he was born to Mario Alanis y Cimafranca and Jarmila Imelda

Ballaho y Al-Raschid, 7 and that the name on his birth certificate was
THIRD DIVISION "Anacleto Ballaho Alanis III." 8 However, he wished to remove his
father's surname "Alanis III," and instead use his mother's maiden
[G.R. No. 216425. November 11, 2020.] name "Ballaho," as it was what he has been using since childhood
and indicated in his school records. 9 He likewise wished to change
ANACLETO BALLAHO ALANIS his first name from "Anacleto" to "Abdulhamid" for the same
III, petitioner, vs. COURT OF APPEALS, Cagayan de reasons. 10
Oro City, and HON. GREGORIO Y. DE LA PEÑA III,
During trial, petitioner testified that his parents separated
Presiding Judge, Br. 12, Regional Trial Court of
when he was five years old. His father was based in Maguindanao
Zamboanga City, respondents.
while his mother was based in Basilan. His mother testified that she
single-handedly raised him and his siblings. 11

DECISION As summarized by the Regional Trial Court, petitioner

presented the following in evidence to support his claim that the
requested change would avoid confusion:
LEONEN, J p: . . . a.) petitioner's photograph in what appears to be a
Reading Article 364 of the Civil Code together with the State's page of a yearbook; b.) another photograph of the
declared policy to ensure the fundamental equality of women and petitioner appearing in the editorial staff of ND Beacon
men before the law, 1 a legitimate child is entitled to use the surname where he appears to be the assistant editor-in-chief; c.)
of either parent as a last name. the high school diploma of the petitioner certifying
that he finished his high school education at Notre
This Court resolves the Petition for Certiorari 2 assailing the Dame of Parang in Parang, Maguindanao; d.) another
Decision 3 and Resolution 4 of the Court of Appeals, which affirmed copy of the editorial of the ND Beacon where
the Regional Trial Court Orders 5 denying Anacleto Ballaho Alanis petitioner's name appears as one of its editorial staff;
III's appeal to change his name to Abdulhamid Ballaho. e.) another copy of the editorial of ND Beacon where
Petitioner filed a Petition before the Regional Trial Court of the name of the petitioner appears as the editor-in-
Zamboanga City, Branch 12, to change his name. 6 He alleged that chief; f.) a certificate of participation issued to the

1
 petitioner by the Department of [E]ducation, Culture
and Sports; g.) a CAP College Foundation, Inc.,
diploma issued in the name of petitioner; h.) another
CAP College Foundation, Inc., diploma issued in the
name of petitioner; i.) a [W]estern Mindanao State
University student identification card in the name of
petitioner; j.) a non-professional driver[']s license
issued in the name of petitioner; k.) the Community
Tax Certificate of petitioner[.] 12
In its April 9, 2008 Order, 13 the Regional Trial Court denied
the Petition, holding that petitioner failed to prove any of the
grounds to warrant a change of name. 14 It noted that the mere fact
that petitioner has been using a different name and has become
known by it is not a valid ground for change of name. It also held
that to allow him to drop his last name was to disregard the surname
of his natural and legitimate father, 15 in violation of the Family
Code and Civil Code, which provide that legitimate children shall
principally use their fathers' surnames. 16
The Regional Trial Court acknowledged that confusion could
exist here, but found that granting his petition would create more
confusion:
Although it may appear that confusion may
indeed arise as to the identity of the petitioner herein
who has accordingly used the name Abdulhamid
Ballaho in all his records and is known to the
community as such person and not Anacleto Ballaho
Alanis III, his registered full name is his Certificate of
Live Birth, this Court believes that the very change of
name sought by the petitioner in this petition would
even create more confusion since if so granted by this
Court, such change sought after could trigger much
deeper inquiries regarding her parentage and/or
paternity, bearing in mind that he is the legitimate
eldest child of the spouses Mario Alanis y Cimafranca
and Jarmila Imelda Ballaho y Al-Raschid[.] 17
Thus, the trial court concluded that, instead of seeking to
change his name in his birth certificate, petitioner should have had
the other private and public records corrected to conform to his true
and correct name:
Time and again, this Court has consistently
ruled that, in similar circumstances, the proper remedy
for the petitioner is to instead cause the proper
correction of his private and public records to conform
to his true and correct first name and surname, which
in this case is Anacleto Ballaho Alanis, III and not to
change his said official, true and correct name as
appearing in his Certificate of Live Birth simply
because either he erroneously and inadvertently or
even purposely or deliberately used an incorrect first
name and surname in his private and public
records. 18
The dispositive portion of the Order reads:
WHEREFORE, in view of the foregoing, and
finding no legal, proper, justified and reasonable
2
 grounds to allow the change of name of the herein
petitioner from Anacleto Ballaho Alanis III as
appearing in his Certificate of Live Birth to
Abdulhamid Ballaho as prayed for by the petitioner in
his petition dated February 1, 2007 the above-entitled
petition is hereby DENIED and ordered DISMISSED
for lack of merit. No cost.
SO ORDERED. 19
Petitioner moved for reconsideration, but the Regional Trial
Court denied this in a June 2, 2008 Order. 20
It appears that on May 2, 2008, a month before the trial court
rendered this Order, petitioner's counsel, Atty. Johny Boy Dialo
(Atty. Dialo), had figured in a shooting incident and failed to report
for work. Thus, petitioner was only able to file a notice of appeal on
September 2, 2008 — months after Atty. Dialo's law office had
received the Order, beyond the filing period. He invoked his
counsel's excusable neglect for a belated appeal, alleging the
shooting incident. 21
Thereafter, with a new counsel, petitioner filed a Record on
Appeal and Notice of Appeal on September 3, 2008, 22 reiterating his
counsel's excusable negligence. 23 He added that he was set to take
the Bar Examinations and had to come home from his review, only
to find out after checking with Atty. Dialo's law office that he had
lost the case and the appeal period had lapsed. 24 However, the
Record and Notice of Appeal were denied in the Regional Trial
Court's September 16, 2008 Order for having been filed out of
time. 25
Thus, petitioner filed a Petition for Certiorari 26 before the
Court of Appeals, providing the same reason to explain his failure to
timely appeal.
In its May 26, 2014 Decision, 27 the Court of Appeals denied
the Petition, holding that petitioner failed to show any reason to
relax or disregard the technical rules of procedure. 28 It noted that
the trial court did not gravely err in denying petitioner's Record on
Appeal for having been filed out of time. 29
Petitioner moved for reconsideration, which was also denied
in the Court of Appeals' December 15, 2014 Resolution. 30 Thus, he
filed this Petition for Certiorari. 31
Petitioner insists that the serious indisposition of his counsel
after being shot and receiving death threats is excusable negligence
for a belated appeal, it not being attended by any carelessness or
inattention. 32 Delving on the substantive issue, petitioner
maintains that he has the right to use his mother's surname despite
his legitimate status, as recognized in Alfon v. Republic. 33
In its Comment, 34 the Office of the Solicitor General argued
that this Petition should be dismissed outright for being the wrong
remedy, and that the proper course was to file a petition for review
on certiorari. 35 Further, it argues that the Court of Appeals did not
gravely abuse its discretion in upholding the trial court's ruling. 36 It
points out that since Atty. Dialo's law office has more than one
lawyer, and it had admittedly received the Order, 37 the belated
appeal was unjustified. Further, petitioner was already a law
graduate when he filed the first Petition, and was expected to be
more vigilant of his case's progress. 38 Thus, the Office of the
3
Solicitor General finds no "exceptionally meritorious" reason to
warrant a liberal interpretation of technical rules. In any case,
petitioner's reason is not among the grounds to warrant a change in
name. 39
In his Reply, 40 petitioner failed to address the argument that
a petition for certiorari is the wrong remedy to assail the Court of
Appeals' dismissal of his Petition for Certiorari. He only reiterated
the Court of Appeals should have discarded technicalities, because
jurisprudence on Article 364 of the Civil Code is settled in his
favor. 41
After this Court had given due course to the Petition, the
parties filed their respective memoranda. 42
The issues for this Court's resolution are:
First, whether or not the Petition should be dismissed for
petitioner's failure to show grave abuse of discretion on the part of
the Court of Appeals;
Second, whether or not legitimate children have the right to
use their mothers' surnames as their surnames; and
Finally, whether or not petitioner has established a
recognized ground for changing his name.
This Court grants the Petition.
I that:
The Petition was filed under Rule 65 of the Rules of Court, but
petitioner did not even attempt to show any grave abuse of
discretion on the part of the Court of Appeals. On this ground alone,
the Petition may be dismissed.
It is not disputed that the Record on Appeal was filed out of
time. The Court of Appeals could have relaxed the rules for
perfecting an appeal, but was not required, by law, to review it.
The Court of Appeals found no reason to warrant any
relaxation of the rules, after appreciating the following
circumstances: (1) petitioner did not adduce evidence to prove the
alleged shooting of his former counsel; 43 (2) petitioner was
represented by counsel belonging to a law office which had more
than one associate; 44 and (3) petitioner was a law graduate and
should have been more vigilant. 45
This Court cannot sidestep the rule on reglementary periods
for appealing decisions, except in the most meritorious cases. 46
Petitioner claims that the circumstances surrounding the
failure to file the appeal are bereft of carelessness or inattention on
the part of counsel, and thus, constitute excusable negligence.
This is unconvincing. In Sublay v. National Labor Relations
Commission, 47 the petitioner filed an appeal out of time because the
counsel on record did not inform her or her other counsel that a
decision had been rendered in her case. This Court affirmed the
denial of her appeal for having been filed out of time, explaining
The unbroken stream of judicial dicta is that
clients are bound by the action of their counsel in the
conduct of their case. Otherwise, if the lawyer's
4
 mistake or negligence was admitted as a reason for the
opening of a case, there would be no end to litigation
so long as counsel had not been sufficiently diligent or
experienced or learned. 48 (Citation omitted)
This Court noted in Sublay that the petitioner was represented
by more than one lawyer. The decision she wished to appeal had
been duly served on one of her lawyers on record, who failed to
inform the more active counsel. This Court ruled that the petitioner
was bound by the negligence of her counsel:
Lastly, petitioner's claim for judicial relief in
view of her counsel's alleged negligence is
incongruous, to say the least, considering that she was
represented by more than one (1) lawyer. Although
working merely as a collaborating counsel who
entered his appearance for petitioner as early as May
1996, i.e., more or less six (6) months before the
termination of the proceedings a quo, Atty. Alikpala
had the bounden duty to monitor the progress of the
case. A lawyer has the responsibility of monitoring and
keeping track of the period of time left to file an appeal.
He cannot rely on the courts to appraise him of the
developments in his case and warn him against any
possible procedural blunder. Knowing that the lead
counsel was no longer participating actively in the trial
of the case several months before its resolution, Atty.
Alikpala who alone was left to defend petitioner
should have put himself on guard and thus anticipated
the release of the Labor Arbiter's decision. Petitioner's
lead counsel might have been negligent but she was
never really deprived of proper representation. This
fact alone militates against the grant of this petition. 49
Here, petitioner failed to respond to the assertion that Atty.
Dialo's law office, Dialo Darunday & Associates Law Office, is a law
firm with more than one lawyer, as well as legal staff, who must have
been aware that Atty. Dialo was not reporting to office or receiving
his mail sent there. Moreover, Atty. Dialo stopped reporting to office
on May 2, 2008, whereas the law firm received the June 2, 2008 Order
more than a month later, on June 12, 2008. Without any response to
this point, this Court cannot automatically excuse the law office and
assume that it could not adjust to Atty. Dialo's absence.
The law firm was certainly negligent in how it dealt with the
Order. Given the other circumstances of this case, petitioner would
ordinarily be bound by this negligence. Consequently, petitioner
had the burden to sufficiently establish, by alleging and arguing, that
this case is so meritorious that it warrants the relaxation of the
procedural rules. This, petitioner did not bother to do.
Nonetheless, in the exercise of its equity jurisdiction, 50 this
Court may choose to apply procedural rules more liberally to
promote substantial justice. Thus, we delve into the substantial
issues raised by petitioner.
II
The fundamental equality of women and men before the law
shall be ensured by the State. This is guaranteed by no less than
the Constitution, 51 a statute, 52 and an international convention to
which the Philippines is a party.
5
 In 1980, the Philippines became a signatory to the Convention
on the Elimination of All Forms of Discrimination Against Women,
and is thus now part of the Philippine legal system. As a state party
to the Convention, the Philippines bound itself to the following:
Article 2
xxx xxx xxx
(f) to take all appropriate measures,
including legislation, to modify or
abolish existing laws, regulations,
customs and practices which constitute
discrimination against women;
xxx xxx xxx
Article 5
xxx xxx xxx
(a) To modify the social and cultural
patterns of conduct of men and women,
with a view to achieving the elimination
of prejudices and customary and all
other practices which are based on the
idea of the inferiority or the superiority
of either of the sexes or on stereotyped
roles for men and women[.] 53
Non-discrimination against women is also an emerging
customary norm. Thus, the State has the duty to actively modify
what is in its power to modify, to ensure that women are not
discriminated.
Accordingly, Article II, Section 14 of the 1987
Constitution reiterated the State's commitment to ensure gender
equality:
SECTION 14. The State recognizes the role of
women in nation-building, and shall ensure the
fundamental equality before the law of women and
men.
In keeping with the Convention, Article II, Section 14 of
the Constitution requires that the State be active in ensuring gender
equality. This provision is even more noticeably proactive than the
more widely-invoked equal protection and due process clauses
under the Bill of Rights. In Racho v. Tanaka, 54 this Court observed:
This constitutional provision provides a more
active application than the passive orientation of
Article III, Section 1 of the Constitution does, which
simply states that no person shall "be denied the equal
protection of the laws." Equal protection, within the
context of Article III, Section 1 only provides that any
legal burden or benefit that is given to men must also
be given to women. It does not require the State to
actively pursue "affirmative ways and means to battle
the patriarchy — that complex of political, cultural,
and economic factors that ensure women's
disempowerment." 55 (Citation omitted)
6
 Article II, Section 14 implies the State's positive duty to
actively dismantle the existing patriarchy by addressing the culture
that supports it.
With the Philippines as a state party to the Convention, the
emerging customary norm, and not least of all in accordance with its
constitutional duty, Congress enacted Republic Act No. 7192, or
the Women in Development and Nation Building Act. Reiterating
Article II, Section 14, the law lays down the steps the government
would take to attain this policy:
SECTION 2. Declaration of Policy. — The State
recognizes the role of women in nation building and
shall ensure the fundamental equality before the law
of women and men. The State shall provide women
rights and opportunities equal to that of men.
To attain the foregoing policy:
(1) A substantial portion of official development
assistance funds received from foreign
governments and multilateral agencies
and organizations shall be set aside and
utilized by the agencies concerned to
support programs and activities for
women;
(2) All government departments shall ensure that
women benefit equally and participate
directly in the development programs and
projects of said department, specifically
those funded under official foreign
development assistance, to ensure the full
participation and involvement of women
in the development process; and
(3) All government departments and agencies
shall review and revise all their
regulations, circulars, issuances and
procedures to remove gender bias
therein. 56
Courts, like all other government departments and agencies,
must ensure the fundamental equality of women and men before the
law. Accordingly, where the text of a law allows for an interpretation
that treats women and men more equally, that is the correct
interpretation.
Thus, the Regional Trial Court gravely erred when it held that
legitimate children cannot use their mothers' surnames. Contrary to
the State policy, the trial court treated the surnames of petitioner's
mother and father unequally when it said:
In the case at bar, what the petitioner wishes is
for this Court to allow him to legally change is [sic] his
given and registered first name from Anacleto III to
Abdulhamid and to altogether disregard or drop his
registered surname, Alanis, the surname of his natural
and legitimate father, and for him to use as his family
name the maiden surname of his mother Ballaho,
which is his registered middle name, which petitioner
claims and in fact presented evidence to be the name
7
 that he has been using and is known to be in all his
records.
In denying the herein petition, this Court brings
to the attention of the petitioner that, our laws on the
use of surnames state that legitimate and legitimated
children shall principally use the surname of the
father. The Family Code gives legitimate children the
right to bear the surnames of the father and the mother,
while illegitimate children shall use the surname of
their mother, unless their father recognizes their
filiation, in which case they may bear the father's
surname. Legitimate children, such as the petitioner in
this case, has [sic] the right to bear the surnames of the
father and the mother, in conformity with the
provisions of the Civil Code on Surnames, and it is so
provided by law that legitimate and legitimated
children shall principally use the surname of the
father. 57 (Citations omitted)
This treatment by the Regional Trial Court was based on
Article 174 of the Family Code, which provides:
ARTICLE 174. Legitimate children shall have
the right:
(1) To bear the surnames of the father and the
mother, in conformity with the provisions
of the Civil Code on Surnames[.]
In turn, Article 364 of the Civil Code provides:
ARTICLE 364. Legitimate and legitimated
children shall principally use the surname of the
father.
The Regional Trial Court's application of Article 364 of
the Civil Code is incorrect. Indeed, the provision states that
legitimate children shall "principally" use the surname of the father,
but "principally" does not mean "exclusively." This gives ample
room to incorporate into Article 364 the State policy of ensuring the
fundamental equality of women and men before the law, and no
discernible reason to ignore it. This Court has explicitly recognized
such interpretation in Alfon v. Republic: 58
The only reason why the lower court denied the
petitioner's prayer to change her surname is that as
legitimate child of Filomena Duterte and
Estrella Alfon she should principally use the surname
of her father invoking Art. 364 of the Civil Code.But
the word "principally" as used in the codal-provision is
not equivalent to "exclusively" so that there is no legal
obstacle if a legitimate or legitimated child should
choose to use the surname of its mother to which it is
equally entitled. Moreover, this Court in Haw Liong vs.
Republic, G.R. No. L-21194, April 29, 1966, 16 SCRA
677, 679, said:
"The following may be
considered, among others, as proper or
reasonable causes that may warrant the
grant of a petitioner for change of name;
8
 (1) when the name is ridiculous, tainted
with dishonor, or is extremely difficult to
write or pronounce; (2) when the request
for change is a consequence of a change
of status, such as when a natural child is
acknowledged or legitimated; and (3)
when the change is necessary to avoid
confusion (Tolentino, Civil Code of the
Philippines, 1953 ed., Vol. 1, p. 660)." 59
Given these irrefutable premises, the Regional Trial Court
patently erred in denying petitioner's prayer to use his mother's
surname, based solely on the word "principally" in Article 364 of
the Civil Code.
III
Having resolved the question of whether a legitimate child is
entitled to use their mother's surname as their own, this Court
proceeds to the question of changing petitioner's first name from
"Anacleto" to "Abdulhamid."
