G.R. No.

153625 July 31, 2006

Heirs of MARCELINO CABAL, represented by VICTORIA CABAL, petitioner,

vs.
Spouses LORENZO CABAL1 and ROSITA CABAL, respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure assailing the Decision2 of the Court of Appeals (CA)
dated September 27, 2001 in CA-G.R. SP No. 64729 which affirmed in toto the
Decision of the Regional Trial Court, Branch 70, Iba, Zambales (RTC) dated
August 10, 2000 in Civil Case No. RTC-1489-I; and the CA Resolution3 dated
May 22, 2002 which denied the Motion for Reconsideration of Marcelino Cabal
(Marcelino).

The factual background of the case is as follows:

During his lifetime, Marcelo Cabal (Marcelo) was the owner of a 4,234-square
meter parcel of land situated at Barrio Palanginan, Iba, Zambales, described as
Lot G and covered by Original Certificate of Title (OCT) No. 29 of the Registry of
Deeds of Zambales.

Sometime in August 1954,4 Marcelo died, survived by his wife Higinia

Villanueva (Higinia) and his children: Marcelino, Daniel, Cecilio, Natividad,
Juan, Margarita, Lorenzo, Lauro and Anacleto.5 It appears that sometime in
1949, five years before he died, Marcelo allowed his son, Marcelino, to build his
house on a portion of Lot G, now the southernmost portion of Lot 1-E of
Transfer Certificate of Title (TCT) No. 43419.6 Since then, Marcelino resided
thereon.7 Later, Marcelino's son also built his house on the disputed
property.8

On August 17, 1964, Marcelo's heirs extra-judicially settled among themselves

Lot G into undivided equal shares of 423.40-square meters each and Transfer
Certificate of Title (TCT) No. T-8635 was issued in their names.9

On September 17, 1973, Daniel sold 380 square meters of his 423.40-square
meter undivided share to spouses Oscar Merete and Clarita Ebue.10

On September 12, 1976, the heirs subdivided Lot G into Lot G-1 in favor of
Marcelino, resulting in the issuance of TCT No. T-22656;11 and Lot G-2 in
favor of Higinia, Daniel, Natividad, Juan, Cecilio, Margarita, Lorenzo, Lauro
and Anacleto, resulting in the issuance of TCT No. 22657.12
On March 1, 1977, Marcelino mortgaged his share, as described under TCT No.
22656, to the Rural Bank of San Antonio (Zambales), Inc.13 The mortgage on
the property was subsequently released on December 19, 1983.14

In the interim, based on consolidated subdivision plan (LRC) Pcd-24078, Lot G-

2 was further subdivided and the remaining portion, known as Lot 1 of the
subdivision plan, comprising 3387.20 square meters, became subject of TCT
No. T-24533 with Higinia, Margarita, Natividad, Lorenzo, Daniel, Oscar Merete,
Cecilio, Carmelita C. Pagar, and Anacleto as co-owners.

On August 3, 1978, the co-owners of Lot 1 executed a Deed of Agreement of

Partition with Sale. Lot 1 was subdivided among the co-owners with Higinia,
Margarita, Natividad, Lorenzo, Cecilio, Carmelita C. Pagar and Anacleto,
receiving 423.40 square meters each; Daniel, with 43.4 square meters; and
Oscar Merete, with 380 square meters.15 In the same deed, Lorenzo bought
the shares of Higinia, Margarita, Daniel and Natividad.16 Thus, Lorenzo's
share in the co-ownership amounted to 1,737 square meters. Likewise, in the
same deed, Cecilio sold his share to a certain Marcela B. Francia.17

On January 13, 1982, a land survey was conducted on Lot 1 by Geodetic

Engineer Dominador L. Santos and Junior Geodetic Engineer Eufemio A. Abay
and based on the survey, they submitted subdivision survey plan (LRC) Psd-
307100, designating the shares of Carmelita C. Pagar, Marcela B. Francia,
spouses Oscar Merete and Clarita Ebue, Anacleto, and Lorenzo as Lots 1-A, 1-
B, 1-C, 1-D and 1-E, respectively.18 The subdivision survey plan of Lot 1 was
approved by the Director of the Bureau of Lands on May 7, 1982.19 On June
7, 1990, the co-owners of Lot 1 executed a Subdivision Agreement designating
their shares based on the approved subdivision plan.20 On July 13, 1993, TCT
No. 43419 covering Lot 1-E was issued in the name of Lorenzo.21

In the meantime, since the subdivision plan revealed that Marcelino and his
son occupied and built their houses on a 423-square meter area located on the
southernmost portion of Lot 1-E and not the adjacent lot designated as Lot G-1
under TCT No. T-22656,22 the spouses Lorenzo and Rosita Cabal
(respondents) confronted Marcelino on this matter which resulted to an
agreement on March 1, 1989 to a re-survey and swapping of lots for the
purpose of reconstruction of land titles.23 However, the agreed resurvey and
swapping of lots did not materialize24 and efforts to settle the dispute in the
barangay level proved futile.25

Hence, on August 10, 1994, respondents filed a complaint for Recovery of

Possession with Damages against Marcelino before the Municipal Trial Court of
Iba, Zambales (MTC), docketed as Civil Case No. 735. They alleged that
Marcelino introduced improvements in bad faith on their land with knowledge
that the adjacent lot is titled in his name.26

