States in 1983.22 Due to the eventual
loss of trust and confidence in Ramon, however, respondent transferred the administration of the
land to his other son, Oscar, in January 1995 until his return in May 1995.23 In other words, the
subject land was in the possession of the respondent’s sons during the contested period.

Petitioners cite an alleged document (Kusangloob na Pagsasauli ng Lupang Sakahan at

Pagpapahayag ng Pagtalikod sa Karapatan) dated March 10, 1995 executed by them and Ramon to
prove a turn over of possession. They also seek to prove their exercise of rights over the land
through alleged frequent visits and the designation of Ramon as their own trustee as declared in a
joint affidavit attached to their position paper filed with the MTC. These instruments, however, fail to
convince us of petitioners’ actual occupancy of the subject land. First, petitioners themselves
acknowledged that Ramon and his wife occupied part of the land as tenants of respondent. Second,
Ramon, a mere tenant, had no authority to sign such document dated March 10, 1995 waiving all
rights to the land. Third, there was no clear proof in the records of the appointment of Ramon as
petitioners’ trustee save their self-serving statements to this effect. Finally, at the time
the Kusangloob na Pagsasauli document was executed, the caretaker of the land was no longer
Ramon but Oscar.24

Most important, the title of the land in question (TCT No. T-118375) remained in the name of
respondent.25 "As the registered owner, petitioner had a right to the possession of the property,
which is one of the attributes of ownership."26 The Civil Code states:

Art. 538. Possession as a fact cannot be recognized at the same time in two different personalities
except in the cases of co-possession. Should a question arise regarding the fact of possession, the
present possessor shall be preferred; if there are two possessors, the one longer in possession; if
the dates of the possession are the same, the one who presents a title; and if all these conditions
are equal, the thing shall be placed in judicial deposit pending determination of its possession or
ownership through proper proceedings.

In view of the evidence establishing respondent’s continuing possession of the subject property,
petitioners’ allegation that respondent deprived them of actual possession by means of force,
intimidation and threat was clearly untenable. In Gaza v. Lim, we held that:
Where a dispute over possession arises between two persons, the person first having actual
possession is the one who is entitled to maintain the action granted by law; otherwise, a mere
usurper without any right whatever, might enter upon the property of another and, by allowing
himself to be ordered off, could acquire the right to maintain the action of forcible entry and detainer,
however momentary his intrusion might have been.27

WHEREFORE, the petition is hereby DENIED. The decision of the Court of Appeals dated March
18, 1997 in CA-G.R. SP No. 42604 is AFFIRMED.

Costs against petitioners.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-18536 March 31, 1965

JOSE B. AZNAR, plaintiff-appellant,

vs.
RAFAEL YAPDIANGCO, defendant-appellee;
TEODORO SANTOS, intervenor-appellee.

Florentino M. Guanlao for plaintiff-appellant.

Rafael Yapdiangco in his own behalf as defendant-appellee.
Lorenzo Sumulong, R. B. Hilao and B. S. Felipe for intervenor-appellee.

REGALA, J.:

This is an appeal, on purely legal questions, from a decision of the Court of First Instance of Quezon City,
Branch IV, declaring the intervenor-appellee, Teodoro Santos, entitled to the possession of the car in dispute.

The records before this Court disclose that sometime in May, 1959, Teodoro Santos advertised in two
metropolitan papers the sale of his FORD FAIRLANE 500. In the afternoon of May 28, 1959, a certain L. De
Dios, claiming to be a nephew of Vicente Marella, went to the Santos residence to answer the ad. However,
Teodoro Santos was out during this call and only the latter's son, Irineo Santos, received and talked with De
Dios. The latter told the young Santos that he had come in behalf of his uncle, Vicente Marella, who was
interested to buy the advertised car.

On being informed of the above, Teodoro Santos instructed his son to see the said Vicente Marella the
following day at his given address: 1642 Crisostomo Street, Sampaloc, Manila. And so, in the morning of May
29, 1959, Irineo Santos went to the above address. At this meeting, Marella agreed to buy the car for
P14,700.00 on the understanding that the price would be paid only after the car had been registered in his
name.

Irineo Santos then fetched his father who, together with L. De Dios, went to the office of a certain Atty. Jose
Padolina where the deed of the sale for the car was executed in Marella's favor. The parties to the contract
thereafter proceeded to the Motor Vehicles Office in Quezon City where the registration of the car in Marella's
name was effected. Up to this stage of the transaction, the purchased price had not been paid.

