ARTICLE 414

HPS Software and Communication Corporation vs. PLDT Company G.R. No. 170217 December
10, 2012

Nedira vs. NJ World Corporation G.R. No. 240005 December 06, 2022

FACTS: Respondent, a taxi company, hired Florencio as a taxi driver. Florencio filed a complaint for
constructive dismissal before the NLRC, but died during the pendency of the proceedings. His wife,
Emma, filed an Omnibus Motion (For Substitution and Extension of Time to File Position
Paper).Subsequently, Emma filed a position paper alleging that Florencio was illegally suspended.
Emma further claimed that Florencio was indefinitely placed on floating status condition. Lastly, she
alleged that Florencio was never paid the value of his unused service incentive leaves (SIL) and his
13th month pay, and she asserted the bond he gave to respondent must be returned.
Nedira countered that the complaint for constructive dismissal does not involve property or property
rights. Thus, it did not survive the death of Florencio, and Emma can no longer pursue it. Nedira also
denied that Florencio was constructively dismissed, and instead averred that Florencio was an on-call
taxi driver who stopped driving after failing to remit boundary payments in 2013. Lastly, Nedira asserted
that there is no documentary evidence supporting the allegations in the complaint.

ISSUE: WON the illegal dismissal is one that principally involves property rights.

RULING: NO. Article 414 of the Civil Code defines property as "all things which are or may be the object
of appropriation" and it may be classified as either (1) immovable or real property; or (2) movable or
personal property.
Certainly, the CA's conclusion that a complaint for illegal dismissal involves property rights would make
sense only if the Civil Code definition of property is solely considered. However, the distinction between
an action involving injury to the person and one involving property rights is rooted in the very nature of
the civil action involved, not on the object of such action.

The instant case involves an illegal dismissal which is an action that does not survive the death of the
accused [sic]. The Court ruled in Bonilla v. Barcena, to wit:
The question as to whether an action survives or not depends on the nature of the
action and the damage sued for. In the causes of action which survive, the wrong
complained [of] affects primarily and principally property and property rights, the injuries
to the person being merely incidental, while in the causes of action which do not survive,
the injury complained of is to the person, the property and rights of property affected
being incidental.
Since the property and property rights of the respondent is only incidental to his complaint for illegal
dismissal, the same does not survive his death. Nonetheless, considering the foregoing disposition
dismissing respondent's petition before the CA and ergo his complaint for illegal dismissal, the Court
can proceed with the resolution of the petition even without the need for substitution of the heirs of
respondent.

DOCTRINE OF ESTOPPEL

MAKATI LEASING and FINANCE CORPORATION, petitioner, vs. WEAREVER TEXTILE MILLS,
INC., and HONORABLE COURT OF APPEALS
Case Digest: G.R. No. L-58469, May 16, 1983
FACTS:
• Wearever Textile Mills, Inc. sought financial assistance from Makati Leasing and Finance
Corporation.
• To secure the financial accommodations, Wearever Textile Mills, Inc. executed a Receivable
Purchase Agreement, assigning several receivables to Makati Leasing and Finance Corporation.
• A Chattel Mortgage was also executed over certain raw materials inventory and machinery
(Artos Aero Dryer Stentering Range).
• Due to default, Makati Leasing filed for extrajudicial foreclosure, but the enforcement failed.
• Petitioner then filed a complaint for judicial foreclosure (Civil Case No. 36040).
• The court issued a writ of seizure, later restrained but eventually enforced, leading to the removal
of the main drive motor of the machinery.
• The Court of Appeals set aside the lower court's orders, declaring the machinery as real property
and the chattel mortgage null and void.
• Makati Leasing filed a petition for review on certiorari.
Arguments of the Parties:
• Makati Leasing argued that the machinery is personal property and the chattel mortgage is valid,
claiming estoppel against Wearever Textile Mills, Inc.
 • Wearever Textile Mills, Inc. contended that the machinery is real property and estoppel doesn't
apply, as it had never represented or agreed that the machinery be considered a personal
property but was merely required by the petitioner to sign a printed form of chattel mortgage
which was in a blank form at the time of signing.
CA Decision:
The CA referred to Article 415 of the new Civil Code, stating that machinery attached to the ground by
bolts is considered real property.
The doctrine of estoppel was invoked based on the Tumalad case, emphasizing that parties may treat
as personal property what would be real property by nature, as long as no third parties are prejudiced.
ISSUES:
1. Whether the machinery in question is real or personal property.
2. Whether estoppel applies against Wearever Textile Mills, Inc.
Ruling:
1.) The Court held that the machinery is personal property, as the parties intended it to be so through
the chattel mortgage. The Court cited the Tumalad vs. Vicencio case, where it emphasized that even
though there's no explicit mention of the house being personal property, the defendants-appellants, by
engaging in actions like ceding or transferring through a chattel mortgage, impliedly treated the house
as chattel. Additionally, the fact that the house was on a rented lot, with defendants-appellants having
a temporary right as lessees, supports the interpretation that the parties intended to treat the house as
personal property. Unlike previous cases where third parties challenged chattel mortgage validity, the
defendants themselves are contesting it in this case, making the doctrine of estoppel applicable due to
their earlier treatment of the house as personal property.
In this case, the Court rejected the argument that the ownership of the land on which the machinery
stands should determine its status.
2.) Estoppel applies because Wearever Textile Mills, Inc. treated the machinery as personal property
when it executed the chattel mortgage and benefited from the contract. It cannot now deny the chattel
mortgage's validity after benefiting from it.
With respect to the contention of the respondent that it had never represented or agreed that the
machinery be considered a personal property but required by the petitioner to sign a printed form of
chattel mortgage which was in a blank form at the time of signing -
The Court held that this contention lacks persuasiveness. As aptly pointed out by petitioner and not
denied by the respondent, the status of the subject machinery as movable or immovable was never
placed in issue before the lower court and the Court of Appeals except in a supplemental memorandum
in support of the petition filed in the appellate court. 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. On the other hand, as pointed out by petitioner and again not
refuted by respondent, the latter has indubitably benefited from said contract. Equity dictates that one
should not benefit at the expense of another. Private respondent could not now therefore, be allowed
to impugn the efficacy of the chattel mortgage after it has benefited therefrom,
The Court reversed the decision of the Court of Appeals, reinstating the lower court's orders and
declaring the machinery as personal property. Estoppel was applied, and the chattel mortgage was
upheld.
Note: The Court made it clear that the return of the seized motor drive did not render the case moot,
as Makati Leasing reserved the right to challenge the Court of Appeals' decision.

Ruby L. Tsai vs. Hon. Court of Appeals, Ever Textile Mills, Inc. and Mamerto R. Villaluz
G.R. No. 120098, October 2, 2001

FACTS OF THE CASE:

Ever Textile Mills, Inc. (EVERTEX) obtained a loan from petitioner Philippine Bank of Communications
(PBCom). As security for the loan, EVERTEX executed in favor of PBCom, a deed of Real and Chattel
Mortgage over the lot where its factory stands, and the chattels located therein as enumerated in a
schedule attached to the mortgage contract.
PBCom granted a second loan to EVERTEX. The loan was secured by a Chattel Mortgage over
personal properties enumerated in a list attached thereto. The listed properties were similar to those
listed in the first mortgage deed. Due to business reverses, EVERTEX filed insolvency proceedings
docketed.
The CFI issued an order on declaring the corporation insolvent. All its assets were taken into the
custody of the Insolvency Court, including the collateral, real and personal, securing the two mortgages
as abovementioned.
Upon EVERTEX’s failure to meet its obligation to PBCom, the latter commenced extrajudicial
foreclosure proceedings against EVERTEX. PBCom was the highest bidder. Thus, PBCom
consolidated its ownership over the lot and all the properties in it and leased the entire factory premises
to petitioner Ruby L. Tsai.
PBCom sold the factory, lock, stock and barrel to Tsai, including the contested machineries. EVERTEX
filed a complaint for annulment of sale, reconveyance, and damages with the Regional Trial Court
against PBCom, alleging inter alia that the extrajudicial foreclosure of subject mortgage was in violation
of the Insolvency Law.
EVERTEX claimed that no rights having been transmitted to PBCom over the assets of insolvent
EVERTEX, therefore Tsai acquired no rights over such assets sold to her, and should reconvey the
assets.
EVERTEX averred that PBCom, without any legal or factual basis, appropriated the contested
properties, which were not included in the Real and Chattel Mortgages.
ISSUE:
WON the foreclosure on the acquired properties of EVERTEX is valid.
RULING:
No. Inasmuch as the subject mortgages were intended by the parties to involve chattels, insofar as
equipment and machinery were concerned, the Chattel Mortgage Law applies, which provides in
Section 7 thereof that: “a chattel mortgage shall be deemed to cover only the property described therein
and not like or substituted property thereafter acquired by the mortgagor and placed in the same
depository as the property originally mortgaged, anything in the mortgage to the contrary
notwithstanding.” And, since the disputed machineries were acquired in 1981 and could not have been
involved in the 1975 or 1979 chattel mortgages, it was consequently an error on the part of the Sheriff
to include subject machineries with the properties enumerated in said chattel mortgages.
As the auction sale of the subject properties to PBCom is void, no valid title passed in its
favor. Consequently, the sale thereof to Tsai is also a nullity under the elementary principle of nemo
dat quod non habet, one cannot give what one does not have.
Assuming arguendo that the properties in question are immovable by nature, nothing detracts the
parties from treating it as chattels to secure an obligation under the principle of estoppel. An immovable
may be considered a personal property if there is a stipulation as when it is used as security in the
payment of an obligation where a chattel mortgage is executed over it, as in the case at bar.

ARTICLE 415 - IMMOVABLE PROPERTIES

PARAGRAPH 1

Evangelista vs. Alto Surety & Insurance Co., Inc. G.R. No. L-11139 April 23, 1958

Rivera was a lessee of a land, where he built a house (subject property). In 1949, Evangelista won a
case against Rivera to which the house was attached in his favor. The same was awarded to him for
being the highest bidder in the public auction in 1951. When Evangelista sought to take possession of
the house, he was told that Alto Surety was already the owner for allegedly buying the same at an
auction sale in 1950.

Hence, Evangelista contended that he acquired a preferential lien (the creditor's entitlement to retain),
since the house levied was an immovable property.

On the other hand, Alto Surety averred that Evangelista did not have the preferential right over the
house since it was erroneously levied, and that when it was levied, it was considered as an immovable
property when it should have been treated as personal property.

ISSUE:

WON a house constructed by the lessee of the land on which it is built, should be dealt with, for purpose
of attachment an immovable property

RULING:

Yes. As stated in the book of Rabuya, the main question was--- who between the contending parties
had a preferential right over the house?

If the levy made on the house pursuant to a writ of preliminary attachment was valid, then Evangelista
had a preferential right over the same, otherwise, it would be Alto Surety.
The validity of the levy, in turn, would depend upon the character of the house.
If the house was a real property, then the levy would be valid.
If the house was a personal property, then the levy would not be valid.

Also, Article 415. The following are immovable property:

1. Land, buildings, roads and constructions of all kinds adhered to the soil.
 The court explained that a house is immovable or real property whether it is erected by the owner
of the land or by usufructuary or lessee. Hence, the levy that was made was proper and
Evangelista acquired a preferential right over the house by virtue of the attachment which was
secured long before the sale of the house in favor of Alto.

The court ruled that the house is not a personal property, much less a debt, credit or other
personal property capable of manual delivery, but immovable property.
Laddera v. Hodges- “a true building (not merely superimposed on the soil) is immovable or real
property, whether it is erected by the owner of the land or by usufructuary or lessee.”

****************
Under the Regalian Doctrine, which is embodied in our Constitution, all lands of the public domain
belong to the State, which is the source of any asserted right to any ownership of land. All lands not
appearing to be clearly within private ownership are presumed to belong to the State. (NOTE: Ancestral
domain not covered by regalian doctrine)
5 categories of lands:
1. agricultural lands, - once declared alienable and disposable becomes a patrimonial property
villasi
2. forest lands,
3. timber lands,
4. mineral lands, and
5. national parks.
2 types of patrimonial property
By nature
Converted patrimonial property - 420 only come from property of public dominion

Woodridge School, Inc. vs. ARB Construction Co. Inc. –

February 16, 2007 (G.R. No. 157285)

FACTS:
ARB is the owner and developer of Soldiers Hills Subdivision in Bacoor, Cavite, which is composed of
four phases. Phase I of the subdivision was already accessible from the Marcos Alvarez Avenue. To
provide the same accessibility to the residents of Phase II of the subdivision, ARB constructed a road
to link the two phases of Soldiers Hills Subdivision in Bacoor
Woodridge School, Inc's properties sit right in the middle of the estates of ARB, one of it is a road within
Soldiers Hills Subdivision IV which leads to Marcos Alvarez Avenue.
Initially, petitioners offered to pay ARB P50,000 as indemnity for the use of the road. Adamant, ARB
refused the offer and fenced the perimeter of the road fronting the properties of petitioners. By doing
so, ARB effectively cut off petitioners' access to and from the public highway.
After failing to settle the matter amicably, petitioners filed a complaint in the RTC to enjoin ARB from
depriving them of the use of the disputed subdivision road and to seek a compulsory right of way after
payment of proper indemnity. RTC rendered its decision in favor of petitioners.
ARB elevated the case to the Court of Appeals. Finding merit in the appeal, the appellate court reversed
the decision of the lower court, also ruling that a compulsory right of way exists in favor of petitioners
as there is no other existing adequate outlet to and from petitioners' properties to the Marcos Alvarez
Avenue other than the subject existing road lot belonging to ARB. In addition, it awarded a reasonable
indemnity to ARB.
Woodridge School, Inc filed the instant petition for review on certiorari insisting that ARB is not entitled
to be paid any indemnity.

ISSUE:
· Whether or not the subject property is a property of public dominion which can be used by the
general public without need for compensation.

HELD:

No. Contrary to the position of petitioners, the use of the subdivision roads by the general public does
not strip it of its private character. The road is not converted into public property by mere tolerance of
the subdivision owner of the public's passage through it. To repeat, "the local government should first
acquire them by donation, purchase, or expropriation, if they are to be utilized as a public road."
The trial court is in error when it ruled that the subject road is public property pursuant to Section 2 of
Presidential Decree No. 1216.
The law is clear. The transfer of ownership from the subdivision owner-developer to the local
government is not automatic but requires a positive act from the owner-developer before the city or
municipality can acquire dominion over the subdivision roads. Therefore, until and unless the roads are
donated, ownership remains with the owner-developer.
Since no donation has been made in favor of any local government and the title to the road lot is still
registered in the name of ARB, the disputed property remains private.
This is not to say that ARB may readily exclude petitioners from passing through the property. As
correctly pointed out by the Court of Appeals, the circumstances clearly make out a case of legal
easement of right of way. It is an easement which has been imposed by law and not by the parties and
it has "for (its) object either public use or the interest of private persons."
To be entitled to a legal easement of right of way, the following requisites must concur: (1) the dominant
estate is surrounded by other immovables and has no adequate outlet to a public highway; (2) payment
of proper indemnity; (3) the isolation was not due to acts of the proprietor of the dominant estate and
(4) the right of way claimed is at the point least prejudicial to the servient estate.
The appellate and trial courts found that the properties of petitioners are enclosed by other estates
without any adequate access to a public highway except the subject road lot which leads to Marcos
Alvarez Avenue. Although it was shown that the shortest distance from the properties to the highway
is toward the east across a creek, this alternative route does not provide an adequate outlet for the
students of the proposed school. This route becomes marshy as the creek overflows during the rainy
season and will endanger the students attending the school.
All told, the only requisite left unsatisfied is the payment of proper indemnity.

Philippine Fisheries Development Authority vs. Court of Appeals

FACTS:

The PFDA was created by then President Marcos and became an attached agency of the Department
of Agriculture.
Meanwhile, the then Ministry of Public Works and Highways reclaimed from the sea a 21-hectare parcel
of land in Barangay Tanza, Iloilo City, and constructed thereon the Iloilo Fishing Port Complex (IFPC),
consisting of breakwater, a landing quay, a refrigeration building, a market hall, a municipal shed, an
administration building, a water and fuel oil supply system and other port related facilities and
machineries.
On August 11, 1976, then President Ferdinand E. Marcos issued Presidential Decree No. 977 (PD 977)
creating the Authority and placing it under the direct control and supervision of the Secretary of Natural
Resources.
Upon its completion the Ministry of Public Works and Highways turned over IFPC to the Authority,
pursuant to Section 11 of PD 977, which places fishing port complexes and related facilities under the
governance and operation of the PFDA.
Notwithstanding said turn over, title to the land and buildings of the IFPC remained with the Republic.
The Authority thereafter leased portions of IFPC to private firms and individuals engaged in fishing
related businesses.
Sometime in May 1988, the City of Iloilo assessed the entire IFPC for real property taxes.
The assessment remained unpaid until the alleged total tax delinquency of the Authority for the fiscal
years 1988 and 1989 amounted to P5,057,349.67, inclusive of penalties and interests. To satisfy the
tax delinquency, the City of Iloilo scheduled on August 30, 1990, the sale at public auction of the IFPC.

ISSUES:
1. Is the Authority liable to pay real property tax to the City of Iloilo? If the answer is in the
affirmative, may the IFPC be sold at public auction to satisfy the tax delinquency?

HELD:

The Court rules that the Authority is not a GOCC but an instrumentality of the national government
which is generally exempt from payment of real property tax.
However, said exemption does not apply to the portions of the IFPC which the Authority leased to
private entities. With respect to these properties, the Authority is liable to pay real property tax.
Nonetheless, the IFPC, being a property of public dominion cannot be sold at public auction to satisfy
the tax delinquency.
the Authority should be classified as an instrumentality of the national government. As such, it is
generally exempt from payment of real property tax, except those portions which have been leased to
private entities.
Thus, the real property tax assessments issued by the City of Iloilo should be upheld only with respect
to the portions leased to private persons. In case the Authority fails to pay the real property taxes due
thereon, said portions cannot be sold at public auction to satisfy the tax delinquency. In Chavez v.
Public Estates Authority it was held that reclaimed lands are lands of the public domain and cannot,
without Congressional fiat, be subject of a sale, public or private,
WHEREFORE, the petition is GRANTED and the June 21, 2005 Decision of the Court of Appeals in
CA-G.R. SP No. 81228 is SET ASIDE. The real property tax assessments issued by the City Iloilo on
the land and buildings of the Iloilo Fishing Port Complex, is declared VOID except those pertaining to
the portions leased to private parties. The City of Iloilo is DIRECTED to refrain from levying on the Iloilo
Fishing Port Complex to satisfy the payment of the real property tax delinquency.

Manila International Airport Authority vs. City of Pasay G.R. No. 163072 April 02, 2009

Facts:

Petitioner Manila International Airport Authority (MIAA) operates and administers the Ninoy Aquino
International Airport (NAIA) Complex under Executive Order No. 903 (EO 903), otherwise known as
the Revised Charter of the Manila International Airport Authority.

Under Sections 3 and 22 of EO 903, approximately 600 hectares of land, including the runways, the
airport tower, and other airport buildings, were transferred to MIAA.
The NAIA Complex is located along the border between Pasay City and Parañaque City.

MIAA received Final Notices of Real Property Tax Delinquency from the City of Pasay for the taxable
years 1992 to 2001. The City of Pasay, through its City Treasurer, issued notices of levy and warrants
of levy for the NAIA Pasay properties.

Thereafter, the City Mayor of Pasay threatened to sell at public auction the NAIA Pasay properties if
the delinquent real property taxes remain unpaid.

MIAA filed with the Court of Appeals a petition for prohibition and injunction with prayer for preliminary
injunction or temporary restraining order.

The petition sought to enjoin the City of Pasay from imposing real property taxes on, levying against,
and auctioning for public sale the NAIA Pasay properties.

Court of Appeals: Upheld the power of the City of Pasay to impose and collect realty taxes on the NAIA
Pasay properties. Sections 193 and 234 of Republic Act No. 7160 or the Local Government Code
withdrew the exemption from payment of real property taxes granted to natural or juridical persons,
including govemment- owned or controlled corporations.

Since MIAA is a government-owned corporation, it follows that its tax exemption under Section 21 of
EO 903 has been withdrawn upon the effectivity of the Local Government Code.