On August 26, 1994, Marcelino filed his Answer with Counterclaim, contending
that respondents have no cause of action against him because he has been in
possession in good faith since 1949 with the respondents' knowledge and
acquiescence. He further avers that acquisitive prescription has set in.27

On January 24, 1997, during the pendency of the trial of the case, Lorenzo
died. Following trial on the merits, the MTC rendered on November 19, 1997 its
Decision28 in favor of Marcelino, the dispositive portion of which reads:

WHEREFORE, on the basis of the foregoing premises as adduced by this Court

the plaintiff or their representatives are hereby directed to relinquish the
possession of said property subject matter of this case and deliver the peaceful
possession of the same to the herein defendant or his authorized
representatives, to remove the improvements made thereon within fifteen (15)
days from the receipt of this decision, otherwise, this Court would remove
and/or destroy the same with cost against the plaintiff, further the plaintiff is
hereby ordered to pay the amount of Ten Thousand Pesos (P10,000.00),
Philippine Currency representing moral damages and exemplary damages in
the amount of Five Thousand Pesos (P5,000.00), Philippine Currency, and the
amount of Twenty Thousand Pesos (P20,000.00), Philippine Currency,
representing attorney's fees.

SO ORDERED.29

The MTC reasoned that prescription or the length of time by which Marcelino
has held or possessed the property has barred the respondents from filing a
claim.

On December 12, 1997, respondents filed a Motion for Reconsideration30 but

the MTC denied it in its Order dated February 5, 1998.31

Dissatisfied, respondents filed an appeal with the RTC Branch 70, Iba,
Zambales, docketed as RTC-1489-I. On August 10, 2000, the RTC rendered its
Decision setting aside the Decision of the MTC.32 The dispositive portion of the
Decision states:

WHEREFORE, the appealed Decision of the Municipal Trial Court is hereby

REVERSED and SET ASIDE ordering the defendant Marcelino Cabal and all
other persons claiming interest under him to vacate and deliver peaceful
possession of the disputed area of 423 sq. m. within Lot 1-E embraced in TCT
No. T-43419 to the plaintiffs-appellants; to remove all improvements therein
introduced by said defendant or by persons under his direction and authority;
to pay the plaintiffs-appellants P10,000.00 and P5,000.00 by way of moral and
exemplary damages, respectively; to pay plaintiff-appellants attorney's fee in
the sum of P20,000.00 and cost of this suit.

SO ORDERED.33

In reversing the MTC, the RTC held that Marcelino's possession was in the
concept of a co-owner and therefore prescription does not run in his favor; that
his possession, which was tolerated by his co-owners, does not ripen into
ownership.

On August 30, 2000, Marcelino filed a Motion for Reconsideration34 but the
RTC denied it in its Order dated May 3, 2001.35

On May 18, 2001, Marcelino filed a petition for review with the CA, docketed as
CA-G.R. SP No. 64729.36 Marcelino, however, died during the pendency of the
case. On September 27, 2001, the CA rendered its Decision affirming in toto
the Decision of the RTC.37

In sustaining the RTC, the CA held that Marcelino may have been in good faith
when he started to occupy the disputed portion in 1949 but his occupation in
good faith diminished after Lot G was surveyed when he was apprised of the
fact that the portion he was occupying was not the same as the portion titled in
his name; that from the tenor of the petition for review Marcelino would like to
hold on to both the lot he occupies and Lot G-1, which cannot be allowed since
it will double his inheritance to the detriment of his brother Lorenzo.

On November 13, 2001, Marcelino's counsel filed a Motion for

Reconsideration38 but the CA denied it in its Resolution dated May 22,
2002.39

On June 6, 2002, the heirs of Marcelino (petitioners), represented by his

widow, Victoria Cabal, filed the present petition anchored on the following
grounds:

I. CONTRARY TO THE COURT OF APPEALS' FINDINGS AND CONCLUSION,

PETITIONER NEVER INTENDED AND NEITHER DOES HE INTEND TO HOLD
ON TO BOTH THE 423 SQUARE METER WITHIN LOT 1-E WHICH HE IS
OCCUPYING AND LOT 1-G (sic). PETITIONER IS ONLY INTERESTED IN THE
DISPUTED PROPERTY, THAT IS, A PORTION OF LOT 1-E BECAUSE THIS IS
WHERE HE INTRODUCED CONSIDERABLE IMPROVEMENTS IN GOOD
FAITH.

II. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE

ERROR WHEN IT RULED THAT THE GOOD FAITH OF PETITIONER ON THE
DISPUTED PROPERTY BEGAN TO DIMINISH AFTER LOT-G WAS
SURVEYED.40

Anent the first ground, petitioners contend that since 1949 Marcelino has
claimed no other portion as his inheritance from Marcelo, except the disputed
lot; that Marcelino believed in good faith that the disputed lot is Lot G-1; that
Marcelino never intended to hold on to both lots since he did not introduce any
improvement on Lot G-1 and he even agreed to a resurvey, swapping of lots
and reconstruction of title after discovery of the mistake in 1989; that
Marcelino wanted the disputed lot because he has introduced considerable
improvements thereon.

On the second ground, petitioners maintain that Marcelino became aware of

the flaw in his title only before the execution of the swapping agreement in
March 1, 1989, long after he had introduced considerable improvements in the
disputed lot; that Marcelino should not be faulted for believing that the
disputed lot is his titled property because he is a layman, not versed with the
technical description of properties; that Marcelino should be adjudged a
builder in good faith of all the improvements built on the disputed property
immediately prior to the execution of the swapping agreement and accorded all
his rights under the law or, alternatively, the swapping of lots be ordered since
no improvements have been introduced on Lot G-1.