From the Motor Vehicles Office, Teodoro Santos returned to his house. He gave the registration papers and a
copy of the deed of sale to his son, Irineo, and instructed him not to part with them until Marella shall have
given the full payment for the car. Irineo Santos and L. De Dios then proceeded to 1642 Crisostomo Street,
Sampaloc, Manila where the former demanded the payment from Vicente Marella. Marella said that the amount
he had on hand then was short by some P2,000.00 and begged off to be allowed to secure the shortage from a
sister supposedly living somewhere on Azcarraga Street, also in Manila. Thereafter, he ordered L. De Dios to
go to the said sister and suggested that Irineo Santos go with him. At the same time, he requested the
registration papers and the deed of sale from Irineo Santos on the pretext that he would like to show them to
his lawyer. Trusting the good faith of Marella, Irineo handed over the same to the latter and thereupon, in the
company of L. De Dios and another unidentified person, proceeded to the alleged house of Marella's sister.

At a place on Azcarraga, Irineo Santos and L. De Dios alighted from the car and entered a house while their
unidentified companion remained in the car. Once inside, L. De Dios asked Irineo Santos to wait at the sala
while he went inside a room. That was the last that Irineo saw of him. For, after a considerable length of time
waiting in vain for De Dios to return, Irineo went down to discover that neither the car nor their unidentified
companion was there anymore. Going back to the house, he inquired from a woman he saw for L. De Dios and
he was told that no such name lived or was even known therein. Whereupon, Irineo Santos rushed to 1642
Crisostomo to see Marella. He found the house closed and Marella gone. Finally, he reported the matter to his
father who promptly advised the police authorities.

That very same day, or on the afternoon of May 29, 1959 Vicente Marella was able to sell the car in question to
the plaintiff-appellant herein, Jose B. Aznar, for P15,000.00. Insofar as the above incidents are concerned, we
are bound by the factual finding of the trial court that Jose B. Aznar acquired the said car from Vicente Marella
in good faith, for a valuable consideration and without notice of the defect appertaining to the vendor's title.

While the car in question was thus in the possession of Jose B. Aznar and while he was attending to its
registration in his name, agents of the Philippine Constabulary seized and confiscated the same in
consequence of the report to them by Teodoro Santos that the said car was unlawfully taken from him.

In due time, Jose B. Aznar filed a complaint for replevin against Captain Rafael Yapdiangco, the head of the
Philippine Constabulary unit which seized the car in question Claiming ownership of the vehicle, he prayed for
its delivery to him. In the course of the litigation, however, Teodoro Santos moved and was allowed to intervene
by the lower court.

At the end of the trial, the lower court rendered a decision awarding the disputed motor vehicle to the
intervenor-appellee, Teodoro Santos. In brief, it ruled that Teodoro Santos had been unlawfully deprived of his
personal property by Vicente Marella, from whom the plaintiff-appellant traced his right. Consequently, although
the plaintiff-appellant acquired the car in good faith and for a valuable consideration from Vicente Marella, the
said decision concluded, still the intervenor-appellee was entitled to its recovery on the mandate of Article 559
of the New Civil Code which provides:

ART. 559. The possession of movable property acquired in good faith is equivalent to title.
Nevertheless, one who lost any movable or has been unlawfully deprived thereof, may recover it from
the person in possession of the same.

If the possessor of a movable lost or of which the owner has been unlawfully deprived, has acquired it
in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid
therefor.

From this decision, Jose B. Aznar appeals.

The issue at bar is one and simple, to wit: Between Teodoro Santos and the plaintiff-appellant, Jose B. Aznar,
who has a better right to the possession of the disputed automobile?

We find for the intervenor-appellee, Teodoro Santos.

The plaintiff-appellant accepts that the car in question originally belonged to and was owned by the intervenor-
appellee, Teodoro Santos, and that the latter was unlawfully deprived of the same by Vicente Marella.
However, the appellant contends that upon the facts of this case, the applicable provision of the Civil Code is
Article 1506 and not Article 559 as was held by the decision under review. Article 1506 provides:

ART. 1506. Where the seller of goods has a voidable title thereto, but his, title has not been voided at
the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith,
for value, and without notice of the seller's defect of title.

The contention is clearly unmeritorious. Under the aforequoted provision, it is essential that the seller should
have a voidable title at least. It is very clearly inapplicable where, as in this case, the seller had no title at all.

Vicente Marella did not have any title to the property under litigation because the same was never delivered to
him. He sought ownership or acquisition of it by virtue of the contract. Vicente Marella could have acquired
ownership or title to the subject matter thereof only by the delivery or tradition of the car to him.
Under Article 712 of the Civil Code, "ownership and other real rights over property are acquired and transmitted
by law, by donation, by testate and intestate succession, and in consequence of certain contracts, by tradition."
As interpreted by this Court in a host of cases, by this provision, ownership is not transferred by contract merely
but by tradition or delivery. Contracts only constitute titles or rights to the transfer or acquisition of ownership,
while delivery or tradition is the mode of accomplishing the same (Gonzales v. Rojas, 16 Phil. 51; Ocejo, Perez
and Co. v. International Bank, 37 Phil. 631, Fidelity and Deposit Co. v. Wilson, 8 Phil. 51; Kuenzle & Streiff v.
Wacke & Chandler, 14 Phil. 610; Easton v. Diaz Co., 32 Phil. 180).