Whether grounds exist to change one's name is a matter
generally left to the trial court's discretion. 60 Notably, the Petition
is devoid of any legal arguments to persuade this Court that the
Regional Trial Court erred in denying him this change. Nonetheless,
we revisit the ruling, and petitioner's arguments as stated in his
appeal.
The Regional Trial Court correctly cited the instances
recognized under jurisprudence as sufficient to warrant a change of
name, namely:
. . . (a) when the name is ridiculous, dishonorable or
extremely difficult to write or pronounce; (b) when the
change results as a legal consequence of legitimation
or adoption; (c) when the change will avoid confusion;
(d) when one has continuously used and been known
since childhood by a Filipino name and was unaware
of alien parentage; (e) when the change is based on a
sincere desire to adopt a Filipino name to erase signs
of former alienage, all in good faith and without
prejudice to anybody; and (f) when the surname causes
embarrassment and there is no showing that the
desired change of name was for a fraudulent purpose
or that the change of name would prejudice public
interest. 61 (Citation omitted)
As summarized in the Record on Appeal, the petition to
change name was filed to avoid confusion:
Petitioner has been using the name
Abdulhamid Ballaho in all his records and
transactions. He is also known to and called by his
family and friends by such name. He has never used
the name Anacleto Ballaho Alanis III even once in his
life. To have the petitioner suddenly use the name
Anacleto Ballaho Alanis III would cause undue
embarrassment to the petitioner since he has never
been known by such name. Petitioner has shown not
only some proper or compelling reason but also that he
will be prejudiced by the use of his true and official
name. A mere correction of his private and public
9
 records to conform to the name stated in his Certificate
of Live Birth would create more confusion because
petitioner has been using the name Abdulhamid
Ballaho since enrollment in grade school until finishing
his law degree. The purpose of the law in allowing
change of name as contemplated by the provisions of
Rule 103 of the Rules of Court is to give a person an
opportunity to improve his personality and to provide
his best interest[.] There is therefore ample justification
to grant fully his petition, which is not whimsical but
on the contrary is based on a solid and reasonable
ground, i.e., to avoid confusion[.] 62 (Citations
omitted)
These arguments are well taken. That confusion could arise is
evident. In Republic v. Bolante, 63 where the respondent had been
known as "Maria Eloisa" her whole life, as evidenced by scholastic
records, employment records, and licenses, this Court found it
obvious that changing the name written on her birth certificate
would avoid confusion:
The matter of granting or denying petitions for
change of name and the corollary issue of what is a
proper and reasonable cause therefor rests on the
sound discretion of the court. The evidence presented
need only be satisfactory to the court; it need not be the
best evidence available. What is involved in special
proceedings for change of name is, to borrow
from Republic v. Court of Appeals, . . . "not a mere matter
of allowance or disallowance of the petition, but a judicious
evaluation of the sufficiency and propriety of the
justifications advanced in support thereof, mindful of the
consequent results in the event of its grant and with the sole
prerogative for making such determination being lodged in
the courts."
With the view we take of the case, respondent's
submission for a change of name is with proper and
reasonable reason. As it were, she has, since she started
schooling, used the given name and has been known
as Maria Eloisa, albeit the name Roselie Eloisa is written
on her birth record. Her scholastic records, as well as
records in government offices, including that of her
driver's license, professional license as a certified
public accountant issued by the Professional
Regulation Commission, and the "Quick Count"
document of the COMELEC, all attest to her having
used practically all her life the name Maria Eloisa
Bringas Bolante.
The imperatives of avoiding confusion dictate
that the instant petition is granted. But beyond
practicalities, simple justice dictates that every person
shall be allowed to avail himself of any opportunity to
improve his social standing, provided he does so
without causing prejudice or injury to the interests of
the State or of other people. 64 (Emphasis in the
original, citations omitted)
This Court made a similar conclusion in Chua v. Republic: 65
10
 The same circumstances are attendant in the
case at bar. As Eric has established, he is known in his
community as "Eric Chua," rather than "Eric Kiat."
Moreover, all of his credentials exhibited before the
Court, other than his Certificate of Live Birth, bear the
name "Eric Chua." Guilty of reiteration, Eric's
Certificate of Baptism, Voter Certification, Police
Clearance, National Bureau of Investigation Clearance,
Passport, and High School Diploma all reflect his
surname to be "Chua." Thus, to compel him to use the
name "Eric Kiat" at this point would inevitably lead to
confusion. It would result in an alteration of all of his
official documents, save for his Certificate of Live
Birth. His children, too, will correspondingly be
compelled to have their records changed. For even
their own Certificates of Live Birth state that their
father's surname is "Chua." To deny this petition
would then have ramifications not only to Eric's
identity in his community, but also to that of his
children. 66
Similarly, in this case, this Court sees fit to grant the requested
change to avoid confusion.
The Regional Trial Court itself also recognized the confusion
that may arise here. Despite this, it did not delve into the issue of
changing "Anacleto" to "Abdulhamid," but instead concluded that
granting the petition would create even more confusion, because it
"could trigger much deeper inquiries regarding [his] parentage
and/or paternity[.]" 67
This Court fails to see how the change of name would create
more confusion. Whether people inquire deeper into petitioner's
parentage or paternity because of a name is inconsequential here,
and seems to be more a matter of intrigue and gossip than an issue
for courts to consider. Regardless of which name petitioner uses, his
father's identity still appears in his birth certificate, where it will
always be written, and which can be referred to in cases where
paternity is relevant.
Aside from being unduly restrictive and highly speculative,
the trial court's reasoning is also contrary to the spirit and mandate
of the Convention, the Constitution, and Republic Act No. 7192,
which all require that the State take the appropriate measures to
ensure the fundamental equality of women and men before the law.
Patriarchy becomes encoded in our culture when it is
normalized. The more it pervades our culture, the more its chances
to infect this and future generations. 68
The trial court's reasoning further encoded patriarchy into
our system. If a surname is significant for identifying a person's
ancestry, interpreting the laws to mean that a marital child's
surname must identify only the paternal line renders the mother and
her family invisible. This, in turn, entrenches the patriarchy and with
it, antiquated gender roles: the father, as dominant, in public; and
the mother, as a supporter, in private. 69
WHEREFORE, the Petition is GRANTED. The May 26, 2014
Decision and December 15, 2014 Resolution of the Court of Appeals
in CA-G.R. SP No. 02619-MIN, as well as the April 9, 2008 and June
2, 2008 Orders of the Regional Trial Court of Zamboanga City,
11
 Branch 12 in Special Proceeding No. 5528, are REVERSED and SET Petitioner seeks to set aside the judgment of respondent Court of
ASIDE. Appeals 1 in affirmance of the decision of the court a quo 2 granting the
petition filed by herein private respondent Maximo Wong for the
As prayed for in his Petition for Change of Name, petitioner's
change of his name to Maximo Alcala, Jr. which was his name prior to
name is declared to be ABDULHAMID BALLAHO. Accordingly,
his adoption by Hoong Wong and Concepcion Ty Wong.
the Civil Registrar of Cebu City is DIRECTED to make the
corresponding corrections to petitioner's name, from ANACLETO The facts are undisputed. Private respondent Maximo Wong is the
BALLAHO ALANIS III to ABDULHAMID BALLAHO. legitimate son of Maximo Alcala, Sr. and Segundina Y. Alcala. When he
SO ORDERED. was but two and a half years old and then known as Maximo Alcala, Jr.,
and his sister Margaret Alcala, was then nine years old, they were, with
the consent of their natural parents 3 and by order of the court in Special
SECOND DIVISION Case No. 593 4 issued on September 9, 1967, adopted by spouses Hoong
Wong and Concepcion Ty Wong, both naturalized Filipinos. Hoong
[G.R. No. 97906. May 21, 1992.] Wong, now deceased, was an insurance agent while Concepcion Ty
Wong was a high school teacher. They decided to adopt the children as
REPUBLIC OF THE they remained childless after fifteen years of marriage. The couple
PHILIPPINES, petitioner, vs. COURT OF APPEALS showered their adopted children with parental love and reared them as
and MAXIMO WONG, respondents. their own children. cdphil
Upon reaching the age of twenty-two, herein private respondent, by
Public Attorney's Office for private respondent. then married and a junior Engineering student at Notre Dame
University, Cotabato City, filed a petition to change his name to Maximo
Alcala, Jr. It was averred that his use of the surname Wong embarrassed
DECISION and isolated him from his relatives and friends, as the same suggests a
Chinese ancestry when in truth and in fact he is a Muslim Filipino
residing in a Muslim community, and he wants to erase any implication
whatsoever of alien nationality; that he is being ridiculed for carrying a
REGALADO, J p:
Chinese surname, thus hampering his business and social life; and that

12
his adoptive mother does not oppose his desire to revert to his former
surname.
As earlier stated, on July 2, 1986, the matter was resolved in favor of
private respondent, the trial court decreeing that, the jurisdictional
requirements having been fully complied with, petitioner's prayer to
change his name from Maximo Wong to Maximo Alcala, Jr. was
granted. 5 On appeal to the respondent court, and over the opposition
of petitioner Republic through the Solicitor General, the decision of the
court below was affirmed in full, hence this petition for review on
certiorari.
The lone issue to be settled is whether or not the reasons given by
private respondent in his petition for change of name are valid,
sufficient and proper to warrant the granting of said petition.
The Solicitor General contends that private respondent's allegations of
ridicule and/or isolation from family and friends were unsubstantiated
and cannot justify the petition for change of name. He claims that for
private respondent to cast aside the name of his adoptive father is crass
ingratitude to the memory of the latter and his adoptive mother who is
still alive, despite her consent to the petition for change of name.
Further, the Solicitor General posits that the reversion of Maximo Wong
to his old name violates Articles 341 and 365 of the Civil Code, which
requires an adoptive child to use the surname of the adopter, and would
identify him with his parents by nature, thus giving the impression that
he has severed his relationship with his adoptive parents. 6
In refutation, private respondent argues that he did as the law required,
that is, upon adoption he used the surname of the adopter. However,
being already emancipated, he can now decide what is best for and by
himself. It is at this time that he realized that the Chinese name he carries
causes him undue ridicule and embarrassment and affects his business
and social life. In fact, his adoptive mother, being aware of his
predicament, gave her consent to the petition for change of name, albeit
making it clear that the same shall in no way affect the legal adoption,
and even underwent the rigors of trial to substantiate her sworn
statement. If his adoptive mother does not take offense nor feel any
resentment, abhorrence or insecurity about his desire to change his
name, private respondent avers that there can be no possible prejudice
on her, much less the State. 7 LexLib
We feel that we should preface our review of this case with a clear
comprehension of the legal significance of a person's name. For all
practical and legal purposes, a man's name is the designation by which
he is known and called in the community in which he lives and is best
known. It is defined as the word or combination of words by which a
person is distinguished from other individuals and, also, as the label or
appellation which he bears for the convenience of the world at large
addressing him, or in speaking of or dealing with him. 8 Names are
used merely as one method of indicating the identity of persons; they
are descriptive of persons for identification, since, the identity is the
essential thing and it has frequently been held that, when identity is
certain, a variance in, or misspelling of, the name is immaterial. 9
The names of individuals usually have two parts: the given name or
proper name, and the surname or family name. The given or proper
name is that which is given to the individual at birth or baptism, to
distinguish him from other individuals. The name or family name is that
13
which identifies the family to which he belongs and is continued from
parent to child. The given name may be freely selected by the parents
for the child; but the surname to which the child is entitled is fixed by
law. 10
A name is said to have the following characteristics: (1) It is absolute,
intended to protect the individual from being confused with others. (2)
It is obligatory in certain respects, for nobody can be without a name.
(3) It is fixed, unchangeable, or immutable, at least at the start, and may
be changed only for good cause and by judicial proceedings. (4) It is
outside the commerce of man, and, therefore, inalienable and
intransmissible by act inter vivos or mortis causa. (5) It is
imprescriptible. 11
Title XIII, Book I of the Civil Code, in Articles 364 to 380, provides the
substantive rules which regulate the use of surnames. Considering the
subject and personalities involved in this present review, particular
attention must be called to Article 365 which mandates that "(a)n
adopted child shall bear the surname of the adopter," in correlation
with Article 341 on the effects of adoption, among which is to "(e)ntitle
the adopted person to use the adopter's surname." This same
entitlement of an adopted child is maintained in Article 39(3), Title II
of Presidential Decree No. 603, otherwise known as the Child and Youth
Welfare Code. More recently, Executive Order No. 209, as amended
by Executive Order No. 227, or the Family Code, echoes the same
statutory right of an adopted child to use the surname of the
adopter. 12 Clearly, from the very wordings of the law, it may be
inferred that the use of the surname of the adopter by the adopted child
is both an obligation and a right.
Under Article 376 of the Civil Code, "(n)o person can change his name
or surname without judicial authority." The application for change of
name thereunder involves a special proceeding governed by and
conducted under the strictures of Rule 103 of the Rules of Court and one
which involves substantial changes, with the declared objective of such
judicial proceedings being the prevention of fraud. The purpose of the
statutory procedure authorizing a change of personal name is simply to
have, wherever possible, a record of the change, and in keeping with the
object of the statute, a court to which application is made should
normally make its decree recording such change of name. 13
A change of name is a special proceeding to establish the status of a
person involving his relation with others, that is, his legal position in, or
with regard to, the rest of the community. It is a proceeding in
rem 14 and, as such, strict compliance with all jurisdictional
requirements, particularly on publication, is essential in order to vest
the court with jurisdiction thereover. 15 For this purpose, the only name
that may be changed is the true or official name recorded in the civil
register. 16 llcd
To digress a little for purposes of clarification, the change of name
contemplated under Article 376 and reglementarily implemented by
Rule 103 must not be confused with and cannot be effected through the
summary proceeding proposed in Article 412 of the same Code, as
procedurally regulated by Rule 108 of the Rules, which refers only to
correction of clerical errors, such as those which are visible to the eye or
obvious to the understanding, or an error made by a clerk or transcriber,
or a mistake in copying or writing, or some harmless or innocuous
change, 17 and not those which will involve substantial changes. 18
14
Turning now to the case at bar, we are guided by the jurisprudential of Furniture but I have little (sic) customer
dictum that the State has an interest in the names borne by individuals because no one believes me that I am Muslim.
and entities for the purpose of identification, and a change of name is
Q You want to inform this Honorable Court that this
not a matter of right but of sound judicial discretion, to be exercised in
family name you are using which is 'Wong'
the light of reasons adduced and the consequences that will likely
embarrassed you from (sic) your friends and
follow; 19 it is a privilege which may be granted only upon a showing
relatives and also cause(d) damage to your
of a proper or reasonable cause or compelling reason therefor. 20
business?
We find unacceptable the assertion of the Solicitor General that private
A Yes sir.
respondent's allegation of ridicule and embarrassment due to the use of
his present surname is unsubstantiated. xxx xxx xxx
The testimony of private respondent in the lower court bears out the ATTY. DUMAMBA:
existence of valid cause in his bid for change of name:
Q Now, considering that according to you, you are
embarrassed because of the family name you are
using, your friends shy away from you and it is a
"ATTY. DUMAMBA:
handicap in your business, what is your desire for
Q Now, after adoption, when you went to school, what the Court to do in order to help you?
did you use as your surname?
A Change my family name.
A 'Wong,' sir.
Q From 'Wong' to what do you want your surname
Q Now, after you adopted the surname 'Wong' in your changed?
studies, what did you observe?
A 'Alcala, Jr.', sir.
A I observed that 'Wong' as a surname embarrassed me
xxx xxx xxx
to my friends and when I go with Chinese friends
I cannot talk Chinese. I am living in Campo COURT:
Muslim, a Muslim community but no one can
Q What is your purpose in changing your family name
believe that I am Muslim. I have a little business
from Maximo Wong to Maximo Alcala, Jr.?

15
A I feel embarrassed to my friends and also to my
relatives and as I said I have a little business of
furniture and only a few customers buying for the
fact that they don't believe I am Muslim.
Cross.
ATTY. SERO:
With the permission of the Honorable Court.
Q Your father's name is Maximo Alcala, Sr., is he still
alive?
A Yes, sir.
Q And what does your father say to this proposed
changed (sic) of your name, your family name to
your real family name given to you?
A Yes, sir.
Q They have no objection to it?
A No, sir.
Q Stated before this Honorable Court, the purpose why
you wanted to change your name from 'Wong' to
'Alcala' is so that to avoid embarrassment because
you are a Muslim and your Muslim relatives
think that you are Chinese.
A Yes, sir.
Q Not for the purpose to hide anything or what not?
A No, sir." 21
The foregoing testimony of private respondent is materially
corroborated by the testimony of private respondent's adoptive mother:
"Q Now, what did you observe to (sic) your son Maximo
Wong after you and your husband adopted him?
A When I adopted him and he used the surname 'Wong'
I observed that some of his relatives, cousins and
friends seem to shy away from him and despise
him in school that is why I agreed to change his
name." 22
We uphold these observations in the decision of respondent appellate
court: LexLib
"The purpose of the law in allowing a change of name as
contemplated by the provisions of Rule 103 of the Rules
of Court is to give a person an opportunity to improve
his personality and to provide his best interest.
(Calderon vs. Republic, 19 SCRA 721). In granting or
denying the petition for change of name, the question of
proper and reasonable cause is left to the discretion of
the court. The evidence presented need only be
satisfactory to the court and not all the best evidence
available is required. (Uy vs. Republic, L-22712, Nov. 25,
1965; Nacionales vs. Republic, L-18067, April 29, 1966;
both cases cited in 1 SCRA 843). In the present case, We
16
 believe that the court a quo had exercised its discretion
judiciously when it granted the petition.
"From the testimony of petitioner-appellee and of his
adopter mother Concepcion Ty-Wong, We discern that
said appellee was prompted to file the petition for
change of name because of the embarrassment and
ridicule his family name 'Wong' brings in his dealings
with his relatives and friends, he being a Muslim Filipino
and living in a Muslim community. Another cause is his
desire to improve his social and business life. It has been
held that in the absence of prejudice to the state or any
individual, a sincere desire to adopt a Filipino name to
erase signs of a former alien nationality which only
hamper(s) social and business life, is a proper and
reasonable cause for change of name (Uy vs. Republic,
L-22712, Nov. 25, 1965, Que Liong Sian vs. Republic, L-
23167, Aug. 17, 1967, 20 SCRA 1074). Justice dictates that
a person should be allowed to improve his social
standing as long as in doing so, he does not cause
prejudice or injury to the interest of the state or of other
persons (Calderon vs. Republic, supra). Nothing
whatsoever is shown in the record of this case that such
prejudice or injury to the interest of the state or of other
persons would result in the change of petitioner's
name." 23
It bears stressing at this point that to justify a request for change of name,
petitioner must show not only some proper or compelling reason
therefor but also that he will be prejudiced by the use of his true and
official name. 24 Among the grounds for change of name which have
been held valid are: (a) When the name is ridiculous, dishonorable or
extremely difficult to write or pronounce; (b) When the change results
as a legal consequence, as in legitimation; (c) When the change will
avoid confusion; 25 (d) Having continuously used and been known
since childhood by a Filipino name, unaware of her alien
parentage; 26 (e) A sincere desire to adopt a Filipino name to erase signs
of former alienage, all in good faith and without prejudicing
anybody; 27 and (f) When the surname causes embarrassment and there
is no showing that the desired change of name was for a fraudulent
purpose or that the change of name would prejudice public interest. 28
In granting or denying petitions for change of name, the question of
proper and reasonable cause is left to the sound discretion of the court.