Respondents, on the other hand, submit that Marcelino cannot be adjudged a

builder in good faith since he exhibited blatant and deliberate bad faith in
dealing with respondents.

The Court rules in favor of the petitioners.

As a general rule, in petitions for review, the jurisdiction of this Court in cases
brought before it from the CA is limited to reviewing questions of law which
involves no examination of the probative value of the evidence presented by the
litigants or any of them.41 The Supreme Court is not a trier of facts; it is not
its function to analyze or weigh evidence all over again.42 Accordingly, findings
of fact of the appellate court are generally conclusive on the Supreme Court.43

Nevertheless, jurisprudence has recognized several exceptions in which factual

issues may be resolved by this Court, such as: (1) when the findings are
grounded entirely on speculation, surmises or conjectures; (2) when the
inference made is manifestly mistaken, absurd or impossible; (3) when there is
grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of facts are conflicting; (6)
when in making its findings the CA went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee;
(7) when the findings are contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the petitioner's main and
reply briefs are not disputed by the respondent; (10) when the findings of fact
are premised on the supposed absence of evidence and contradicted by the
evidence on record; (11) when the CA manifestly overlooked certain relevant
facts not disputed by the parties, which, if properly considered, would justify a
different conclusion.44 The Court finds that exceptions (1), (2), (4) and (11)
apply to the present petition.

It is undisputed that Marcelino built his house on the disputed property in

1949 with the consent of his father. Marcelino has been in possession of the
disputed lot since then with the knowledge of his co-heirs, such that even
before his father died in 1954, when the co-ownership was created, his
inheritance or share in the co-ownership was already particularly designated or
physically segregated. Thus, even before Lot G was subdivided in 1976,
Marcelino already occupied the disputed portion and even then co-ownership
did not apply over the disputed lot. Elementary is the rule that there is no co-
ownership where the portion owned is concretely determined and identifiable,
though not technically described,45 or that said portion is still embraced in
one and the same certificate of title does make said portion less determinable
or identifiable, or distinguishable, one from the other, nor that dominion over
each portion less exclusive, in their respective owners.46

Thus, since Marcelino built a house and has been occupying the disputed
portion since 1949, with the consent of his father and knowledge of the co-
heirs,47 it would have been just and equitable to have segregated said portion
in his favor and not one adjacent to it. Undoubtedly, the subdivision survey
effected in 1976 spawned the dilemma in the present case. It designated Lot G-
1 as Marcelino's share in the inheritance notwithstanding his possession since
1949 of a definite portion of Lot G, now the southernmost portion of Lot 1-E.

Marcelino raised the defense of acquisitive prescription, in addition to

possession in good faith, in his Answer to the Complaint in the MTC.
Prescription, in general, is a mode of acquiring or losing ownership and other
real rights through the lapse of time in the manner and under conditions laid
down by law, namely, that the possession should be in the concept of an
owner, public, peaceful, uninterrupted and adverse.48 Acquisitive prescription
is either ordinary or extraordinary.49 Ordinary acquisitive prescription requires
possession in good faith and with just title50 for ten years.51 In extraordinary
prescription ownership and other real rights over immovable property are
acquired through uninterrupted adverse possession thereof for thirty years,
without need of title or of good faith.52

In the present case, the evidence presented during the trial proceedings in the
MTC were sorely insufficient to prove that acquisitive prescription has set in
with regards to the disputed lot. The tax declaration53 and receipts54
presented in evidence factually established only that Marcelino had been
religiously paying realty taxes on Lot G-1. Tax declarations and receipts can
only be the basis of a claim of ownership through prescription when coupled
with proof of actual possession.55 Evidently, Marcelino declared and paid
realty taxes on property which he did not actually possess as he took
possession of a lot eventually identified as the southernmost portion of Lot 1-E
of subdivision plan (LRC) Psd-307100.

Furthermore, the Court notes that Marcelino no longer invoked prescription in

his pleadings before the RTC56 and CA;57 neither did herein petitioners raise
prescription in their petition58 and memorandum59 before this Court. They
only extensively discussed the defense of possession in good faith. They are
thus deemed to have abandoned the defense of prescription.

The Court shall now delve on the applicability of the principle of possession in
good faith.

It has been said that good faith is always presumed, and upon him who alleges
bad faith on the part of the possessor rests the burden of proof.60 Good faith is
an intangible and abstract quality with no technical meaning or statutory
definition, and it encompasses, among other things, an honest belief, the
absence of malice and the absence of design to defraud or to seek an
unconscionable advantage. An individual's personal good faith is a concept of
his own mind and, therefore, may not conclusively be determined by his
protestations alone. It implies honesty of intention, and freedom from
knowledge of circumstances which ought to put the holder upon inquiry.61
The essence of good faith lies in an honest belief in the validity of one's right,
ignorance of a superior claim, and absence of intention to overreach another.62
Applied to possession, one is considered in good faith if he is not aware that
there exists in his title or mode of acquisition any flaw which invalidates it.63

In the present case, Marcelino's possession of the disputed lot was based on a
mistaken belief that Lot G-1 is the same lot on which he has built his house
with the consent of his father. There is no evidence, other than bare allegation,
that Marcelino was aware that he intruded on respondents' property when he
continued to occupy and possess the disputed lot after

partition was effected in 1976.