Issue:

WON the NAIA Pasay properties of MIAA are exempt from real property tax - YES.

Held: 1. MIAA
is government "instrumentality" that does not qualify as a "government-owned or controlled corporation.
Under Section 133(0) of the Local Government Code, local government units have no power to tax
instrumentalities of the national government. Therefore, MIAA exempt from any kind of tax from the
local governments.

A government "instrumentality" may or may not be a "government-owned or controlled corporation"

(Section 2(10) of the Introductory Provisions of the Administrative Code of 1987). A government-owned
or controlled corporation must be "organized as a stock or non-stock corporation." MIAA is not
organized as a stock or non-stock corporation. It is not a stock corporation because it has no capital
stock divided into shares. It is also not a non-stock. corporation because it has no members. The
Government cannot be considered as the sole member of MIAA because non- stock corporations
cannot distribute any part of their income to their members Section 11 of the MIAA Charter mandates
MIAA to remit 20% of its annual gross operating to the National Treasury.
Income

MIAA is like any other instrumentality, but is vested corporate powers to perform efficiently its
governmental functions. When the law vests in a government instrumentality corporate powers, the
instrumentality does not become a corporation.

2. The airport lands and buildings of MIAA are properties of public dominion intended for public use,
and as such are exempt from real property tax under Section 234(a) of the Local Government Code. -

HEIRS OF MARIO MALABANAN VS REPUBLIC OF THE PHILIPPINES G.R. No. 179987

Facts:
On February 20, 1998, applicant Mario Malabanan, purchased the property from Eduardo Velazco,
filed an application for land registration Tagaytay City, Cavite, claiming that the property formed part of
the alienable and disposable land of the public domain, and that he and his predecessors-in-interest
had been in open, continuous, uninterrupted, public and adverse possession and occupation of the
land for more than 30 years, thereby entitling him to the judicial confirmation of his title.

To prove that the property was an alienable and disposable land of the public domain, Malabanan
presented during trial a certification dated June 11, 2001 issued by the Community Environment and
Natural Resources Office (CENRO) of the Department of Environment and Natural Resources
(DENR).

This is to certify that the parcel of land designated as Lot No. 9864 Cad 452-D, Silang Cadastre as
surveyed for Mr. Virgilio Velasco located at Barangay Tibig, Silang, Cavite containing an area of
249,734 sq. meters as shown and described on the Plan Ap-04-00952 is verified to be within the
Alienable or Disposable land per Land Classification Map No. 3013 established under Project No. 20-
A and approved as such under FAO 4-1656 on March 15, 1982

The RTC granted his application.

The Office of the Solicitor General (OSG) appealed the judgment to the CA, arguing that Malabanan
had failed to prove that the property belonged to the alienable and disposable land of the public domain,
and that the RTC erred in finding that he had been in possession of the property in the manner and for
the length of time required by law for confirmation of imperfect title.

On February 23, 2007, the CA promulgated its decision reversing the RTC and dismissing the
application for registration of Malabanan. The CA declared that under Section 14(1) of the Property
Registration Decree, any period of possession prior to the classification of the land as alienable and
disposable was inconsequential and should be excluded from the computation of the period of
possession.

Noting that the CENRO-DENR certification stated that the property had been declared alienable and
disposable only on March 15, 1982, Velazco's possession prior to March 15, 1982 could not be counted
for purposes of computing Malabanan's period of possession.

Issue:

Whether/not Malabanan has the right over the property

Ruling:

No. 14(2) of the Property Registration Decree provides the registration of land whose possession is
after June 12, 1945. It involves application of those who acquired ownership of private lands by
prescription "under the provisions of the existing law."

All lands not appearing to be clearly under private ownership are presumed to belong to the State. Also,
public lands remain part of the inalienable land of the public domain unless the State is shown to have
reclassified or alienated them to private persons

The law mentioned in the provision refers to the Civil Code. Under the civil code, prescriptive acquisition
may be ordinary or extra ordinary. It is therefore proper to refer to the Civil Code on the provisions of
property.

Article 422 of the civil code is controlling the conversion of the land of public dominion to patrimonial
property. It is only when a land becomes patrimonial that it becomes susceptible to prescription. There
must be an express declaration by the State that an alienable and disposable land is no longer intended
for public service. It is only after such express declaration that the period may begin to run.

• (a) Patrimonial property is private property of the government. The person acquires ownership
of patrimonial property by prescription under the Civil Code is entitled to secure registration
thereof under Section 14(2) of the Property Registration Decree.

It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired
ownership over the subject property under Section 48(b) of the Public Land Act. There is no substantive
evidence to establish that Malabanan or petitioners as his predecessors-in-interest have been in
possession of the property since 12 June 1945 or earlier. The earliest that petitioners can date back
their possession, according to their own evidence—the Tax Declarations they presented in particular—
is to the year 1948. Thus, they cannot avail themselves of registration under Section 14(1) of the
Property Registration Decree.

• 14(1) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable
lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

Section 48(b) of the Public Land Act

Section 48(b) merely requires possession since 12 June 1945 and does not require that the
lands should have been alienable and disposable during the entire period of possession, the
possessor is entitled to secure judicial confirmation of his title thereto as soon as it is declared
alienable and disposable, subject to the timeframe imposed by Section 47 of the Public Land
Act.
• the possessor is entitled to secure judicial confirmation of his title thereto as soon as it is
declared alienable and disposable, subject to the timeframe imposed by Section 47 of the Public
Land Act.

Hence, 14(2) applies for the case at bar. Possession of the land is traced back to 1948. Since the land
in question has no express declaration of being patrimonial, Malabanan failed to adhere to the period
as required by law.

Classifications of land according to ownership

Land, which is an immovable property, may be classified as either of public dominion or of private
10

ownership. Land is considered of public dominion if it either: (a) is intended for public use; or (b)
11

belongs to the State, without being for public use, and is intended for some public service or for the
development of the national wealth. Land belonging to the State that is not of such character, or
12

although of such character but no longer intended for public use or for public service forms part of the
patrimonial property of the State.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 23 February 2007
and Resolution dated 2 October 2007 are AFFIRMED. No pronouncement as to costs.

JOYCE Y. LIM vs REPUBLIC OF THE PHILIPPINES

FACTS:

Joyce Lim bought two parcels of land (Lot 13687 and Lot 13686) in Adlas, Silang Cavite from the
Spouses Edgardo and Jorgina Pagkalinawan and applied for land registration before the Regional Trial
Court, Tagaytay City.
To prove that she and her predecessors-in-interest had been in continuous and uninterrupted
possession of the lots as required under the law, petitioner offered the testimony of Domingo Destura
(Destura) as a common witness for both applications.
Destura, who was 71 years old at the time he took the witness stand on March 17, 1999, testified that
he was 13 years old when he became a helper at his father’s farm which adjoins the subject lots; and
that the lots were eventually sold to Edgardo Pagkalinawan sometime in the 1990s
The Regional Trial Court granted the two applications in favor of Joyce Lim, respectively.
The Solicitor General questioned the order on the ground that Joyce Lim failed to comply with the
provisions of the Property Registration Decree and Article 1137 of the Civil Code, both laws of which
require at least 30 years of adverse possession.
Consequently, the Court of Appeals reversed and set aside the decisions of the RTC and dismissed
Joyce Lim applications for the reason the possession was short for a 30-year period.
said possession of [petitioner’s] predecessors-in-interest in 1967 could not be used as the basis for the
reckoning of the thirty (30) years period [sic]

Applying March 15, 1982 as the date when the subject land was classified as alienable, it can be
concluded that since [petitioner] filed this Application on September 7, 1998 (Record pp. 1-5) and her
predecessors-in-interest have been in possession of the subject land for only sixteen (16) years,

ISSUE
Whether or not the involved parcels of land bought by Joyce Lim were inalienable?
RULING
No, the mentioned parcels of land were still considered public domain when Joyce Lim bought it from
the Spouses Pagkalinawan.
An applicant in a land registration case cannot just harp on mere conclusions of law to embellish the
application but must impress thereto the facts and circumstances evidencing the alleged ownership
and possession of the land.
The Public Land Act provides: Section 48. The following described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such lands or an interest therein, but
whose titles have not been perfected or completed, may apply to the Court of First Instance of the
province where the land is located for confirmation of their claims and the issuance of a certificate of
title therefor, under the Land Registration Act, to wit:
xxxx
(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of agricultural lands of the public domain, under a
bona fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the
filing of the application for confirmation of title except when prevented by war or force majeure. These
shall be conclusively presumed to have performed all the conditions essential to a Government grant
and shall be entitled to a certificate of title under the provisions of this chapter.
As earlier discussed, while the subject lots were verified to be alienable or disposable lands since March
15, 1982, there is no sufficient proof that open, continuous and adverse possession over them by
petitioner and her predecessors-in-interest commenced on June 12, 1945 or earlier.
Thus, a property classified as alienable and disposable public land may be converted into private
property by reason of open, continuous, exclusive and notorious possession of at least 30 years, public
41

dominion lands become patrimonial property not only with a declaration that these are alienable or
disposable but also with an express government manifestation that the property is already patrimonial
or no longer retained for public use, public service or the development of national wealth. 42

And only when the property has become patrimonial can the prescriptive period for the acquisition of
property of the public dominion begin to run.

City of Pasig vs. Republic of the Philippines G.R. No. 185023 August 24, 2011

FACTS:

Mid-Pasig Land Development Corporation (MPLDC) owned two parcels of land, the "payanig"
properties, with a total area of 18.4891 hectares, situated in Pasig City. Portions of the properties are
leased to different business establishments. In 1986, the registered owner of MPLDC, Campos,
voluntarily surrendered MPLDC to the Republic of the Philippines. On 30 September 2002, the Pasig
City Assessor's Office sent MPLDC two notices of tax delinquency for its failure to pay real property tax
on the properties for the period 1979 to 2001 totaling P256,858,555.86.
In a letter dated 29 October 2002, MPLDC informed the Pasig City Treasurer that the tax for the period
1979 to 1986 had been paid, and that the properties were exempt from tax beginning 1987 claiming
that, upon the voluntary surrender Campos of the "payanig" properties to the Presidential Commission
on Good Government (PCGG), there was a clear admission that these properties were part of the ill-
gotten wealth of former President Marcos.
As such, there was already constructive reconveyance to the State, which immediately placed these
reconveyed properties under the control and stewardship of the PCGG as representative of the
Republic of the Philippines. Under such special circumstance, these voluntary surrendered properties
had already belonged to the State.

ISSUE:

Whether or not the subject real estate voluntarily surrendered by its former owner, Campos, to the State
are exempt from real property tax.

HELD:

NO. Even as the Republic of the Philippines is now the owner of the properties in view surrender of
MPLDC by its former registered owner, Campos, to the State, such transfer does not prevent a third
party with a better right from claiming such properties in the proper forum.
In the meantime, the Republic of the Philippines is the presumptive owner of the properties for taxation
purposes.
Section 234(a) of Republic Act No. 7160 states that properties owned by the Republic of the Philippines
are exempt from real property tax "except when the beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person." Thus, the portions of the properties not leased to
taxable entities are exempt from real estate tax while the portions of the properties leased to taxable
entities are subject to real estate tax.
The law imposes the liability to pay real estate tax on the Republic of the Philippines for the portions of
the properties leased to taxable entities. It is, of course, assumed that the Republic of the Philippines
passes on the real estate tax as part of the rent to the lessees who have beneficial use over portions
within the "payanig" properties.
WHEREFORE, the petition is PARTIALLY GRANTED.
Pasig City is DIRECTED to issue to respondent new real property tax assessments covering only the
portions of the properties actually leased to taxable entities, and only for the period of such leases.
Interests and penalties on such new real property tax assessment shall accrue only after receipt of
such new assessment by respondent.

Republic of the Philippines vs. City of Parañaque G.R. No. 191109 July 18, 2012

FACTS:

The Public Estates Authority (PEA) is a government corporation created by virtue of Presidential Decree
(P.D.) No. 1084 (Creating the Public Estates Authority, Defining its Powers and Functions, Providing
Funds Therefor and for Other Purposes) took effect on February 4, 1977 to provide a coordinated,
economical and efficient reclamation of lands, and the administration and operation of lands belonging
to, managed and/or operated by, the government with the object of maximizing their utilization and
hastening their development consistent with public interest.

On February 14, 1979, by virtue of Executive Order (E.O.) No. 525 issued by then President Ferdinand
Marcos, PEA was designated as the agency primarily responsible for integrating, directing and
coordinating all reclamation projects for and on behalf of the National Government.

On October 26, 2004, then President Gloria Macapagal-Arroyo issued E.O. No. 380 transforming PEA
into PHILIPPINE RECLAMATION AUTHORITY (PRA), which shall perform all the powers and functions
of the PEA relating to reclamation activities.

By virtue of its mandate, PRA reclaimed several portions of the foreshore and offshore areas of Manila
Bay, including those located in Parañaque City, and was issued Original Certificates of Title (OCT Nos.
180, 202, 206, 207, 289, 557, and 559) and Transfer Certificates of Title (TCT Nos. 104628, 7312,
7309, 7311, 9685, and 9686) over the reclaimed lands.

On February 19, 2003, then Parañaque City Treasurer Liberato M. Carabeo (Carabeo) issued Warrants
of Levy on PRA’s reclaimed properties (Central Business Park and Barangay San Dionisio) located in
Parañaque City based on the assessment for delinquent real property taxes made by then Parañaque
City Assessor Soledad Medina Cue for tax years 2001 and 2002.

ISSUE:
Whether or not Philippine Reclamation Authority (PRA) is an incorporated instrumentality of the national
government and is, therefore, exempt from payment of real property tax

under sections 234(a) and 133(0) of Republic Act 7160?

Held:
Yes it is a Government Instrumentality.
In the case at bench, PRA is not a GOCC because it is neither a stock nor a non-stock corporation. It
cannot be considered as a stock corporation because although it has a capital stock divided into no par
value shares as provided in Section 74 of P.D. No. 1084, it is not authorized to distribute dividends,
surplus allotments or profits to stockholders.

PRA is a government instrumentality vested with corporate powers and performing an essential public
service pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code.

Being an incorporated government instrumentality, it is exempt from payment of real property tax.

Many government instrumentalities are vested with corporate powers but they do not become stock or
non-stock corporations, which is a necessary condition before an agency or instrumentality is deemed
a GOCC. The fundamental provision above authorizes Congress to create GOCCS through special
charters on two conditions: 1) the GOCC must be established for the common good; and 2) the GOCC
must meet the test of economic viability. In this case, PRA may have passed the first condition of
common good but failed the second one - economic viability. Undoubtedly, the purpose behind the
creation of PRA was not for economic or commercial activities.

Clearly, respondent has no valid or legal basis in taxing the subject reclaimed lands managed by PRA.
On the other hand, Section 234(a) of the LGC, in relation to its Section 133(0), exempts PRA from
paying realty taxes and protects it from the taxing powers of local government units.
Section 234(a) of the Local Government Code states that real property owned by the Republic of the
Philippines (the Republic) is exempt from real property tax unless the beneficial use thereof has been
granted to a taxable person.
Section 133 f the Local Government Code states that "unless otherwise provided" in the Code, local
governments cannot tax national government instrumentalities.
In this case, there is no proof that PRA granted the beneficial use of the subject reclaimed lands to a
taxable entity. There is no showing on record either that PRA leased the subject reclaimed properties
to a private taxable entity.
WHEREFORE, the petition is GRANTED. The Order of the Regional Trial Court, Branch 195,
Parañaque City, is REVERSED and SET ASIDE.

Dream Village Neighborhood Association, Inc. vs. Bases Conversion Development Authority G.R. No.
192896 July 24, 2013

The United States of America (USA) purchased the subject land early in the American colonial period,
to be converted into the military reservation known as Fort William Mckinley, Transfer Certificate of Title
(TCT) No. 192 was issued in the name of the USA to cancel OCT No. 291.

On December 6, 1956, the USA formally ceded Fort William Mckinley to the Republic of the Philippines
(Republic), and

on September 11, 1958, TCT No. 2288 was cancelled and replaced by TCT No. 61524, this time in the
name of the Republic.

On October 16, 1987, President Corazon C. Aquino issued Proclamation No. 172 amending
Proclamation No. 2476 by limiting to Lots 1 and 2 of the survey Swo-13-000298 the areas in Western
Bicutan open for disposition.
On March 13, 1992, R.A. No. 7227 was passed creating the Bases Conversion and Development
19

Authority (BCDA) to oversee and accelerate the conversion of Clark and Subic military reservations
and their extension camps (John Hay Station, Wallace Air Station, O’Donnell Transmitter Station, San
Miguel Naval Communications Station and Capas Relay Station) to productive civilian uses.

under Executive Order (E.O.) No. 561 which created the COSLAP,

Now charging the BCDA of wrongfully asserting title to Dream Village and unlawfully subjecting its
members to summary demolition, resulting in unrest and tensions among the residents, on November
22, 1999, the latter filed a letter-complaint with the Commission on the Settlement of Land Problems
(COSLAP) to seek its assistance in the verification survey of the subject property, which they claimed
is covered by Proclamation No. 172.

They also claim that they have been occupying the area for thirty (30) years "in the concept of owners
continuously, exclusively and notoriously for several years,"

ISSUE:
Whether the land is subject to prescription.

NO. While property of the State or any of its subdivisions patrimonial in character may be the object of
prescription, those "intended for some public service or for the development of the national wealth” are
considered property of public dominion and therefore not susceptible to acquisition by prescription.
The said lands did not become patrimonial, since the BCDA law makes the express reservation that
they are to be sold in order to raise funds for the conversion of the former American bases in Clark and
Subic.
That it is only upon their sale to a private person or entity as authorized by the BCDA law that they
become private property and cease to be property of the public dominion. For as long as the property
belongs to the State, although already classified as alienable or disposable, it remains property of the
public dominion if when it is "intended for some public service or for the development of the national
wealth."
City of Lapu-Lapu vs. Philippine Economic Zone Authority G.R. No. 184203 November 26, 2014
Phili Economic Zone Authority (PEZA) was created by virtue of Republic Act No. 7916 or “the Special
Economic Zone Act of 1995” to operate, administer, manage, and develop economic zones in the
country.

The PEZA was granted the power to register, regulate, and supervise the enterprises located in the
economic zones. By virtue of the law, the export processing zone in Mariveles, Bataan became the
Bataan Economic Zone and the Mactan Export Processing Zone the Mactan Economic Zone.

The City of Lapu-Lapu, through the Office of the Treasurer, demanded from the PEZA real property
taxes for the period from 1992 to 1998 on the PEZA’s properties located in the Mactan Economic Zone.
The City cited the Local Government Code of 1991 that withdrew the real property tax exemptions
previously granted to or presently enjoyed by all persons. The City pointed out that no provision in the
Special Economic Zone Act of 1995 specifically exempted the PEZA from payment of real property
taxes, unlike Section 21 of Presidential Decree No. 66, which explicitly provided for EPZA’s exemption.

Since no legal provision explicitly exempted the PEZA from payment of real property taxes, the City
argued that it could tax the PEZA.

Issue WON PEZA is exempt from payment of real property taxes

Ruling:

Yes. PEZA is exempt from payment of real property taxes.

PEZA cannot be taxed for real property taxes even if it acts as a developer or operator of special
economic zones. The PEZA is an instrumentality of the national government exempt from payment of
real property taxes under Section 133(o) of the Local Government Code.

As this court said in Manila International Airport Authority, "there must be express language in the law
empowering local governments to tax national government instrumentalities. Any doubt whether such
power exists is resolved against local governments."

In this case, the properties sought to be taxed are located in publicly owned economic zones. These
economic zones are property of public dominion. Properties of public dominion, even if titled in the
name of an instrumentality as in this case, remain owned by the Republic of the Philippines.

All told, the PEZA is an instrumentality of the national government. Furthermore, the lands owned by
the PEZA are real properties owned by the Republic of the Philippines. The City of Lapu-Lapu and the
Province of Bataan cannot collect real property taxes from the PEZA.