The evidence presented need only be satisfactory to the court and not
all the best evidence available. 29 Summarizing, in special proceedings
for change of name, what is involved is not a mere matter of allowance
or disallowance of the request, but a judicious evaluation of the
sufficiency and propriety of the justifications advanced in support
thereof, mindful of the consequent results in the event of its grant and
with the sole prerogative for making such determination being lodged
in the courts.
While it is true that the statutory fiat under Article 365 of the
Civil Code is to the effect that an adopted child shall bear the
surname of the adopter, it must nevertheless be borne in mind
that the change of the surname of the adopted child is more an incident
rather than the object of adoption proceedings. 30 The act of adoption
17
 fixes a status, viz., that of parent and child. More technically, it is an
act by which relations of paternity and affiliation are recognized as
legally existing between persons not so related by nature. It has been
defined as the taking into one's family of the child of another as son
or daughter and heir and conferring on it a title to the rights and
privileges of such. The purpose of an adoption proceeding is to effect
this new status of relationship between the child and its adoptive
parents, the change of name which frequently accompanies adoption
being more an incident than the object of the proceeding. 31 The
welfare of the child is the primary consideration in the determination
of an application for adoption. On this part, there is unanimous
agreement. 32
It is the usual effect of a decree of adoption to transfer from the natural
parents to the adoptive parents the custody of the child's person, the
duty of obedience owing by the child, and all other legal consequences
and incidents of the natural relation, in the same manner as if the child
had been born of such adoptive parents in lawful wedlock, subject,
however, to such limitations and restrictions as may be by statute
imposed. 33 More specifically under the present state of our law,
the Family Code, superseding the pertinent provisions of the Civil Code
and of the Child and Youth Welfare Code on the matter, 34 relevantly
provides in this wise with regard to the issue involved in this case:
"Art. 189. Adoption shall have the following effects:
(1) For civil purposes, the adopted shall be deemed to be
the legitimate child of the adopters and both shall
acquire the reciprocal rights and obligations arising from
the relationship of parent and child, including the right of
the adopted to use the surname of the adopters;" (Emphasis
supplied.).
xxx xxx xxx
The Solicitor General maintains the position that to sustain the change
of name would run counter to the behest of Article 365 of the Civil Code
and the ruling in Manuel vs. Republic 35 that "one should not be allowed
to use a surname which otherwise he is not permitted to employ under
the law," and would set a bad example to other persons who might also
seek a change of their surnames on lame excuses. 36
While we appreciate the Solicitor General's apprehensions and concern,
we find the same to be unfounded. We do not believe that by reverting
to his old name, private respondent would then be using a name which
he is prohibited by law from using. True, the law prescribes the surname
that a person may employ; but the law does not go so far as to
unqualifiedly prohibit the use of any other surname, and only subjects
such recourse to the obtention of the requisite judicial sanction. What
the law does not prohibit, it permits.
If we were to follow the argument of the Solicitor General to its
conclusion, then there will never be any possibility or occasion for any
person, regardless of status, to change his name, in view of the supposed
subsequent violation of the legal imperative on the use of surnames in
the event that the petition is granted. Rule 103 of the Rules of Court
would then be rendered inutile. This could hardly have been the
intendment of the law.
A petition for change of name is a remedy allowed under our law only
by way of exception to the mandatory provisions of the Civil Code on
18
the use of surnames. The law fixes the surnames that may be used by a
person, at least inceptively, and it may be changed only upon judicial
permission granted in the exercise of sound discretion. Section 1 of Rule
103, in specifying the parties who may avail of said remedy, uses the
generic term "persons" to signify all natural persons regardless of status.
If a legitimate person may, under certain judicially accepted exceptional
circumstances, petition the court for a change of name, we do not see
any legal basis or logic in discriminating against the availment of such
a remedy by an adopted child. In other words, Article 365 is not an
exception, much less can it bar resort, to Rule 103.
We are of the view that the circumstances herein obtaining are within
the ambit of the established exceptions and find merit in private
respondent's submission: LLpr
"Rule 103 of the Rules of Court has its primordial
purpose which (State) is to give a person an opportunity
to improve his personality and provide his best interest
(Calderon vs. Republic, 19 SCRA 721). In the instant
case, the court a quo found the petition of Maximo Wong
for change of name justifiable after due hearing, thus its
'factual findings and appreciation of testimonies count
heavily and need not be disturbed unless for strong and
cogent reasons because the trial court is in a better
position to examine real evidence as well as to observe
the demeanor of the witnesses while testifying in the
case (Baliwag Transit, Inc. vs. CA, 147 SCRA 82).
Moreover, the trial court could take judicial notice of
other existing factors in the community where herein
respondent lives which it considers material in its
judicious determination of the case. . .
"Additionally, herein respondent is already of age and
as such he can decide what is best for him. His
experience with regards (sic) his social and business
dealings is personal and it is only him (sic) who can
attest to the same. Finding his predicament's proper
remedy is solely through legal process, herein
respondent accordingly filed a petition pursuant to Rule
103 of the Rules of Court which was granted by the
Court a quo." 37
Besides, we have faith in the circumspection of our lower courts and
that, in the exercise of their discretion, said courts shall consider
petitions for change of name only on cogent and meritorious grounds as
would justify the granting of such applications. We do not expect our
trial courts to cater or give in to the whim or caprice of an applicant,
aside from the fact that there is always the safeguard and corrective
interdiction of appellate review.
It is not fair to construe the desired reversion of private respondent to
the use of the name of his parents by nature as crass ingratitude. To go
by the Solicitor General's suggestion that private respondent should
have his adoption revoked if he wants to use the surname of his natural
father would be to exact too dear a toll for making use of an appropriate
and valid remedy available under the law.
19
Herein private respondent, before he filed the petition for change of
name, asked for his adoptive mother's permission to do so:
"Q Now, in filing this petition for change of surname,
you had talked with your adopted mother?
A Yes, sir.
Q Did you ask permission from her whether she wants
you to change the surname?
A Yes, sir." 38
True enough, the above testimony of private respondent was confirmed
by his adoptive mother in this manner:
"Q How are you related to Maximo Wong?
A My adopted son.
Q He is your adopted son, did your son talk to you when
he filed this petition for change of his surname?
A Yes, he even tried to ask me and I said, alright if you
want to change.
xxx xxx xxx
Q Now, when you agreed to the filing of this petition for
change of name, did you reduce your consent in
writing?
A Yes, sir, I agreed also so that his business will prosper
because he is already Alcala and not Wong
because Wong they said is Chinese." 39
As proof of her assent to the filing of said petition (her husband having
already passed away), Concepcion Ty Vda. de Wong executed an
affidavit in Cotabato City on May 27, 1985, with these textual
declarations:
"That I am the same and identical person, who is the
surviving adapted (sic) parent of Maximo Wong;
"That I personally discovered it myself from the time my
adapted (sic) son Maximo used the surname of my late
husband Wong, his relatives and childhood friends shy
away from him because he is branded as a son of a
Chinese which is different from them whose parents are
Muslim Filipinos;
"That I pity my son who is often ridiculed (sic) by his
friends and relatives because of his family name Wong,
hence, in order not to hamper (sic) his social and
business life in the future, I am voluntarily and of my
own free will without being forced, coerced, or
intimidated give (sic) my consent to his desire to change
his surname without affecting however the legal
adoption granted by the Court on September 9, 1967,
making him as one of my legal and compulsory heir
(sic).
20
 "That I am executing this affidavit to attest to the truth of SO ORDERED.
all the above mentioned facts and for all legal intent (sic)
and purposes. 40
EN BANC
There could be no other plausible reason for private respondent to first
secure his adoptive mother's consent before resorting to the questioned [G.R. No. L-18456. November 30, 1963.]
legal recourse other than the parental respect and reverence which is
owed by and to be expected of a dutiful child. If private respondent was
CONRADO P. NAVARRO, plaintiff-appellee, vs.
such an ingrate, as the Solicitor General would have us believe, he
RUFINO G. PINEDA, RAMONA REYES, ET
would not have bothered to seek his adoptive mother's counsel. In the
AL., defendants-appellants.
same breath, had his adoptive mother regarded him as an ungrateful
adoptee, she would not have executed the affidavit above quoted, much
less testify in his behalf at the hearing of his petition. Deogracias Tañedo, Jr. for plaintiff-appellee.
Moreover, worthy of note is the fact that private respondent's adoptive Renato A. Santos for defendants-appellants.
mother emphasized that she executed the above affidavit "without
affecting the legal adoption granted by the Court on September 9, 1967, SYLLABUS
making him as one of my legal and compulsory heir(s)." This is
incontrovertible proof that she never entertained any misgivings and
1. CHATTEL MORTGAGE; SUBJECT-MATTER; HOUSE ON
reservations with respect to her consent to his petition. This likewise
LAND BELONGING TO ANOTHER TREATED AS MOVABLE
dispels any possible confusion as to private respondent's legal status or
PROPERTY BETWEEN THE PARTIES. — Where a house stands on
adoptive paternity and his successional rights. Concordantly, we have
a rented land belonging to another person, it may be the subject-
heretofore held that a change of name does not define or effect a change
matter of a chattel mortgage as personal or movable property if so
in one's existing family relations or in the rights and duties flowing
stipulated in the document of mortgage, and in an action by the
therefrom. It does not alter one's legal capacity, civil status or
Mortgagee for foreclosure, the validity of the chattel mortgage
citizenship: what is altered is only the name. 41
cannot be assailed by one of the parties to the contract of mortgage.
WHEREFORE, the petition is DENIED and the decision of respondent
2. PROPERTY; IMMOVABLE PROPERTY; HOUSE ON
Court of Appeals is hereby AFFIRMED in toto.
LAND BELONGING TO ANOTHER; GENERAL RULE AND
EXCEPTIONS. — Although in some instances, a house of mixed

21
materials has been considered as a chattel between the parties and
that the validity of the contract between them, has been recognized,
it has been a constant criterion that, with respect to third persons,
who are not parties to the contract, and specially in executed
proceedings, the house is considered as an immovable property.
DECISION
PAREDES, J p:
On December 14, 1959, defendants Rufino G. Pineda and his
mother Juana Gonzales (married to Gregorio Pineda), borrowed
from plaintiff Conrado P. Navarro, the sum of P2,550.00, payable 6
months after said date or on June 14, 1959. To secure the
indebtedness, Rufino executed a document captioned "DEED OF
REAL ESTATE and CHATTEL MORTGAGES", whereby Juana
Gonzales, by way of Real Estate Mortgage hypothecated a parcel of
land, belonging to her, registered with, the register of Deeds of
Tarlac, under Transfer Certificate of Title No. 25776, and Rufino G.
Pineda, by way of Chattel Mortgage, mortgaged his two-story
residential house, having a floor area of 912 square meters, erected
on a lot belonging to Atty. Vicente Castro, located at Bo. San Roque,
Tarlac, Tarlac; and one motor truck, registered in his name, under
Motor Vehicle Registration Certificate No A-171805. Both mortgages
were contained in one instrument, which was registered in both the
Office of the Register of Deeds and the Motor Vehicles Office of
Tarlac.
When the mortgage debt became due and payable, the
defendants, after demands made on them, failed to pay. They,
however, asked and were granted an extension up to June 30, 1960,
within which to pay. Came June 30, defendants again failed to pay
and, for the second time, asked for another extension, which was
given, up to July 30, 1960. In the second extension, defendant Pineda
in a document entitled "Promise", categorically stated that in the
remote event he should fail to make good the obligation on such date
(July 30, 1960), the defendant would no longer ask for further
extension and there would be no need for any formal demand, and
plaintiff could proceed to take whatever action he might desire to
enforce his rights, under the said mortgage contract. In spite of said
promise, defendants failed and refused to pay the obligation.
On August 10, 1960, plaintiff filed a complaint for foreclosure
of the mortgage and for damages, which consisted of liquidated
damages in the sum of P500.00 and 12% per annum interest on the
principal, effective on the date of maturity, until fully paid.
Defendants, answering the complaint, among others, stated
—
"Defendants admit that the loan is overdue
but deny that portion of paragraph 4 of the First
Cause of Action which states that the defendants
unreasonably failed and refuse to pay their
obligation to the plaintiff the truth being the
22
 defendants are hard up these days and pleaded to
the plaintiff to grant them more time within which
to pay their obligation and the plaintiff refused; . . .
"WHEREFORE, in view of the foregoing it is
most respectfully prayed that this Honorable court
render judgment granting the defendants until
January 31, 1961, within which to pay their
obligation to the plaintiff."
On September 30, 1960, plaintiff presented a Motion for
Summary Judgment, claiming that the Answer failed to tender any
genuine and material issue. The motion was set for hearing, but the
record is not clear what ruling the lower court made on the said
motion. On November 11, 1960, however, the parties submitted a
Stipulation of Facts, wherein the defendants admitted the
indebtedness, the authenticity and due execution of the Real Estate
and Chattel Mortgages; that the indebtedness has been due and
unpaid since June 14, 1960; that a liability of 12% per annum as
interest was agreed, upon failure to pay the principal when due and
P500.00 as liquidated damages; that the instrument had been
registered in the Registry of Property and Motor Vehicles Office,
both of the province of Tarlac; that the only issue in the Case is
whether or not the deed of Real Estate and Chattel Mortgages is
valid, particularly on the questions of whether or not the residential
house, subject of the mortgage therein, can be considered a chattel
and the propriety of the attorney's fees.
On February 24, 1961, the lower court held —
". . . WHEREFORE, this Court renders
decision in this Case:
(a) Dismissing the complaint with regards
to defendant Gregorio Pineda;
(b) Ordering defendants Juana Gonzales
and the spouses Rufino Pineda and Ramona Reyes,
to pay jointly and severally and within ninety (90)
days from the receipt of the copy of this decision to
the plaintiff Conrado P. Navarro the principal sum
of P2,550.00 with 12% compounded interest per
annum from June 14, 1960, until said principal sum
and interests are fully paid, plus P500.00 as
liquidated damages and the costs of this suit, with
the warning that in default of said payment the
properties mentioned in the deed of real estate
mortgage and chattel mortgage (Annex 'A' to the
complaint) be sold to realize said mortgage debt,
interests, liquidated damages and costs, in
accordance with the pertinent provisions of Act
3135, as amended by Act 4118, and Art. 14 of the
Chattel Mortgage Law, Act 1508; and
(c) Ordering the defendants Rufino Pineda
and Ramona Reyes, to deliver immediately to the
Provincial Sheriff of Tarlac the personal properties
mentioned in said Annex 'A', immediately after the
lapse of the ninety (90) days above-mentioned, in
default of such payment."
23
 The above judgment was directly appealed to this Court, the
defendants therein assigning only a single error, allegedly
committed by the lower court, to wit —
"In holding that the deed of real estate and
chattel mortgages appended to the complaint is
valid, notwithstanding the fact that the house of the
defendant Rufino G. Pineda was made the subject
of the chattel mortgage, for the reason that it is
erected on a land that belongs to a third person."
Appellants contend that Article 415 of the New Civil Code, in
classifying a house as immovable property, makes no distinctions
whether the owner of the land is or is not the owner of the building;
the fact that the land belongs to another is immaterial, it is enough
that the house adheres to the land; that in case of immovables by
incorporation, such as houses, trees, plants, etc; the Code does not
require that the attachment or incorporation be made by the owner
of the land, the only criterion being the union or incorporation with
the soil. In other words, it is claimed that "a building is an immovable
property, irrespective of whether or not said structure and the land
on which it is adhered to, belong to the same owner"
(Lopez vs. Orosa, G.R. Nos. L-10817-8, Feb. 28, 1958). (See also the
case of Leung Yee vs. Strong Machinery Co., 37 Phil. 644). Appellants
argue that since only movables can be the subject of a chattel
mortgage (Sec. 1, Act No. 3952), then the mortgage in question
which, is the basis of the present action, cannot give rise to an action
for foreclosure because it is a nullity. (Citing Associated Ins. Co., et
al. vs. Isabel Iya, Isabel Iya vs. Adriano Valino, et al. L-10838, May 30,
1958.)
The trial court did not predicate its decision declaring the
deed of chattel mortgage valid solely on the ground that the house
mortgaged was erected on the land which belonged to a third
person, but also and principally on the doctrine of estoppel, in that
"the parties have so expressly agreed" in the mortgage to consider the
house as a chattel "for its smallness and mixed materials
of sawali and wood". In construing Arts. 334 and 335 of the Spanish
Civil Code (corresponding to Arts. 415 and 416, N.C.C.), for
purposes of the application of the Chattel Mortgage Law, it was held
that under certain conditions, "a property may have a character
different from that imputed to it in said articles. It is undeniable that
the parties to a contract may by agreement, treat as personal property
that which by nature would be real property" (Standard Oil Co. of
N.Y. vs. Jaranillo, 44 Phil., 632-633). "There can not be any question
that a building of mixed materials may be the subject of a chattel
mortgage, in which case, it is considered as between the parties as
personal property . . . The matter depends on the circumstances and
the intention of the parties". "Personal property may retain its
character as such where it is so agreed by the parties interested even
though annexed to the realty . . .". (42 Am. Jur. 209-210, cited in
Manarang, et al. vs. Ofilada, et al., G.R. No. L-8133, May 18, 1956; 52
O.G. No. 8, p. 3954). The view that parties to a deed of chattel
mortgage may agree to consider a house as personal property for the
purposes of said contract, "is good only insofar as the contracting
parties are concerned. It is based, partly, upon the principles of
estoppel . . ." (Evangelista vs. Alto Surety No. L-11139, Apr. 23, 1958).