Moreover, the fact that in 1977 Marcelino mortgaged Lot G-1 subject of TCT
No. 22656 is not an indication of bad faith since there is no concrete evidence
that he was aware at that time that the property covered by the title and the
one he was occupying were not the same. There is also no evidence that he
introduced improvements on Lot G-1. In fact, the agreement on March 1, 1989
to a resurvey and swapping of lots for the purpose of reconstructing the land
titles is substantial proof of Marcelino's good faith, sincerity of purpose and
lack of intention to hold on to two lots.

Thus, the CA's conclusion that Marcelino intended to hold on to both the
disputed lot and Lot G-1 is pure speculation, palpably unsupported by the
evidence on record. Marcelino is deemed a builder in good faith64 at least until
the time he was informed by respondents of his encroachment on their
property.65

When a person builds in good faith on the land of another, the applicable
provision is Article 448, which reads:

Article 448. The owner of the land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in Articles
54666 and 548,67 or to oblige the one who built or planted to pay the price of
the land, and the one who sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land if its value is considerably more than
that of the building or trees. In such case, he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the lease and in
case of disagreement, the court shall fix the terms thereof.

Thus, the owner of the land on which anything has been built, sown or planted
in good faith shall have the right to appropriate as his own the building,
planting or sowing, after payment to the builder, planter or sower of the
necessary and useful expenses, and in the proper case, expenses for pure
luxury or mere pleasure. The owner of the land may also oblige the builder,
planter or sower to purchase and pay the price of the land. If the owner
chooses to sell his land, the builder, planter or sower must purchase the land,
otherwise the owner may remove the improvements thereon. The builder,
planter or sower, however, is not obliged to purchase the land if its value is
considerably more than the building, planting or sowing. In such case, the
builder, planter or sower must pay rent to the owner of the land. If the parties
cannot come to terms over the conditions of the lease, the court must fix the
terms thereof. The right to choose between appropriating the improvement or
selling the land on which the improvement stands to the builder, planter or
sower, is given to the owner of the land.68

In accordance with Depra v. Dumlao, 69 this case must be remanded to the

trial court to determine matters necessary for the proper application of Article
448 in relation to Articles 546 and 548. Such matters include the option that
respondents would take and the amount of indemnity that they would pay,
should they decide to appropriate the improvements on the lots.
The Court notes that petitioners' alternative prayer that swapping of lots be
ordered because no improvements have been introduced on Lot G-1. This
cannot be granted. Respondents and Marcelino, petitioners' predecessor-in-
interest, did not pray for swapping of lots in all their pleadings below. Both
parties also did not allege the existence of a swapping agreement in their initial
pleadings, much less pursue the enforcement of the swapping agreement. They
are deemed to have renounced or abandoned any enforceable right they had
under the swapping agreement and the parties cannot be compelled to a
swapping of lots.

WHEREFORE, the instant petition is GRANTED. The assailed Decision and

Resolution of the Court of Appeals in CA-G.R. SP No. 64729 are REVERSED
and SET ASIDE. The case is REMANDED to the court of origin for further
proceedings to determine the facts essential to the proper application of Article
448 in relation to Articles 546 and 548 of the Civil Code.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 164356 July 27, 2011

HEIRS OF MARGARITO PABAUS, namely, FELICIANA P. MASACOTE,

MERLINDA P. CAILING, MAGUINDA P. ARCLETA, ADELAIDA PABAUS, RAUL
MORGADO AND LEOPOLDO MORGADO, Petitioners,
vs.
HEIRS OF AMANDA YUTIAMCO, namely, JOSEFINA TAN, AND MOISES,
VIRGINIA, ROGELIO, ERLINDA, ANA AND ERNESTO, all surnamed
YUTIAMCO, Respondents.

DECISION

VILLARAMA, JR., J.:

By way of petition1 for review on certiorari, petitioners Heirs of Margarito

Pabaus challenge the June 10, 2004 Decision2 of the Court of Appeals (CA) in
CA-G.R. CV No. 65854. The CA affirmed the October 8, 1999 Judgment3 of the
Regional Trial Court (RTC) of Butuan City, Branch 1 in Civil Case No. 4489
declaring void petitioners’ title and ordering them and all those claiming any
right under them to vacate the land covered by said title and deliver possession
thereof to the respondents.
Subject of this controversy are three adjoining parcels of land located in
Barangay Cabayawa, Municipality of Tubay, Agusan Del Norte. Lot 1, Plan Psu-
213148 with an area of 58,292 square meters, and Lot 2, Plan Psu-213148,
consisting of 1,641 square meters, are registered in the name of Amanda L.
Yutiamco under Original Certificate of Title (OCT) No. O-1044 and Transfer
Certificate of Title (TCT) No. T-1428,5 respectively. Lot 2994, Pls-736, with an
area of 35,077 square meters, is owned by Margarito Pabaus and covered by
OCT No. P-8649.6

OCT No. O-104 was issued pursuant to Judicial Decree No. R-130700 dated
July 9, 1970 which covered Lots 1 and 2. A separate title, TCT No. T-1428, was
subsequently issued to Amanda Yutiamco for Lot 2, thus partially canceling
OCT No. O-104. Meanwhile, OCT No. P-8649 was issued to Margarito Pabaus
on March 12, 1974 pursuant to Free Patent No. (X-2)102.