Under Section 234(a) of the Local Government Code, real properties owned by the Republic of the
Philippines are exempt from real property taxes. Even the PEZA’s lands and buildings whose beneficial
use have been granted to other persons may not be taxed with real property taxes. The PEZA may
only lease its lands and buildings to PEZA-registered economic zone enterprises and entities. These
PEZAregistered enterprises and entities, which operate within economic zones, are not subject to real
property taxes. Under Section 24 of the Special Economic Zone Act of 1995, no taxes, whether local
or national, shall be imposed on all business establishments operating within the economic zones

Navy Officers’ Village Association, Inc. vs. Republic of the Philippines G.R. No. 177168 August 03,
2015

Facts:
A Transfer Certificate Title (TCT) issued in Navy Officers’ Village Association, Inc (NOVAI)’s name
covers a land situated inside the former Fort Andres Bonifacio Military Reservation in Taguig.

This property was previously a part of a larger parcel of land which TCT’s under the name of the
Republic of the Philippines.

President Garcia issued a Proclamation No. 423 which reserves for military purposes certain parcels
of the public domain situated in Pasig, Taguig, Paranaque, Rizal and Pasay City.

Thereafter, then President Macapagal issued Proclamation No. 461 which excluded Fort McKinley a
certain portion of land situated in the provinces above mentioned and declared them as AFP Officers’
Village to be disposed of under the provisions of certain laws.

However, this area was subsequently reserved for veterans’ rehabilitation, medicare and training center
sites.

The property was the subject of a deed of sale between the Republic and NOVAI to which the TCT was
registered in favor of the latter.

The Republic sought to cancel NOVAI’s title on the ground that the property was still part of the military
reservation thus inalienable land of the public domain and cannot be the subject of sale.

The RTC ruled that the property was alienable and disposable in character. The Court of Appeals
reversed RTC’s decision.
Issue: Whether or not the property covered by TCT issued under the name of NOVAI is inalienable land
of public domain and cannot be the subject of sale.

Held: Yes, the property remains a part of the public domain that could not have been validly disposed
of in NOVAI’s favor.

NOVAI failed to discharge its burden of proving that the property was not intended for public or quasi-
public use or purpose.

The classification and disposition of lands of the public domain are governed by Commonwealth
Act (C.A.) No. 141 or the Public Land Act, the country's primary law on the matter.

Under Section 6 of C.A. No. 141, the President of the Republic of the Philippines, upon the
recommendation of the Secretary of Agriculture and Natural Resources, may, from time to time, classify
lands of the public domain into alienable or disposable, timber and mineral lands, and transfer these
lands from one class to another for purposes of their administration and disposition.

In a limited sense, parcels of land classified as reservations for public or quasi-public uses under
Section 9 (d) of C.A. No. 141 are still non-alienable and non-disposable, even though they are, by the
general classification under Section 6, alienable and disposable lands of the public domain. By specific
declaration under Section 88, in relation with Section 8, these lands classified as reservations are non-
alienable and non-disposable.

As provided in Article 420 of Civil Code, “property of the public dominion as those which are intended
for public use or, while not intended for public use, belong to the State and are intended for some public
service”. In this case, the property was classified as military reservation thus, remained to be property
of the public dominion until withdrawn from the public use for which they have been reserved, by act of
Congress or by proclamation of the President. Since there was no positive act from the government,
the property had to retain its inalienable and non-disposable character. It cannot therefore, be subject
of sale otherwise, the sale is void for being contrary to law.

Alolino vs. Flores G.R. No. 198774 April 04, 2016

Facts:

In 1994, respondent spouses Flores constructed their house/sari sari store on the vacant
municipal/barrio road immediately adjoining the rear perimeter wall of the house of petitioner, Teofilo
Alolino.

This construction prevented Alolino's to travel to the municipal road through the rear door of his house.

Thus, Alolino demanded that the respondent spouses remove their structure but the latter refused. He
therefore complained about the illegal construction to the Building Official of the Municipality of Taguig.
The respondents did not comply with the directive from the building official. Alolino then filed a complaint
against the respondents with the RTC praying for the removal of the encroaching structure.

In their answer, the respondents admitted that they did not secure a building permit because the
property was constructed on a municipal/barrio road. They claimed, however, that on March 1, 2004,
the Sangguniang Bayan of Taguig, through a resolution, reclassified the property as a residential lot
from its prior classification as a barrio/municipal road.

RTC held that the respondents' house was a public nuisance, having been illegally constructed on a
barrio road - a government property - without a building permit. However, the CA reversed the RTC
decision, concluding that the Government had already abandoned the barrio road pursuant to the 2004
Sanggunian resolution.

Hence, this case was filed.

Issue:
Is a Sanggunian resolution enough to withdraw a barrio road from public use and reclassify it as a
residential lot?

Ruling:

No, there is no merit in the contention that the Local Government of Taguig, through a resolution, had
already withdrawn the subject barrio road from public use and reclassified it as a residential lot.
To convert a barrio road into patrimonial property, the law requires the LGU to enact an ordinance,
approved by at least two-thirds (2/3) of the Sanggunian members, permanently closing the road.

In this case, the Sanggunian did not enact an ordinance but merely passed a resolution.

The difference between an ordinance and a resolution is settled in jurisprudence: an ordinance is a law
but a resolution is only a declaration of sentiment or opinion of the legislative Body

Properties of the local government that are devoted to public service are deemed public and are under
the absolute control of Congress. Hence, LGUs cannot control or regulate the use of these properties
unless specifically authorized by Congress. In exercising this authority, the LGU must comply with the
conditions and observe the limitations prescribed by Congress.

The Sanggunian's failure to comply with it, by enacting only a resolution instead of an ordinance,
renders ineffective its reclassification of the barrio road.

Sangguniang Panlalawigan of Bataan vs. Garcia, Jr. G.R. No. 174964 October 05, 2016

Doctrine: Under the well-entrenched and time-honored Regalian Doctrine, all lands of the public domain
are under the absolute control and ownership of the State.

FACTS:
On February 26, 1998, the Congress of the Philippines passed the Republic Act (R.A.) No. 8562,
authored by Congressman Enrique T. Garcia, Jr. (Cong. Garcia), converting the Medina Lacson de
Leon School of Arts and Trades (MLLSAT) into a polytechnic college, to be known as the Bataan
Polytechnic State College (BPSC), and integrating thereto the BCC.

"All parcels of land belonging to the government occupied by the MLLSAT and the Bataan Community
Colleges are hereby declared to be the property of the Bataan Polytechnic State College (BPSC) and
shall be titled under that name:

Provided, That should the State College cease to exist or be abolished or should such parcels of land
aforementioned be no longer needed by the State College, the same shall revert to the Province of
Bataan."

On the basis of the above provision, Cong. Garcia wrote to then Governor of Bataan Leonardo Roman,
and the Sangguniang Panlalawigan of Bataan (petitioner), requesting them to cause the transfer of the
title of the aforesaid lots to BPSC. No transfer was effected.

Thus, Cong. Garcia, along with the faculty members and some concerned students of BPSC
(collectively, the respondents) led a Special Civil Action for Mandamus with the RTC of Balanga, Bataan
against the Governor and the petitioner.

The RTC ruled granted the writ of mandamus. The Governor and the petitioner appealed to the CA
alleging that the subject lots were the patrimonial properties of the Province of Bataan, and as such
they cannot be taken by the National Government without due process of law and without just
compensation.

The CA rejected the claim that the subject lots were the patrimonial properties of the Province of
Bataan, declaring that the petitioner failed to provide proof that the Province of Bataan acquired them
with its own private or corporate funds, and for this reason the lots must be presumed to belong to the
State.

The petitioner insists that the subject lots are not communal lands, but are the patrimonial properties of
the Province of Bataan, which were issued a Torrens title by the Cadastral Court on August 11, 1969
in Cadastral Case No. 5.

ISSUE: Whether or not the subject parcels of land are patrimonial properties of the province of Bataan
which cannot be taken without due process of law and without just compensation.

HELD:
Yes. Under the well-entrenched and time-honored Regalian Doctrine, all lands of the public domain are
under the absolute control and ownership of the State. The State's ownership of and control over all
lands and resources of the public domain are beyond dispute. Reproducing almost verbatim from the
1973 Constitution.
Furthermore, local government property devoted to governmental purposes, such as local
administration, public education, and public health, as may be provided under special laws, is classified
as public.

In The Province of Zamboanga del Norte v. City of Zamboanga, the Court classified properties of local
governments as either (a) properties for public use, or (b) patrimonial properties, and held that the
capacity in which the property is held by a local government is dependent on the use to which it is
intended and for which it is devoted.

If the property is owned by the municipal corporation in its public and governmental capacity, it is public
and Congress has absolute control over it; but if the property is owned in its private or proprietary
capacity, then it is patrimonial and Congress has no absolute control, in which case, the municipality
cannot be deprived of it without due process and payment of just compensation.

Moreover, in the 2009 case of Heirs of Mario Malabanan v. Republic of the Philippines, the Court
reiterated that Article 420 (2) of the Civil Code makes clear that properties "which belong to the State,
without being for public use, and are intended for some public service or for the development of the
national wealth," are public dominion property. For as long as the property belongs to the State,
although already classified as alienable or disposable, it remains property of the public dominion when
it is "intended for some public service or for the development of the national wealth."

Property registered in the name of the municipal corporation but without proof that it was acquired with
its corporate funds is deemed held by it in trust for the State.

The court further states that as a general rule that regardless of the source or classification of land in
the possession of a municipality, excepting those acquired with its own funds in its private or corporate
capacity, such property is held in trust for the State for the benet of its inhabitants, whether it be for
governmental or proprietary purposes. Therefore, BPSC is entitled to a writ of mandamus.

Heirs of Delfin vs. National Housing Authority G.R. No. 193618 November 28, 2016

FACTS:
In a Complaint for "Payment of Parcel(s) of Land and Improvements and Damages" the Delfin Spouses
claimed that they were the owners of a 28,800 square meter parcel of land in Townsite, Suarez, Iligan
City (the "Iligan Property"). They allegedly bought the property in 1951 from Felix Natingo and Carlos
Carbonay, who, allegedly, had been in actual possession of the property since time immemorial. The
Delfin Spouses had been declaring the Iligan Property in their names for tax purposes since 1952, and
had been planting it with mangoes, coconuts, corn, seasonal crops, and vegetables. They farther
alleged that, sometime in 1982, respondent National Housing Authority forcibly took possession of a
10,798 square meter portion of the property.

Despite their repeated demands for compensation, the National Housing Authority failed to pay the
value of the property.11 The Delfin Spouses thus, filed their Complaint. On May 20, 2002, the Regional
Trial Court rendered a Decision in favor of the Delfin Spouses.

The Regional Trial Court's May 20, 2002 Decision awarded compensation to Delfin Spouses for an
Iligan City property subsequently occupied by respondent National Housing Authority.

The Court of Appeals Decision reversed the Regional Trial Court's May 20, 2002 Decision and
dismissed the Delfin Spouses' complaint seeking compensation.

The assailed Court of Appeals Resolution denied their Motion for Reconsideration.

ISSUE:
Whether petitioners are entitled to just compensation for the Iligan City property occupied by respondent
National Housing Authority.

Yes. Petitioners may have are erroneously claimed title based on acquisitive prescription under Section
14(2) of Presidential Decree No. 1529. For acquisitive prescription to set in pursuant to Section 14(2)
of Presidential Decree No. 1529, two (2) requirements must be satisifled:
1. the property is established to be private in character; and
2. the applicable prescriptive period under existing laws had passed. Contrary to petitioners' theory
then, for prescription to be viable, the publicly-owned land must be patrimonial or private in character
at the onset. Possession for thirty (30) years does not convert it into patrimonial property.
For land of the public domain to be converted into patrimonial property, there must be an express
declaration - "in the form of a law duly enacted by Congress or a Presidential Proclamation in cases
where the President is duly authorized by law" that "the public dominion property is no longer intended
for public service or the development of the national wealth or that the property has been converted
into patrimonial.

But petitioners "Attached to the present Petition a copy of a May 18, 1988 supplemental letter to the
Director of the Land Management Bureau. This referred to an executive order, which stated that
petitioners' property was no longer needed for any public or quasi-public purposes:

While petitioners may not claim title by prescription, they may, nevertheless, claim title pursuant to
Section 48 (b) of Commonwealth Act No. 141 (the Public Land Act).

Section 48 enabled the confirmation of claims and issuance of titles in favor of citizens occupying or
claiming to own lands of the public domain or an interest therein. Section 48 (b) specifically pertained
to those who "have been in open, continuous, exclusive, and notorious possession and, occupation of
agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, since June
12, 1945":

The Iligan Property was supposedly part of a military reservation area which was subsequently reserved
for Iligan City's slum improvement and resettlement program, and the relocation of families who were
dislocated by the National Steel Corporation's five-year expansion program.

Indeed, by virtue of Proclamation No. 2143 (erroneously referred to by respondent as Proclamation No.
2151) certain parcels of land in Barrio Suarez, Iligan City were reserved for slum-improvement and
resettlement program purposes. The proclamation characterized the covered area as "disposable
parcel of public land"

Clearly then, petitioners acquired title over the Iligan Property pursuant to Section 48(b) of the Public
Land Act.

First, there is no issue that the Iligan Property had already been declared to be alienable and disposable
land. Respondent has admitted this and Deputy Public Land Inspector Pio Lucero, Jr.'s letters to the
Director of Land attest to this.

Second, although the Delfin Spouses' testimonial evidence and tax declarations showed that their
possession went only as far back as 1952, Deputy Public Land Inspector Pio Lucero, Jr.'s letters to the
Director of Land nevertheless attest to a previous finding that the property had already been occupied
as early as June 1945.

Having shown that the requisites of Section 48(b) of the Public Land Act have been satisfied and having
established their rights to the Iligan Property, it follows that petitioners must be compensated for it
taking.

SUPREMA T. DUMO, Petitioner, v. REPUBLIC OF THE PHILIPPINES, Respondent

G.R. No. 218269, June 06, 2018

Facts:
Petitioner Suprema T. Dumo filed an application for registration of two parcels of land, covered by
Advance Plan of Lot Nos. 400398 and 400399 with a total area of 1,273 square meters (LRC Case No.
270-Bg).

Dumo traces her title from her mother, Trinidad, who purchased the lots from Florencio Mabalay in
August 1951. Mabalay was Dumo's maternal grandfather. Mabalay, on the other hand, purchased the
properties from Carlos Calica.

Dumo alleged that the lots belonged to her mother Bernarda M. Trinidad, and that she and her siblings
inherited them upon their mother's death. She further alleged that through a Deed of Partition with
Absolute Sale dated 6 February 1987, she acquired the subject lots from her siblings.

The heirs of Marcelino Espinas opposed Dumo's application for land registration on the ground that the
properties sought to be registered by Dumo are involved in the accion reivindicatoria case.

The RTC consolidated the land registration case with the Complaint for Recovery of Ownership,
Possession and Damages.
On 2 July 2010, the RTC rendered its Joint Decision, finding that the subject property was owned by
the heirs of Espinas. The RTC ordered the dismissal of Dumo's land registration application on the
ground of lack of registerable title, and ordered Dumo to restore ownership and possession of the lots
to the heirs of Espinas.
The CA rendered afirmmed the RTC's decision dismissing the application for land registration of Dumo,
and finding that she failed to demonstrate that she and her predecessors-in¬ interest possessed the
property in the manner required by law to merit the grant of her application for land registration.

The CA, however, modified the decision of the RTC insofar as it found that the Subject Property
belonged to the heirs of Espinas.

The CA found that since the property still belonged to the public domain, and the heirs of Espinas were
not able to establish their open, continuous, exclusive and notorious possession and occupation of the
land under a bona fide claim of ownership since 12 June 1945 or earlier, it was erroneous for the RTC
to declare the heirs of Espinas as the owners of the Subject Property; hence, this petition.

Issue:
Whether Dumo is able to prove that the subject property forms part of the alienable and
disposable land of public domain.
Held:
NO, Dumo failed to submit any of the documents required to prove that the land she seeks to register
is alienable and disposable land of the public domain.

The applicant bears the burden of proving the status of the land. In this connection, the Court held that
there are two (2) documents which must be presented: first, a copy of the original classification
approved by the Secretary of the DENR and certified as a true copy by the legal custodian of the official
records, and second, a certificate of land classification status issued by the CENRO or the PENRO
based on the land classification approved by the DENR Secretary.

In this case, none of the documents submitted by respondent to the trial court indicated that the subject
property was agricultural or part of the alienable and disposable lands of the public domain. At most,
the CENRO Report and Certification stated that the land was not covered by any kind of public land
application. This was far from an adequate proof of the classification of the land.

Unfortunately for respondent, the evidence submitted clearly falls short of the requirements for
original registration in order to show the alienable character of the lands subject herein.
WHEREFORE, the petition is DENIED. The assailed decision and resolution of the Court of Appeals
are AFFIRMED.

Republic of the Philippines vs. Spouses Alejandre G.R. No. 217336 October 17, 2018

FACTS:
Spouses Alejandre filed an application for the registration of Lot No. 6487 with an area of 256 square
meters under P.D. No. 1529. They alleged that they are the owners the subject property by virtue of a
deed of sale or conveyance; that the subject property was sold to them by its former owner Angustia
Lizardo Taleon by way of Deed of Absolute Sale; that the said land is presently occupied by the
applicants-spouses.
Republic contended that the subject property applied for is a portion of the public domain belonging to
the Republic of the Philippines which is not subject to private appropriation.
RTC granted the application for registration of title. It ruled that applicants fall under the 4th type of
applicants (Those who have acquired ownership of land in any other manner provided for by law) who
may apply for registration of title to land provided under Section 14 of PD No. 1529.
(1) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable lands of
the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.
It is undisputed that the applicants acquired the land in question by virtue of a Deed of Absolute Sale
executed on June 20, 1990 from Taleon who acquired the land from her mother by inheritance.
CA affirmed RTC's decision.
the applicant spouses acquired ownership over Lot 6487 through a contract of sale, which is well within
the purview of Paragraph 4 of Section 14 of P.D. No. 1529.
ISSUE:
Whether or not the granting of the application for registartion of land was valid.
HELD:
No, the granting of the application for registartion of land was not valid because the applicants failed to
prove private ownership of the subject land.
It is well-entrenched in jurispridence that all lands not appearing to be clearly of private dominion or
ownership presumptively belong to the State.
Accordingly, public lands not shown to have been classified, reclassified or released as alienable
agricultural land or alienated to a private person by the State remain part of the inalienable lands of
public domain.
Therefore, the onus to overturn, by incontrovertible evidence, the presumption that the land subject of
an application for registration is alienable and disposable rests with the applicant.
Applicants, based on the evidence that they adduced, are apparently claiming ownership over the land
subject of their application for registration by virtue of tradition, as a consequence of the contract of
sale, and by succession in so far as their predecessors-in-interest are concerned.
Both modes are derivative modes of acquiring ownership. Yet, they failed to prove the nature or
classification of the land. The fact that they acquired the same by sale and their transferor by succession
is not incontrovertible proof that it is of private dominion or ownership. In the absence of such
incontrovertible proof of private ownership, the well-entrenched presumption arising from the Regalian
doctrine that the subject land is of public domain or dominion must be overcome. Respondents failed
to do this.

Privatization and Management Office vs. Court of Tax Appeals G.R. No. 211839 March 18, 2019

Topic/Doctrine: Any encumbrance, levy on execution or auction sale of any property of public dominion
is void for being contrary to public policy.
Facts of the Case:
Private and Management Office (PMO) owns the Leyte Park Hotel, Inc. (LPHI) which they leased out
to UNIMASTER CONGLOMERATION INC. (UCI) at P300K per month.
Respondent City Govt. of Tacloban filed for collection of sum of money before the CTA against LPHI
and UCI for the unpaid RPTs in the amount P23,377,353.08.
Thereafter, respondent City amended its complaint and impleaded additional defendants, namely: The
Province of Leyte, the Philippine Tourism Authority (PTA) and the PM.
Petitioner filed its Answer and argued, among others, that the liability to pay real property taxes
devolves on UCI pursuant to Section 234 of the Local Government Code.
After trial, the CTA Special First Division rendered a Decision holding UCI liable for the payment of the
unpaid real property taxes.
UCI moved to reconsider but the same was denied.
UCI filed a Petition for Review with the CTA En Banc.
On February 7, 2013, the CTA En Banc issued the now assailed Resolution granting petitioner's Motion
for Suspension of Collection of Real Property Tax and Cancellation of Warrants of Levy conditioned on
its filing of a surety bond equivalent to one and one-half of the amount sought to be collected by
respondent City.