In a case, a mortgaged house built on a rented land, was held to be a
personal property not only because the deed of mortgage
24
considered. it as such, but also because it did not form an integral
part of the land (Evangelista vs. Abad, [CA]; 36 O.G. 2913), for it is
now well settled that an object placed on land by one who has only
a temporary right to the same, such as a lessee or usufructuary, does
not become immobilized by attachment (Valdez vs. Central
Altagracia, 222 U.S. 58, cited in Davao Sawmill Co. Inc. vs. Castillo,
et al., 61 Phil. 709). Hence, if a house belonging to a person stands on
a rented land belonging to another person, it may be mortgaged as a
personal property if so stipulated in the document of mortgage
(Evangelista vs. Abad, supra). It should be noted, however, that the
principle is predicated on statements by the owner declaring his
house to be a chattel, a conduct that may conceivably estop him from
subsequent claiming otherwise (Ladera, et al. vs. C.W. Hodges, et al.,
[CA]; 48 O.G. 5374). The doctrine, therefore, gathered from these
cases is that although in some instances, a house of mixed materials
has been considered as a chattel between the parties and that the
validity of the contract between them, has been recognized, it has
been a constant criterion nevertheless that, with respect to third
persons, who are not parties to the contract, and specially in
execution proceedings, the house is considered as an immovable
property (Art. 1431, New Civil Code).
In the case at bar, the house in question was treated as
personal or movable property, by the parties to the contract
themselves. In the deed of chattel mortgage, appellant Rufino G.
Pineda conveyed by way of "Chattel Mortgage" "my personal
properties", a residential house and a truck. The mortgagor himself
grouped the house with the truck, which is, inherently a movable
property. The house which was not even declared for taxation
purposes was small and made of light construction materials: G.I.
sheets roofing, sawali and wooden walls and wooden posts; built on
land belonging to another.
The cases cited by appellants are not applicable to the present
case. The Iya cases, (L-10837-38, supra), refer to a building or a house
of strong materials, permanently adhered to the land, belonging to
the owner of the house himself. In the case of Lopez vs. Orosa, (L-
10817-18), the subject building was a theater, built of materials worth
more than P62,000.00 attached permanently to the soil. In these two
cases and in the Leung Yee Case, supra, third persons assailed the
validity of the deed of chattel mortgages; in the present case, it was
one of the parties to the contract of mortgages who assailed its
validity.
CONFORMABLY WITH ALL THE FOREGOING, the
decision appealed from, should be, as it is hereby affirmed, with
costs against appellants.
THIRD DIVISION
[G.R. No. 137705. August 22, 2000.]
SERG'S PRODUCTS, INC., and SERGIO T.
GOQUIOLAY, petitioners, vs. PCI LEASING AND
FINANCE, INC., respondent.
Antonio R. Bautista & Partners for petitioners.
25
 Perez & Calima Law Offices for respondent.
SYNOPSIS
On February 13, 1998, respondent PCI Leasing and Finance Inc.
filed with the RTC of Quezon City a complaint for sum of money, with
an application for a writ of replevin. On March 6, 1998, respondent judge
issued a writ of replevin directing its sheriff to seize and deliver the
machineries and equipment to PCI Leasing after 5 days and upon
payment of the necessary expenses. The sheriff proceeded to petitioner's
factory and seized one machinery. On March 25, 1998, petitioner filed a
motion for special protective order invoking the power of the court to
control the conduct of its officers and amend and control its processes,
praying for a directive for the sheriff to defer enforcement of the writ of
replevin. The motion was opposed by PCI on the ground that the
properties were personal and therefore still subject to seizure and writ
of replevin. In their reply, petitioners asserted that the properties were
immovable. They further stated that PCI was estopped from treating
these machineries as personal because the contracts were totally sham
and farcical. On April 7, 1998, petitioners went to the Court of
Appeals via an original action for certiorari. The Court of Appeals ruled
that the subject machines were personal property as provided by the
agreement of the parties. Hence, this petition. TaCEHA
The Court found the petition not meritorious. The Court ruled
that the contracting parties may validly stipulate that a real property be
considered as personal. After agreeing to such stipulation, they are
consequently estopped from claiming otherwise. Under the principle of
estoppel, a party to a contract is ordinarily precluded from denying the
truth of any material fact found therein. In the present case, the lease
agreement clearly provides that the machines in question are to be
considered as personal properties. Clearly then, petitioners were
estopped from denying the characterization of the subject machines as
personal property. Under the circumstances, they are proper subject of
the writ of seizure. Accordingly, the petition was denied and the
assailed decision of the Court of Appeals was affirmed.
SYLLABUS
1. CIVIL LAW; CONTRACTS; CONTRACTING PARTIES MAY
VALIDLY STIPULATE THAT REAL PROPERTY BE CONSIDERED AS
PERSONAL. — The Court has held that contracting parties may validly
stipulate that a real property be considered as personal. After agreeing
to such stipulation, they are consequently estopped from claiming
otherwise. Under the principle of estoppel, a party to a contract is
ordinarily precluded from denying the truth of any material fact found
therein. Hence, in Tumalad v. Vicencio, the Court upheld the intention of
the parties to treat a house as a personal property because it had been
made the subject of a chattel mortgage. The Court ruled: ". . . . Although
there is no specific statement referring to the subject house as personal
property, yet by ceding, selling or transferring a property by way of
chattel mortgage defendants-appellants could only have meant to
convey the house as chattel, or at least, intended to treat the same as
such, so that they should not now be allowed to make an inconsistent
stand by claiming otherwise." Applying Tumalad, the Court in Makati
Leasing and Finance Corp. v. Wearever Textile Mills also held that the
26
machinery used in a factory and essential to the industry, as in the the lis mota of the civil action pending before the RTC. A resolution of
present case, was a proper subject of a writ of replevin because it was these questions, therefore, is effectively a resolution of the merits of the
treated as personal property in a contract. CcaASE case. Hence, they should be threshed out in the trial, not in the
proceedings involving the issuance of the Writ of Seizure. Indeed, in La
2. ID.; ID.; ID.; THIRD PERSONS ACTING IN GOOD FAITH
Tondeña Distillers v. CA, the Court explained that the policy under Rule
ARE NOT AFFECTED BY STIPULATION CHARACTERIZING
60 was that questions involving title to the subject property — questions
MACHINERY AS PERSONAL. — In the present case, the Lease
which petitioners are now raising — should be determined in the trial.
Agreement clearly provides that the machines in question are to be
In that case, the Court noted that the remedy of defendants under Rule
considered as personal property. Specifically, Section 12.1 of the
60 was either to post a counter-bond or to question the sufficiency of the
Agreement reads as follows: "12.1 The PROPERTY is, and shall at all
plaintiff's bond. They were not allowed, however, to invoke the title to
times be and remain, personal property notwithstanding that the
the subject property. The Court ruled: "In other words, the law does not
PROPERTY or any part thereof may now be, or hereafter become, in any
allow the defendant to file a motion to dissolve or discharge the writ of
manner affixed or attached to or embedded in, or permanently resting
seizure (or delivery) on ground of insufficiency of the complaint or of
upon, real property or any building thereon, or attached in any manner
the grounds relied upon therefor, as in proceedings on preliminary
to what is permanent." Clearly then, petitioners are estopped from
attachment or injunction, and thereby put at issue the matter of the title
denying the characterization of the subject machines as personal
or right of possession over the specific chattel being replevied, the policy
property. Under the circumstances, they are proper subjects of the Writ
apparently being that said matter should be ventilated and determined
of Seizure. It should be stressed, however, that our holding — that the
only at the trial on the merits." THADEI
machines should be deemed personal property pursuant to the Lease
Agreement — is good only insofar as the contracting parties are
concerned. Hence, while the parties are bound by the Agreement, third
persons acting in good faith are not affected by its stipulation DECISION
characterizing the subject machinery as personal. In any event, there is
no showing that any specific third party would be adversely affected.
PANGANIBAN, J p:
3. REMEDIAL LAW; PROVISIONAL REMEDIES; REPLEVIN;
THE REMEDY OF DEFENDANTS UNDER RULE 60 WAS EITHER TO After agreeing to a contract stipulating that a real or immovable
POST A COUNTER-BOND OR TO QUESTION THE SUFFICIENCY OF property be considered as personal or movable, a party is estopped from
PLAINTIFF'S BOND. — The validity and the nature of the contract are

27
subsequently claiming otherwise. Hence, such property is a proper
subject of a writ of replevin obtained by the other contracting party.
The Case
Before us is a Petition for Review on Certiorari assailing the
January 6, 1999 Decision 1 of the Court of Appeals (CA) 2 in CA-GR SP
No. 47332 and its February 26, 1999 Resolution 3 denying
reconsideration. The decretal portion of the CA Decision reads as
follows: IEAacT
"WHEREFORE, premises considered, the assailed
Order dated February 18, 1998 and Resolution dated
March 31, 1998 in Civil Case No. Q-98-33500 are hereby
AFFIRMED. The writ of preliminary injunction issued
on June 15, 1998 is hereby LIFTED." 4
In its February 18, 1998 Order, 5 the Regional Trial Court (RTC)
of Quezon City (Branch 218) 6 issued a Writ of Seizure. 7 The March 18,
1998 Resolution 8 denied petitioners' Motion for Special Protective
Order, praying that the deputy sheriff be enjoined "from seizing
immobilized or other real properties in [petitioners'] factory in Cainta,
Rizal and to return to their original place whatever immobilized
machineries or equipments he may have removed." 9
The Facts
The undisputed facts are summarized by the Court of Appeals as
follows: 10
"On February 13, 1998, respondent PCI Leasing
and Finance, Inc. (PCI Leasing for short) filed with the
RTC-QC a complaint for [a] sum of money (Annex 'E'),
with an application for a writ of replevin docketed as
Civil Case No. Q-98-33500.
"On March 6, 1998, upon an ex-parte application
of PCI Leasing, respondent judge issued a writ of
replevin (Annex 'B') directing its sheriff to seize and
deliver the machineries and equipment to PCI Leasing
after 5 days and upon the payment of the necessary
expenses.
"On March 24, 1998, in implementation of said
writ, the sheriff proceeded to petitioner's factory, seized
one machinery with [the] word that he [would] return
for the other machineries.
"On March 25, 1998, petitioners filed a motion for
special protective order (Annex 'C'), invoking the power
of the court to control the conduct of its officers and
amend and control its processes, praying for a directive
for the sheriff to defer enforcement of the writ of
replevin.
"This motion was opposed by PCI Leasing
(Annex 'F'), on the ground that the properties [were] still
personal and therefore still subject to seizure and a writ
of replevin.
"In their Reply, petitioners asserted that the
properties sought to be seized [were] immovable as
defined in Article 415 of the Civil Code, the parties'
28
 agreement to the contrary notwithstanding. They
argued that to give effect to the agreement would be
prejudicial to innocent third parties. They further stated
that PCI Leasing [was] estopped from treating these
machineries as personal because the contracts in which
the alleged agreement [were] embodied [were] totally
sham and farcical.
"On April 6, 1998, the sheriff again sought to
enforce the writ of seizure and take possession of the
remaining properties. He was able to take two more, but
was prevented by the workers from taking the rest.
"On April 7, 1998, they went to [the CA] via an
original action for certiorari."
Ruling of the Court of Appeals
Citing the Agreement of the parties, the appellate court held that
the subject machines were personal property, and that they had only
been leased, not owned, by petitioners. It also ruled that the "words of
the contract are clear and leave no doubt upon the true intention of the
contracting parties." Observing that Petitioner Goquiolay was an
experienced businessman who was "not unfamiliar with the ways of the
trade," it ruled that he "should have realized the import of the document
he signed." The CA further held:
"Furthermore, to accord merit to this petition
would be to preempt the trial court in ruling upon the
case below, since the merits of the whole matter are laid
down before us via a petition whose sole purpose is to
inquire upon the existence of a grave abuse of discretion
on the part of the [RTC] in issuing the assailed Order and
Resolution. The issues raised herein are proper subjects
of a full-blown trial, necessitating presentation of
evidence by both parties. The contract is being enforced
by one, and [its] validity is attacked by the other — a
matter . . . which respondent court is in the best position
to determine."
Hence, this Petition. 11
The Issues
In their Memorandum, petitioners submit the following issues
for our consideration:
"A. Whether or not the machineries purchased
and imported by SERG'S became real property by virtue
of immobilization.
B. Whether or not the contract between the
parties is a loan or a lease." 12
In the main, the Court will resolve whether the said machines are
personal, not immovable, property which may be a proper subject of a
writ of replevin. As a preliminary matter, the Court will also address
briefly the procedural points raised by respondent.
The Court's Ruling
The Petition is not meritorious.
Preliminary Matter:
29
 Procedural Questions
Respondent contends that the Petition failed to indicate expressly
whether it was being filed under Rule 45 or Rule 65 of the Rules of
Court. It further alleges that the Petition erroneously impleaded Judge
Hilario Laqui as respondent.
There is no question that the present recourse is under Rule 45.
This conclusion finds support in the very title of the Petition, which is
"Petition for Review on Certiorari." 13
While Judge Laqui should not have been impleaded as a
respondent, 14 substantial justice requires that such lapse by itself
should not warrant the dismissal of the present Petition. In this light, the
Court deems it proper to remove, motu proprio, the name of Judge Laqui
from the caption of the present case.
Main Issue:
Nature of the Subject Machinery
Petitioners contend that the subject machines used in their
factory were not proper subjects of the Writ issued by the RTC because
they were in fact real property. Serious policy considerations, they
argue, militate against a contrary characterization.
Rule 60 of the Rules of Court provides that writs of replevin are
issued for the recovery of personal property only. 15 Section 3 thereof
reads:
"SECTION 3. Order. — Upon the filing of such
affidavit and approval of the bonds, the court shall issue
an order and the corresponding writ of replevin
describing the personal property alleged to be
wrongfully detained and requiring the sheriff forthwith
to take such property into his custody."
On the other hand, Article 415 of the Civil Code enumerates
immovable or real property as follows:
ARTICLE 415. The following are immovable
property: HCTEDa
xxx xxx xxx
(5) Machinery, receptacles, instruments or
implements intended by the owner of the tenement for
an industry or works which may be carried on in a
building or on a piece of land, and which tend directly
to meet the needs of the said industry or works.
xxx xxx xxx"
In the present case, the machines that were the subjects of the
Writ of Seizure were placed by petitioners in the factory built on their
own land. Indisputably, they were essential and principal elements of
their chocolate-making industry. Hence, although each of them was
movable or personal property on its own, all of them have become
"immobilized by destination because they are essential and principal
elements in the industry." 16 In that sense, petitioners are correct in
arguing that the said machines are real, not personal, property pursuant
to Article 415 (5) of the Civil Code.17
30
 Be that as it may, we disagree with the submission of the
petitioners that the said machines are not proper subjects of the Writ of
Seizure.
The Court has held that contracting parties may validly stipulate
that a real property be considered as personal. 18 After agreeing to such
stipulation, they are consequently estopped from claiming otherwise.
Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein.
Hence, in Tumalad v. Vicencio, 19 the Court upheld the intention
of the parties to treat a house as a personal property because it had been
made the subject of a chattel mortgage. The Court ruled:
". . . Although there is no specific statement
referring to the subject house as personal property, yet
by ceding, selling or transferring a property by way of
chattel mortgage defendants-appellants could only have
meant to convey the house as chattel, or at least,
intended to treat the same as such, so that they should
not now be allowed to make an inconsistent stand by
claiming otherwise."
Applying Tumalad, the Court in Makati Leasing and Finance Corp.
v. Wearever Textile Mills 20 also held that the machinery used in a factory
and essential to the industry, as in the present case, was a proper subject
of a writ of replevin because it was treated as personal property in a
contract. Pertinent portions of the Court's ruling are reproduced
hereunder:
". . . if a house of strong materials, like what was
involved in the above Tumalad case, may be considered
as personal property for purposes of executing a chattel
mortgage thereon as long as the parties to the contract so
agree and no innocent third party will be prejudiced
thereby, there is absolutely no reason why a machinery,
which is movable in its nature and becomes immobilized
only by destination or purpose, may not be likewise
treated as such. This is really because one who has so
agreed is estopped from denying the existence of the
chattel mortgage."
In the present case, the Lease Agreement clearly provides that the
machines in question are to be considered as personal property.
Specifically, Section 12.1 of the Agreement reads as follows: 21
"12.1 The PROPERTY is, and shall at all times be
and remain, personal property notwithstanding that the
PROPERTY or any part thereof may now be, or hereafter
become, in any manner affixed or attached to or
embedded in, or permanently resting upon, real
property or any building thereon, or attached in any
manner to what is permanent."
Clearly then, petitioners are estopped from denying the
characterization of the subject machines as personal property. Under the
circumstances, they are proper subjects of the Writ of Seizure.
It should be stressed, however, that our holding — that the
machines should be deemed personal property pursuant to the Lease
31
Agreement — is good only insofar as the contracting parties are
concerned. 22 Hence, while the parties are bound by the Agreement,
third persons acting in good faith are not affected by its stipulation
characterizing the subject machinery as personal. 23 In any event, there
is no showing that any specific third party would be adversely affected.
Validity of the Lease Agreement
In their Memorandum, petitioners contend that the Agreement is
a loan and not a lease. 24 Submitting documents supposedly showing
that they own the subject machines, petitioners also argue in their
Petition that the Agreement suffers from "intrinsic ambiguity which
places in serious doubt the intention of the parties and the validity of
the lease agreement itself." 25 In their Reply to respondent's Comment,
they further allege that the Agreement is invalid. 26
These arguments are unconvincing. The validity and the nature
of the contract are the lis mota of the civil action pending before the RTC.
A resolution of these questions, therefore, is effectively a resolution of
the merits of the case. Hence, they should be threshed out in the trial,
not in the proceedings involving the issuance of the Writ of Seizure.
Indeed, in La Tondeña Distillers v. CA, 27 the Court explained that
the policy under Rule 60 was that questions involving title to the subject
property — questions which petitioners are now raising — should be
determined in the trial. In that case, the Court noted that the remedy of
defendants under Rule 60 was either to post a counter-bond or to
question the sufficiency of the plaintiff's bond. They were not allowed,
however, to invoke the title to the subject property. The Court ruled:
"In other words, the law does not allow the
defendant to file a motion to dissolve or discharge the
writ of seizure (or delivery) on ground of insufficiency
of the complaint or of the grounds relied upon therefor,
as in proceedings on preliminary attachment or
injunction, and thereby put at issue the matter of the title
or right of possession over the specific chattel being
replevied, the policy apparently being that said matter
should be ventilated and determined only at the trial on
the merits." 28
Besides, these questions require a determination of facts and a
presentation of evidence, both of which have no place in a petition
for certiorari in the CA under Rule 65 or in a petition for review in this
Court under Rule 45. 29
Reliance on the
Lease Agreement
It should be pointed out that the Court in this case may rely on
the Lease Agreement, for nothing on record shows that it has been
nullified or annulled. In fact, petitioners assailed it first only in the RTC
proceedings, which had ironically been instituted by respondent.
Accordingly, it must be presumed valid and binding as the law between
the parties.