For the legal acquisition and transfer of ownership and other property rights, the thing transferred must
be delivered, inasmuch as, according to settled jurisprudence, the tradition of the thing is a necessary
and indispensable requisite in the acquisition of said ownership by virtue of contract. (Walter Laston v.
E. Diaz & Co. & the Provincial Sheriff of Albay, supra.)

So long as property is not delivered, the ownership over it is not transferred by contract merely but by
delivery. Contracts only constitute titles or rights to the transfer or acquisition of ownership, while
delivery or tradition is the method of accomplishing the same, the title and the method of acquiring it
being different in our law. (Gonzales v. Roxas, 16 Phil. 51)

In the case on hand, the car in question was never delivered to the vendee by the vendor as to complete or
consummate the transfer of ownership by virtue of the contract. It should be recalled that while there was
indeed a contract of sale between Vicente Marella and Teodoro Santos, the former, as vendee, took
possession of the subject matter thereof by stealing the same while it was in the custody of the latter's son.

There is no adequate evidence on record as to whether Irineo Santos voluntarily delivered the key to the car to
the unidentified person who went with him and L. De Dios to the place on Azcarraga where a sister of Marella
allegedly lived. But even if Irineo Santos did, it was not the delivery contemplated by Article 712 of the Civil
Code. For then, it would be indisputable that he turned it over to the unidentified companion only so that he
may drive Irineo Santos and De Dios to the said place on Azcarraga and not to vest the title to the said vehicle
to him as agent of Vicente Marella. Article 712 above contemplates that the act be coupled with the intent of
delivering the thing. (10 Manresa 132)

The lower court was correct in applying Article 559 of the Civil Code to the case at bar, for under it, the rule is
to the effect that if the owner has lost a thing, or if he has been unlawfully deprived of it, he has a right to
recover it, not only from the finder, thief or robber, but also from third persons who may have acquired it in good
faith from such finder, thief or robber. The said article establishes two exceptions to the general rule of
irrevindicability, to wit, when the owner (1) has lost the thing, or (2) has been unlawfully deprived thereof. In
these cases, the possessor cannot retain the thing as against the owner, who may recover it without paying
any indemnity, except when the possessor acquired it in a public sale. (Del Rosario v. Lucena, 8 Phil. 535;
Varela v. Finnick, 9 Phil. 482; Varela v. Matute, 9 Phil. 479; Arenas v. Raymundo, 19 Phil. 46. Tolentino, id.,
Vol. II, p. 261.)

In the case of Cruz v. Pahati, et al., 52 O.G. 3053 this Court has already ruled
that —

Under Article 559 of the new Civil Code, a person illegally deprived of any movable may recover it from
the person in possession of the same and the only defense the latter may have is if he has acquired it
in good faith at a public sale, in which case, the owner cannot obtain its return without reimbursing the
price paid therefor. In the present case, plaintiff has been illegally deprived of his car through the
ingenious scheme of defendant B to enable the latter to dispose of it as if he were the owner thereof.
Plaintiff, therefore, can still recover possession of the car even if it is in the possession of a third party
who had acquired it in good faith from defendant B. The maxim that "no man can transfer to another a
better title than he had himself" obtains in the civil as well as in the common law. (U.S. v. Sotelo, 28
Phil. 147)

Finally, the plaintiff-appellant here contends that inasmuch as it was the intervenor-appellee who had caused
the fraud to be perpetrated by his misplaced confidence on Vicente Marella, he, the intervenor-appellee, should
be made to suffer the consequences arising therefrom, following the equitable principle to that effect. Suffice it
to say in this regard that the right of the owner to recover personal property acquired in good faith by another, is
based on his being dispossessed without his consent. The common law principle that where one of two
innocent persons must suffer by a fraud perpetrated by another, the law imposes the loss upon the party who,
by his misplaced confidence, has enabled the fraud to be committed, cannot be applied in a case which is
covered by an express provision of the new Civil Code, specifically Article 559. Between a common law
principle and a statutory provision, the latter must prevail in this jurisdiction. (Cruz v. Pahati, supra)