On February 14, 2013, PMO filed a Motion for Exemption from Posting of Surety Bond on the ground
that national government agencies and instrumentalities, such as petitioner, are not, and should not be
required to file any bond as there should be no doubt as to the solvency of the Republic of the
Philippines.
Issue:
Whether or not the petitioner, as an agency of the government, is required to file a surety bond as a
condition precedent to suspend the tax collection -
RULING:
NO. Section 9 of Republic Act (R.A.) No. 9282 provides for the rule that an appeal to the CTA from the
decision of the City Treasurer of a Local Government Unit (as in this case) will not suspend the payment,
levy, distraint, and/or sale of any property of the taxpayer for the satisfaction of his tax liability, as
provided by existing law.
However, when, in the view of the CTA, the collection may jeopardize the interest of the Government
and/or the taxpayer, it may suspend the said collection and require the taxpayer either to deposit the
amount claimed or to file a surety bond.
Petitioner, as a government entity, it is exempt from payment of real property taxes pursuant to Section
234(a) of the 1991 Local Government Code or R.A. No. 7160. The said provision also provides that
when
the beneficial use of the real property owned by the Republic or any of its political subdivision, is vested

Baguio vs. Heirs of Ramon Abello G.R. No. 192956. July 24, 2019
FACTS:
This case involves a 16,295sqm parcel of land located in Barrio Sillon, Municipality of Bantayan,
Province of Cebu.
On April 6, 1972, the Abello heirs filed a Sales Application with the Bureau of Lands over the disputed
parcel. Batayola and Pacina opposed the application and filed their respective claims over the portions
they have been occupying.
The Bureau ruled in favor of Batayola and Pacina.
Batayola's heirs and Pacina then filed free patent applications which were granted. Abella heirs filed a
complaint for nullity of title before the RTC, since they discovered the existence of an OCT which was
in the custody of their uncle, Vicente Pacina. The OCT was in the name of Diego, the Abello heir's
predecessors-in- interest.
However, in April 1996, the Abello heirs discovered the existence of OCT No. 1208, which was in the
custody of their uncle, Valentin Pacina.
Armed with evidence of their own title, the Abello heirs filed a complaint for nullity of title dated May
1997 before the RTC of Bogo, Cebu, Branch 61. The complaint sought the following reliefs: the
nullification of the BL-VII decision and the consequent issuance of the free patents and the OCT in
favor of Batayola the ejectment of the Batayola group from their claimed portions and damages.
Batayola heirs contended that the OCT is void insofar as their occupied portions are concerned, since
they have been in occupation and possession of said lots long before the issuance thereof.
The said lots were still public land at the time the parcel was surveyed sometime in 1951; hence the
same cannot be surveyed as private land on behalf of Diego. and, therefore, the issuance or OCT No.
1208 should have been done either through mistake or fraud.
RTC dismissed the complaint since the ruling of the Bureau of Lands have long been final and
executory.
The heirs of Abella appealed to the CA. CA set aside RTC and decreed the cancellation of titles issued
to Diego and Batayola.
The fundamental issue in the appeal was whether or not the disputed parcel was alienable and
disposable land of the public domain: a question it answered in the negative.
There was no evidence or any positive act or declaration of the government setting aside the disputed
parcel as alienable and disposable land of the public domain. Furthermore, the disputed parcel is
foreshore land, which cannot be disposed of by free patent

Under Sections 58 to 61 of CA 141, foreshore lands may only be disposed of to private parties by lease,
after a declaration by the President that the same are not necessary for public service and are open to
disposition under the Act.
Both come now to the Court, arguing that the CA could not have annulled the titles in the names of their
predecessors-in-interest since the case at bar is for nullity of title and not for reversion; and because
Section 101 of the Public Land Act provides that reversion suits must be instituted by the Solicitor
General, who was not made a party to the case.
ISSUE:
W/N the subject land is a foreshore land - YES
HELD:
Yes. Foreshore lands are defined as those lands adjacent to the sea or immediately in front of the
shore, lying between the high and low water marks and alternately covered with water and left dry
according to the ordinary flow of the tides.
Foreshore lands are usually indicated by the middle line between the highest and the lowest tides.
The records reveal two conflicting Bureau of Lands reports regarding the disputed parcel, which led to
the issuance of the certificates of title held respectively by Diego Abello and Batayola.
The first report, dated May 30, 1963, was prepared by Land Investigator Mauro T. Torreda wherein it
states that Diego has been in open, continuous, notorious, and exclusive possession since 1916 of a
parcel of land with an area of 3.5730 hectares. The lots were found to be within agricultural land and
planted with coconut trees.
The second report was the Del Monte report, which was prepared in connection with the sales patent
application filed by the Abello heirs in 1972. It categorically describes the disputed parcel as foreshore
land which was gradually filled in through the efforts of Batayola and Pacina, who made the necessary
works to keep the land from being submerged during high tide, built houses, sheds and fish driers, and
planted coconut trees thereon.
The survey plans, sketch maps, and other documentary evidence on record clearly establish that the
disputed parcel is located along the eastern shoreline of Bantayan Island, but are inconclusive as to
whether the parcel is foreshore land.
The plan of the 1951 private survey ordered by Abella, which was approved by the then-Director of
Lands, does not include the boundaries of the disputed parcel.
Legal provisions mandate that foreshore lands of the public domain must first be opened to disposition
or concession by the President; and afterwards may only be disposed of through lease, and not
otherwise. The "appropriate public lands application”
Both the Batayola heirs and Pacina filed FP applications, in 1983 and 1985, respectively, instead of
foreshore lease applications. There is nothing in the record which indicates that the disputed parcel
had been released into the public domain and reclassified as agricultural land prior to 1983;

On the other hand, Presidential Proclamation No. 2151, dated December 29, 1981, expressly declared
Bantayan a Wilderness Area, with the effect of withdrawing all lands therein "from entry, sale,
settlement, exploitation of whatever nature or forms of disposition, subject to existing recognized and
valid private rights, if any there be"; and placing said lands under the administration and control of the
DENR
It is clear from the foregoing that the Batayola heirs and Pacina failed to tile the appropriate public lands
application as required by the BL-VII decision. Worse, they repeated the same error committed by
Diego in 1963: filing an application for free patent over land that is neither agricultural nor alienable and
disposable.
IN VIEW OF THE FOREGOING, both petitions are hereby DENIED. The Decision dated November 10,
2008 and the Resolution dated July 5, 2010 of the Court of Appeals in CA-G.R. CV No. 79669 are
hereby AFFIRMED, without prejudice to the institution of reversion proceedings by the State through
the Office of the Solicitor General.

Republic of the Philippines vs. National Commission on Indigenous Peoples G.R. No. 208480
September 25, 2019

FACTS:

The petitioners are the heirs of "Sarah" Piraso, the daughter of Piraso, otherwise known as Kapitan
Piraso, an Ibaloi, who occupied an ancestral land located at what is known as Session Road, Baguio
City. Aside from having five (5) children, Kapitan Piraso also adopted, in accordance with the Ibaloi
tradition, a son in the name of Nimer. Nimer and his family, in turn, [have] been planting and harvesting
vegetables and fruit-bearing trees on several portions of the ancestral land.

With this, they respectively filed an application for the identification, delineation and recognition of the
ancestral land before Baguio National Commission on Indigenous Peoples (NCIP) City Office pursuant
to the provisions of R.A. 8371 or IPRA Law.

NCIP granted their petition through two resolutions:

1. Resolution No. 107-2010-AL for Heirs of Piraso where NCIP ordered the issuance of 8
Certificates of Ancestral Land Titles (CALTs) under the petitioners' names.
2. Resolution No. 108-2010-AL for Abanags (heirs of Menchi) where NCIP ordered the issuance
of 28 CALTs under the petitioners' names.

2 years after, OSG files a petition seeking to annul, reverse and set aside the said resolutions.

NCIP: Held that respondents Pirasos and Abanags have vested rights over their ancestral lands on the
basis of a native title and as mandated by Article XII, Section 5 of the 1987 Constitution and Republic
Act No. 8371 (RA 8371), otherwise known as "The Indigenous Peoples' Rights Act of 1997."

CA: Agrees with the finding of the NCIP that Baguio City is no different from any part of the Philippines
and that there is no sensible difference that merits the city's exclusion from the coverage of the IPRA.

ISSUE: WON the issued Certificates of Ancestral Land Titles of the NCIP is valid.

RULING: No. Republic Act No. 8371 (IPRA Law) expressly excludes the City of Baguio from the
application of the general provisions of the IPRA.

Section 78 of RA 8371 provides: "[t]he City of Baguio shall remain to be governed by its Charter and
all lands proclaimed as part of its townsite reservation shall remain as such until otherwise reclassified
by appropriate legislation:

Congressional deliberations also shows that there is clear legislative intent that, despite the enactment
of the IPRA, Baguio City shall remain to be governed by its charter and that all lands proclaimed as
part of Baguio City's Townsite Reservation shall remain to be a part of the Townsite Reservation unless
reclassified by Congress. The NCIP cannot transgress this clear legislative intent.

With this, I PRA expressly excludes land proclaimed to be part of the Baguio Townsite Reservation.
Absent legislation passed by Congress, the Baguio Townsite Reservation shall belong to the public
and exclusively for public purpose.

The Wright Park, the Secretary's Cottage, the Senate President's Cottage, the Mansion House, and
the public roads therein which are all covered by the assailed CALTs shall remain to exist for the benefit
and enjoyment of the public. These subject lands comprise of historical heritage and belong to the
State.

This is supported by Art. 420 (2) of the Civil Code which provides:
Art. 420. The following things are property of public dominion:
 1. Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
2. Those which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth

Dispositive: Petition granted, assailed CALTs are declared null and void.
Light Rail Transit Authority vs. Quezon City G.R. No. 221626 October 09, 2019
FACTS:
1) By reason of EO 603 creating and organizing the LRTA, the LRTA acquired real properties,
constructed structural improvements, such as buildings, carriageways, passenger terminal stations,
and installed various kinds of machinery and equipment and facilities for the purpose of its operations.
2) In 1984, the City Assessor of Manila assessed the real properties of LRTA, consisting of lands,
buildings, carriageways and passenger terminal stations, machinery and equipment which he
considered real property under the Real Property Tax Code.
3) LRTA paid its real property taxes on all its real property holdings, except the carriageways and
passenger terminal stations including the land where it is constructed on the ground that the same are
not real properties under the Real Property Tax Code, and if the same are real property, are for public
use/purpose, therefore, exempt from realty taxation. This claim was denied by the City Assessor of
Manila.
4) LRTA filed an appeal with the Central Board of Assessment Appeals of Manila which denied the
appeal and declared that carriageways and passenger terminal stations are improvements, therefore,
are real property under the Code, and not exempt from the payment of real property tax. The
subsequent MR was denied.
5) On appeal the CA affirmed the decision of the Board. Hence this petition.
ISSUES:
1) Whether or not carriageways and terminal stations are considered as public roads
2) Whether or not the carriageways and terminal stations are subject to real property tax
3) Whether or not the LRTA is performing governmental functions

HELD:
1) No. It is true that petitioner's carriageways and terminal stations are anchored, at certain points, on
public roads. However, these structures do not form part of such roads, since the former have been
constructed over the latter in such a way that the flow of vehicular traffic would not be impeded.
These carriageways and terminal stations serve a function different from that of the public roads. The
former are part and parcel of the light rail transit (LRT) system which, unlike public roads, are not open
to use by the general public. The carriageways are accessible only to the LRT trains, while the terminal
stations have been built for the convenience of LRTA itself and its customers who pay the required
fare.
2) Yes. EO. 603, the charter of LRTA, does not provide for any real estate tax exemption in its favor.
Its exemption is limited to direct and indirect taxes, duties or fees in connection with the importation of
equipment not locally available.
Even granting that the national government indeed owns the carriageways and terminal stations, the
exemption would not apply because their beneficial use has been granted to petitioner, a taxable entity
3) No. Though the creation of the LRTA was impelled by public service to provide mass transportation
to alleviate the traffic and transportation situation in Metro Manila, its operation undeniably partakes of
ordinary business.
Petitioner is clothed with corporate status and corporate powers in the furtherance of its proprietary
objectives. Indeed, it operates much like any private corporation engaged in the mass transport
industry. Given that it is engaged in a service-oriented commercial endeavor, its carriageways and
terminal stations are patrimonial property subject to tax, notwithstanding its claim of being a
government-owned or controlled corporation.

Philippine Heart Center v. Local Government of Quezon City

G.R. No. 225409 March 11, 2020
FACTS:
In 1975, the PHC was established under Presidential Decree 673 (PD 673) as a specialty hospital
mandated to provide expert comprehensive cardiovascular care to the general public, especially the
poor and less fortunate in life.
The national government provided the initial land, building, equipment and facilities needed for its
establishment to enable the PHC to perform its mandate.
PD 673 also authorized the PHC to acquire properties; to enter into contracts; and to mortgage,
encumber, lease, sell, convey or dispose of its properties.
More, it exempted the PHC from "the payment of all taxes, charges, fees imposed by the Government
or any political subdivision or instrumentality thereof" for a period of ten (10) years.
In 1985, then President Ferdinand E. Marcos issued Letter of Instruction (LOI) 1455 extending the tax
exemption "without interruption."
In 2004 respondent Quezon City Government issued three (3) final Notices of Delinquency for unpaid
real property taxes of Php36,530,545.00 pertaining to the eleven (11) properties of the PHC. The
notices were unheeded, thus, respondent Quezon City Treasurer levied on the PHC's properties.
Respondent Quezon City Treasurer issued a Warrant of Levy for the PHC 's failure to pay real property
taxes despite due notice. On July 7, 2011, after due publication, all the properties were sold to the
Quezon City Government, the lone bidder during the public auction.
ISSUES:
1. Whether PHC is a government instrumentality with corporate power exempt from local tax.
2. Whether PHC is exempt from paying real property taxes on its eleven (11) properties in Quezon
City leased to private parties.

RULING:
1. YES. PHC is a government instrumentality with corporate power exempt from local tax.
An agency will be classified as a government instrumentality vested with corporate powers when
the following elements concur: a) it performs governmental functions, and b) it enjoys operational
autonomy. The PHC passes these twin criteria.
As the PHC is vested with corporate powers under Section 5 of PD 673, to adopt a set of by-
laws, rules and regulations not inconsistent with law and the provisions hereof to govern the
administration and operation of the affairs of the Philippine Heart Center; and to do all such other
acts and things as are or may be necessary or incidental for the accomplishment of the purposes
and objectives of the Philippine Heart Center. Therefore, PHC bears the essential characteristics
of a government instrumentality vested with corporate powers, exempt from real property taxes.
The properties of the PHC are properties of public dominion devoted to public use and welfare
under Article 420 of the Civil Code and, therefore, exempt from real property taxes and levy,
without prejudice to the liability of taxable persons to whom the beneficial use of any of these
properties has been granted.

2. NO. PHC’s real property leased to private parties are not tax exempted.
Section 234(a) of RA 7160 exempts real property owned by the Republic from real property
taxes except when the beneficial use thereof has been granted, for consideration or otherwise,
to a taxable person.
Thus, the Court has invariably held that a government instrumentality, though vested with
corporate powers, are exempt from real property tax but the exemption shall not extend to
taxable private entities to whom the beneficial use of the government instrumentality's properties
has been vested.
Therefore, respondent correctly posit that the PHC's properties which are leased to private
individuals are no longer covered by the tax exemption.
NOTE IN THIS CASE: However, respondents failed to specify which of the eleven (11) properties
or portions thereof were being leased out, to whom they were being leased, and the lease
periods for which the private individuals are to be taxed.
A final word. Local government units must exercise restraint in levying on government properties. The
"power to destroy" ought not be used against the very entity that wields it. Despite its corporate status,
the PHC remains an instrumentality of the government from which the power to tax of local units
originates. Thus, it, too, must be spared from a local unit's power of confiscation.
DISPOSITION: ACCORDINGLY, the petition is GRANTED. The Court of Appeals' Decision dated
March 15, 2016 and Resolution dated June 23, 2016 in CA G.R. SP No. 121019 are REVERSED and
SET ASIDE.
The Court further DECLARES:
1. The Philippine Heart Center and its properties utilized in relation to the establishment, operation, and
maintenance a specialty hospital in the country are EXEMPT from the real property taxes of the Quezon
City Government;
2. All the real property tax assessments, as well as the final notices of real property tax delinquencies,
and the warrant of levy issued by the Quezon City government on the Philippine Heart Center and its
properties, are VOID; and
3. The July 7, 2011 sale at public auction of the properties of the Philippine Heart Center, as well as
the purchase of these properties by the Quezon City Government, are VOID.

Authority of the Freeport Area of Bataan vs. F.F. Cruz & Co., Inc. G.R. No. 240047 May 14, 2021

On June 21, 1969, Republic Act (R.A.) No. 5490 was enacted which established the town of Mariveles,
Bataan as a principal port of entry and Foreign Trade Zone under the management of the Foreign Trade
Zone Authority (FTZA).
On August 31, 1971, former President Ferdinand E. Marcos issued Proclamation No. 899 which
reserved parcels of land with an area of 497.034 hectares, more or less, located in Mariveles, Bataan,
for quarry site purposes under the Foreign Trade Zone. Similarly, Proclamation No. 939 was issued on
December 10, 1971 which reserved additional parcels of land with an area of 267.69 hectares in
Mariveles, Bataan, for Foreign Trade Zone purposes.
 On November 20, 1972, Presidential Decree (P.D.) No. 66 was issued which created the Export
Processing Zone Authority (EPZA). The EPZA took over the functions of FTZA and assumed ownership
over its properties, monies, assets, rights, choses in action, obligations, liabilities, records, and
contracts.
The EPZA was eventually converted into the Philippine Economic Zone Authority (PEZA) through
the enactment of R.A. No. 7916, known as "The Special Economic Zone Act of 1995." Executive Order
No. 282 was issued on October 30, 1995, which ordered the PEZA to assume all of EPZA's powers
and functions, and take over its funds, unexpended appropriations, properties, equipment, assets,
records, choses in action, and other rights under its control and supervision.
On July 27, 2009, R.A. No. 9728, the "Freeport Area of Bataan, Act of 2009," was enacted. The
Bataan Economic Zone in Mariveles, Bataan, was converted into a special economic zone and freeport
to be known as the Freeport Area of Bataan (FAB).
The Authority of the Freeport Area of Bataan (AFAB) was also created to manage and operate the
FAB. All properties, assets, funds, rights, obligations, and liabilities of the PEZA in the Bataan Economic
Zone were transferred to AFAB.
Pursuant to its mandate, AFAB proceeded to transfer titles over real properties owned by PEZA in
Mariveles, Bataan under its own name.1a⍵⍴h!1
However, in the process of surveying and inspecting the real properties, it discovered that several
parcels of land which were reserved under Proclamation Nos. 899 and 939 were erroneously registered
under the name of F.F. Cruz & Co. (FFCCI) (Subject Properties).
Consequently, AFAB, through the Office of the Government Corporate Counsel (OGCC) as its
counsel, filed an Amended Complaint for Declaration of Nullity and Cancellation of Title (Complaint)
against FFCCI to regain title over the Subject Properties.
AFAB's Amended Complaint summarized its findings and relief sought as follows:
12. To fully accomplish the objectives of the above provision, the AFAB recently initiated
the process of transferring the titles over all real estate properties from PEZA to AFAB's
name.
13. During the process of conducting a survey and inspecting all its properties, including
all the parcels of lands covered by Proclamations 899 and 939, which PEZA transferred
to it, the AFAB discovered that certain contiguous parcels of its landholdings covered by
Proclamations 899 and 939 are registered in FFCCI's name
Instead of filing an Answer, FFCCI filed a Motion to Dismiss the Amended Complaint based on the
16

following grounds:
I.
The AMENDED COMPLAINT FAILS TO STATE A CAUSE OF ACTION IN THAT AFAB
FAILS TO IDENTIFY ITS LEGAL RIGHT, WHICH WAS VIOLATED, AND THE
CORRESPONDING OBLIGATION ON THE PART OF FFCCI, WHICH IT FAILED TO
PERFORM.
A. REPUBLIC ACT NO. 5490, WHICH SERVES AS THE BASIS OF AFAB'S
CLAIMS OVER FFCCI'S PROPERTIES, IS BEREFT OF CLEAR
DEMARCATIONS TO CLEARLY DELINEATE, IDENTIFY, AND
DISTINGUISH WHAT AFAB CLAIMS IS ITS TERRITORY.
B. THE AMENDED COMPLAINT STATES NEITHER AFAB'S LEGAL BASES
FOR AN ACTION TO ANNUL FFCCI'S TITLES NOR ASK FOR
REVERSION OF THE PROPERTIES COVERED BY THEM.
II.
THE COMPLAINT IS IN THE NATURE OF EXPROPRIATION, WHICH AFAB IS NOT
EMPOWERED TO UNDERTAKE.
III.
FFCCI, A BUYER IN GOOD FAITH, IS ENTITLED TO THE PROTECTION OF THE
LAW. ITS TORRENS TITLE IS INDEFEASIBLE.
IV.
BASED ON THE PRINCIPLE OF RES JUDICATA, FFCCI, A HOLDER OF A TORRENS
TITLE, IS ENTITLED TO THE GENERALLY CONCLUSIVE EVIDENCE OF
OWNERSHIP OF THE LAND REFERRED TO IN ITS TORRENS TITLES.
V.
THE FILING OF THE COMPLAINT AND AMENDED COMPLAINT IS BARRED BY
PRESCRIPTION AND LACHES.
VI.
THE AMENDED COMPLAINT WAS FILED WITHOUT THE CORRESPONDING
REQUISITE FILING FEES PAID IN FULL.