On December 26, 1996, respondents Josefina Tan, and Moises, Virginia,

Rogelio, Erlinda, Ana and Ernesto, all surnamed Yutiamco, representing
themselves as the heirs of Amanda L. Yutiamco, filed a Complaint7 for
Cancellation of OCT No. P-8649, Recovery of Possession and Damages against
the heirs of Margarito Pabaus, namely, petitioners Feliciana P. Masacote,
Merlinda P. Cailing, Maguinda P. Arcleta, Adelaida Pabaus, Raul Morgado and
Leopoldo Morgado. The case was docketed as Civil Case No. 4489 in the RTC of
Butuan City, Branch 1.

Respondents alleged that petitioners illegally entered upon their lands,

harvested coconuts therein and built a house on the premises, thus
encroaching a substantial portion of respondents’ property. Despite repeated
demands and objection by Moises Yutiamco, petitioners continued to occupy
the encroached portion and harvest the coconuts; petitioners even filed a
criminal complaint against the respondents before the Office of the Provincial
Prosecutor. Respondents averred that OCT No P-8649 issued to Margarito
Pabaus is invalid as it substantially includes a land already covered by Decree
No. N-130700 and OCT No. O-104 issued on July 9, 1970 in the name of
Amanda Yutiamco. When Moises Yutiamco caused a resurvey of the land, the
relocation plan confirmed that the free patent title of Margarito Pabaus
overlapped substantially the lot covered by OCT No. O-104.

In their Answer with Counterclaim,8 petitioners admitted having gathered

coconuts and cut trees on the contested properties, but asserted that they did
so in the exercise of their rights of dominion as holders of OCT No. P-8649.
They also contended that it was respondents who unlawfully entered their
property and harvested coconuts therein. Citing a sketch plan prepared by
Engr. Rosalinda V. De Casa, petitioners claimed it was the respondents who
encroached Lot 1708, Cad-905 which is within and part of OCT No. P-8649. It
was pointed out that with the claim of respondents of an alleged
encroachment, respondents’ land area would have increased by 5,517.50
square meters (or a total of 65,447.5) while that of petitioners would be
decreased to only 29,546 square meters. Petitioners likewise averred that the
complaint states no cause of action since the case was not referred for
barangay conciliation and respondents’ cause of action was, in any event,
already barred by prescription, if not laches.

In the pre-trial conference held on March 12, 1997, the RTC issued an Order9
which directed the conduct of a relocation survey to determine if the land
covered by petitioners’ title overlaps those in defendants’ titles. The three
commissioners who conducted the said survey were Engr. Romulo Estaca, a
private surveyor and the court-appointed commissioner, Antonio Libarios, Jr.,
the representative of respondents, and Engr. Regino Lomarda, Jr., petitioners’
representative.10 It was agreed that the relocation survey shall be done by
having the commissioners examine the titles in question and then survey the
land to determine if there was indeed an overlapping of titles and who has
better right to the contested lands.11

During the same pre-trial conference, petitioners manifested their intention to

file an amended answer. The RTC gave them five days within which to seek
leave of court to file the amended answer but they failed to comply. Thus, the
court considered petitioners to have waived the filing of said pleading.

At the continuation of the pre-trial conference on June 23, 1997, the trial court
informed the parties of the following findings in the Relocation Survey Report12
dated May 27, 1997:

xxxx

That, Lot 2, Psu-213148 covered by TCT#T-1428 issued in favor of Amanda L.

[Yutiamco] is inside the lot covered by OCT#[P]-8649, issued in favor of
Margarito Pabaus;

That, Portion of Lot 1, Psu-213148 covered by OCT#O-104, issued in favor of

Amanda L. [Yutiamco] containing an area of 15,675 Sq. M. is inside the lot
covered by OCT#P-8649, issued in favor of Margarito Pabaus;

That, there is actually an overlapping in the issuance of title[s] on the above-

mentioned two (2) parcels of land, please refer to accompanying relocation plan
and can be identified through color legend;

That, the Technical Description of Lot 1, Psu-213148 of OCT#O-104 has been

properly verified and checked against approved plan of Psu-213148, approved
in the name of Amanda L. [Yutiamco];
Finally, that during the relocation survey nobody objected and oppose[d] the
findings conducted by the undersigned.

x x x x13

The Report was accompanied by a Relocation Plan14 which was certified by

Engr. Estaca as accurately indicating the boundaries of the subject properties.
Engr. Libarios, Jr. and Engr. Lomarda, Jr. also signed the Relocation Plan,
expressing their conformity thereto.

In the pre-trial conference held on July 17, 1997, petitioners’ counsel sought
leave of court to file an amended answer. In their Amended Answer with
Counterclaim,15 petitioners reiterated that in Engr. De Casa’s sketch plan
which was plotted in accordance with the description in the cadastral survey, it
was respondents who encroached and claimed Lot 1708, Cad-905 within and
part of OCT P-8649. They further alleged –

xxxx

10. That plaintiffs[’] title to the property in [question], known as O.C.T. No. 104
and TCT No. 1428 both registered in the name of Amanda Yutiamco were both
secured thru fraud, if not the said properties are situated away, for a distance
as adjoining of defendants property, under the following circumstances:

10.a. The subject property was surveyed by a private surveyor Antonio A.