Makati Leasing and Finance Corporation 30 is also instructive on
this point. In that case, the Deed of Chattel Mortgage, which
characterized the subject machinery as personal property, was also
assailed because respondent had allegedly been required "to sign a
printed form of chattel mortgage which was in a blank form at the time
32
of signing." The Court rejected the argument and relied on the Deed,
ruling as follows:
". . . Moreover, even granting that the charge is
true, such fact alone does not render a contract void ab
initio, but can only be a ground for rendering said
contract voidable, or annullable pursuant to Article 1390
of the new Civil Code, by a proper action in court. There
is nothing on record to show that the mortgage has been
annulled. Neither is it disclosed that steps were taken to
nullify the same. . . ."
Alleged Injustice Committed
on the Part of Petitioners
Petitioners contend that "if the Court allows these machineries to
be seized, then its workers would be out of work and thrown into the
streets." 31 They also allege that the seizure would nullify all efforts to
rehabilitate the corporation.
Petitioners' arguments do not preclude the implementation of the
Writ. As earlier discussed, law and jurisprudence support its propriety.
Verily, the above-mentioned consequences, if they come true, should
not be blamed on this Court, but on the petitioners for failing to avail
themselves of the remedy under Section 5 of Rule 60, which allows the
filing of a counter-bond. The provision states:
"SECTION 5. Return of property. — If the adverse
party objects to the sufficiency of the applicant's bond,
or of the surety or sureties thereon, he cannot
immediately require the return of the property, but if he
does not so object, he may, at any time before the
delivery of the property to the applicant, require the
return thereof, by filing with the court where the action
is pending a bond executed to the applicant, in double
the value of the property as stated in the applicant's
affidavit for the delivery thereof to the applicant, if such
delivery be adjudged, and for the payment of such sum
to him as may be recovered against the adverse party,
and by serving a copy bond on the applicant."
WHEREFORE, the Petition is DENIED and the assailed Decision
of the Court of Appeals AFFIRMED. Costs against petitioners. THEcAS
SO ORDERED.
SECOND DIVISION
[G.R. No. L-32974. July 30, 1979.]
BARTOLOME ORTIZ, petitioner, vs. HON. UNION C.
KAYANAN, in his capacity as Judge of the Court of First
Instance of Quezon, Branch IV; ELEUTERIO ZAMORA,
QUIRINO COMINTAN, VICENTE FERRO, AND
GREGORIO PAMISARAN, respondents.
Salonga, Ordoñez, Yap, Sicat & Associates and Salvador, Ulgado
& Carbon for petitioner.
Jose A. Cusi for private respondents.
33
DECISION
ANTONIO,J p:
Petition for Certiorari and Prohibition with Preliminary
Injunction to nullify the Order of respondent Judge directing the
execution of the final judgment in Civil Case No. C-90, entitled
"Bartolome Ortiz vs. Secretary of Agriculture and Natural
Resources, et al.," and the Writ of Execution issued to implement said
Order, allegedly for being inconsistent with the Judgment sought to
be enforced. LLpr
Civil Case No. C-90 was filed by Bartolome Ortiz who sought
the review and/or annulment of the decision of the Secretary of
Agriculture and Natural Resources, giving preference to the sales
applications of private respondents Quirino Comintan and Eleuterio
Zamora over Lot No. 5785, PLS-45, located at Barrio Cabuluan,
Calauag, Quezon.
I on plaintiff's protest by Assistant Public Lands Inspector
The factual background of the case, as found by respondent
Court, is as follows:
"...The lot in controversy was formerly the subject
of Homestead Application No. 122417 of Martin
Dolorico II, plaintiff's ward who died on August 20,
1931; that since then it was plaintiff who continued the
cultivation and possession of the property, without
however filing any application to acquire title thereon;
that in the Homestead Application No. 122417, Martin
Dolorico II named his uncle, Martin Dolorico I as his heir
and successor in interest, so that in 1951 Martin Dolorico
I executed an affidavit relinquishing his rights over the
property in favor of defendants Quirino Comintan and
Eleuterio Zamora, his grandson and son-in-law,
respectively, and requested the Director of Lands to
cancel the homestead application; that on the strength of
the affidavit, Homestead Application No. 122417 was
cancelled and thereafter, defendants Comintan and
Zamora filed their respective sales applications Nos.
8433 and 9258; that plaintiff filed his protest on
November 26, 1951 alleging that he should be given
preference to purchase the lot inasmuch as he is the
actual occupant and has been in continuous possession
of the same since 1931; and inspite of plaintiff's
opposition, 'Portion A' of the property was sold at public
auction wherein defendant Comintan was the only
bidder; that on June 8, 1957, investigation was conducted
Serapion Bauzon who submitted his report to the
Regional Land Officer, and who in turn rendered a
decision on April 9, 1958, dismissing plaintiff's claim and
giving due course to defendants' sales applications on
the ground that the relinquishment of the homestead
rights of Martin Dolorico I in favor of Comintan and
Zamora is proper, the former having been designated as
successor in interest of the original homestead applicant
34
 and that because plaintiff failed to participate in the
public auction, he is forever barred to claim the property;
that plaintiff filed a motion for reconsideration of this
decision which was denied by the Director of Lands in
his order dated June 10, 1959; that finally, on appeal to
the Secretary of Agriculture and Natural Resources, the
decision rendered by the Regional Land Officer was
affirmed in toto." 1
On March 22, 1966, respondent Court rendered judgment in
the afore-mentioned civil case, the dispositive portion of which reads
as follows:
"IN VIEW OF THE FOREGOING
CONSIDERATIONS, judgment is hereby rendered
awarding Lot No. 5785-A of PLS-45, (Calauag Public
Land Subdivision) one-half portion of the property in
litigation located at Bo. Cabuluan, Calauag, Quezon in
favor of defendant QUIRINO COMINTAN, being the
successful bidder in the public auction conducted by the
Bureau of Lands on April 18, 1955, and hereby giving
due course to the Sales Application No. 9258 of
defendant Eleuterio Zamora over the other half, Lot No.
5785-B of PLS-45, Calauag, without prejudice to the right
of plaintiff BARTOLOME ORTIZ to participate in the
public bidding of the same to be announced by the
Bureau of Lands, Manila. However, should plaintiff
Bartolome Ortiz be not declared the successful bidder thereof
defendants Quirino Comintan and Eleuterio Zamora are
ordered to reimburse jointly said plaintiff the improvements he
has introduced on the whole property in the amount of
THIRTEEN THOUSAND SIX HUNDRED THIRTY-TWO
(P13,632.00) PESOS, the latter having the right to retain the
property until after he has been fully paid therefor, without
interest since he enjoys the fruits of the property in
question,with prejudice and with costs against the
plaintiff." 2
Plaintiff appealed the decision to the Court of Appeals.
Two (2) years after the rendition of the judgment by the
court a quo,while the case was pending appeal and upon petition of
private respondents Quirino Comintan and Eleuterio Zamora,
respondent Court appointed respondent Vicente Ferro, Clerk of
Court, as Receiver to collect tolls on a portion of the property used
as a diversion road. On August 19, 1969, the Court of Appeals issued
a Resolution annulling the Order appointing the Receiver.
Subsequently, on February 19, 1970, the Appellate Court affirmed
the decision of the trial court. A petition for review on certiorari of
the decision of the Court of Appeals was denied by this Court on
April 6, 1970. At this point, private respondents filed a petition for
appointment of a new receiver with the court a quo. This petition was
granted and the receiver was reappointed. Petitioner sought the
annulment of this Order with the Court of Appeals, but said Court
ruled that its decision had already become final and that the records
of the case were to be remanded to the trial court. LLpr
Not satisfied with such denial, petitioner filed a petition for
certiorari, prohibition and mandamus with preliminary injunction
before this Court, 3 praying for the annulment of the Order
35
reappointing the Receiver. On July 13, 1970, the petition was
dismissed by this Court on the ground of insufficient showing of
grave abuse of discretion.
II
The judgment having become final and executory private
respondents filed a motion for the execution of the same, praying as
follows:
"WHEREFORE, it is respectfully prayed of this
Honorable Court to order the issuance of a writ of
execution in accordance with the judgment of this
Honorable Court, confirmed by the Court of Appeals
and the Supreme Court, commanding any lawful officer
to deliver to defendants Comintan and Zamora the land
subject of the decision in this case but allowing
defendants to file a bond in such amount as this
Honorable Court may fix, in lieu of the P13,632.00
required to be paid to plaintiff, conditioned that after the
accounting of the tools collected by plaintiff, there is still
an amount due and payable to said plaintiff, then if such
amount is not paid on demand, including the legal
interests, said bond shall be held answerable.
"Ordering further the plaintiff to render an
accounting of the tolls he collected from March of 1967
to December 31, 1968 and from September 1969 to March
31, 1970, and deliver said tolls collected to the receiver
and if judgment is already executed, then to Quirino
Comintan and Eleuterio Zamora; and,
"Finally, to condemn plaintiff to pay moral
damages for withholding the tools which belong to your
movant in an amount this Court may deem just in the
premises." 4
Acting upon the foregoing motion, respondent Judge issued
an Order, dated September 23, 1970, stating, among others, the
following:
"The records further disclosed that from March
1967 to December 31, 1968, plaintiff Bartolome Ortiz
collected tolls on a portion of the property in question
wherein he has not introduced any improvement
particularly on Lot No. 5785-A; PLS-45 awarded to
defendant Quirino Comintan, thru which vehicular
traffic was detoured or diverted, and again from
September 1969 to March 31, 1970, the plaintiff resumed
the collection of tools on the same portion without
rendering any accounting on said tolls to the Receiver,
who was reappointed after submitting the required
bond and specifically authorized only to collect tolls
leaving the harvesting of the improvements to the
plaintiff.
xxx xxx xxx
"In virtue of the findings of this Court as
contained in the dispositive portion of its decision, the
defendants are jointly obligated to pay the plaintiff in the
amount of P13,632.00 as reasonable value of the
improvements he introduced on the whole property in
36
question, and that he has the right of retention until fully
paid. It can be gleaned from the motion of the
defendants that if plaintiff submits an accounting of the
tolls he collected during the periods above alluded to,
their damages of about P25,000.00 can more than offset
their obligation of P13,362.00 in favor of the plaintiff,
thereafter the possession of the land he delivered to the
defendants since the decision of the Supreme Court has
already become final and executory, but in the
interregnum pending such accounting and recovery by
the Receiver of the tolls collected by the plaintiff, the
defendants pray that they allowed to put up a bond in
lieu of the said P13,632.00 to answer for damages of the
former, if any.
"On the other hand, plaintiff contends in his
opposition, admitting that the decision of the Supreme
Court has become final and executory; (1) the offer of a
bond in lieu of payment of P13,632.00 does not, and
cannot, satisfy the condition imposed in the decision of
this Court which was affirmed in toto;(2) the public sale
of Portion 'B' of the land has still to take place as
ordained before the decision could be executed; and, (3)
that whatever sums plaintiff may derive from the
property cannot be set off against what is due him for
the improvements he made, for which he has to be
reimbursed as ordered.
xxx xxx xxx
"Let it be known that plaintiff does not dispute his
having collected tolls during the periods from March
1967 to December 31, 1968 and from September 1969 to
March 31, 1970. The Supreme Court affirmed the
decision of this Court in its findings that said tolls belong
to the defendants, considering that the same were
collected on a portion of the land in question where the
plaintiff did not introduce any improvement. The
reimbursement to the plaintiff pertains only to the value
of the improvements, like coconut trees and other plants
which he introduced on the whole property. The tolls
collected by the plaintiff on an unimproved portion
naturally belong to the defendants, following the
doctrine on accretion. Further, the reappointment of a
Receiver by this Court was upheld by the Supreme
Court when it denied the petition for certiorari filed by
the plaintiff, bolstering the legal claim of defendants
over said tolls. Thus, the decision of the Supreme Court
rendered the decision of this Court retroactive from
March 22, 1966 although pending appeal its
implementation was suspended. It is our honest
conviction, therefore, that the putting up of a bond by
the defendants pending accounting of the tolls collected
by the plaintiff is justified and will not prejudice
anybody, but certainly would substantially satisfy the
conditions imposed in the decision. However, insofar as
the one-half portion 'B' of the property, the decision may
37
 be executed only after public sale by the Bureau of Lands
shall be accomplished.
"WHEREFORE, finding the Motion for Execution
filed by the defendants to be meritorious, the same is
granted; provided, however, that they put up a bond
equal the adjudicated amount of P13,632.00 accruing in
favor of the plaintiff, from a reputable or recognized
bonding or surety company, conditioned that after an
accounting of the tolls collected by the plaintiff should
there be found out any balance due and payable to him
after reckoning said obligation of P13,632.00 the bond
shall be held answerable therefor." 5
Accordingly, a Writ of Execution was issued after private
respondent Quirino Comintan had filed the required bond. The writ
directed the Sheriff to enforce the decision of the Court, and stated,
in part, the following:
"But should there be found any amount
collectible after accounting and deducting the amount of
P13,632.00, you are hereby ordered that of the goods and
chattels of Bartolome Ortiz of Bo. Kabuluan, Calauag,
Quezon, be caused to be made any excess in the
abovementioned amount together with your lawful fees
and that you render same to defendant Quirino
Comintan. If sufficient personal property cannot be
found thereof to satisfy this execution and lawful fees
thereon, then you are commanded that of the lands and
buildings of the said BARTOLOME ORTIZ you make
the said excess amount in the manner required by the
Rules of Court, and make return of your proceedings
within this Court within sixty (60) days from date of
service.
"You are also ordered to cause Bartolome Ortiz to
vacate the property within fifteen (15) days after service
thereof the defendant Quirino Comintan having filed the
required bond in the amount of THIRTEEN
THOUSAND SIX HUNDRED THIRTY-TWO
(P13,632.00) PESOS." 6
On October 12, 1970, petitioner filed a Motion for
Reconsideration of the aforesaid Order and Writ of Execution,
alleging:
"(a) That the respondent judge has no authority to
place respondents in possession of the property;
"(b) That the Supreme Court has never affirmed
any decision of the trial court that tolls collected from the
diversionary road on the property, which is public land,
belong to said respondents;
"(c) That to assess petitioner a P25,000.00 liability
for damages is purely punitive imposition without
factual or legal justification."
The foregoing Motion for Reconsideration was denied by
respondent Judge per Order dated November 18, 1970. Said Order
states, in part:
38
 "It goes without saying that defendant Comintan
is entitled to be placed in possession of Lot No. 5785-A
of PLS-45 (Calauag Public Land Subdivision) and
enjoyment of the tolls from March, 1967 to March, 1968
and from September, 1969 to March 31, 1970 which were
received by plaintiff Bartolome Ortiz, collected from the
property by reason of the diversion road where
vehicular traffic was detoured. To defendant Comintan
belongs the tolls thus collected from a portion of the land
awarded to him used as a diversionary road by the
doctrine of accretion and his right over the same is ipso
jure,there being no need of any action to possess said
addition. It is so because as consistently maintained by
the Supreme Court, an applicant who has complied with
all the terms and conditions which entitle him to a patent
for a particular tract of public land, acquires a vested
right therein and is to be regarded as equitable owner
thereof so that even without a patent, a perfected
homestead or sales application is a property right in the
fullest sense, unaffected by the fact that the paramount
title is still in the Government and no subsequent law
can deprive him of that vested right. The question of the
actual damages suffered by defendant Comintan by
reason of the unaccounted tolls received by plaintiff had
already been fully discussed in the order of September
23, 1970 and the Court is honestly convinced and
believes it to be proper and regular under the
circumstances.
"Incidentally, the Court stands to correct itself
when in the same order, it directed the execution of the
decision with respect to the one-half portion 'B' of the
property only after the public sale by the Bureau of
Lands, the same being an oversight, it appearing that the
Sales Application of defendant Eleuterio Zamora had
already been recognized and fully confirmed by the
Supreme Court.
"In view thereof, finding the motion filed by
plaintiff to be without merit, the Court hereby denies the
same and the order of September 23, 1970 shall remain
in full force subject to the amendment that the execution
of the decision with respect to the one-half portion 'B'
shall not be conditioned to the public sale by the Bureau
of Lands.
"SO ORDERED." 7
III
Petitioner thus filed the instant petition, contending that in
having issued the Order and Writ of Execution, respondent Court
"acted without or in excess of jurisdiction, and/or with grave abuse
of discretion, because the said order and writ in effect vary the terms
of the judgment they purportedly seek to enforce." He argued that
since said judgment declared the petitioner a possessor in good faith,
he is entitled to the payment of the value of the improvements
introduced by him on the whole property, with right to retain the
land until he has been fully paid such value. He likewise averred that
no payment for improvements has been made and, instead, a bond
39
therefor had been filed by defendants (private respondents),which,
according to petitioner, is not the payment envisaged in the decision
which would entitle private respondents to the possession of the
property. Furthermore, with respect to portion "B",petitioner alleges
that, under the decision, he has the right to retain the same until after
he has participated and lost in the public bidding of the land to be
conducted by the Bureau of Lands. It is claimed that it is only in the
event that he loses in the bidding that he can be legally dispossessed
thereof. cdll
It is the position of petitioner that all the fruits of the property,
including the tolls collected by him from the passing vehicles, which
according to the trial court amounts to P25,000.00, belongs to
petitioner and not to defendant/private respondent Quirino
Comintan, in accordance with the decision itself, which decreed that
the fruits of the property shall be in lieu of interest on the amount to
be paid to petitioner as reimbursement for improvements. Any
contrary opinion, in his view, would be tantamount to an
amendment of a decision which has long become final and executory
and, therefore, cannot be lawfully done.
Petitioner, therefore, prayed that (1) a Writ of Preliminary
Injunction be issued enjoining the enforcement of the Orders of
September 23, 1970 and November 18, 1970, and the Writ of
Execution issued thereto, or restoring to petitioner the possession of
the property if the private respondents had been placed in
possession thereof; (2) annulling said Orders as well as the Writ of
Execution, dissolving the receivership established over the property;
and (3) ordering private respondents to account to petitioner all the
fruits they may have gathered or collected from the property in
question from the time of petitioner's illegal dispossession thereof.