AFAB filed its Comment/Opposition to the Motion to Dismiss alleging that its Amended
Complaint sufficiently stated a cause of action. Contrary to FFCCI's claim, it adequately provided
the demarcations of its territory through the copies of Proclamation Nos. 899 and 939 attached
to the Amended Complaint. The Amended Complaint also cannot be considered as a complaint
for expropriation because the Subject Properties involved are not private lands but lands of the
public domain.
RTC ruled in facor of AFAB
The CA reversed the RTC Orders: granting FFCCI's Motion to Dismiss.
The CA summarized the following grounds for its grant of FFCCI's Motion for Reconsideration:
1. The Complaint failed to state a cause of action.
2. The RTC had no jurisdiction over the Amended Complaint which prays for the nullification
of OCT No. 234. This would entail the nullification of the prior CFI (RTC) decision that
ordered the issuance of the OCT which is a case properly within the jurisdiction of the
CA.
3. The Amended Complaint, although denominated as one for Nullification of Title, ultimately
seeks the reversion of privately held land to inalienable land of the public domain which
is an action that can be brought only by the State through the OSG
ISSUE:
The issue in this case is whether or not the CA committed reversible error in setting aside its
previous Decision and granting FFCCI's Motion to Dismiss.

PEtition is denied. The State is the Real Party in Interest to Institute an Action for Reversion of
the Subject Properties.
REVERSION MAY BE BROUGHT ONLY BY THE STATE THROUGH THE OFFICE OF THE
SOLICITOR GENERAL.
AFAB is notably a government instrumentality in accordance with its definition under the
Administrative Code
Having established that AFAB is a government instrumentality, it follows that the State remains
the beneficial owner of the lands owned by it
Properties owned by the state are either property of public dominion or patrimonial property. Article
420 of the Civil Code of the Philippines enumerates property of public dominion:
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks, shores, roadsteads, and
others of similar character;
(2) Those which belong to the State, without belonging for public use, and are
intended for some public service or for the development of the national
wealth.

A port of entry, where imported goods are unloaded then introduced in the market for public
consumption, is considered property for public use. Thus, Article 420 of the Civil Code classifies a port
as property of public dominion. The Freeport Area of Bataan, where the government allows tax and
duty-free importation of goods, is considered property of public dominion. The Freeport Area of Bataan
is owned by the state and cannot be taxed under Section 234(a) of the Local Government Code.
Properties of public dominion, even if titled in the name of an instrumentality as in this case, remain
owned by the Republic of the Philippines. If property registered in the name of an instrumentality is
conveyed to another person, the property is considered conveyed on behalf of the Republic of the
Philippines.

Republic of the Philippines vs. Pasig Rizal Co., Inc. G.R. No. 213207 February 15, 2022
FACTS:
A 944-square parcel of land located in Barangay Caniogan, Pasig City registered under Manuel
Dee Ham's name for tax purposes.
In 1961, Dee Ham died which resulting to inheritance of the surviving wife and children. Upon
inheritance, they opted to collectively transfer their beneficial ownership of that property to Dee
Ham Corporation, Pasig Rizal Co (PRCI) and paid its real property tax.
In 2010, the surviving wife, in behalf of the corporation, filed for an original registration of title
over the property in the Regional Trial Court which granted the same. She alleged that all
improvements thereon and her predecessors-in-interest have been open, notorious, exclusive
and exclusive possessed the property for more than 50 years, neither encumbered, nor
adversely possessed or claimed by any other party.
RTC PROCEEDINGS: PRCI appended the following documents, to wit:
o a) the Approved Survey Plan
o b) Tax Declarations and Tax Receipts proving that since 1956, [the Subject Property was
already declared for tax purposes and the corresponding realty taxes were paid;
o c) Affidavit of Esperanza Gerona establishing the transfer of ownership and possession
of the subject realty to PRCI;
o d) Certification of the Regional Technical Director of Forest Management Service of the
Department of Environment and Natural Resources (DENR) proving that the subject lot
is within the amenable and disposable land of public domain, as verified under Project
 No. 21 of Pasig pursuant to Land Classificatlon Map 639 which was approved on [March
11, 1927 and] per ocular inspection on the ground on [September 12, 2011]; and
o e) Affidavit of Bemarda Lu, a friend and neighbor of the Dee Ham family, attesting to
[PRCI’s] ownership of the [Subject Property] and its uninterrupted possession as well as
the payment of land taxes thereon

On January 3, 2012, the Republic, through the Office of the Solicitor General (OSG), assailed
the RTC Decision before the CA via Rule 41 (Appeal).
BOTH RTC AND CA Dismissed the appeal. The Court ruled that the respondent complied with
necessary required evidence on the record paved the right to have registered the property in its
corporation's name under Presidential Decree 1529, Section 14(2) as prescription.
To support the claim, citing the case of Heirs of Malabanan vs. The Republic wherein the owner
may be granted to his/her registration upon showing the facts and evidences that will prove its
open, notorious, continuous, and exclusively use of the land since June 12, 1945 or earlier by
means of prescription.
On the other hand, the Republic, argued that the respondent's failed to prove such prescription
for the purposes of land registration because the construe regarding the particular provision
stated needs a validation that even the land was declared alienable and disposable, it should
fall within the ambit of Article 421 or 422 that patrimonial property shall not belong to those
property which even not intended for public use but intended for public service or determination
of national wealth.
In order to pursue such, expressed positive acts of the government must be issued Failure to
do so, the property cannot still be subjected for appropriation.

ISSUE:

Whether the subject land in question was considered a state-owned land?

HELD:
A) No, the Supreme Court modified the ruling.
The Court cited Presidential Decree 1529 which governs land registration of land under the
Torrens System for which cited its Section 14(2) for prescription. The Civil Code provided that
the lapse of time possession is through possession in good faith for 10 years whereas 30 years
for possession in bad faith and uninterrupted possession of the land for over 30 years.
In Malabanan, the concept of prescription was provided in Article 1113 of the New Civil Code in
relation to Article 420 and 421 which emphasized that any property of the State not patrimonial
in character shall not be subject for object of prescription.
Based on the foregoing discussion in Malabanan, the requirements for original registration under
then Section 14(2) were: (i) a declaration that the land subject of the application is alienable and
disposable; (ii) an express government manifestation that said land constitutes patrimonial
property, or is "no longer retained" by the State for public use, public service, or the development
of national wealth; and (iii) proof of possession for the period and in the manner prescribed by
the Civil Code for acquisitive prescription, reckoned from the moment the property subject of the
application becomes patrimonial property of the State.

The second Malabanan requirement, that is, the express government manifestation that the land
constitutes patrimonial property, was anchored on the premise that "all lands owned by the
State, although declared alienable or disposable, remain as [property of public dominion] and
ought to be used only by the Government." However, this premise was not meant to be adopted
in absolute terms.

Once property of public dominion is classified by the State as alienable and disposable land of
the public domain, it immediately becomes open to private acquisition, since "[a]lienable lands
of the public domain x x x [form] part of the patrimonial [property] of the State."
NEW RULE: The operative act which converts property of public dominion to patrimonial
property is its classification as alienable and disposable land of the public domain, as this
classification precisely serves as the manifestation of the State's lack of intent to retain the same
for some public use or purpose.

In cases where land held by the State has not been previously utilized for some public purpose,
the State has no prior use to abandon or withdraw the land from. It would therefore be
unreasonable to require the applicant to present a law or executive proclamation expressing
such abandonment for there never will be one. The imposition of this additional requirement in
cases where the land so possessed had never been utilized by the State has dire consequences
for those who have occupied and cultivated the land in the concept of owners for periods beyond
what is required by law.
However, and to be clear, where the property subject of the application had been previously
utilized by the State for some public purpose, proof of conversion requires the establishment of
a positive fact — the abandonment by the State of its use and the consequent withdrawal of the
property from the public dominion. To establish this positive fact, it becomes incumbent upon
the applicant to present an express government manifestation that the land subject of his
application already constitutes patrimonial property, or is no longer retained for some public
purpose. It is within this context that the second requirement espoused in Malabanan was
crafted. This second requirement covered "converted" patrimonial property of the State, or those
falling within the scope of Article 422 of the Civil Code.

The fact that the Roppongi site has not been used for a long time for actual Embassy service
does not automatically convert it to patrimonial property.
Any such conversion happens only if the property is withdrawn from public use. A property
continues to be part of the public [dominion], not available for private appropriation or ownership
"until there is a formal declaration on the part of the government to withdraw it from being such

RA 11573 - curative law - cure defects / enacted to cure defects in a prior law or to validate legal
proceedings, instruments or acts of public authorities - given retroactive effect
Requirements:
Shortens the period of possession instead of before june 12 1945 to
20 yrs of possession - declared as alienable disposable immediately placed to commerce of
man and susceptible to private acquisition
No need for express declaration of the gov as long as it is classified as alienable and disposable
Documents needed proof that land is alienable:
SEC. 7. Proof that the Land is Alienable and Disposable. — For purposes of judicial confirmation
of imperfect titles filed under [PD 1529, a duly signed certification by a duly designated DENR
geodetic engineer that the land is part of alienable and disposable agricultural lands of the public
domain is sufficient proof that the land is alienable. Said certification shall be imprinted in the
approved survey plan submitted by the applicant in the land registration court. The imprinted
certification in the plan shall contain a sworn statement by the geodetic engineer that the land
is within the alienable and disposable lands of the public domain and shall state the applicable
Forestry Administrative Order, DENR Administrative Order, Executive Order, Proclamations and
the Land Classification Project Map Number covering the subject land.

In this case it was not established w/n the subject land is patrimonial property or not that is why
it was remanded to the CA

Hence, in that case, the applicant needs to overcome the presumption of regularity that "lands
belong to the State, without for public use, and all intended for public service or development of
national wealth".
The Court said this requirement is unreasonable in the case at bar because after all, that
creation of that provision meant that the State shall be the one to prove that the land is for public
service or determination of national wealth.
The subject land in question was already a patrimonial property, hence, alienable and
disposable.
The Court clarified that in relation to the Constitution that ownership of the land contemplated
not only ownership by private persons but also public ownership which was classified in our Civil
Code.
In Article 420, the law distinguished public use or not for public use but for public service or
development of the national wealth. In Article 421, it had been stated that other State-owned
property, not mentioned or neither for public use nor public service in Article 420-421 is
considered as patrimonial property. The problem arose that it might be conflict between them.
The Court qualified that "land of public domain" in the Constitution means all lands held by the
State both in public and private capacity. The word "public dominion" is exclusive and pertain
only to lands intended for public use, public service, or development of national wealth and
excludes patrimonial property.
Hence, all of contents of public dominion is a public domain of the Constitution.
In this qualification, patrimonial property is subject for alienation and disposition likewise owned
by the private individuals.
By these qualifications, the State-owned agricultural land declared as alienable and disposable
a proof of withdrawal from public dominion. On the other hand, the patrimonial property
conversion from public dominion means that opening the land to private ownership.
For the final note, by the amendments made through Republic Act 11573 confirmed the
classification of land as alienable and disposable immediately places it within the commerce of
man, and susceptible to private acquisition through adverse possession. It shortened the grant
of right to seek registration without having comply with the 30-year possession required for
acquisitive prescription under Civil Code.
The petition here was denied.

Light Rail Transit Authority vs. City of Pasay G.R. No. 211299 June 28, 2022

FACTS
From 1985 to 2001, Pasay City assessed the Light Rail Transit Authority (LRTA) of real estate taxes
on its properties.
LRTA admitted the tax liabilities however failed to settle its outstanding obligations.
RTC Pasay
LRTA filed a petition questioning the assessments. It claimed that it is a government instrumentality
exempt from local taxation.
RTC dismissed the petition for being an improper remedy.
Court of Appeals denied the appeal by LRTA finding that LRTA has not exhausted all administrative
remedies.
It also held that LRTA was already found to be a taxable entity pursuant to the 2000 LRTA case.
Hence, this petition by LRTA.
On the exhaustion of all administrative remedies, LRTA argues that the rule on exhaustion of
administrative remedies not involve questions of fact but only questions of law.
must be set aside in light of the Ty case, since the petition does collect RPT. It never questioned the
assessments made LRTA is questioning the very authority of Pasay to impose and collect
by the city assessor or the amounts being collected by the city treasurer.
Pasay City argues that LRTA cannot be a government instrumentality since the latter is allegedly
integrated within the department framework and is thus inconsistent with the definition of a government
instrumentality in the Administrative

W/N it was proper for LRTA to file petition to SC?→ YES.

RATIO

Yes.
In general, where administrative remedies are available, petitions for the issuance of the extraordinary
writs should not be granted by the courts in order to give the administrative body the opportunity to
decide the matter by itself correctly, and to prevent unnecessary and premature resort to courts.
However, this principle of exhaustion of administrative remedies is not without exception. Two of the
exceptions are when the issue involved is purely a legal question, and when the rule does not provide
a plain, speedy and adequate remedy.

In this case, it can be seen that the circumstances necessitates that the general rule be set aside. LRTA
primarily questions the authority of the tax assessor to impose tax assessments, as LRTA claims to be
a non-taxable entity. Being a legal question, there was no need to exhaust administrative remedies,
even assuming that such remedies exist.
Moreover, there are no competent administrative tribunals that may grant the relief that LRTA is
seeking. The protest under the LGC is limited to questioning the assessment itself, and not the authority
of the assessor. The proceedings before the Local Board of Assessment Appeals (LBAA) is also limited
to fact-finding.
Instrumentality vs. GOCC

Non-taxable
departmental framework, but vested by law with special functions or jurisdiction, endowed with some if
not all corporate powers, administering special funds, and enjoying operational autonomy usually
through a charter.
From the foregoing, the following elements in order to qualify as a government instrumentality with
corporate powers (GICP) or government corporate entity (GCE) can be distilled, to wit:
•
(a) agency of the government;
(b) neither a corporation nor agency integrated within the departmental framework;
(c) vested by law with special functions or jurisdiction;
(d) endowed with some if not all
(e) administering special fund corporate powers:
and
(f) enjoying operational autonomy usually through a charter.
As applied in this case, LRTA still clearly qualifies as a GICP/GCE under the definition provided in
Section 3(n) of the GOCC Governance Act of 2011.
like LRTA falls under Section 133(0) of the Local Government Code, which states: Unless otherwise
A govemment ins of the taxing powers of provinces cities municipalities, and barangays shall not extend
to the levy
provided herein, the
of the following: (0) Taxes, fees or charges of any kind on the National Government, its agencies and
instrumentalities and local government units.
SC agrees with LRTA's position that the real owner of these properties is actually the State, especially
considering the fact that said properties could not have been obtained without the use of the State's
inherent power of eminent domain, which it merely delegated to the LRTA A as its agent. Thus, the
inescapable conclusion is that the properties of the LRTA are not merely patrimonial properties but are
properties of the public dominion that cannot be subjected to real property tax. Section 234(a) of the
LGC exempts from real property tax any "real property owned by the Republic of the Philippines." The
Administrative Code allows real property owned by the Republic to be titled in the name of agencies or
instrumentalities of the national government. Such real properties remain owned by the Republic and
continue to be exempt from real estate tax.
To summarize:
Under Section 2(10) and (13) of the Introductory Provisions of the Administrative Code, which governs
the legal relation and status of government units, agencies and offices within the entire government
machinery, LRTA is a government instrumentality. and not a GOCC. Under Section 13
133 (0) of the LGC, LRTA as a government instrumentality is not a taxable person because it is not
subject to "Itjaxes, fees or charges of any kind" by local governments. The only exception is when LRTA
grants the beneficial use of its real property to a "taxable person" as provided in Section 234 (a) of the
LGC, in which case, the specific real property leased becomes subject to real property tax, which must
be paid by the "taxable person". Thus, only portions of the LRT leased to taxable persons like private
parties are subject to real property tax by the City.
Under Article 420 of the Civil Code, the rail roads and terminals of the LRT, being devoted to public
use, are properties of public dominion and thus owned by the State or the Republic of the Philippines.
Article 420, while not specifically mentioning "rail roads" or "rail road tracks," allow for the inclusion of
properties of a similar c ar character. L er. LRT rail roads, which necessarily include its terminals, are
of a similar character to public roads, as both are devoted for public use and both facilitate
transportation through certain vehicles. In any event, the LRT is owned by the State through the LRTA,
as its agent, and is definitely intended for some public service, which is to provide mass transportation
to the people to alleviate the traffic and transportation situation in Metro Manila. Therefore, being
properties of public dominion owned by the Republic, there is no doubt that the LRT rail roads and
terminals are expressly exempt from real estate tax under Section 234(a) of the LGC, subject to the
rule discussed above, and are not subject to execution or foreclosure sale.

Bishop vs CA
G.R. No. 86787, May 8, 1992
MILAGROS TUMULAK BISHOP, JUANA PANGILINAN, EMILIO MAXIMO, ANITA PANGILINAN,
MAGDALENA ROSETE, MANUEL DACUT, RECTO DIESTA, VIRGINIA NOVICIO, and LINDA
BONILLA (petitioners)
SPOUSES MANUEL AND JESUSA SALANG (respondents)

FACTS:
The dispute involves portions of a land in Calapacuan, Subic, Zambales. The private respondents,
spouses Manuel and Jesusa Salang, are the registered owners of the entire parcel under Transfer
Certificate of Title No. T-29018.
On January 22, 1985, the Salangs filed a suit against the petitioners, seeking recovery of possession
of certain lots within the parcel. The petitioners claimed that the lots were part of the public domain and
could not be registered under the Torrens system.