Libarios, Jr. on November 3 and 5, 1960, nonetheless, his license as Geodetic
Engineer was issued only on November 11, [1965];

10.b. Base[d] on this fact, the survey plan or relocation survey was approved by
the Director of Land[s], Nicanor G. Jorge on June 9, 1965;

10.c. Perspicacious examination of the technical description of plaintiffs[’] title

under OCT No. 104 and TCT No. 1428, the BLLM is marked as No. 4, which
the tie line of PSU No. 213148, as compared [to] defendants[’] title under OCT
No. P-8649, the BLLM is marked as No. 1, which the tie line of PLS 736;

11. Actually, based on the foregoing observation, the properties of plaintiffs are
away situated with the property of defendants; should plaintiffs insisted (sic)
based on the relocation survey conducted by the commissioner appointed by
this Honorable Court, which defendants believed that there was a maneuver to
hoax and hoodwink themselves, into believing that plaintiffs properties are
situated in the heart of defendants property, then their titles, covering their
properties were secured thru fraud, which annulment of the same is proper
and within the bounds of the law.
x x x x16

At the trial, plaintiffs presented as witnesses Moises Yutiamco (adopted son of

Amanda Yutiamco), Figuracion Regala, Sr. (former barangay captain of Tubay),
Antonio Payapaya (tenant of Moises Yutiamco) and court-appointed
commissioner Engr. Estaca, while the defendants presented Raul P. Morgado
(one of the heirs of Margarito Pabaus), Francisco Baylen (retired Land
Management Officer/Deputy Land Inspector of the Bureau of Lands, Butuan
City), Engr. Rosalinda V. De Casa (Geodetic Engineer I, DENR) and Ambrocio P.
Alba (retired Land Management Officer-Chief of Lands Management Services,
CENRO-Cabadbaran, Agusan del Norte).

On October 8, 1999, the RTC rendered judgment in favor of the respondents

and against the petitioners. Said court gave credence to the finding in the
Relocation Survey Report that petitioners’ lot overlap respondents’ lands. It
held that since the land in dispute was already under the private ownership of
the respondents and no longer part of the public domain, the same could not
have been the subject of a free patent. As to the presumption of regularity in
the performance of official duty invoked by the petitioners as far as the
issuance of the free patent and title, the trial court pointed out that this cannot
be appreciated in view of the testimony of Engr. De Casa that in conducting the
cadastral survey, she was not able to secure a copy of the title of the
landholdings of Amanda Yutiamco from the Register of Deeds, which is a vital
document in the scheme of operations. The trial court thus applied the rule
that in case of two certificates of title issued to different persons over the same
land, the earlier in date must prevail. Hence, respondents’ OCT No. O-104 is
superior to petitioners’ OCT No. P-8649 which is a total nullity.

The fallo of the RTC decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of

the plaintiffs and against the defendants, as follows:

1. Declaring as null and void ab initio [Original] Certificate of Title No. [P]-8649
and ordering defendants and all those claiming any right under them to vacate
the land covered by said title and deliver possession thereof to the plaintiffs
and/or otherwise refrain and desist perpetually from exercising any act of
dispossession and encroachment over the subject premises;

2. Declaring the plaintiffs as the true and legal owner of the property subject of
this case;

3. Ordering defendants to render an accounting to the plaintiffs with respect to

the income of the coconuts in the area in conflict starting from December 26,
1996 up to the time…reconveyance as herein directed is made, and to deliver
or pay to the plaintiffs the income with legal interest thereon from the date of
filing of the complaint in this case[,] which is December 26, 1996, until the
same is paid or delivered; and

4. Ordering defendants to pay the plaintiffs, jointly and severally, the amount
of P13,175.00 by way of actual damages, P50,000.00 by way of moral damages,
the sum of P30,000.00 by way of attorney's fees and the cost of litigation in the
amount of P720.00.

SO ORDERED.17

On appeal, the CA affirmed the RTC ruling and emphasized that petitioners are
bound by the findings contained in the Relocation Survey Report and the
Relocation Plan because not only did they agree to the appointment of the three
commissioners but the commissioner representing them also manifested his
conformity to the findings. It noted that neither party posed any objection while
the survey was ongoing and that petitioners disputed the findings only after it
turned out adverse to them. Since the settled rule is that a free patent issued
over a private land is null and void and produces no legal effects whatsoever,
and with the trial court’s finding that the properties of respondents and
petitioners overlapped as to certain areas, the CA held that the trial court
correctly declared as void the title of the petitioners. Moreover, the CA cited
previous rulings stating that "a certificate of title over a land issued pursuant
to the Public Land Law, when in conflict with one obtained on the same date
through judicial proceedings, must give way to the latter," and that "a
certificate of title issued pursuant to a decree of registration and a certificate of
title issued in conformity therewith are on a higher level than a certificate of
title based upon a patent issued by the Director of Lands."18

Aggrieved, petitioners filed the instant petition arguing that --

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING

THE LOWER COURT DECISION THAT PETITIONERS’ LOT NO. 2994,
COVERED BY OCT NO. P-8649[,] REGISTERED IN THE NAME OF
MARGARITO PABAUS OVERLAPPED RESPONDENTS[’] LOT 2 AND LOT 1,
[RESPECTIVELY] COVERED [BY] TCT NO. T-1428 AND OCT NO. O-
104...BOTH REGISTERED IN THE NAME OF AMANDA YUTIAMCO.