UPON ALL THE FOREGOING, the instant appeal is hereby dismissed and the decision of the lower court
affirmed in full. Costs against the appellant.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon, Makalintal, Bengzon,
J.P., and Zaldivar, JJ., concur.
JOSE B. AZNAR v. RAFAEL YAP-DIANGCO, GR No. L-18536, 1965-03-31
Facts:
, Teodoro Santos advertised in two metropolitan papers the sale of his FORD
FAIRLANE 500.
a certain L. De Dios, claiming to be a nephew of Vicente
Marella, went to the Santos residence to answer the ad. However, Teodoro Santos was
out during this call and only the latter's son, Irineo Santos received and talked with De
Dios.
The latter told the young Santos that he had... come in behalf °f his uncle, Vicente
Marella, who was interested to buy he advertised car.
On being informed
Teodoro Santos instructed his son to see the said Vicente Marella .the following day at
his given address
And so,... Irineo Santos went to the above address.
Marella agreed to buy the car for P14,700.00 on the understanding that the price would
be paid only after the car had been registered in his name.
Irineo Santos then fetched his father who, together with L. De Dios, went to the office of
a certain Atty. Jose Padolina where the deed of sale for the car was executed in
Marella's favor.
registration of the car in Marella's name was. effected.
Up to this stage of the transaction, the purchase price had not been paid.
Teodoro Santos returned to his house. He gave the registration papers and a copy of
the deed of sale to his son, Irineo, and instructed him not to part with them until Marella
shall have given the full... payment for the car
Irineo Santos... demanded for the payment from Vicente Marella.
Marella said that the... amount he had on hand then was short by some P2,000.00...
and begged off to be allowed to secure the shortage from a sister supposedly living
somewhere in Azcarraga Street also in Manila. Thereafter, he ordered L. De Dios to go
to the said sister and... suggested that Irineo Santos to go with him. At the same time,
he requested for the registration papers and the deed of sale from Ireneo Santos on the
pretext that he would like to show them to h lawyers. Trusting the good faith of
Marella,... Irene" handed over the same to the latter... lrineo Santos and L. De Dios
alighted from the car and entered a house, while their unidentified companion remained
in the car. Once inside, L. De Dios asked lrineo Santos to wait at the... sala while he
went inside a room. That was the last that Ireneo saw of him. For, after a considerable
length of time waiting in vain for De Dios to return, Ireneo went down to discover that
neither the car nor their... unidentified companion was there anymore.
That very .same day,... Vicente Marella was able to sell the car in question to the
plaintiff... herein, Jose B. Aznar, for P15,000.00.
While the car in question was thus in the possession of Jose B. Aznar and while he was
attending to its registration in his name, agents of the Philippine Constabulary seized
and confiscated the same in consequence of the report to them by Teodoro
Santos that the said car unlawfully taken from him.
Jose B. Aznar filed a complaint for replevin against Captain Rafael Yapdiangco, the
head of the Philippine Constabulary unit which seized the car in Question. Claiming
ownership of the vehicle, he prayed for its delivery to... him.
At the end of the trial, the lower court... awarding the disputed motor vehicle to
Teodoro Santos.
it ruled that Teodoro Santos had been unlawfully deprived of his personal property by
Vicente Marella, from whom the plaintiff-appellant traces his right.
From this decision, Jose B. Aznar appeals.
Issues:
Between Teodoro Santos and the plaintiff
Jose B. Aznar, who has a better right to the posession of the disputed automobile?
We find for the
Teodoro Santos.
Ruling:
We find for the
Teodoro Santos.
in this case, the seller had no title at all.
Under Article 712 of the Civil Code, "ownership and other real rights over property are
acquired and transmitted by law, by donation, by testate and intestate succession, and
in consequence of certain contracts, by tradition." As interpreted by this Court in a host
of cases,... by this provision, ownership is not transferred by contract merely but by
tradition or delivery. Contracts only constitute titles or rights to the transfer or acquisition
of ownership, while delivery or tradition is the mode of accomplishing the same.
"So long as property is not delivered, the ownership over it is not transferred by contract
-merely but by delivery. Contracts only constitute titles or lights to the transfer or
acquisition of ownership, while delivery or tradition is the method of accomplishing the
same,... the title and the method of acquiring it being different in our law." (Gonzales vs.
Rojas, 16 Phil. 51)
In the case on hand, the car in question was never delivered to the vendee by the
vendor as to complete or consummate the transfer of ownership by virtue of the
contract. It should be recalled that while there was indeed a contract of sale between
Vicente Marella... and Teodoro Santos, the former, as vendee, took possession of the
subject matter thereof by stealing the same while it was in the custody of the latter's
son.
The lower court was correct in applying Article 559 of the Civil Code to the case at bar.
For under it, the rule is to the effect that if the owner has lost the thing, or if he has been
unlawfully deprived of it, he has a right to recover it, not only from the finder, thief... or
robber, but also from the third person who may have acquired it in good faith from such
finder, thief or robber.
he said article establishes two exceptions to the general rule of irrevindicability to wit:
when the owner (1) has lost the thing, or (2) has been... unlawfully deprived thereof. In
these cases, the possessor cannot retain the thing as against the owner, who may
recover it without paying any indemnity, except when the possessor acquired it in a
public sale.