The trial court ruled in favor of the Salangs, affirming their right to possession as registered owners.
The decision was upheld on appeal.
Petitioners argued that the land is public, questioning its registrability. They also invoked laches,
claiming that the Salangs took too long to assert their rights. In the alternative, they asserted the rights
of builders in good faith under specific Civil Code articles.
The Salangs relied on their Torrens title as conclusive proof of ownership. They argued against laches
and acquisitive prescription, emphasizing that a Torrens title cannot be lost by prescription.
ISSUES:
1. Whether the land in question is part of the public domain and not registrable under the Torrens
system. -NO
2. Whether the petitioners, by laches or acquisitive prescription, have acquired title to the lots.-NO
3. Whether the petitioners, as builders in good faith, are entitled to certain rights. -NO

RULING:
 1. NO.The land's registration in the Torrens system, traced back to an Original Certificate of Title
issued in 1910, makes it private and registrable. The certification from the Bureau of Forestry
submitted by petitioners was disregarded as lacking legal basis.
The court emphasized that for an annulment of a Torrens certificate, , it must be shown that the
registration court had not acquired jurisdiction over the case and that there was actual fraud in
securing the title. All they submitted was the certification of the Bureau of Forestry that the land
in question was alienable and disposable public land. Significantly, it does not appear in the
record that the Director of Forestry, or any other representative of the Government for that
matter, entered any opposition to the land registration proceedings that led to the issuance of
the Original Certificate of Title. No less importantly, an action to invalidate a certificate of title on
the ground of fraud prescribes after the expiration of one (1) year from the entry of the decree of
registration and cannot now be resorted to by the petitioners at this late hour. And collaterally
at that.Moreover, any action to invalidate a title based on fraud is barred after one year from the
decree of registration. The petitioners' argument that the owner must physically possess the
registered land was dismissed, and the non-presentation of tax declarations was considered
irrelevant to proving ownership.
2. NO. The registered owners, the Salangs, cannot lose their title by prescription. Laches does not
apply against them as they have an imprescriptible right to demand the return of their property,
regardless of the length of unauthorized possession by the petitioners.
As registered owners of the lots in question, the private respondents have a right to eject any person
illegally occupying their property. This right is imprescriptible. Even if it be supposed that they were
aware of the petitioners' occupation of the property, and regardless of the length of that possession,
the lawful owners have a right to demand the return of their property at any time as long as the
possession was unauthorized or merely tolerated, if at all. This right is never barred by laches.
In urging laches against the private respondents for not protesting their long and continuous occupancy
of the lots in question, the petitioners are in effect contending that they have acquired the said lots by
acquisitive prescription. It is an elementary principle that the owner of a land registered under the
Torrens system cannot lose it by prescription.
As the Court observed in the early case Legarda v. Saleeby:
The real purpose of the Torrens system of land registration is to quite title to land; to put a stop forever
to any question of the legality of the title, except claims which were noted at the time of registration in
the certificate, or which may arise subsequent thereto. That being the purpose of the law, it would seem
that once the title was registered, the owner may rest secure, without the necessity of waiting in the
portals of the court, or sitting in the "mirador de su casa," to avoid the possibility of losing his land.
Applied consistently these many years, this doctrine has been burnished bright with use and has long
become a settled rule of law.
•
3. NO. The petitioners, not being in good faith, cannot claim the rights of builders in good faith since
they were aware that they had no right to occupy the land.
A builder in good faith is one who is unaware of any flaw in his title to the land at the time he builds on
it. This definition cannot apply to the petitioners because they knew at the very outset that they had no
right at all to occupy the subject lots.
The petitioners have consistently insisted that the lots were part of the public domain and even
submitted a certification to that effect from the Bureau of Forestry. The land was in fact registered under
the Torrens system and such registration was constructive notice to the whole world, including the
petitioners. Apparently, the petitioners did not take the trouble of checking such registration. At any
rate, the point is that, whether the land be public or private, the petitioners knew they had no right to
occupy it and build on it. The Court of Appeals was correct in calling them squatters for having entered,
without permission or authority, land that did not belong to them.
The petition was denied, affirming the decisions of the lower courts. The Torrens title of the Salangs
was upheld, emphasizing the protection accorded to registered owners under the Torrens system. The
petitioners' claims of laches, acquisitive prescription, and rights as builders in good faith were rejected.
SO ORDERED

G.R. No. 152440 January 31, 2005 BORBAJO vs. HIDDEN VIEW HOMEOWNERS, INC.,
FACTS: Jose C. Bontuyan (Bontuyan) and the Solons were the registered owners of a parcel of
agricultural land Barangay Bacayan, Cebu City as evidenced by a Transfer Certificate of Title.
At the instance of Bontuyan, the property was surveyed to convert it into a subdivision. The Regional
Technical Director of the DENR, Lands Management Sector in Cebu, approved the subdivision plan.
Bontuyan sold the resulting lots to different individuals.
Among the lots sold are the ones which later became the subject of this case, the three (3) road lots.
The road lots were sold to petitioner Borbajo and Bongo and they obtained the titles to the lots. Using
the advance payments of his lot purchasers, Bontuyan proceeded to develop a subdivision which was
later named Hidden View Subdivision I by its residents and homeowners. Later, he applied for and
secured from the Housing and Land Use Regulatory Board (HLURB) a License to Sell10 dated 29 July
1991.
Borbajo also decided to develop into a subdivision the other properties adjacent to Hidden View
Subdivision I which she acquired. She named this new subdivision ST Ville Properties and secured
Certificate of Registration No. 05005 for the ST Ville Properties project and a License to Sell the same
from the HLURB.
She also secured a Certificate of Registration for another subdivision project called Hidden View
Subdivision II from the HLURB, with the corresponding License to Sell. The two new subdivision
projects were located at the back of Hidden View Subdivision I. The residents and homeowners of
Hidden View Subdivision I heard reports to the effect that Borbajo had purchased the entire subdivision
from Bontuyan through an oral agreement.
They also heard that they have no right to use the road lots, since the lots have already been registered
in Borbajo’s name.
When confronted by the homeowners about her claim that she had bought the subdivision from
Bontuyan, Borbajo confirmed her claim of ownership over the subdivision and the road lots. She also
told them that they have "no right regarding the road right-of-way."
The HLURB replied that under the law the owner or developer of the subdivision should have legal title
or right over the road lots of the subdivision and that if the title or right is in the name of other persons
it follows that there is failure to comply with the requirements of the law. The HLURB Officer pointed
out that Hidden View Subdivision II and ST Ville Properties had not filed an application for registration
and license to sell with the HLURB. The homeowners caused the construction of a guardhouse at the
entrance of Hidden View Subdivision I and hired the services of a security guard to prevent
unauthorized persons and construction vehicles from passing through their subdivision. Borbajo filed
before the RTC of Cebu City, Branch 58, an action for damages and injunction against Hidden View
Homeowners, Inc.
This was granted. The Court of Appeals reversed the lower court decision Borbajo contends that the
appellate court erred in reversing the finding of the RTC that she is the developer of Hidden View
Subdivision I. According to her, and as borne out by her testimony before the RTC, she was the true
developer of Hidden View Subdivision I even though the License to Sell was issued in the name of
Bontuyan. On the other hand, respondents argue that the sale of the road lots made by Bontuyan in
favor of Borbajo was illegal and contrary to the provisions of Presidential Decree (P.D.) No. 957 which
requires that the road lots in a subdivision development shall be in the name of the developer or owner,
of which Borbajo is neither.
22 They aver that Borbajo fraudulently obtained her titles to the road lots through a falsified deed of
sale which was the document presented to the Office of the Register of Deeds.23 They also point out
that the use by Borbajo of the road lots for the ingress and egress of heavy equipment has continuously
resulted in the rapid deterioration of the roads. Moreover, the road lots are not the nearest point
between the development project of Borbajo and the provincial road.24 Finally, they assert that they
are merely exercising acts of ownership which include the right to prevent others from enjoying the
thing owned by them. Respondents oppose the issuance of a preliminary injunction because
notwithstanding the registration of the subject road in Borbajo’s name, her title thereto is tainted by the
discovery of fraud she allegedly perpetrated in securing the questioned titles.
Issue: Whether respondents may legally prevent Borbajo from using and passing through the three (3)
road lots within Hidden View Subdivision I.
RULING
It is a well-known doctrine that the issue as to whether title was procured by falsification or fraud can
only be raised in an action expressly instituted for the purpose. A Torrens title can be attacked only for
fraud, within one year after the date of the issuance of the decree of registration. Such attack must be
direct, and not by a collateral proceeding. The title represented by the certificate cannot be changed,
altered, modified, enlarged, or diminished in a collateral proceeding.
33 The certificate of title serves as evidence of an indefeasible title to the property in favor of the person
whose name appears therein.
34 There are serious allegations that the issuance of the TCTs over the road lots was tainted with fraud
as evidenced by alterations made on the face of the certificates and discrepancies in the records of the
contract of absolute sale filed before the Office of the Register of Deeds and the Notarial Division of
the RTC of Cebu City.
35 If the court finds that the titles of Borbajo were obtained fraudulently, her right to the road lots ceases
as well as her right-of-way by virtue of said titles. As long as the titles are not annulled, Borbajo remains
registered a co-owner and therefore her right to use the road lots subsists. Likewise, with Borbajo as a
registered co-owner of the road lots, it is utterly pointless to discuss whether she is entitled to the
easement of right of way. Both from the text of Article 64936 of the Civil Code and the perspective of
elementary common sense, the dominant estate cannot be the servient estate at the same time. One
of the characteristics of an easement is that it can be imposed only on the property of another, never
on one’s own property. An easement can exist only when the servient and the dominant estates belong
to different owners. Borbajo, being a registered co-owner of the three (3) road lots, is entitled to the
injunctive relief. A preliminary injunction order may be granted only when the application for the
issuance of the same shows facts entitling the applicant to the relief demanded.
39 A preliminary injunction is not proper when its purpose is to take the property out of the possession
or control of one party and transfer the same to the hands of another who did not have such control at
the inception of the case and whose legal title has not clearly been established.40 The writ of
preliminary injunction issued by the Regional Trial Court of Cebu City, Branch 58, is made permanent,
subject to the final outcome of Civil Case No. 21239 pending before the Regional Trial Court of Cebu
City, Branch 9.

Custodio vs. Corrado G.R. No. 146082 July 30, 2004

Facts:
n July 12, 1993, respondent Rosendo F. Corrado filed an ejectment case against petitioner Melchor
5

Custodio with the MTC of Calataga

Petitioners sought to recover possession and ownership of lot no. 1639- D, which was allegedly rented
and occupied by herein respondent, who countered that they are co-owners of subject property and
the said lot is still covered by its original title and that it was not partitioned by their respective
predecessors-in-interest as there were no annotations regarding the said partition in the original title.
At any rate, the issue of tenancy relationship had already been settled during the pre-trial stage where
the parties stipulated that the subject lot is registered in the name of respondent and that petitioner was
never a tenant of respondent. Petitioner and respondent are bound by such stipulations which are
deemed settled and need not be proven during the trial. Pre-trial is a procedural device intended to
clarify and limit the basic issues between the parties. It thus paves the way for a less cluttered trial and
resolution of the case. Its main objective is to simplify, abbreviate and expedite the trial, or totally
dispense with it. Prescinding therefrom, it is a basic legal precept that the parties are bound to honor
the stipulations they made during the pre-trial.

Issue:

Whether or not property in the possession of another can be acquired by acquisitive prescription.

Held:

No, to be able to acquire the property, the possession must be in the concept of an owner.

The payment of rentals by respondents reveal that they are mere lessees. As such, the possession of
respondents over Lot No. 1639-D is that of a holder and not in the concept of an owner. One who
possesses as a mere holder acknowledges in another a superior right which he believes to be
ownership, whether his belief be right or wrong. Since the possession of respondents were found to be
that of lessors of petitioners, it goes without saying that the latter were in possession of Lot No. 1639-
D in the concept of an owner from 1952 up to the time the present action was commenced.

For res judicata to bar the institution of a subsequent action, the following requisites must concur: (1)
the former judgment must be final; (2) it must have been rendered by a court having jurisdiction of the
subject matter and the parties; (3) it must be a judgment on the merits; and (4) there must be, between
the first and second actions, (a) identity of parties, (b) identity of subject matter, and (c) identity of cause
of action.1

Philippine National Bank vs. Bacani G.R. No. 194983 June 20, 2018
Rodolfo Bacani was the registered owner of a parcel of land
The subject property was used to secure the Php 80,000.00 loan that Rodolfo and his wife, Nellie
Bacani (collectively, the Spouses Bacani) obtained from PNB
September 9, 1986 When the Spouses Bacani failed to pay their loan, PNB extrajudicially foreclosed
the subject property. It was awarded to PNB as the highest bidder.
who had a bid amount of Php 148,960.74.
The Spouses Bacani failed to redeem the property.
Consequently, Rodolfo's title was cancelled and a new title was issued in the name of PNB.
PNB issued SEL Circular No. 8-7/89, revising its policy on the disposition of acquired assets. Subject
to certain conditions, former owners or their heirs, as the case may be, were given priority in the re-
acquisition of their foreclosed assets on negotiated basis without public bidding.
In light of this PNB circular, the Spouses Bacani initiated negotiations with PNB regarding the re-
acquisition of their property. Their intention to buy back the subject property was manifested at the
earliest through a written offer on August 26, 1991. This was followed by another letter to PNB
the Spouses Bacani accordingly offered to repurchase the subject property for Php 200,000.00 in cash
and Php 100,000.00 payable in installments for two years
PNB later informed the Spouses Bacani that the request for repurchase was refused and instead, the
subject property would be sold in a public auction.
At that time, the subject property's fair market value was appraised at Php 494,000.00.
the Spouses Bacani increased their offer to Php 350,000.00
he Spouses Bacani received a notice from Mr. Pua that the PNB Special Assets Management
Department (SAMD) had begun to accept offers for the purchase of various properties, including the
subject property. They were provided with a copy of the Invitation to Bid,
PNB set the floor bid price to Php 4,000,000.00
On January 30, 1996, PNB sold the subject property through a negotiated sale to Renato de Leon.
for the price of Php1,500,000.00.
Pursuant to this sale, the title of PNB was cancelled, and a new title was issued in the name of Renato.

Renato later on filed an ejectment case against the respondents

The respondents were consequently directed to vacate the subject property, and their houses were
later on demolished.

The respondents filed a complaint for the annulment of the sale and Renato's title over the subject
property. They claimed that PNB's refusal to accept their offer, and the subsequent sale of the subject
property to Renato despite its earlier scheduled auction sale, were all badges of bad faith on the part
of PNB that warrant the annulment of Renato's title.

PNB refuted the respondents' allegations. It was alleged that as the registered owner, PNB may dispose
of the subject property in accordance with its own terms and conditions.

The RTC ruled in favor of the respondents. The CA affirmed the trial court 's findings that the sale of
the subject property to Renato was fraudulent because the Spouses Bacani were unable to exercise
their right to buy back their foreclosed property at the scheduled public bidding.

PNB claims that the decisions of the RTC and the CA deprived it of its right to freely dispose of the
subject property, which was rightfully acquired in a foreclosure sale after the Spouses Bacani defaulted
on their loan obligation.
Ruling of the RTC
After trial, the RTC ruled in favor of the respondents, and found that PNB acted in bad faith by failing
to give preference to the Spouses Bacani's offer to purchase the subject property.
RULING OF CA
The CA affirmed the trial court 's findings that the sale of the subject property to Renato was fraudulent
because the Spouses Bacani were unable to exercise their right to buy back their foreclosed property
at the scheduled public bidding.

ISSUE:
Whether or not PNB rightfully acquired the property through the foreclosure sale.

RULING:
The Court grants the petition. Both the RTC and the CA gravely erred in relying on PNB SEL Circular
No. 8-7/89 to nullify the sale of the subject property.
Upon the expiration of the period to redeem, the Spouses Bacani do not have an enforceable right to
repurchase the subject property.

in extrajudicial foreclosures of real estate mortgage, the debtor, his or her successors-in-interest, or
any judicial creditor or judgment creditor of said debtor, is granted a period of one (1) year within which
to redeem the property. The redemption period is reckoned from the registration of the certificate of
sale with the Register of Deeds. When the debtor, or the successors-in-interest as the case may be,
fails to redeem the property within the prescribed statutory period, the consolidation of ownership in
favor of the purchaser becomes a matter of right. At that point, the purchaser becomes the absolute
owner of the property, and may, as a necessary consequence, exercise all the essential attributes of
ownership.

In this case, PNB's certificate of sale was registered and one (1) year lapsed from the date of
registration without the Spouses Bacani exercising their right to redeem the subject property.
Due to the unfortunate failure of the Spouses Bacani to exercise their redemption right, the title of
Rodolfo over the subject property was cancelled and new TCT was issued in the name of PNB. At this
point, PNB became the absolute owner of the property and Rodolfo, as well as his wife, lost all their
rights and interests over it. Verily, PNB not only had the right to its possession, but also all the other
rights considered as essential attributes of ownership including the right to dispose or alienate the
subject property.

The Court notes that when the Spouses Bacani made its initial offer to repurchase the subject property
almost four (4) years passed since the redemption period expired on October 10, 1987. Thus, by the
time the parties started negotiating the Spouses Bacani's reacquisition of the subject property, PNB
was already the absolute owner.

The Spouses Bacani, however, anchored their claim on PNB SEL Circular No. 8- 7/89. But when the
circular was issued, the redemption period has expired and the title over the subject property was
already consolidated in favor of PNB as its purchaser during the foreclosure sale. For this reason, any
offer on the part of the Spouses Bacani is merely an offer to repurchase, and PNB was not statutorily
or contractually bound to accept such offer.

Heirs of Cullado vs. Gutierrez G.R. No. 212938 July 30, 2019
On May 5, 1997, [Dominic]'s father, Dominador L. Gutierrez, representing [Dominic] who was then still
a minor, filed [before the Regional Trial Court, Branch 22 of Cabagan, Isabela (RTC)] an action for [7]

recovery of ownership, possession with damages with prayer for preliminary mandatory injunction and
[8]

temporary restraining order against Alfredo C[u]llado (C[u]llado).

In the action for recovery of ownership, [Dominic] maintained that C[u]llado had been squatting on the
parcel of land
Cullado file a Motion to Dismiss, interposed the special and affirmative defenses of his actual
possession and cultivation of the subject parcel of land.
He likewise asked for the reconveyance of the property, considering that Dominic and his father
fraudulently had the subject property titled in Dominic's name.
Cullado died during the course of the trial and was substituted by his heirs.
[Dominic]'s counsel repeatedly failed to attend the scheduled hearings, and as a consequence, [the
heirs of Cullado] were eventually allowed to present their evidence after [Dominic] was deemed to have
waived his right to cross-examine [the] witness [of the heirs of Cullado].

The RTC rendered a Decision, in favor of the heirs of Cullado and against Dominic, ordering the
dismissal of the complaint and to reconvey in favor of the Heirs of Alfredo Cullado the land covered and
embraced by Katibayan ng Orihinal na Titulo Blg. P-61499.
Dominic filed with the CA a petition for annulment of judgment on the ground of extrinsic fraud and lack
of jurisdiction. The CA initially dismissed the petition but reinstated the same upon Dominic's motion for
reconsideration.
The CA granted the petition stating that, "in the action for recovery of possession filed by Dominic, the
heirs of Cullado in their Answer raised as affirmative defense and not as a counterclaim, and asked for,
the reconveyance of the lot in issue as the same was supposedly fraudulently titled in Dominic's name,
considering that neither Dominic nor his father actually possessed or cultivated the same.
These allegations constitute a collateral attack against Dominic's title, which cannot be allowed in an
accion publiciana." - An accion publiciana is an ordinary civil proceeding to recover the right of
possession and determine the better right of possession of realty independently of title when the
dispossession has lasted for more than one year and the plenary action of forcible entry or illegal
detainer is no longer available.