II

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RELYING

[ON] THE FINDING OF PRIVATE SURVEYOR OR GEODETIC [ENGR.] ROMULO
S. ESTACA APPOINTED BY THE COURT WHO DISTURBED THE CADASTRAL
SURVEY CONDUCTED BY THE GOVERNMENT THRU THE DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES.19

Petitioners contend that the original technical description of Lot 2994, as per
the 1961 public land survey20, clearly showed that respondents’ property lies
south of the land applied for by Margarito Pabaus. The matter of encroachment
was likewise refuted by Engr. De Casa who conducted the cadastral survey
CAD 905 in Tubay and plotted the subject lots on the cadastral map.21 They
likewise assailed the relocation survey undertaken solely by the court-
appointed commissioner, Engr. Estaca while the other two surveyors did not
perform their respective tasks or confirm the ground verification conducted by
Engr. Estaca. With the admission by Engr. Estaca that there were five missing
corners, there was no precise and accurate ground verification made on the
alleged overlapping. Petitioners cite the testimony of Engr. De Casa which was
based on the cadastral map she herself prepared showing the respective
locations of the subject lots. They assert that the three government witnesses
testified that the property of Margarito Pabaus was surveyed based on existing
official records, and that the presumption of regularity in the performance of
official duty should be upheld.

Respondents, for their part, assert that petitioners’ assignment of errors delve
on factual matters which are not proper subjects of an appeal before this
Court. They echo the trial court’s conclusion that petitioners’ title is void since
it covers private land.

As a general rule, in petitions for review, the jurisdiction of this Court in cases
brought before it from the CA is limited to reviewing questions of law which
involves no examination of the probative value of the evidence presented by the
litigants or any of them. The Supreme Court is not a trier of facts; it is not its
function to analyze or weigh evidence all over again.22 Accordingly, findings of
fact of the appellate court affirming those of the trial court are generally
conclusive on this Court.

Nonetheless, jurisprudence has recognized certain exceptions to the general

rule that findings of the fact by the Court of Appeals are not reviewable by the
Supreme Court. One such exception is when such findings are not sustained
by the evidence.23 Another is when the judgment of the CA is based on
misapprehension of facts or overlooked certain relevant facts not disputed by
the parties which, if properly considered, would justify a different
conclusion.24

The case of overlapping of titles necessitates the assistance of experts in the

field of geodetic engineering. The very reason why commissioners were
appointed by the trial court, upon agreement of the parties, was precisely to
make an evaluation and analysis of the titles in conflict with each other. Given
their background, expertise and experience, these commissioners are in a
better position to determine which of the titles is valid. Thus, the trial court
may rely on their findings and conclusions.25

However, in overlapping of titles disputes, it has always been the practice for
the court to appoint a surveyor from the government land agencies – the Land
Registration Authority or the DENR – to act as commissioner.26 In this case,
the trial court appointed a private surveyor in the person of Engr. Estaca who
actually conducted the relocation survey while the two other surveyors chosen
by the parties expressed their conformity with the finding of encroachment or
overlapping indicated in the Relocation Plan27 submitted to the court by Engr.
Estaca. Said plan showed that the area in conflict is on the northeastern
portion wherein petitioners’ OCT No. P-8649 overlapped with respondents’ title
(OCT No. O-104) by 15,675 square meters.

Were the respondents able to prove their claim of overlapping?

We rule in the negative.

Survey is the process by which a parcel of land is measured and its boundaries
and contents ascertained; also a map, plat or statement of the result of such
survey, with the courses and distances and the quantity of the land.28 A case
of overlapping of boundaries or encroachment depends on a reliable, if not
accurate, verification survey.29 To settle the present dispute, the parties
agreed to the conduct of a relocation survey. The Manual for Land Surveys in
the Philippines (MLSP)30 provides for the following rules in conducting
relocation surveys:

Section 593 - The relocation of corners or re-establishment of boundary lines

shall be made using the bearings, distances and areas approved by the
Director of Lands or written in the lease or Torrens title.

Section 594 - The data used in monumenting or relocating corners of approved

surveys shall be submitted to the Bureau of Lands for verification and
approval. New corner marks set on the ground shall be accurately described in
the field notes and indicated on the original plans on file in the Bureau of
Lands. (Italics supplied.)

In his Report, Engr. Estaca stated that he was able to relocate some missing
corners of the subject lots:

xxxx

By April 26, 1997, the whole survey team together with Mr. E. Concon and
representatives from the Plaintiffs and De[f]endants returned to the area in
question to relocate missing corners of Lot 1, Psu-213148 of OCT#O-104; Lot
2, Psu-213148 of TCT#T-1428; and OCT#P-8649. We were able to relocate the
following corners of: Cors. 2 & 4 of Lot 1, Psu-213148 of OCT#O-104; cors. 7 &
8 of Lot 1, Psu-213148 of OCT#[O]-104 which are identical to cors. 15 & 16 of
OCT#P-8649, respectively. We laid out missing cors. 3 & 2 of Lot 2, Psu-
213148 of TCT#T-1428 and missing cors. 1 & 3 of Lot 1, Psu-213148 of
OCT#O-104. All missing corners which were relocated were not yet planted
with cylindrical concrete monuments pending court decision of the case.

x x x x31

On cross-examination, Engr. Estaca testified as follows:

xxxx

Q In your report, you stated that there missing corners: 3 and 2 of Lot 2; and
missing corners 1 and 3 of Lot 1. Which of these three documents, Exhibit S
which is OCT No. O-104 or Exhibit T which is TCT No. T-1428 or OCT No. P-
8649 in which there are missing corners?

A TCT No. T-1428 has 3 missing corners; and OCT No. O-104 has 2 missing
corners.

Q When you say missing corners, what do you mean by that?

A Well, based on the technical description, we were not able to locate the
corners because it might have been moved or lost.