On January 29, 1971, this Court issued the Writ of Preliminary
Injunction. On January 30, 1971, private respondents filed a Motion
for Reconsideration and/or Modification of the Order dated January
29, 1971. This was followed by a Supplemental Motion for
Reconsideration and Manifestation on February 3, 1971. In the latter
motion, private respondents manifested that the amount of
P14,040.96, representing the amount decreed in the judgment as
reimbursement to petitioner for the improvements, plus interest for
six months, has already been deposited by them in court, "with the
understanding that said amount shall be turned over to the plaintiff
after the court a quo shall have determined the improvement on Lot
5785-A, and subsequently the remaining balance of the deposit shall
be delivered to the petitioner (plaintiff therein) in the event he loses
the bid for Lot 5785-B in favor of private respondent Eleuterio
Zamora." 8 The deposit is evidenced by a certification made by the
Clerk of the Court a quo.9 Contending that said deposit was a faithful
compliance with the judgment of the trial court, private respondent
Quirino Comintan prayed for the dissolution of the Writ of
Injunction. llcd
It appears that as a consequence of the deposit made by
private respondents, the Deputy Sheriff of Calauag, Quezon ousted
petitioner's representative from the land in question and put private
respondents in possession thereof. 10
On March 10, 1971, petitioner filed a "Comment on
Respondents' 'Motion for Reconsideration' dated January 29, 1971'
40
and 'Supplemental Motion for Reconsideration and Manifestation,"'
contending that the tender of deposit mentioned in the
Supplemental Motion was not really and officially made, "'inasmuch
as the same is not supported by any official receipt from the lower
court, or from its clerk or cashier, as required by law;" that said
deposit does not constitute sufficient compliance with the judgment
sought to be enforced, neither was it legally and validly made
because the requisites for consignation had not been complied with;
that the tender of legal interest for six months cannot substitute
petitioner's enjoyment of the fruits of the property as long as the
judgment in Civil Case No. C-90 has not been implemented in the
manner decreed therein; that contrary to the allegations of private
respondents, the value of the improvements on the whole property
had been determined by the lower court, and the segregation of the
improvements for each lot should have been raised by them at the
opportune moment by asking for the modification of the decision
before it became final and executory; and that the tolls on the
property constituted "civil fruits" to which the petitioner is entitled
under the terms of the decision.
IV
The issue decisive of the controvercy is — after the rendition
by the trial court of its judgment in Civil Case No. C-90 on March 22,
1966 confirming the award of one-half of the property to Quirino
Comintan — whether or not petitioner is still entitled to retain for
his own exclusive benefit all the fruits of the property, such as the
tolls collected by him from March 1967 to December 1968, and
September 1969 to March 31, 1970, amounting to about P25,000.00.
In other words, petitioner contends that so long as the aforesaid
amount of P13,632.00 decreed in the judgment representing the
expenses for clearing the land and the value of the coconuts and fruit
trees planted by him remains unpaid, he can appropriate for his
exclusive benefit all the fruits which he may derive from the
property, without any obligation to apply any portion thereof to the
payment of the interest and the principal of the debt. LexLib
We find this contention untenable.
There is no question that a possessor in good faith is entitled
to the fruits received before the possession is legally
interrupted. 11 Possession in good faith ceases or is legally
interrupted from the moment defects in the title are made known to
the possessor, by extraneous evidence or by the filing of an action in
court by the true owner for the recovery of the property. 12 Hence,
all the fruits that the possessor may receive from the time he is
summoned in court, or when he answers the complaint, must be
delivered and paid by him to the owner or lawful possessor. 13
However, even after his good faith ceases, the possessor in
fact can still retain the property, pursuant to Article 546 of the New
Civil Code, until he has been fully reimbursed for all the necessary
and useful expenses made by him on the property. This right of
retention has been considered as one of the conglomerate of
measures devised by the law for the protection of the possessor in
good faith. Its object is to guarantee the reimbursement of the
expenses, such as those for the preservation of the property, 14 or for
the enhancement of its utility or productivity. 15 It permits the actual
possessor to remain in possession while he has not been reimbursed
by the person who defeated him in the possession for those
41
necessary expenses and useful improvements made by him on the
thing possessed. The principal characteristic of the right of retention
is its accessory character. It is accessory to a principal obligation.
Considering that the right of the possessor to receive the fruits
terminates when his good faith ceases, it is necessary, in order that
this right to retain may be useful, to concede to the creditor the right
to secure reimbursement from the fruits of the property by utilizing
its proceeds for the payment of the interest as well as the principal
of the debt while he remains in possession. This right of retention of
the property by the creditor, according to Scaevola, in the light of the
provisions of Article 502 of the Spanish Civil Code,16 is considered
not a coercive measure to oblige the debtor to pay, depriving him
temporarily of the enjoyment of the fruits of his property, but as a
means of obtaining compensation for the debt. The right of retention
in this case is analogous to a contract of antichresis and it can be
considered as a means of extinguishing the obligation, inasmuch as
the right to retain the thing lasts only for the period necessary to
enable the creditor to be reimbursed from the fruits for the necessary
and useful expenses. 17
According to Manresa, the right of retention is, therefore,
analogous to that of a pledge, if the property retained is a movable,
and to that of antichresis, if the property held is immovable. 18 This
construction appears to be in harmony with similar provisions of the
civil law which employs the right of retention as a means or device
by which a creditor is able to obtain the payment of a debt. Thus,
under Article 1731 of the New Civil Code, any person who has
performed work upon a movable has a right to retain it by way of
pledge until he is paid. Similarly, under Article 1914 of the same
Code, the agent may retain in pledge the things which are the object
of the agency until the principal effects reimbursement of the funds
advanced by the former for the execution of the agency, or he is
indemnified for all damages which he may have suffered as a
consequence of the execution of the agency, provided he is free from
fault. To the same effect, the depository, under Article 1994 of the
same Code, may retain the thing in pledge until the full payment of
what may be due him by reason of the deposit. The usufructuary,
pursuant to Article 612 of the same Code, may retain the property
until he is reimbursed for the amount paid for taxes levied on the
capital (Article 597) and for extraordinary repairs (Article 594). LLjur
In all of these cases, the right of retention is used as a means
of extinguishing the obligation. As amply observed by Manresa: "El
derecho de retencion, lo hemos dicho, es el derecho de prenda o el
de anticresis constituido por la ley con independencia de la voluntad
de las partes." 19 In a pledge if the thing pledged earns or produces
fruits, income, dividends or interests, the creditor shall compensate
what he receives with those which are owing him. 20 In the same
manner, in a contract of antichresis, the creditor acquires the right to
receive the fruits of an immovable of his debtor with the obligation
to apply them to the payment of the interest, if owing, and thereafter
to the principal of his credit. 21 The debtor can not reacquire
enjoyment of the immovable until he has actually paid what he owes
the creditor. 22
Applying the afore-cited principles to the case at bar,
petitioner cannot appropriate for his own exclusive benefit the tolls
which he collected from the property retained by him. It was his duty
under the law, after deducting the necessary expenses for his
42
administration, to apply such amount collected to the payment of the
interest, and the balance to the payment of the principal of the
obligation.
We hold, therefore, that the disputed tolls, after deducting
petitioner's expenses for administration, belong to Quirino
Comintan, owner of the land through which the toll road passed,
further considering that the same was on portions of the property on
which petitioner had not introduced any improvement. The trial
court itself clarified this matter when it placed the toll road under
receivership. The omission of any mention of the tolls in the decision
itself may be attributed to the fact that the tolls appear to have been
collected after the rendition of the judgment of the trial court.
The records further reveal that earnest efforts have been made
by private respondents to have the judgment executed in the most
practicable manner. They deposited in court the amount of the
judgment in the sum of P13,632.00 in cash, subject only to the
accounting of the tolls collected by the petitioner so that whatever is
due from him may be set off with the amount of reimbursement. This
is just and proper under the circumstances and, under the law,
compensation or set off may take place, either totally or partially.
Considering that petitioner is the creditor with respect to the
judgment obligation and the debtor with respect to the tolls
collected, Comintan being the owner thereof, the trial court's order
for an accounting and compensation is in accord with law. 23
With respect to the amount of reimbursement to be paid by
Comintan, it appears that the dispositive portion of the decision was
lacking in specificity, as it merely provided that Comintan and
Zamora are jointly liable therefor. When two persons are liable
under a contract or under a judgment, and no words appear in the
contract or judgment to make each liable for the entire obligation, the
presumption is that their obligation is joint or mancomunada,and each
debtor is liable only for a proportionate part of the obligation. 24 The
judgment debt of P13,632.00 should, therefore, be pro-rated in equal
shares to Comintan and Zamora.
Regarding Lot 5785-B, it appears that no public sale has yet
been conducted by the Bureau of Lands and, therefore, petitioner is
entitled to remain in possession thereof. This is not disputed by
respondent Eleuterio Zamora. 25 After public sale is had and in the
event that Ortiz is not declared the successful bidder, then he should
be reimbursed by respondent Zamora in the corresponding amount
for the improvements on Lot 5785-B.
WHEREFORE, in view hereof, the Order of respondent Court
of November 18, 1970 is hereby modified to conform to the foregoing
judgment. The Writ of Preliminary Injunction, dated January 29,
1971, is hereby dissolved. Without special pronouncement as to
costs.
FIRST DIVISION
[G.R. No. L-20264. January 30, 1971.]
CONSUELO S. DE GARCIA and ANASTACIO
GARCIA, petitioners, vs. HON. COURT OF APPEALS,
43
 ANGELINA D. GUEVARA and JUAN B.
GUEVARA, respondents.
Deogracias T. Reyes and Jose M. Luison for petitioners.
Tolentino & Garcia and D. R. Cruz for private respondents.
DECISION
FERNANDO, J p:
This petition for certiorari to review a decision of respondent
Court of Appeals was given due course because it was therein
vigorously asserted that legal questions of gravity and of moment,
there being allegations of an unwarranted departure from and a
patent misreading of applicable and controlling decisions, called for
determination by this Tribunal. The brief for petitioners-spouses,
however, failed to substantiate such imputed failings of respondent
Court. The performance did not live up to the promise. On the basis
of the facts as duly found by respondent Court, which we are not at
liberty to disregard, and the governing legal provisions, there is no
basis for reversal. We affirm.
The nature of the case presented before the lower court by
private respondent Angelina D. Guevara, assisted by her spouse,
Juan B. Guevara, as plaintiffs, was noted in the decision of
respondent Court of Appeals thus: "Plaintiff seeks recovery of 'one
(1) lady's diamond ring 18 cts. white gold mounting, with one (1)
2.05 cts. diamond-solitaire, and four (4) brills 0.10 cts. total weight'
which she bought on October 27, 1947 from R. Rebullida,
Inc." 1 Then came a summary of now respondent Guevara of her
evidence: "Plaintiff's evidence tends to show that around October 11,
1953 plaintiff while talking to Consuelo S. de Garcia, owner of La
Bulakeña restaurant recognized her ring in the finger of Mrs. Garcia
and inquired where she bought it, which the defendant answered
from her comadre. Plaintiff explained that that ring was stolen from
her house in February, 1952. Defendant handed the ring to plaintiff
and it fitted her finger. Two or three days later, at the request of
plaintiff, plaintiff, her husband Lt. Col. Juan Guevara, Lt. Cementina
of Pasay PD, defendant and her attorney proceeded to the store of
Mr. Rebullida to whom they showed the ring in question. Mr.
Rebullida examined the ring with the aid of high power lens and
after consulting the stock card thereon, concluded that it was the
very ring that plaintiff bought from him in 1947. The ring was
returned to defendant who despite a written request therefor failed
to deliver the ring to plaintiff. Hence, this case. Later on when the
sheriff tried to serve the writ of seizure (replevin), defendant refused
to deliver the ring which had been examined by Mr. Rebullida,
claiming it was lost." 2
How the defendant, Consuelo S. de Garcia, the present
petitioner before us, along with her husband Anastacio Garcia,
sought to meet plaintiff's claim was narrated thus: "On the other
hand, defendant denied having made any admission before plaintiff
or Mr. Rebullida or the sheriff. Her evidence tends to show that the
ring (Exhibit 1) was purchased by her from Mrs. Miranda who got it
44
from Miss Angelita Hinahon who in turn got it from the owner.
Aling Petring, who was hoarding in her house; that the ring she
bought could be similar to, but not the same ring plaintiff purchased
from Mr. Rebullida which was stolen; that according to a pawn-shop
owner the big diamond on Exhibit 1 was before the trial never
dismantled. When dismantled, defendant's diamond was found to
weigh 2.57 cts." 3
Plaintiff lost in the lower court. She elevated the matter to
respondent Court of Appeals with the judgment of the lower court
being reversed. It is this decision now under review.
These are the facts as found by respondent Court of Appeals:
"That the ring brought by the parties for examination by Rafael
Rebullida on December 14, 1958 was the same ring purchased by
plaintiff from B. Rebullida, Inc. on October 27, 1947 and stolen in
February, 1962 has been abundantly established by plaintiff's
evidence. Before plaintiff lost the ring, she had been wearing it for
six years and became familiar with it. Thus, when she saw the
missing ring in the finger of defendant, she readily and definitely
identified it. Her identification was confirmed by Mr. Rafael
Rebullida, whose candid testimony is entitled to great weight, with
his 30 years experience behind him in the jewelry business and being
a disinterested witness since both parties are his customers. Indeed,
defendant made no comment when in her presence Rebullida alter
examining the ring and stock card told plaintiff that that was her
ring, nor did she answer plaintiff's letter of demand, . . . asserting
ownership. Further confirmation may be found in the extra-judicial
admissions, contained in defendant's original and first amended
answers . . ." 4
These further facts likewise appear therein: "The foregoing
proof is not counter-balanced by the denial on the part of defendant
or the presentation of the ring, Exhibit I, which has a diamond-
solitaire weighing 2.57 cts., or much heavier than the lost diamond
weighing 2.05 cts. only. It is noteworthy that defendant gave a rather
dubious source of her ring. Aling Petring from whom the ring
supposedly came turned out to be a mysterious and ephemeral
figure. Miss Hinahon did not ever know her true and full name, nor
her forwarding address. She appeared from nowhere, boarded three
months in the house of Miss Hinahon long enough to sell her
diamond ring, disappearing from the scene a week thereafter.
Indeed, the case was terminated without any hearing the third-party
and fourth-party complaints, which would have shown up the
falsity of defendant's theory. Moreover, Mrs. Baldomera Miranda,
third-party defendant, who tried to corroborate defendant on the
latter's allege attempt to exchange the ring defendant bought
through is [belied] by her judicial admission in her Answer that
appellee 'suggested that she would make alterations to the mounting
and structural design of the ring to hide the true identity and
appearance of the original one' (Cunanan vs. Amparo, 45 O.G. 3796).
Finally, defendant is refuted by her own extra-judicial admissions . .
. although made by defendant's counsel. For an attorney who acts as
counsel of record and is permitted to act such, has the authority to
manage the cause, and this includes the authority to make admission
for the purpose of the litigation. . . . Her proffered explanation that
her counsel misunderstood her is puerile because the liability to
error as to the identity of the vendor and the exchange of the ring
with another ring of the same value was rather remote." 5
45
 It is in the light of the above facts as well as the finding that
the discrepancy as to the weight between the diamond-solitaire in
Exhibit I and the lost diamond was due to defendant having
"substituted a diamond-solitaire of plaintiff with a heavier stone"
that the decision was rendered, respondent Court reversing the
lower court and ordering defendant, now petitioner Consuelo S. de
Garcia, to return plaintiff's ring or fact value of P1,000.00 and costs,
as well as to pay plaintiff P1,000.00 as attorney's fee and P1,000.00 as
exemplary damages. Hence this appeal.
To repeat, there is no occasion to reverse respondent Court. It
correctly applied the law to the facts as found.
1. The controlling provision is Article 559 of the Civil Code. It
reads thus: "The possession of movable property acquired in good
faith is equivalent to a title. Nevertheless, one who has 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 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." Respondent
Angelina D. Guevara, having been unlawfully deprived of the
diamond ring in question, was entitled to recover it from petitioner
Consuelo S. de Garcia who was found in possession of the same. The
only exception the law allows is when there is acquisition in good
faith of the possessor at a public sale, in which case the owner cannot
obtain its return without reimbursing the price. As authoritatively
interpreted in Cruz v. Pahati, 6 the right of the owner cannot be
defeated even by proof that there was good faith in the acquisition
by the possessor. There is a reiteration of this principle in Aznar v.
Yapdiangco. 7 Thus: "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." 8
2. It is thus immediately apparent that there is no merit to the
contention raised in the first assigned error that her possession in
good faith, equivalent to title, sufficed to defeat respondent
Guevara's claim. As the above cases demonstrate, even on that
assumption the owner can recover the same once she can show
illegal deprivation. Respondent Court of Appeals was so convinced
from the evidence submitted that the owner of the ring in litigation
is such respondent. That is a factual determination to which we must
pay heed. Instead of proving any alleged departure from legal norms
by respondent Court, petitioner would stress Article 541 of the Civil
Code, which provides: 'A possessor in the concept of owner has in
his favor the legal presumption that he possesses with a just title and
he cannot be obliged to show or prove it." She would accord to it a
greater legal significance than that to which under the controlling
doctrines it is entitled. The brief for respondents did clearly point out
why petitioner's assertion is lacking in support not only from the
cases but even from commentators. Thus: "Actually, even under the
first clause, possession in good faith does not really amount to title,
46
for the reason that Art. 1132 of the Code provides for a period of
acquisitive prescription for movables through 'uninterrupted
possession for four years in good faith' (Art. 1955 of the old Spanish
Code, which provided a period of three years), so that many Spanish
writers, including Manresa, Sanchez Roman, Scaevola, De Buen, and
Ramos, assert that under Art. 464 of the Spanish Code (Art. 559 of
the New Civil Code), the title of the possessor in good faith is not that of
ownership, but is merely a presumptive title sufficient to serve as a basis for
acquisitive prescription (II Tolentino, Civil Code of the Phil., p. 258: IV
Manresa, Derecho Civil Español, 6th Ed., p. 380). And it is for the
very reason that the title established by the first clause of Art. 559 is
only a presumptive title sufficient to serve as a basis for acquisitive
prescription, that the clause immediately following provides that
'one who has lost any movable or has been unlawfully deprived
thereof, may recover it from the person in possession of the same.'
As stated by the Honorable Justice Jose B. L. Reyes of this Court in
Sotto vs. Enage (C.A.), 43 Off. Gaz. 5075, Dec. 1947: 'Article 559 in
fact assumes that possessor is as yet not the owner; for it is obvious
that where the possessor has come to acquire indefeasible title by, let
us say, adverse possession for the necessary period, no proof of loss
or illegal deprivation could avail the former owner of the chattel. He
would no longer be entitled to recover it under any condition.'" 9
The second assigned error is centered on the alleged failure to
prove the identity of the diamond ring. Clearly the question raised
is one of fact. What the Court of Appeals found is conclusive. Again,
petitioner could not demonstrate that in reaching such a conclusion
the Court of Appeals acted in an arbitrary manner. As made mention
of in the brief for respondents two disinterested witnesses, Mr.
Rafael Rebullida as well as Lt. Reynaldo Cementina of the Pasay City
Police Department, both of whom could not be accused of being
biased in favor of respondent Angelina D. Guevara, did testify as to
the identity of the ring.
The third assigned error of petitioners would find fault with
respondent Court relying "on the weakness of the title or evidence"
of petitioner Consuelo S. de Garcia. It is true, in the decision under
review, mention was made of petitioner Consuelo S. de Garcia
making no comment when in her presence Rebullida, after
examining the ring and the stock card, told respondent Angelina D.