Issue:

Whether the CA erred in reversing the Decision of the RTC and in granting Dominic's petition for
annulment of judgment. - no

Ruling:

In ruling the case, the court elaborately explained accion publiciana in the following manner. Accion
publiciana or the plenary action to recover the better right of possession (possession de jure), which
should be brought in the proper inferior court or Regional Trial Court when the dispossession has lasted
for more than one year.
Proceeding now to the main issue, it may be recalled that the three usual actions to recover
possession of real property are:
1. Accion interdictal or a summary ejectment proceeding, which may be either for forcible entry
(detentacion) or unlawful detainer (desahucio), for the recovery of physical or material possession
(possession de facto) where the dispossession has not lasted for more than one year, and should be
brought in the proper inferior court;
[23]

2. Accion publiciana or the plenary action to recover the better right of possession (possession de jure),
which should be brought in the proper inferior court or Regional Trial Court (depending upon the value
of the property) when the dispossession has lasted for more than one year (or for less than a year in
[24]

cases other than those mentioned in Rule 70 of the Rules of Court) ; and
[25]

3. Accion reivindicatoria or accion de reivindicacion or reivindicatory action, which is an action for

recovery of ownership which must be brought in the proper inferior court or Regional Trial Court
(depending upon the value of the property)
In an accion reivindicatoria, the cause of action of the plaintiff is to recover possession by virtue of his
ownership of the land subject of the dispute. This follows that universe of rights conferred to the owner
of property, or more commonly known as the attributes of ownership. In classical Roman law terms,
[32]

they are:
1. Jus possidendi or the right to possess;
2. Jus utendi or the right to use and enjoy;
3. Jus fruendi or the right to the fruits;
4. Jus accessionis or right to accessories;
5. Jus abutendi or the right to consume the thing by its use;
6. Jus disponendi or the right to dispose or alienate; and
7. Jus vindicandi or the right to vindicate or recover.
Jus vindicandi is expressly recognized in paragraph 2 of Article 428, Civil Code, viz.: "The owner has
also a right of action against the holder and possessor of the thing in order to recover it."
If the plaintiff's claim of ownership (and necessarily, possession or jus possidendi) is based on his
Torrens title and the defendant disputes the validity of this Torrens title, then the issue of whether there
is a direct or collateral attack on the plaintiffs title is also irrelevant. This is because the court where the
reivindicatory or reconveyance suit is filed has the requisite jurisdiction to rule definitively or with finality
on the issue of ownership — it can pass upon the validity of the plaintiff's certificate of title.
[I]t is a fundamental principle in land registration that the certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of the person whose name appears therein.
It is conclusive evidence with respect to the ownership of the land described therein. Moreover, the
age-old rule is that the person who has a Torrens title over a land is entitled to possession thereof.
In addition, as the registered owner, [the] right to evict any person illegally occupying [the] property is
imprescriptible. In the recent case of Gaudencio Labrador, represented by Lulu Labrador Uson, as
Attorney-in-Fact v. Sps. Ildefonso Perlas and Pacencia Perlas and Sps. Rogelio Pobre and Melinda
Fogata Pobre, the Court held that:
As a registered owner, petitioner has a right to eject any person illegally occupying his property. This
right is imprescriptible and can never be barred by laches. In Bishop v. Court of Appeals, we held, thus:
As registered owners of the lots in question, the private respondents have a right to eject any person
illegally occupying their property. This right is imprescriptible. Even if it be supposed that they were
aware of the petitioners' occupation of the property, and regardless of the length of that possession,
the lawful owners have a right to demand the return of their property at any time as long as the
possession was unauthorized or merely tolerated, if at all. This right is never barred by laches.

Article 555 of the new Civil Code recognizes that a possessor may lose his possession de facto by the
possession of another when the latter's possession has lasted longer than one year. However, his real
right of possession is not lost until after the lapse of 10 years. The same Article 555 thus recognizes
the registered owner's remedy to institute an accion publiciana within the said 10-year period.
Art. 555. A possessor may lose his possession: (1) By the abandonment of the thing; (2) By an
assignment made to another either by onerous or gratuitous title; (3) By the destruction or total loss of
the thing, or be cause it goes out of commerce; (4) By the possession of another, subject to the
provisions of Article 537, if the new possession has lasted longer than one year. But the real right of
possession is not lost till after the lapse of ten years.
This Court has held that the objective of the plaintiffs in accion publiciana is to recover possession only,
not ownership. However, where the parties raise the issue of ownership, the courts may pass upon the
issue to determine who between the parties has the right to possess the property.
The case law on the matter does not allow a collateral attack on the Torrens certificate of title on the
ground of actual fraud. The rule now finds expression in Section 48 of P.D. 1529 otherwise known as
the Property Registration Decree
In this regard, there is no dispute that Dominic was awarded a patent on May 10, 1995 and Original
Certificate of Title No. (OCT) P-61499 was issued in his name pursuant to the said patent on May 17,
1995.
Cullado's Answer, filed on August 18, 1997, questioned the OCT issued in Dominic's name. At that
time, Dominic's OCT had already become incontrovertible upon the lapse of the one-year period to
question it by reason of actual fraud as provided in Section 32 of PD 1529.

Since the period of one year had already lapsed when Cullado questioned the OCT's validity on the
ground of fraud, via his Answer filed on August 18, 1997, then Dominic's OCT had already become
indefeasible and, until cancelled in an appropriate direct proceeding, remains to be valid.

As a final note, we stress that our ruling in this case is limited only to the issue of determining who
between the parties has a better right to possession. This adjudication is not a final and binding
determination f the issue of ownership. As such, this is not a bar for the parties or even third persons
to file an action for the determination of the issue of ownership.

HENCE, the Supreme Court DENIED the Petition for lack of merit. The Court of Appeals Decision are
hereby AFFIRMED. The petitioners, the heirs of Alfredo Cullado, and all persons claiming under them
are ORDERED to vacate and surrender the land
are AFFIRMED. The petitioners, the heirs of Alfredo Cullado, and all persons claiming under them are
ORDERED to vacate and surrender the land covered by Original Certificate of Title No. P-61499 to its
registered owner, respondent Dominic V. Gutierrez.

Article 429

Grand Union Supermarket, Inc. vs. Espino, Jr. G.R. No. L-48250 December 28, 1979
FACTS:

August 22, 1970: Espino was in South Supermarket in Makati with his wife and two daughters o While
his wife was shopping, he browsed around the other parts of the market - found a "cylindrical rat tail"
file, because of its tiny size, he decided to put it in his breast pocket and not in his wife's cart (a good
part of the object was still seen from the breast pocket)

Espino and his wife then saw the maid of the latter's wife and engaged in a conversation At the check-
out counter, the couple paid for their expenses which amounted to P77.00, but Espino forgot about the
item in his pocket
By the exit of the supermarket, a security guard approached Espino and said, "Excuse me sir, I think
you have something in your pocket which you have not paid for"
Espino apologized and head toward the cashier to pay
Guard stopped him and led him toward the rear of the supermarket, guard said that this was the
procedure of the supermarket when they are apprehended While Espino was being directed to the rear
of the supermarket, a group of customers saw what was happening
Espino was then brought into a cubicle, where a man told him to make a brief statement about what
happened in an "incident report"
Espino narrated the story about him getting the rat tail file and then forgetting about putting it in his
breast pocket because he talked to his aunt's helper
The guard then took Espino back inside the supermarket where his wife was waiting The pair were then
directed to a desk near the main entrance where a woman was seated, Nelia Fandino
Fandino then said, "Ano, nakaw nanaman ito?" - she then read the incident report that Espino wrote
Espino then explained and narrated the incident, to which Fandino replied, "That is all they say, the
people whom we caught not paying for the goods say... they all intended to pay for the things that are
found to them."
Espino objected and declared that he is a regular customer
Espino then gave a P5.00 bill and said that he wanted to pay for the item which cost P3.85→ Fandino
got the bill and said "We are fining you P5.00"
Espino objected because he was being treated like a common criminal → Fandino said that the P5.00
will be given as an incentive to the guards who apprehended him While all this was happening, the
other customers in the store were staring and were listening to what was happening

At the trial, Espino said, "I felt as though I wanted to disappear into a hole on the ground" → he added
that although his first instinct was to go back to the supermarket that night to throw rocks at its glass
windows, reason prevailed over passion and he thought that justice should take its due course

During the trial, when the incident report was shown, Espino also added that when he signed the
"incident report", only a brief statement of facts was written thereon, the ff. additions were made after:

SUBJECT: "Shoplifting"

ACTIONS TAKEN: "Released by Mrs. Fandino after paying the item." REMARKS NOTED: "Guard
Ebreo requested Guard Paunil to apprehend subject shoplifter"

CFI: Dismissed the complaint

CA: Reversed and set aside the judgment of the CFI, and granted moral, exemplary and attorney's fees
to Espino - petitioners are hable for moral and exemplary damages, the award of P75,000.00 for moral
damages and P25,000.00 for exemplary damages by the respondent Court of Appeals is not legally
justified and/or is grossly excessive in the premises.

ISSUE:
W/N Petitioners legitimately exercised their right of defense of property within the context of Article 429
of the Civil Code negating the application of Articles 19 and 21 of the same Code; - YES
RULING:
Petitioners acted in good faith in trying to protect and recover their property, a right which the law
accords to them. Under Article 429, New Civil Code, the owner or lawful possessor of a thing has a
right to exclude any person from the enjoyment and disposal thereof and for this purpose, he may use
such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful
physical invasion or usurpation of his property.
And since a person who acts in the fulfillment of a duty or in the lawful exercise of a right or office
exempts him from civil or criminal liability, petitioner may not be punished by imposing exemplary
damages against him. We agree that petitioners acted upon probable cause in stopping and
investigating private respondent for taking the file without paying for it, hence, the imposition of
exemplary damages as a warning to others by way of a deterrent is without legal basis. We, therefore,
eliminate the grant of exemplary damages to the private respondent.

Private respondent is entitled to damages but We hold that the award of Seventy-Five Thousand Pesos
(P75,000.00) for moral damages and Twenty-Five Thousand Pesos (P25,000.00, for exemplary
damages is unconscionable and excessive.
While no proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or
exemplary damages may be adjudicated, the assessment of such damages, except liquidated ones, is
left to the discretion of the court, according to the circumstances of each case (Art. 2216, New Civil
Code). In the case at bar, there is no question that the whole incident that befell respondent had arisen
in such a manner that was created unwittingly by his own act of forgetting to pay for the file. It was his
forgetfulness in checking out the item and paying for it that started the chain of events which led to his
embarrassment and humiliation thereby causing him mental anguish, wounded feelings and serious
anxiety. Yet, private respondent's act of omission contributed to the occurrence of his injury or loss and
such contributory negligence is a factor which may reduce the damages that private respondent may
recover (Art. 2214, New Civil Code).

the purpose of moral damages is essentially indemnity or reparation, both punishment or correction.
Moral damages are emphatically not intended to enrich a complainant at the expense of a defendant;
they are awarded only to enable the injured party to obtain means, diversion or amusements that will
serve to alleviate the moral suffering he has undergone, by reason of the defendant's culpable action.
In other words, the award of moral damages is aimed at a restoration, within the limits of the possible,
of the spiritual status quo ante and, it must be proportionate to the suffering inflicted.
In Our considered estimation and assessment, moral damages in the amount of Five Thousand Pesos
(P5,000.00) is reasonable and just to award to private respondent.
The grant of Twenty-Five Thousand Pesos (P25,000.00) as exemplary damages is unjustified.
WHEREFORE, IN VIEW OF THE FOREGOING, the judgment of the Court of Appeals is hereby
modified. Petitioners are hereby ordered to pay, jointly and severally, to private respondent moral
damages in the sum of Five Thousand Pesos (P5,000.00) and the amount of Two Thousand Pesos
(P2,000.00) as and for attorney's fees; and further, to return the P5.00 fine to private respondent. No
costs.

People of the Philippines vs. Narvaez G.R. Nos. L-33466-67 April 20, 1983
Fast Facts:
At about 2:30 in the afternoon of August 22, 1968, Graciano Juan, Jesus Verano and Cesar Ibanez
together with the two deceased Davis Fleischer and Flaviano Rubia, were fencing the land of George
Fleischer, father of deceased Davis Fleischer. The place was in the boundary of the highway and the
hacienda owned by George Fleischer. This is located in the municipality of Maitum, South Cotabato. At
the place of the fencing is the house and rice drier of appellant Mamerto Narvaez (pp. 179-182, t.s.n.,
Pieza II). At that time, appellant was taking his rest, but when he heard that the walls of his house were
being chiselled, he arose and there he saw the fencing going on. If the fencing would go on, appellant
would be prevented from getting into his house and the bodega of his ricemill. So he addressed the
group, saying 'Pare, if possible you stop destroying my house and if possible we will talk it over what is
good,' addressing the deceased Rubia, who is appellant's compadre. The deceased Fleischer,
however, answered: 'No, gademit, proceed, go ahead.' Appellant apparently lost his equilibrium and he
got his gun and shot Fleischer, hitting him. As Fleischer fell down, Rubia ran towards the jeep, and
knowing there is a gun on the jeep, appellant fired at Rubia, likewise hitting him (pp. 127-133, t.s.n.,
Defense transcript). Both Fleischer and Rubia died as a result of the shotting'

FACTS:
On Aug. 22, 1968, Narvaez was asleep when he heard sounds of construction and found a fence being
made. Fleischer and Rubia were constructing a fence that would prevent Narvaez from getting into his
house and rice mill. Defendant addressed the group and asked them to stop and talk things over.
Fleischer responded with, "No, gadamit, proceed, go ahead." Narvaez lost his equilibrium and shot
Fleischer. Rubia ran towards the jeep where a gun was available but Narvaez shot him before reaching
such.
Mamerto Narvaez has been convicted of murder for the death of David Fleischer and Flaviano Rubia.
•

It is said that the incident is intertwined with the long drawn out legal battle between Fleischer and Co.,
Inc. and the land settlers of Cotobato among whom was Narvaez.
At the time of the shooting, the civil case between the parties was still pending for annulment where
the settlers wanted granting of property to Fleischer to be annulled.
At the time of the shooting, Narvaez had leased his property from Fleischer to avoid conflict. On June
25, Narvaez received a letter terminating the contract because he has not paid rent for six months to
the company. He was given 6 months to remove his house, ricemill, bodega, and water pitcher pumps.
The shooting happened barely 2 months after the letter.
Narvaez claimed that he acted in defense of his person and property but the CFI of Cotabato ruled that
he was guilty of murder. He was originally sentenced to reclusion perpetua, to indemnify the heirs, and
to pay for moral damages.
The act of killing of the two deceased by appellant is not disputed. Appellant admitted having shot them
from the window of his house with the shotgun which he surrendered to the police authorities. He
claims, however, that he did so in defense of his person and of his rights, and therefore he should be
exempt from criminal liability.
Issues: WON the lower court erred in convicting defendant-appellant since he acted in defense of his
rights - yes

Ruling:
The crime committed is homicide on two counts
in the case at bar, there was an actual physical invasion of appellant's property which he had the right
to resist, pursuant to Art. 429 of the Civil Code of the Philippines which provides:
Art. 429. The owner or lawful possessor of a thing has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably
necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his
property
Defense of one's person or rights is treated as a justifying circumstance under Art. 11, par. 1 of the
Revised Penal Code, but in order for it to be appreciated, the following requisites must occur:
First. Unlawful aggression;
Second. Reasonable necessity of the means employed to prevent or repel it;
Third. Lack of sufficient provocation on the part of the person defending himself (Art. 11, par. 1,
Revised Penal Code, as amended).

The reasonableness of the resistance is also a requirement of the justifying circumstance of self-
defense or defense of one's rights under paragraph 1 of Article 11, Revised Penal Code. When the
appellant fired his shotgun from his window, killing his two victims, his resistance was disproportionate
to the attack.
WE find, however, that the third element of defense of property is present, i.e., lack of sufficient
provocation on the part of appellant who was defending his property.
As a matter of fact, there was no provocation at all on his part, since he was asleep at first and was
only awakened by the noise produced by the victims and their laborers. His plea for the deceased and
their men to stop and talk things over with him was no provocation at all.
Be that as it may, appellant's act in killing the deceased was not justifiable, since not all the elements
for justification are present. He should therefore be held responsible for the death of his victims, but he
could be credited with the special mitigating circumstance of incomplete defense, pursuant to
paragraph 6, Article 13 of the Revised Penal Code.

WHEREFORE, FINDING APPELLANT GUILTY BEYOND REASONABLE DOUBT OF ONLY TWO (2)
HOMICIDES, MITIGATED BY THE PRIVILEGED EXTENUATING CIRCUMSTANCE OF
INCOMPLETE SELF-DEFENSE AS WELL AS BY TWO (2) GENERIC MITIGATING
CIRCUMSTANCES OF VOLUNTARY SURRENDER AND OBFUSCATION, WITHOUT ANY
AGGRAVATING CIRCUMSTANCE, APPELLANT IS HEREBY SENTENCED TO SUFFER AN
IMPRISONMENT OF FOUR (4) MONTHS OF ARRESTO MAYOR, TO INDEMNIFY EACH GROUP
OF HEIRS OF DAVIS FLEISCHER AND OF FLAVIANO RUBIA IN THE SUM OF FOUR THOUSAND
(P 4,000.00) PESOS, WITHOUT SUBSIDIARY IMPRISONMENT AND WITHOUT ANY AWARD FOR
MORAL DAMAGES AND ATTORNEY'S FEES.
CONSIDERING THAT APPELLANT HAS BEEN UNDER DETENTION FOR ALMOST FOURTEEN
(14) YEARS NOW SINCE HIS VOLUNTARY SURRENDER ON AUGUST 22,1968, HIS IMMEDIATE
RELEASE IS HEREBY ORDERED. NO COSTS.
Dissenting opinions:

• Abad Santos, J. - The self-defense of the RPC refers to unlawful aggression on persons, not property.

• Gutierrez, JR., J. - Agrees with the order to release appellant but believes that the mere utterance of
"No, gademit, proceed, go ahead" is not the unlawful aggression which entitles appellant to the plea of
self-defense. Crime is only homicide but should be without any privileged mitigating circumstance.
Metropolitan Waterworks and Sewerage System vs. Act Theater, Inc. G.R. No. 147076 June 17, 2004

On September 22, 1988, four employees of the Act Theater, Inc. were apprehended by Quezon City
police force for violation of PD No. 401, as amended by BP Blg. 876 (PENALIZING THE
UNAUTHORIZED INSTALLATION OF WATER, ELECTRICAL OR TELEPHONE CONNECTIONS,
THE USE OF TAMPERED WATER OR ELECTRICAL METERS, AND OTHER ACTS) - tampering of
water meter

On account of the incident, Act Theater, Inc.'s water service connection was cut off by MWSS, who
owns the utility providing water supply. Act Theater, Inc. filed a complaint for injunction with damages
against MWSS.

Act Theater, Inc. alleged in its complaint that MWSS acted arbitrarily, whimsically and capriciously, in
cutting off their water service connection without prior notice.

In Criminal Case No. Q-89-2412

WHEREFORE, for failure of the prosecution to prove the guilt of the accused beyond reasonable doubt,
the four (4) above-named Accused are hereby ACQUITTED of the crime charged.
1. Ordering defendant MWSS to pay plaintiff actual or compensatory damages in the amount of
P25,000.00; and to return the sum of P200,000.00 deposited by the plaintiff for the restoration
of its water services after its disconnection on September 23, 1988;

2. Defendant’s counterclaim for undercollection of P530,759.96 is dismissed for lack of merit;

3. Ordering defendant MWSS to pay costs of suit;

4. Ordering defendant MWSS to pay plaintiff the amount of P5,000.00 as attorney’s fees;

5. Making the mandatory injunction earlier issued to plaintiff Act Theater, Inc. permanent.
Aggrieved, the petitioner appealed the civil aspect of the aforesaid decision to the CA. The appellate
court, however, dismissed the appeal. According to the CA, the court a quo correctly found that the
petitioner’s act of cutting off the respondent’s water service connection without prior notice was
arbitrary, injurious and prejudicial to the latter justifying the award of damages under Article 19 of the
Civil Code.
MWSS insists that in cutting off the Act Theater, Inc.'s water service connection, MWSS merely
exercised its proprietary right under Article 429 of the Civil Code.

ISSUE
WHETHER OR NOT THE HONORABLE COURT OF APPEAL[S] CORRECTLY APPLIED THE
PROVISION OF ARTICLE 19 OF THE NEW CIVIL CODE WITHOUT CONSIDERING THE
APPLICABLE PROVISION OF ARTICLE 429 OF THE SAME CODE.
RULING

YES . The petition is devoid of merit.

MWSS cannot invoke Art 429 to justify its act of disconnecting the water supply of the respondent
without prior notice,
Article 429 of the Civil Code, relied upon by the petitioner in justifying its act of disconnecting the water
supply of the respondent without prior notice, reads:
Art. 429. The owner or lawful possessor of a thing has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonable to
repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.
A right is a power, privilege, or immunity guaranteed under a constitution, statute or decisional law, or
recognized as a result of long usage, constitutive of a legally enforceable claim of one person against
[6]

the other.[7]

Concededly, the petitioner, as the owner of the utility providing water supply to certain consumers
including the respondent, had the right to exclude any person from the enjoyment and disposal thereof.
However, the exercise of rights is not without limitations. Having the right should not be confused with
the manner by which such right is to be exercised. [8]

Article 19 of the Civil Code precisely sets the norms for the exercise of one’s rights:
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.
When a right is exercised in a manner which discards these norms resulting in damage to another, a
legal wrong is committed for which actor can be held accountable.