Q And when you say corners, you are referring to cylindrical concrete
monuments?

A Yes, sir.

Q Do you agree with me Mr. Witness that in order to locate the missing corners
to proceed with the relocation survey, you have to make a point of reference?

A Yes.

Q And that point of reference is found in the title itself?

A Yes, sir.

Q Do you agree with me that the point of reference is BLLM?

A No, that is a point of tie line. But the point of reference can be any of the
corners within the property. If you have say ten corners, you can base from the
existing corners. In other words, localize your location. Unless the whole
property is lost, meaning all missing corners are not reliable then you have to
tie from known BLLM (Bureau of Lands Location Monument) That is
established by a geographic position.

Q Do you agree with me that in order to have an accurate relocation survey, to

determine and to locate the missing corners, you have to base the relocation
survey on the tie line?

A It depends. There are tie lines which are located "40 kilometers" from that
point. The big error is there. So we will not adopt all monuments. Anyway, they
interrelated to each other. You can determine it by doing relocation survey. You
can check it out by their positions. So the allowable for that is only 30
centimeters.

xxxx

Q Finally, in your resurvey report which is Exhibit Q, you mentioned that there
were missing corners which were relocated and you said certain basis for the
relocation if there are missing corners and you said that the river is not a
reliable point or basis. What did you base on your relocation survey
considering that there are missing corners?

A Based on other existing monuments, sir.

Q What for example?

A Based on my report, I stated from a known corners identified as cors. 10 and

9 of Lot 1, PSU 213148 of OCT #O-104 which are identical to corners 1 and 17
of OCT #P-8649.

Q Is this already covered in your report?

A Yes, and it is found on par. 2 of my report.

x x x x32

The MLSP laid down specific rules regarding tie lines, point of reference and
overlapping of adjoining titled lands. In this case, records failed to disclose that
the basis for relocating the missing corners was submitted to the Bureau of
Lands (now Land Management Bureau) for verification and approval as
required by Section 594. This is crucial considering that the court-appointed
commissioner is a private surveyor and not a government surveyor from the
LRA or LMB-DENR. It bears stressing that in every land dispute, the aim of the
courts is to protect the integrity of and maintain inviolate the Torrens system of
land registration, as well as to uphold the law; a resolution of the parties’
dispute is merely a necessary consequence.33

On the part of petitioners, their only evidence to support their opposition to the
claim of encroachment by the respondents is the cadastral map which
indicated the boundary of respondents’ property at the south of petitioners’ lot.
But as admitted by Engr. De Casa, during the cadastral survey they conducted
from 1986 to 1996, they did not send a written notice to the landowner
Amanda Yutiamco and that she plotted the boundaries of her property based
merely on a tax declaration because the cadastral survey team failed to obtain
copies of OCT No. O-104 and TCT No. T-1428 from the Registry of Deeds.34
The MLSP specifically required that relocation of boundary lines is to be made
using the bearings, distances and areas approved by the Director of Lands or
indicated in the Torrens titles. Hence, said cadastral map is not competent
proof of the actual location and boundaries of respondents’ Lots 1 and 2, Psu-
213148.1awphi1

Indeed, we have ruled that if the land covered by free patent was a private land,
the Director of Lands has no jurisdiction over it. Such free patent and the
subsequent certificate of title issued pursuant thereto are a nullity.35 The
aggrieved party may initiate an action for cancellation of such title. In the
recent case of De Guzman v. Agbagala,36 the Court reiterated:

The settled rule is that a free patent issued over a private land is null and void,
and produces no legal effects whatsoever. Private ownership of land - as when
there is a prima facie proof of ownership like a duly registered possessory
information or a clear showing of open, continuous, exclusive, and notorious
possession, by present or previous occupants - is not affected by the issuance
of a free patent over the same land, because the Public Land [L]aw applies only
to lands of the public domain. The Director of Lands has no authority to grant
free patent to lands that have ceased to be public in character and have passed
to private ownership. Consequently, a certificate of title issued pursuant to a
homestead patent partakes of the nature of a certificate issued in a judicial
proceeding only if the land covered by it is really a part of the disposable land
of the public domain.37

Considering, however, that the claim of overlapping has not been clearly
established, it is premature to declare the free patent issued to Margarito
Pabaus null and void. Instead, the Court deems it more appropriate to remand
the case to the trial court for the conduct of a verification/relocation survey
under the direction and supervision of the LMB-DENR. In the event that
respondents’ claim of encroachment of 15,675 square meters is found to be
correct, the corresponding adjustment in the metes and bounds of petitioners’
property should be reflected in OCT No. P-8649 which title will then have to be
partially, not totally, voided and the corresponding amendment as to the
precise area and technical description of Lot 2994, PLS 736 be entered by the
Registry of Deeds.

WHEREFORE, the Decision dated June 10, 2004 of the Court of Appeals in CA-
G.R. CV No. 65854 and Judgment dated October 8, 1999 of the Regional Trial
Court of Butuan City, Branch 1 in Civil Case No. 4489 are SET ASIDE. The
case is REMANDED to the said RTC which is hereby directed to order the Land
Management Bureau of the DENR to conduct verification/relocation survey to
determine overlapping of titles over Lots 1 and 2, Psu-213148 and Lot 2994,
PLS 736 covered by OCT No. O-104, TCT No. T-1428 and OCT No. P-8649,
respectively, all of the Registry of Deeds for the Province of Agusan del Norte.

SO ORDERED.