Guevara that that was her ring, nor did petitioner answer a letter of
the latter asserting ownership. It was likewise stated in such decision
that there were extra-judicial admissions in the original and first
amended answers of petitioner. In the appraisal of her testimony,
respondent Court likewise spoke of her giving a rather dubious
source of her ring the person from whom she allegedly bought it
turning out "to be a mysterious and ephemeral figure." As a matter
of fact, as set forth a few pages back, respondent Court did
enumerate the flaws in the version given by petitioner. From the
weakness of the testimony offered which, as thus made clear,
petitioner, did not even seek to refute, she would raise the legal
question that respondent Court relied on the "weakness of [her] title
or evidence" rather than on the proof justifying respondent Angelina
D. Guevara's claim of ownership. Petition here would ignore the
finding of fact of respondent Court that such ownership on her part
"has been abundantly established" by her evidence. Again here, in
essence, the question raised is one of fact, and there is no justification
for us to reserve respondent Court.
47
 The legal question raised in the fourth assignment of error is
that the matter of the substitution of the diamond on the ring was a
question raised for the first time on appeal as it was never put in
issue by the pleadings nor the subject of reception of evidence by
both parties and not touched upon in the decision of the lower court.
Why no such question could be raised in the pleadings of respondent
Angelina D. Guevara was clarified by the fact that the substitution
came after it was brought for examination to Mr. Rebullida. After the
knowledge of such substitution was gained, however, the issue was
raised at the trial according to the said respondent resulting in that
portion of the decision where the lower court reached a negative
conclusion. As a result, in the motion for reconsideration, one of the
points raised as to such decision being contrary to the evidence is the
finding that there was no substitution. It is not necessary to state that
respondent Court, exercising its appellate power reversed the lower
court. What was held by it is controlling. What is clear is that there
is no factual basis for the legal arguments on which the fourth
assigned error is predicated.
What is said takes care of the fifth assigned error that
respondent Court was mistaken in its finding that there was such a
substitution. Again petitioner would have us pass on a question of
credibility which is left to respondent Court of Appeals, The sixth
assigned error would complain against the reversal of the lower
court judgment as well as petitioner Consuelo S. de Garcia being
made to pay respondent Angelina D. Guevara exemplary damages,
attorney's fees and costs. The reversal is called for in the light of the
appraisal of the evidence of record as meticulously weighed by
respondent Court. As to the attorney's fees and exemplary damages,
this is what respondent Court said in the decision under review:
"Likewise, plaintiff is entitled to recover reasonable attorney's fees in
the sum of P1,000, it being just and equitable under the
circumstances, and another P1,000 as exemplary damages for the
public good to discourage litigants from resorting to fraudulent
devices to frustrate the ends of justice, as defendant herein tried to
substitute the ring, Exhibit 1, for plaintiff's ring." 10 Considering the
circumstances, the cursory discussion of the sixth assigned error on
the matter by petitioner fails to demonstrate that respondent Court's
actuation is blemished by legal defects.
WHEREFORE, the decision of respondent Court of Appeals
of August 6, 1962 is hereby affirmed. With costs.
EN BANC
[G.R. No. L-19614. March 27, 1971.]
JESUS M. GABOYA, as Administrator of the Estate of
DON MARIANO CUI, plaintiff-
appellant, vs. ANTONIO MA. CUI, MERCEDES CUl-
RAMAS, and GIL RAMAS, defendants-appellees, JESUS
MA. CUI, JOSE MA. CUI, SERAFIN MA. CUI, JORGE
MA. CUI, ROSARIO CUI DE ENCARNACION,
PRECILLA C. VELEZ, and LOURDES C.
VELEZ, intervenors-appellants, VICTORINO
REYNES, defendant-in-counterclaim and appellee.
48
 Vicente Jayme for plaintiff-appellant.
Hector L. Hofileñia, Candido Vasquez & Jaime R. Nuevas for
defendants-appellees.
Jose W. Diokno for intervenors-appellants.
SYLLABUS
1. CIVIL LAW; PROPERTY; OWNERSHIP; INDUSTRIAL
ACCESSION BY EDIFICATION; RULE; NOT APPLICABLE IN
CASE AT BAR — Under the articles of the Civil Code on industrial
accession by edification on the principal land (Articles 445 to 456 of
the Civil Code), such accession is limited either to buildings erected
on the land of another, or buildings constructed by the owner of the
land with materials owned by someone else. Thus, Article 445,
establishing the basic rule of industrial accession, prescribes that —
"Whatever is built, planted or sown on the land of another, and the
improvements or repairs made thereon, belong to the owner of the
land subject to the provisions of the following articles " while Article
449 states: "He who builds, plants or sows in bad faith on the land of
another, loses what is built, planted or sown without right to
indemnity." Articles 447 and 455, in turn, treat of accession produced
by the landowner's building, planting and sowing "with the
materials of another " and when the "materials, plants or seeds
belong to a third person " other than the landowner or the builder,
planter or sower. Nowhere in these articles on industrial accession is
there any mention of the case of a landower building on his own land
with materials owned by himself (which is the case of appellees
Mercedes and Antonio Cui). The reason for the omission is readily
apparent: recourse to the rules of accession are totally unnecessary
and inappropriate where the ownership of land and of the materials
used to build thereon are concentrated on one and the same person.
Even if the law did not provide for accession, the landowner would
necessarily own the building, because he has paid for the materials
and labor used in constructing it. We deem it unnecessary to belabor
this obvious point.
2. ID.; CONTRACTS; MORTGAGE; MORTGAGOR, NOT
DIRECTLY LIABLE FOR LOAN SECURED BY MORTGAGE. —
Appellants urge that the loan for the construction of the building was
obtained upon the security of a mortgage not only upon the share of
appellees but also upon the undivided interest of Don Manano Cui
in the lots in question. That factor is irrelevant to the ownership of
the building, because the money used for the building was loaned
exclusively to the appellees, and they were the ones primarily
responsible for its repayment. Since the proceeds of the loan was
exclusively their property, the building constructed with the funds
loaned is likewise their own. A mortgagor does not become directly
liable for the payment of the loan secured by the mortgage, in the
absence of stipulation to that effect; and his subsidiary role as
guarantor does not entitle him to the ownership of the money
borrowed, for which the mortgage is mere security.
3. ID. ID.; RESCISSION; WITHOUT SUFFICIENT BASIS IN
CASE AT BAR. — The alleged breach of contract by the appellees
Antonio and Mercedes Cui could only consist in their failure to pay
to the usufructuary the rental value of the area occupied by the
building constructed by them. But as the rental value in question had
49
 not been ascertained or fixed either by the parties or by the court
prior to the decision of 31 October 1961, now under appeal, nor had
Don Mariano Cui, or anyone else in his behalf, made any previous
demand for its payment, the default, if any, can not be exclusively
blamed upon the defendants-appellees. Hence, the breach is not "so
substantial and fundamental as to defeat the object of the parties in
making the agreement" as to justify the radical remedy of rescission.
This Court, in Banahaw, Inc. vs. Dejarme, 55 Phil. 338, ruled that —
"... Under the third paragraph of Article 1124 (Now Article 1191,
Civil Code of the Philippines) of the Civil Code, the court is given a
discretionary power to allow a period within which a person in
default may be permitted to perform the stipulation upon which the
claim for resolution of the contract is based. The right to resolve or
rescind a contract for nonperformance of one of its stipulations is
therefore, not absolute."
DECISION
REYES, J.B.L., J p:
Direct appeal (before Republic Act 5440) from a decision of
the Court of First Instance of Cebu (in its Civil Case No. R-1720)
denying resolution of a contract of sale of Lots 2312, 2313 and 2319
executed on 20 March 1946 by the late Don Mariano Cui in favor of
three of his children, Antonio Ma. Cui, Mercedes Cui de Ramas and
Rosario Cui de Encarnacion, but sentencing the first two, Antonio
Cui and Mercedes Cui, to pay, jointly and severally (in solidum), to
the Judicial Administrator of the Estate of Mariano Cui (appellant
Jesus M. Gaboya) the amount of P100,088.80, with legal interest from
the interposition of the complaint (5 November 1951), plus P5,000.00
attorney's fees and the costs.
The antecedents of the case are stated in the previous decision
of this Supreme Court rendered on 31 July 1952, in the case of
Antonio and Mercedes Cui vs. Judge Piccio, et al., 91 Phil. 712:
"Don Mariano Cui, widower, as owner of
lots Nos. 2312, 2313 and 2319 situated in the City of
Cebu, with an area of 152 square meters, 144 square
meters and 2,362 square meters, respectively, or a
total extension of 2,658 square meters, on March 8,
1946, sold said three lots to three of his children
named Rosario C. de Encarnacion, Mercedes C. de
Ramas and Antonio Ma. Cui, pro indiviso for the
sum of P64,000. Because Rosario C. de Encarnacion
for lack of funds was unable to pay her
corresponding share of the purchase price, the sale
to her was cancelled and the one-third of the
property corresponding to her was returned to the
vendor. These three lots are commercial. The
improvements thereon were destroyed during the
last Pacific War so that at the time of the sale in
1946, there were no buildings or any other
improvements on them. Because of the sale of these
lots pro indiviso and because of the cancellation of
the sale to one of the three original vendees, Don
50
Mariano and his children Mercedes and Antonio
became co-owners of the whole mass in equal
portions. In the deed of sale vendor Don Mariano
retained for himself the usufruct of the property in
the following words:
'. . . do hereby sell, transfer, and
convey to Messrs. Rosario C. de
Encarnacion, Mercedes C. de Ramas and
Antonio Ma, Cui, the above-mentioned
parcel of land in equal parts, . . . and the
further consideration, that I, shall enjoy the
fruits and rents of the same, as long as my
natural life shall last. Granting and
conveying unto the said buyers the full
rights as owners to enjoy the constructive
possession of the same, improve, construct
and erect a building in the lot, or do whatever
they believe to be proper and wise, as long as
the same will not impair nor obstruct my right
to enjoy the fruits and rents of the same. . .'
"Subsequently, a building was erected on a
portion of this mass facing Calderon street and was
occupied by a Chinese businessman for which he
paid Don Mariano P600 a month as rental. The date
when the building was constructed and by whom
do not appear in the record.
"Sometime after the sale to Mercedes and
Antonio the two applied to the Rehabilitation
Finance Corporation (RFC) for a loan of P130,000
with which to construct a 12-door commercial
building presumably on a portion of the entire
parcel corresponding to their share. In order to
facilitate the granting of the loan and inasmuch as
only two of the three co-owners applied for the
loan, Don Mariano on January 7, 1947, executed an
authority to mortgage (Annex U) authorizing his
two children co-owners to mortgage his share, the
pertinent portion of said authority reading thus:
'That by virtue of these presents, I hereby
agree, consent, permit and authorize my said co-
owners to mortgage, pledge my share so that they
may be able to construct a house or building in the
said property, provided however, that the rents of
the said land shall not be impaired and will always be
received by me.'
The loan was eventually granted and was secured
by a mortgage on the three lots in question, Don
Mariano being included as one of the three
mortgagors and signing the corresponding
promissory note with his two co-owners. He did
not however, join in the construction of the 12-door
commercial building as may be gathered from the
"Convenio de Asignacion de Parte' (Annex V)
wherein it was agreed among the three co-owners
51
to assign to Don Mariano that one-third of the
whole mass facing Calderon street and on which
was erected the building already referred to as
being occupied by a Chinese businessman and for
which he was paying Don Mariano P600 a month
rental. The area of this one-third portion was fixed
at 900 square meters approximately one-third of
the total area of these three lots. The pertinent
portion of this Annex V reads as follows:
'Que como quiera que, la propiedad arriba
descrita est actualmente hipotecada a la
Rehabilitation Finance Corporation para
garantizar la construccion que mis condueños
contruyeron en la parte que les corresponde;
'Y que como quiera que, el Sr. Don
Mariano Cui, uno de los condueños, no ha querido
unirse a la construccion de dicho edificio, y desea que
la parte que le corresponda sea la 1/3 que est
dando frente a la Calle Calderon.'
The 12-door commercial building was
eventually constructed and the builder-owners
thereof Mercedes and Antonio received and
continued to receive the rents thereof amounting to
P4,800 a month and paying therefrom the
installments due for payment on the loan to the
Rehabilitation Finance Corporation.
On March 25, 1948, two other children of
Don Mariano named Jesus and Jorge brought an
action (Civil case No. 599-R) in the Court of First
Instance of Cebu for the purpose of annulling the
deed of sale of the three lots in question on the
ground that they belonged to the conjugal
partnership of Don Mariano and his deceased wife
Antonia Perales. Thereafter, plaintiffs Jesus and
Jorge applied for the appointment of a receiver to
take charge of the lots and of the rentals of the
building. This petition was denied on November 8,
1948.
On March 19, 1949, Rosario C. Encarnacion,
that daughter of Don Mariano who was one of the
original vendees, filed a petition to declare her
father incompetent and to have a guardian
appointed for his property, in Special Proceeding
No. 481-R of the Court of First Instance of Cebu. In
May 1949 the petition was granted and Don
Mariano was declared incompetent and Victorino
Reynes was appointed guardian of his property.
Thereafter, the complaint in civil case No. 599-R
seeking to annul the deed of sale of the three lots in
favor of Mercedes and Antonio was amended so as
to include as plaintiffs not only the guardian
Victorino Reynes but also all the other children of
Don Mariano.
52
 On June 15, 1949, guardian Victorino Reynes
filed a motion in the guardianship proceedings
seeking authority to collect the rentals from the
three lots in question and asking the Court to order
Antonio and Mercedes to deliver to him as
guardian all the rentals they had previously
collected from the 12-door commercial building,
together with all the papers belonging to his ward.
This motion was denied by Judge Piccio in his
order of July 12, 1949. The guardian did not appeal
from this order.
"On May 22, 1951, Judge Saguin rendered a
decision in civil case No. 599-R and found that the
three lots in question were not conjugal property
but belonged exclusively to Don Mariano and so
upheld the sale of two-thirds of said lots to Antonio
and Mercedes. The plaintiffs appealed to the Court
of Appeals where the case is now pending."
From the Court of Appeals the case was brought to the
Supreme Court, and the decision of Judge Saguin upholding the
validity of the sale in favor of Antonio and Mercedes Cui was finally
affirmed on 21 February 1957, in Cui vs. Cui, 100 Phil. 914.
This third case now before Us was started by the erstwhile
guardian of Don Mariano Cui (while the latter was still alive) in
order to recover P126,344.91 plus legal interest from Antonio Cui
and Mercedes Cui (Record on Appeal, pages 2-3) apparently as fruits
due to his ward by virtue of his usufruct. The guardian's complaint
was supplemented and amplified by a 1957 complaint in
intervention (duly admitted) filed by the other compulsory heirs of
Mariano Cui, who had died on 29 July 1952, some nine months after
the present case was instituted in the court below (Record on Appeal,
pages 67-68).
In essence, the complaint alleges that the usufructuary right
reserved in favor of Don Mariano Cui extends to and includes the
rentals of the building constructed by Antonio Cui and Mercedes
Cui on the land sold to them by their father; that the defendants
retained those rentals for themselves; that the usufructuary rights of
the vendor were of the essence of the sale, and their violation entitled
him to rescind (or resolve) the sale. It prayed either for rescission
with accounting, or for delivery of the rentals of the building with
interests, attorneys' fees and costs (Record on Appeal, pages 12-38).
The amended answer, while admitting the reserved usufruct
and the collection of rentals of the building by the defendants,
denied that the usufructuary rights included or extended to the said
rentals, or that such usufruct was of the essence of the sale; that the
vendor (Don Mariano Cui) had waived and renounced the usufruct
and that the defendants vendees gave the vendor P400.00 a month
by way of aid; that the original complaint having sought fulfillment
of the contract, plaintiff can not thereafter seek rescission; that such
action is barred by res judicata (on account of the two previous
decisions of the Supreme Court and by extinctive prescription.
Defendants counter claimed for actual and moral damages and
attorney's fees.
Plaintiffs denied the allegations in the counterclaim.
53
 From a consideration of the pleadings, the basic and pivotal
issue appears to be whether the usufruct reserved by the vendor in
the deed of sale, over the lots in question that were at the time vacant
and unoccupied, gave the usufructuary the right to receive the
rentals of the commercial building constructed by the vendees with
funds borrowed from the Rehabilitation and Finance Corporation,
the loan being secured by a mortgage over the lots sold. Similarly, if
the usufruct extended to the building, whether the failure of the
vendees to pay over its rentals to the usufructuary entitled the latter
to rescind, or more properly, resolve the contract of sale. In the third
place, should the two preceding issues be resolved affirmatively,
whether the action for rescission due to breach of the contract could
still be enforced and was not yet barred.
The court below declared that the reserved right of usufruct
in favor of the vendor did not include, nor was it intended to include,
the rentals of the building subsequently constructed on the vacant
lots, but that it did entitle the usufructuary to receive a reasonable
rental for the portion of the land occupied by the building, which the
Court a quo fixed at P1,858.00 per month; and that the rentals for the
land from November, 1947, when the building was rented, to 29 July
1952, when Don Mariano died, amounted to P100,088.80. It also
found no preponderant evidence that the seller, Don Mariano Cui,
had ever waived his right of usufruct, as contended by the
defendants; and that the Supreme Court, in denying reconsideration
of its second (1957) decision (100 Phil. 914), had, like the court of
origin, refused to pass upon the extent of the usufructuary rights of
the seller, specially because the present cases was already pending
in the Court of First Instance, hence no res judicata existed. No
attorney's fees were awarded to the defendants, but they were
sentenced to pay counsel fees to plaintiffs.
Both parties appealed from the decision of the court a quo.
We find no error in the decision appealed from. As therein
pointed out, the terms of the 1946 deed of sale of the vacant lots in
question made by the late Don Mariano Cui in favor of his three
children, Rosario, Mercedes and Antonio Cui, in consideration of the
sum of P64,000.00 and the reserved usufruct of the said lot in favor
of the vendor, as amplified by the deed of 7 January 1947,
authorizing Mercedes, and Antonio Cui to borrow money, with the
security of a mortgage over the entirety of the lots, in order to enable
them to construct a house or building thereon —
"provided, however, that the rents of said land shall
not be impaired and will always received by me."
clearly prove that the reserved usufruct in favor of the vendor,
Mariano Cui, was limited to the rentals of the land alone. Had it been
designed to include also the rents of the buildings intended to be
raised on the land, an express provision would have been included
to that effect, since in both documents (heretofore quoted) the
possibility of such construction was clearly envisaged and
mentioned.
Appellants, however, argue that the terms of the deed
constituting the usufruct are not determinative of the extent of the
right conferred; and that by law, the enjoyment of the rents of the
building subsequently erected passed to the usufructuary, by virtue
of Article 571 of the Civil Code of the Philippines (Article 479 of the
Spanish Civil Code of 1889) prescribing that:
54
 "Art. 571. The usufructuary shall have the right to
enjoy any increase which the thing in usufruct may
acquire through accession, the servitudes established in
its favor, and, in general, all the benefits inherent
therein",
inasmuch as (in the appellants' view) the building constructed by
appellees was an accession to the land.
This argument is not convincing. Under the articles of the
Civil Code on industrial accession by edification on the principal
land (Articles 445 to 456 of the Civil Code) such accession is limited
either to buildings erected on the land of another, or buildings
constructed by the owner of the land with materials owner by someone
else.
Thus, Article 445, establishing the basic rule of industrial
accession, prescribes that —
"Whatever is built, planted or sown on the land of
another, and the improvements or repairs made thereon,
belong to the owner of the land subject to the provisions
of the following articles."
while Article 449 states:
"He who builds, plants or sows in bad faith on
the land of another, loses what is built, planted or sown
without right to indemnity." (Emphasis supplied)
Articles 447 and 445, in turn, treat of accession produced by
the landowner's building, planting and sowing "with the materials of
another" and when "the materials, plants or seeds belong to a third
person" other than the landowner or the builder, planter or sower.
Nowhere in these articles on industrial accession is there any
mention of the case of landowner building on his own land with
materials owned by himself (which is the case of appellees Mercedes
and Antonio Cui). The reason for the omission is readily apparent:
recourse to the rules of accession are totally unnecessary and
inappropriate where the ownership of land and of the materials used
to build thereon are concentrated on one and the same person. Even
if the law did not provide for accession, the landowner would
necessarily own the building, because he has paid for the materials
and labor used in constructing it. We deem it unnecessary to belabor
this obvious point.
There is nothing in the authorities (Manresa, Venezian,
Santamaria, and Borrell) cited by appellants that specifically deals
with constructions made by a party on his own land, with his own
materials, and at his own expense. The authorities cited merely
indicate the application in general of the rules of accession. But as
already stated above, the Civil Code itself limits the cases of
industrial accession to those involving land and materials belonging
to different owners. Anyway, commentators' opinions are not
binding where not in harmony with the law itself.
The author that specifically analyses the situation of the
usufructuary vis-á-vis constructions made by the landowner with his
own materials is Scaevola (Codigo Civil, 2d Edition, pages 288 to
55
297); and his conclusion after elaborate discussion is that, at the most
— usufruct, for which the latter should be indemnified. This is precisely
"(b) El nudo propietario no podria, sin el
consentimiento del usufructuario, hacer construcciones.
plantaciones y siembras en el predio objecto del
usufructo; y en el caso de que aqul las cosintiese, la
utilizacion ser comun en los frutos y productos de lo
sembrado y plantado, y con respecto a las construcciones, el
usufructuario tendrá derecho a la renta que de mutuo acuerdo
se fije a las mismas; en su defecto, por la autoridad
judicial." (Author cit., Emphasis supplied)
Scaevola's opinion is entirely in harmony with Article 595 of
the Civil Code of the Philippines, prescribing that —
"The owner may construct any works and make
any improvements of which the immovable in usufruct
is susceptible, or make new plantings thereon if it be
rural, provided that such acts do not cause a diminution
in the value of the usufruct or prejudice the right of the
usufructuary."
Note that if the income from constructions made by the owner
during the existence of the usufruct should be held to accrue
automatically to the usufructuary under Article 571, such
improvements could not diminish the value of the usufruct nor
prejudice the right of the usufructuary; and the qualifications by
Article 595 on the owner's right to build would be redundant. The
limitations set by Article 595 to the construction rights of the naked
owner of the land are evidently premised upon the fact that such
constructions would necessarily reduce the area of the land under
what the court a quo has done in sentencing the appellee owners of
the building to pay to the usufructuary a monthly rent of P1,758.00
for the area occupied by their building, after mature consideration,
of the rental values of lands in the neighborhood.
Additional considerations against the thesis sustained by
appellants are (1) that the amount invested in the building represents
additional capital of the landowners not foreseen when the usufruct
was created; and (2) that no landowner would be willing to build
upon vacant lots under usufruct if the gain therefrom were to go to
the usufructuary while the depreciation of the value of the building
(as distinguished from the necessary repairs) and the amortization
of its cost would burden exclusively the owner of the land. The
unproductive situation of barren lots would thus be prolonged for
an indefinite time, to the detriment of society. In other words, the
rule that appellants advocate would contradict the general interest
and be against public policy.
Appellants urge, in support of their stand, that the loan for
the construction of the building was obtained upon the security of a
mortgage not only upon the share of appellees but also upon the
undivided interest of Don Mariano Cui in the lots in question. That
factor is irrelevant to the ownership of the building, because the
money used for the building was loaned exclusively to the appellees,
and they were the ones primarily responsible for its repayment.
Since the proceeds of the loan was exclusively their property, 1 the
building constructed with the funds loaned is likewise their own. A
mortgagor does not become directly liable for the payment of the
56
loan secured by the mortgage, in the absence of stipulation to that
effect; and his subsidiary role as guarantor does not entitle him to
the ownership of the money borrowed, for which the mortgage is
mere security.
We agree with the trial court that there was no adequate proof
that the vendor, Don Mariano Cui, ever renounced his usufruct. The
alleged waiver was purely verbal, and is supported solely by the
testimony of Antonio Cui, one of the alleged beneficiaries thereof. As
a gratuitous renunciation of a real right over immovable property
that was created by public document, the least to be expected in the
regular course of business is that the waiver should also appear in
writing. Moreover, as pointed out in the appealed decision (Record
on Appeal, page 184, et seq.), in previous pleadings sworn to by
Antonio Cui himself, in Civil Case No. 599 and Special Proceeding
481-R of the Cebu Court of First Instance (Exhibits "I," "J," and "20-
A"), he and his sister Mercedes had contended that Don Mariano Cui
had been receiving from them P400.00 per month as the value of his
usufruct, and never claimed that the real right had been renounced
or waived. The testimony of Antonio Cui on the alleged waiver,
given after the usufructuary had been declared incompetent and
could no longer contradict him, is obviously of negligible probative
value.
Turning now to the second issue tendered by herein
appellants, that the non-compliance with the provisions concerning
the usufruct constituted sufficient ground for the rescission (or
resolution) of the sale under the tacit resolutory condition
established by Article 1191 of the Civil Code. What has been stated
previously in discussing the import of Don Mariano's usufruct
shows that the alleged breach of contract by the appellees Antonio
and Mercedes Cui could only consist in their failure to pay to the
usufructuary the rental value of the area occupied by the building
constructed by them. But as the rental value in question had not been
ascertained or fixed either by the parties or the court, prior to the
decision of 31 October 1961, now under appeal, nor had Don
Mariano Cui, or anyone else in his behalf, made any previous
demand for its payment, the default, if any, can not be exclusively
blamed upon the defendants-appellees. Hence, the breach is not "so
substantial and fundamental as to defeat the object of the parties in
making the agreement" 2 as to justify the radical remedy of
rescission. This Court, in Banahaw, Inc. vs. Dejarme, 55 Phil. 338,
ruled that —
". . . Under the third paragraph of article
1124 3 of the Civil Code, the court is given a
discretionary power to allow a period within which
a person in default may be permitted to perform
the stipulation upon which the claim for resolution
of the contract is based. The right to resolve or
rescind a contract for nonperformance of one of its
stipulations is, therefore, not absolute."
We have stated "the default, if any," for the reason that
without previous ascertainment of the exact amount that the
defendants-appellees were obligated to turn over to the
usufructuary by way of reasonable rental value of the land occupied
by their building, said parties can not be considered as having been
in default (mora) for failure to turn over such monies to the
usufructuary. "Ab illiquido non fit mora": this principle has been
57
repeatedly declared by the jurisprudence of Spanish Supreme Court
(v. Manresa, Commentaries to the Spanish Civil Code [5th Ed.], Vol.
8, No. 1, page 134) that is of high persuasive value in the absence of
local adjudications on the point.
"No puede estimarse que incurre en mora el
obligado al pago de cantidad mientras esta no sea
liquida, y tenga aquél conocimiento por virtud de
requirimiento o reclamacion judicial de lo que debe
abonar" (Sent. TS of Spain, 13 July 1904)
"Segun tiene declarado esta sala con repeticion,
no se puede establecer que hay morosidad, ni condenar
por tal razon al abono de intereses, cuando no se conoce
la cantidad liquida reclamable" (Sent. TS of Spain, 29
November 1912)
". . .es visto que no existiendo obligacion de
entregar cantidad hasta tanto que se liquide, no puede
estimarse, segun jurisprudencia, que los recurridos
incurran en mora, y por tanto que hayan de pagar
intereses legales de la cantidad que en su caso resulte."
(Sent. TS of Spain, 29 April 1914)
In the absence of default on the part of the defendants-
vendees, Article 1592 of the Civil Code of the Philippines, 4 that is
invoked by appellants in support of their alleged right to rescind the
sale, is not applicable: for said article (which is a mere variant of the
general principle embodied in Article 1191, of the same Code)
presupposes default of the purchasers in the fulfillment of their
obligations. As already noted, no such default or breach could occur
before liquidation of the usufructuary's credit; and the time for
paying such unliquidated claim can not be said to have accrued until
the decisions under appeal was rendered, fixing the rental value of
the land occupied by the building.
The filing of the initial complaint by Victoriano Reynes, then
guardian of the late Don Mariano in 1951, seeking to recover
P126,344.91 plus interest, did not place appellees in default, for that
complaint proceeded on the theory that the usufructuary was
entitled to all the rentals of the building constructed by the appellees
on the lot under usufruct; and as We have ruled, that theory was not
legally tenable. And the 1957 complaint in intervention, seeking
rescission of the sale as alternative remedy, was only interposed after
the death of the usufructuary in 1952, and the consequent extinction
of the usufruct, conformably to Article 603, paragraph (1), of the
Civil Code.
It is also urged by the appellants that the usufruct was a
condition precedent to the conveyance of ownership over the land in
question to herein appellees, and their failure to comply with their
obligations under the usufruct prevented the vesting of title to the
property in said appellees. We need not consider this argument,
since We have found that the usufruct over the land did not entitle
the usufructuary to either the gross or the net income of the building
erected by the vendees, but only to the rental value of the portion of
the land occupied by the structure (in so far as the usufructuary was
prevented from utilizing said portion), and that rental value was not
liquidated when the complaints were filed in the court below; hence,
there was no default in its payment. Actually, this theory of
appellants fails to take into account that Don Mariano could not
58
retain ownership of the land and, at the same time, be the
usufructuary thereof. His intention of the usufructuary rights in
itself imports that he was no longer its owner. For usufruct is
essentially jus in re aliena; and to be a usufructuary of one's own
property is in law a contradiction in terms, and a conceptual
absurdity.
The decision (Exhibit "30") as well as the resolution of this
Court upon the motion to reconsider filed in the previous case (100
Phil. 914) refusing to adjudicate the usufructuary rights of Don
Mariano in view of the pendency of the present litigation (Exhibit
"22") amply support the trial court's overruling of the defense of res
judicata.
Summing up, We find and hold:
(1) That the usufructuary rights of the late Don Mariano Cui,
reserved in the deed of sale (Exhibit "A" herein), was over the land
alone and did not entitle him to the rents of the building later
constructed thereon by defendants Mercedes and Antonio Cui at
their own expense.
(2) That said usufructuary was entitled only to the reasonable
rental value of the land occupied by the building aforementioned.
(3) That such rental value not having been liquidated until the
judgment under appeal was rendered, Antonio and Mercedes Cui
were not in default prior thereto, and the deed of sale was, therefore,
not subject to rescission.
(4) That, as found by the court below, the reasonable rental
value of the land occupied by the defendants' building totalled
P100,088.80 up to the time the usufructuary died and the usufruct
terminated.
(5) That pursuant to Articles 2208 (No. 11), 2210 and 2213 of
the Civil Code, 5 the trial court had discretion to equitably award
legal interest upon said sum of P100,088.80, as well as P5,000.00
attorney's fees, considering that defendants Cui have enjoyed the
said rental value of the land during all those years.
WHEREFORE, finding no reversible error in the appealed
decision, the same is hereby affirmed. Costs against appellant-
intervenors, Jesus Ma. Cui, Jose Ma. Cui, Serafin Ma. Cui, Jorge Ma.
Cui, Rosario Cui de Encarnacion, Precilla C. Velez, and Lourdes C.
Velez.
EN BANC
[G.R. No. L-14652. June 30, 1960.]
JUAN GARGANTOS, petitioner, vs. TAN YANON and
THE COURT OF APPEALS, respondents.
Jose T. Nery for petitioner.
Constantino P. Tadena for respondents.
SYLLABUS
59
 EASEMENT OF LIGHT AND VIEW; TWO ADJOINING
ESTATES FORMERLY OWNED BY ONE PERSON; WHEN
EXISTENCE OF DOORS AND WINDOWS IS EQUIVALENT TO A
TITLE. — Where two adjoining estates were formerly owned by just
one person who introduced improvements on both such that the
wall of the house constructed on the first estate extends to the wall
of the camarin on the second estate; and at the time of the sale of the
first estate, there existed on the aforementioned wall of the house,
doors and windows which serve as passages for light and view,
there being no provision in the deed of sale that the easement of light
and view will not be established, the same is covered by Article 624,
New Civil code, which provides that the existence of an apparent
sign of easement between two estates established by the proprietor
of both, shall be considered, if one of them is alienated, as a title so
that easement will continue actively and passively, unless at the time
the ownership of the estate is divided, the contrary is stated in the
deed of alienation of either of them, or the sign is made to disappear
before the instrument is executed. The existence of doors and
windows on the aforesaid wall of the house is equivalent to a title,
for the visible and permanent sign of an easement is the title that
characterizes its existence. But while the law declares that the
easement is to "continue", the easement actually arises for the first
time only upon alienation of either estate, inasmuch as before that
time there is no easement to speak of, there being but one owner of
both estates (Article 613, N.C.C.).
DECISION
GUTIERREZ DAVID, J p:
Juan Gargantos appeals by certiorari from the decision of the
Court of Appeals reversing the judgment of the Court of First
Instance of Romblon.
The record discloses that the late Francisco Sanz was the
former owner of a parcel of land containing 888 square meters, with
the buildings and improvements thereon, situated in the poblacion of
Romblon. He subdivided the lot into three and then sold each
portion to different persons. One portion was purchased by
Guillermo Tengtio who subsequently sold it to Vicente Uy Veza.
Another portion, with the house of strong materials thereon, was
sold in 1927 to Tan Yanon, respondent herein. This house has on its
northeastern side, doors and windows overlooking the third portion,
which, together with the camarin and small building thereon, after
passing through several hands, was finally acquired by Juan
Gargantos, petitioner herein.
On April 23, 1955, Gargantos applied to the Municipal Mayor
of Romblon for a permit to demolish the roofing of the old camarin.
The permit having been granted, Gargantos tore down the roof of
the camarin. On May 11, 1955, Gargantos asked the Municipal
Council of Romblon for another permit, this time in order to
construct a combined residential house and warehouse on his lot.
Tan Yanon opposed approval of this application.
Because both the provincial fiscal and district engineer of
Romblon recommended granting of the building permit to
Gargantos, Tan Yanon filed against Gargantos an action to restrain
him from constructing a building that would prevent plaintiff from
60
receiving light and enjoying the view through the windows of his
house, unless such building is erected at a distance of not less than
three meters from the boundary line between the lots of plaintiff and
defendant, and to enjoin the members of the Municipal Council of
Romblon from issuing the corresponding building permit to
defendants. The case as against the members of the Municipal
Council was subsequently dismissed with concurrence of plaintiff's
council. After trial, the Court of First Instance of Romblon rendered
judgment dismissing the complaint and ordering plaintiff to pay
defendant the sum of P12,500.00 by way of compensatory,
exemplary, moral and moderate damages.
On appeal, the Court of Appeals set aside the decision of the
Court of First Instance of Romblon and enjoined defendant from
constructing his building unless "he erects the same at a distance of
not less than three meters from the boundary line of his property, in
conformity with Article 673 of the New Civil Code."
So Juan Gargantos filed this petition for review of the
appellate Court's decision. The focal issue herein is whether the
property of respondent Tan Yanon has an easement of light and view
against the property of petitioner Gargantos.
The kernel of petitioner's argument is that respondent never
acquired any easement either by title or by prescription. Assuredly,
there is no deed establishing an easement. Likewise, neither
petitioner nor his predecessors-in-interest have ever executed any
deed whereby they recognized the existence of the easement, nor has
there been final judgment to that effect. Invoking our decision in
Cortes vs. Yu-Tibo (2 Phil., 24), petitioner maintains that respondent
has not acquired an easement by prescription because he has never
formally forbidden petitioner from performing any act which would
be lawful without the easement, hence the prescriptive period never
started.
It is obvious, however, that Article 538, O.C.C. (now Article
621, N.C.C.) and the doctrine in the Yu-Tibo case are not applicable
herein because the two estates, that now owned by petitioner, and
that owned by respondent, were formerly owned by just one person,
Francisco Sanz. It was Sanz who introduced improvements on both
properties. On that portion presently belonging to respondent, he
constructed a house in such a way that the northeastern side thereof
extends to the wall of the camarin on the portion now belonging to
petitioner. On said northeastern side of the house, there are windows
and doors which serve as passages for light and view. These
windows and doors were in existence when respondent purchased
the house and lot from Sanz. The deed of sale did not provide that
the easement of light and view would not be established. This then
is precisely the case covered by Article 541, O.C.C. (now Article 624,
N.C.C.) which provides that the existence of an apparent sign of
easement between two estates, established by the proprietor of both,
shall be considered, if one of them is alienated, as a title so that the
easement will continue actively and passively, unless at the time the
ownership of the two estates is divided, the contrary is stated in the
deed of alienation of either of them, or the sign is made to disappear
before the instrument is executed. The existence of the doors and
windows on the northeastern side of the aforementioned house, is
equivalent to a title, for the visible and permanent sign of an
easement is the title that characterizes its existence
61
(Amor vs. Florentino, 74 Phil., 403). It should be noted, however, that
while the law declares that the easement is to "continue" the
easement actually arises for the first time only upon alienation of
either estate, inasmuch as before that time there is no easement to
speak of, there being but one owner of both estates (Article 530,
O.C.C., now Article 613, N.C.C.).
We find that respondent Tan Yanon's property has an
easement of light and view against petitioner's property. By reason
of this easement, petitioner cannot construct on his land any building
unless he erects it at a distance of not less than three meters from the
boundary line separating the two estates.
Wherefore, the appealed decision is hereby affirmed with
costs against petitioner.

62