In this case, the petitioner failed to act with justice and give the respondent what is due to it when the
petitioner unceremoniously cut off the respondent’s water service connection. As correctly found by the
appellate court:
While it is true that MWSS had sent a notice of investigation to plaintiff-appellee prior to the
disconnection of the latter’s water services, this was done only a few hours before the actual
disconnection. Upon receipt of the notice and in order to ascertain the matter, Act sent its assistant
manager Teodulo Gumalid, Jr. to the MWSS office but he was treated badly on the flimsy excuse that
he had no authority to represent Act. Act’s water services were cut at midnight of the day following the
apprehension of the employees. Clearly, the plaintiff-appellee was denied due process when it was
deprived of the water services. As a consequence thereof, Act had to contract another source to provide
water for a number of days. Plaintiff-appellee was also compelled to deposit with MWSS the sum of
P200,000.00 for the restoration of their water services.[10]

There is, thus, no reason to deviate from the uniform findings and conclusion of the court a quo and
the appellate court that the petitioner’s act was arbitrary, injurious and prejudicial to the respondent,
justifying the award of damages under Article 19 of the Civil Code.

United Coconut Planters Bank vs. Basco G.R. No. 142668 August 31, 2004
FACTS:

Respondent Ruben E. Basco has been employed with the petitioner United Coconut Planters Bank
(UCPB) for seventeen (17) years. He was the Bank Operations Manager of UCPB Olongapo Branch
and also a stockholder thereof and owned 804 common shares of stocks at the par value of P1.00.
Aside from his employment with the bank, respondent also worked as an underwriter at the United
Coconut Planters Life Association (Coco Life) which is a subsidiary of UCPB. He also solicited
insurance policies from UCPB employees.

In or about the period May to June 1992, respondent was, together with other fellow officers and
employees, investigated by UCPB in connection with anomalies.
He was recommended terminated as a result of the investigation, in which he was found guilty of
committing or taking part in the commission of the following:
a. Abuse of discretion in connection with actions taken beyond or outside the limits of authority;
b. Borrowing money from bank client;
c. Gross negligence or dereliction of duty in the implementation of bank policies or valid orders of
management;
d. Direct refusal or willful failure to perform, or delay in performing, an assigned task;
e. Fraud or willful breach of trust in the conduct of his work; and
f. Falsification or forgery of bank records/documents.

The respondent thereafter decided to contest his termination by filing a complaint for illegal dismissal,
non-payment of salaries and damages against the bank before the NLRC.
The respondent was also employed by All-Asia Life Insurance Company as an underwriter.
The respondent still frequented the UCPB main office in Makati City to solicit insurance policies from
the employees and even discussed the complaint he filed against the bank with the said employees.
Petitioner Ongsiapco, UCPB First Vice-President, Human Resource Division upon seeing respondent
Basco within UCPB's premises even after his dismissal and filing of complaints against the said bank,
was worried that bank records could be purloined and employees could be hurt.
on November 15, 1995, Ongsiapco issued a Memorandum to Vice President of the Security Department
Jesus Belanio directing the latter not to allow the respondent access to the bank premises.
On December 7, 1995, the respondent wrote Ongsiapco, requesting for the reconsideration of the
Memorandum and that he be allowed entry into the bank premises.
He insisted on seeing and talking to the bank's employees, claiming he needed to do this in connection
with his insurance solicitation activities. Petitioner did not reconsider.
In his reply dated December 12, 1995, Ongsiapco informed the respondent that his request could not
be granted:
The respondent was undaunted. At 5:30 p.m. of December 21, 1995, he went to the office of Junne
Cacay, the Assistant Manager of the Makati Branch.
Momentarily, a security guard of the bank approached the respondent and told him that it was already
past office hours. He was also reminded not to stay longer than he should in the bank premises.
The respondent was embarrassed and told Cacay that he was already leaving
On January 31, 1996, respondent again went to the UCPB Makati Branch to receive a check from Rene
Jolo and to deposit money for a friend.
Jose Regino Casil, a bank employee, was asked by Jolo to deliver the check to the respondent. Casil
motioned to the respondent to approach him in his working area to receive his check, but when
respondent proceeded in the direction of Casil, he was approached by the bank's security guards and
was shown Ongsiapco's Memorandum.

On March 11, 1996, the respondent filed a complaint for damages against the petitioners UCPB and
Ongsiapeo in the RTC Manila alleging petitioners' vindictive intent to prevent him from carrying out his
job as an insurance agent, that such discriminatory policy as well as Ongsiapco's Memorandum have
caused him undeserved embarrassment.
RTC rendered judgment in favour of the respondent. It held that petitioners abused their rights; hence,
were liable to the respondent for damages.
The petitioners appealed the decision to the CA. On March 30, 2000, it rendered a decision affirming
the decision of the RTC with modifications.
The CA deleted the awards for moral and exemplary damages, but ordered the petitioner bank to pay
nominal damages due to the January 31, 1996 incident.

ISSUE:

Whether or not the petitioner abused its right when it issued, through petitioner Ongsiapco, the
Memorandum barring the respondent access to all bank premises. - no

HELD: NO.
The petitioners aver that the petitioner bank has the right to prohibit the respondent from access to all
bank premises
under Article 429 of the New Civil Code. The petitioners contend that the said provision, which
enunciates the Principle of Self-Help, applies when there is a legitimate necessity to personally or
through another, prevent not only an unlawful, actual, but also a threatened unlawful aggression or
usurpation of its properties and records, and its personnel and customers/clients who are in its
premises.

The petitioners assert that Ongsiapco issued the Memorandum because the respondent had been
dismissed from his employment for varied grave offenses; hence, his presence in the premises of the
bank posed a threat to the integrity of its records and to the persons of its employees.

We agree with the respondent bank that it has the right to exclude certain individuals from its premises
or to limit their access thereto as to time, to protect, not only its premises and records, but also the
persons of its personnel and its customers/clients while in the premises.
After all, by its very nature, the business of the petitioner bank is so impressed with public trust; banks
are mandated to exercise a higher degree of diligence in the handling of its affairs than that expected
of an ordinary business enterprise.

However, it must also be noted that while the Court agreed that the petitioner may prohibit non-
employees from entering the working area, it also held that the Memorandum, as worded, violates the
right of the respondent as a stockholder or a depositor of the petitioner bank, for being capricious and
arbitrary.
It likewise contrary to the intention of the petitioners, as they did not intent to bar the respondent from
access to all bank premises under all circumstances. Petitioner Ongsiapco testified that a former
employee of the bank who is a customer/client also has access to the bank premises, except those
areas reserved for its officers and employees, such as working areas.
Thus, it is necessary for the petitioners to revise such Memorandum to conform to its actual intention,
which is to bar the respondent only in areas reserved for the petitioner bank's officers and employees,
such as working areas.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Decision of the Court of
Appeals is REVERSED and SET ASIDE. The complaint of the respondent in the trial court and the
counterclaims of the petitioners are DISMISSED.

Article 430
North Greenhills Association, Inc. vs. Morales G.R. No. 222821 August 09, 2017

FACTS:

1. Atty. Morales is a resident of North Greenhills Subdivision in San Juan City. His house is located
alongside Club Filipino Avenue and adjacent to McKinley Park, an open space/playground area owned
and operated by North Greenhills Association (NGA). He also has a personal access door, which he
built through a wall separating his house from the park.
2. NGA is an association composed of members of the subdivision, organized to promote and advance
the best interest, general welfare, prosperity, and safeguard the well-being of the owners, lessees and
occupants of North Greenhills, is the undisputed owner of the park.

3. NGA started constructing a pavilion or kiosk occupying the side of the park adjacent to the residence
of Atty. Morales. Part of the design was a public restroom intended to serve the needs of park guests
and members of the NGA. Said restroom was constructed alongside the concrete wall separating the
house of Atty. Morales from the park.

4. Objecting to the construction of the restroom, Atty. Morales filed a complaint before the HOUSE AND
LAND USE REGULATORY BOARD (HLURB), his complaint sought the demolition of the pavilion which
was then being built.

5. Atty. Morales alleged that for a period of 33 years, he had an open, continuous, immediate, and
unhampered access to the subdivision park through his side door, which also served as an exit door in
case of any eventuality. that having such access to the park was one of the considerations why he
purchased the lot, that the construction of the pavilion was illegal because it violated his right to
immediate access to the park.

6. NGA, in its Answer with Compulsory Counterclaim, rejected the assertions of Atty. Morales. It
contended that as the absolute owner of the park, it had absolute right to fence the property and impose
reasonable conditions for the use thereof; that the construction of the restroom was for the use and
benefit of all NGA members, including Atty. Morales; and that the use of side entrance to the park for
33 years could not have ripened into any right because easement of right of way could not be acquired
by prescription. NGA likewise sought the payment of P878,778.40 corresponding to the annual
membership dues which Atty. Morales had not been paying since 1980.

7. HLURB Board rendered a decision in favor of Atty. Morales. It ordered NGA to relocate the restroom
constructed or being constructed in the McKinley Park away from the walls of any resident and where
it will not block complainant's side door access to the park.

8. NGA appealed to the Office of the President (OP). NGA's motion for reconsideration was denied.

9. NGA filed a petition for review before the CA. The CA affirmed the ruling of the OP.
It found no error on the part of the OP in affirming the characterization of the restrooms built as nuisance
per accidens considering that the structure posed sanitary issues which could adversely affect not only
Atty. Morales, but also his entire household; that even if there existed a perimeter wall between the
park and Atty. Morales' home, the odor emanating from the restroom could easily find its way to the
dining area, and the foul and noxious smell would make it very difficult and annoying for the residents
of the house to eat; and that the proximity of the restroom to Atty. Morales' house placed the people
residing therein at a greater risk of contracting diseases both from improperly disposed waste and
human excrements, as well as from flies, mosquitoes and other insects, should NGA fail to maintain
the cleanliness of the structures.
The CA stated that NGA's fear of being exposed to outsiders and criminals because Atty. Morales'
access was unfounded. It pointed out that the door had been in existence for more than three decades
and that if dangers truly existed, NGA should have taken immediate action and blocked the side access
years earlier.
NGA claims that the CA erred in upholding Atty. Morales' unbridled access to the park, which effectively
constituted an easement of right of way without any basis as against the clear statutory right of NGA,
as the owner of the park, to fence and protect its property on the basis of Articles 429 and 430 of the
Civil Code

ISSUE: WHETHER NGA HAS THE RIGHT TO BLOCK ATTY. MORALES' ACCESS TO THE PARK

HELD: YES.
The Court agrees with NGA.
Under the Civil Code, NGA, as owner of the park, has the right to enclose or fence his land or tenements
by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes
constituted thereon. It also has a right to exclude others from access to, and enjoyment of its property.
NGA's legal right to block the access door is beyond doubt. Courts have no business in securing the
access of a person to another property absent any clear right on the part of the latter.
The CA essentially violated the right of NGA. Atty. Morales never introduced any evidence that he had
acquired any right by prescription or by agreement or legal easement to access the park through his
side door. Moreover, he never claimed that his side door was his only access to the park. He has other
means and, being adjacent to the park, going through other means is not cumbersome.
The conditions set forth under the Deed of Donation by Ortigas & Co. Ltd. to NGA could not be used
25

by Atty. Morales in his favor. Assuming that he has a right as a member to use the park, it does not
mean that he can assert that his access to the park could only be done through his side door. Atty.
Morales knows very well that he can access the park through some other parts of the park.
WHEREFORE, the petition is PARTLY GRANTED. The March 13, 2015 Decision and the February 3,
2016 Resolution of the Court of Appeals in CA-G.R. SP No. 131707, areREVERSED insofar as it
affirmed (1) Atty. Morales' entitlement to an unbridled access to the park through his side door; and (2)
the order to relocate the restroom to another area.
SO ORDERED.

Article 431

Andamo vs. Intermediate Appellate Court G.R. No. 74761 November 06, 1990

FACTS:

Emmanual and Natividad Andamo owned a parcel of land adjacent to that of the Missionaries of Our
Lady of La Sallette. Within the land or Our Lady, waterpaths and an artificial lake were constructed,
allegedly inundating and eroding the Andamos' land. This caused a young man to drown, damaged the
Andamos' crops and fences, and endangered their lives. The Andamos instituted criminal action against
the officers and directors of Our Lady for destruction by means of inundation under Art. 324 of the RPC.
Subsequently, they filed a civil case for damages against the respondents.

Upon motion of respondents, the civil case was dismissed for lack of jurisdiction, since the criminal
case instituted ahead of the civil case was still unresolved. This was based on the provision of the Rules
of Court which provides that criminal and civil actions arising from the same offense may be instituted
separately, but after the criminal action has been commenced, the civil action cannot be instituted until
final judgment has been rendered in the criminal action.

Petitioners appealed from that order to the Intermediate Appellate Court

On February 17, 1986, respondent Appellate Court, First Civil Cases Division, promulgated a decision
4
affirming the questioned order of the trial court. A motion for reconsideration filed by petitioners was
5

denied by the Appellate Court in its resolution dated May 19, 1986

ISSUE:
W/N Missionaries of Our Lady of La Sallette is liable for damages

Ruling:
Yes, Clearly, from petitioner's complaint, the waterpaths and contrivances built by respondent
corporation are alleged to have inundated the land of petitioners. There is therefore, an assertion of a
causal connection between the act of building these waterpaths and the damage sustained by
petitioners. Such action if proven constitutes fault or negligence which may be the basis for the recovery
of damages.

While the property involved in the cited case belonged to the public domain and the property subject of
the instant case is privately owned, the fact remains that petitioners' complaint sufficiently alleges that
petitioners have sustained and will continue to sustain damage due to the waterpaths and contrivances
built by respondent corporation. Indeed, the recitals of the complaint, the alleged presence of damage
to the petitioners, the act or omission of respondent corporation supposedly constituting fault or
negligence, and the causal connection between the act and the damage, with no pre-existing
contractual obligation between the parties make a clear case of a quasi delict or culpa aquiliana.

It must be stressed that the use of one's property is not without limitations. Article 431 of the Civil Code
provides that "the owner of a thing cannot make use thereof in such a manner as to injure the rights of
a third person." SIC UTERE TUO UT ALIENUM NON LAEDAS.

Moreover, adjoining landowners have mutual and reciprocal duties which require that each must use
his own land in a reasonable manner so as not to infringe upon the rights and interests of others.
Although we recognize the right of an owner to build structures on his land, such structures must be so
constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining
landowners and can withstand the usual and expected forces of nature. If the structures cause injury
or damage to an adjoining landowner or a third person, the latter can claim indemnification for the injury
or damage suffered.

Article 433
Spouses Castro vs. Spouses Dela Cruz G.R. No. 190122 January 10, 2011

FACTS:

Spouses Perez borrowed money from spouses Castro amounting to 250,000. The loan was secured
by a Real Estate Mortgage.

The spouses Perez were unable to settle the obligation, hence, the spouses Castro extrajudicially
foreclosed on the mortgage.

t turned out that before the foreclosure or sometime in 1997 respondent Spouses Perez, contrary to a
provision of the real estate mortgage, sold the property to respondent Spouses dela Cruz

SPS Castro thus filed on April 8, 1999 a complaint against herein two sets of respondent Spouses, for
annulment of Deed of Sale and damages before the Malolos Regional Trial Court (RTC)

By respondent Spouses dela Cruz’s allegation, before buying the property, they inspected it and found
no improvements thereon that would put them on guard against the integrity of the TD of the sellers-
Spouses Perez which TD, contrary to petitioners’ claim, bore no annotation of the mortgage. They had
in fact constructed a house on the property in the course of which they were approached by petitioners
who informed them of an existing mortgage thereover, but as petitioners did not present any document
to prove it, they paid no heed to the information.
During the pendency of petitioners’ complaint against respondents spouses, petitioners filed an ex-
parte motion before Branch 16 of the RTC for the issuance of a writ of possession over the property by
virtue of the foreclosure of the mortgage of the sale to them of the property. 2

Petitioners’ motion was granted and a writ of possession dated August 2, 2001 was issued and enforced
against respondent Spouses dela Cruz who were evicted from the property.
respondent Spouses dela Cruz actually took possession of the property before the real estate mortgage
covering it was foreclosed, and had in fact cancelled the TD in Spouses Perez’ name and had one
issued in their name. It appears, however, that petitioners did not inform Branch 16, RTC of the previous
sale of the property to third parties, herein respondent Spouses dela Cruz, and the latter’s actual
possession thereof.

On December 7, 2002, petitioners amended, with leave of court, their complaint, alleging that, inter alia,
respondent Spouses Perez failed to redeem the mortgage within the reglementary period.
In their Answer to the Amended Complaint, respondent Spouses dela Cruz prayed for the issuance of
a writ of preliminary mandatory injunction to restore them to physical possession of the property, which
prayer Branch 7 of the RTC granted of October 29, 2004
Petitioners’ motion for reconsideration of the trial court’s Order of October 29, 2004 was denied by
Order of March 5, 2007, hence, they filed a petition for certiorari before the Court of Appeals. Finding
no grave abuse of discretion in the issuance of the Order, the appellate court denied petitioners’ petition

Hence, the present petition.

ISSUE:

Whether or not the spouses dela Cruz were entitled to the writ of injunction.

RULING:

The petition is without merit. The Civil Code specifically provides that possession under claim of
ownership raises a disputable presumption of ownership. It also says that possessors have the right to
enjoy possession undisturbed. Given that the spouses dela Cruz was in possession prior to the
foreclosure, and that they bought the property, they have a clear right over the property.

The issuance of the writ was proper. First, the spouses dela Cruz had a clear right over the property,
which is about to be disturbed by the writ of possession. Second, if the writ of possession was permitted
to be executed, then it will amount to the deprivation of property of the spouses dela Cruz without
judicial intervention.

For the enforcement of the writ of possession against respondent Spouses dela Cruz, who did not take
part in the foreclosure proceedings, would amount to taking of real property without the benefit of a
proper judicial intervention.
The procedural shortcut which petitioners is impermissible. Even Article 433 of the Civil Code instructs
that "Actual possession under claim of ownership raises disputable presumption of ownership. The true
owner must resort to judicial process for the recovery of the property." The contemplated judicial
process is not through an ex-parte petition as what petitioners availed of, but a process wherein a third
party, Spouses de la Cruz herein, is given an opportunity to be heard. 8

The jurisdictional foundation for the issuance of a writ of injunction rests not only in the existence of a
cause of action and in the probability of irreparable injury, among other considerations, but also in the
prevention of multiplicity of suits.
Since petitioners failed to show that the appellate court erred in upholding the trial court’s exercise of
its discretion in issuing the writ of preliminary mandatory injunction, the challenged Decision stands.
Villanueva vs. Cherdan Lending Investors Corporation G.R. No. 177881 October 13, 2010
>>>>>
FACTS: Spouses Peñaredondo obtained from respondent Cherdan Lending Investors Corporation a
loan amounting to ₱2.2 million secured by a real estate mortgage over a parcel of land.

Despite demand, spouses Peñaredondo failed to pay the obligation. Hence, respondent extrajudicially
foreclosed the mortgage.

Cherdan won the bid. Upon the expiration of the redemption period, the title to the property was
consolidated and a new title was issued in respondent's name.

On September 28, 2001, respondent filed before the Regional Trial Court (RTC) of Parañaque City,
Branch 258, an Ex-Parte Petition for Issuance of Writ of Possession for Real Property Covered by
Transfer Certificate of Title No. 143284 of the Registry of Deeds for Parañaque City. 4

In an Order dated January 7, 2002, the RTC granted the petition

5

Writ of possession was issued for Cherdan, Emmanuel C. Villanueva moved for the reconsideration of
the order and the setting aside of the writ of possession on the ground that he is the owner and is in
actual possession of the subject property.

RTC granted Villanueva's motion and ordered that the same be allowed possession of the property
pending finality of decision of the matter. And writ of possession previously issued in favor of Cherdan
was recalled.

Cherdan instituted a special civil action for certiorari before the CA. CA granted the petition.

The CA held that the pendency of the case for annulment of the foreclosure proceedings was not a bar
to the issuance of the writ of possession. The CA refused to apply Section 33, Rule 39 of the Rules of
Court, which authorizes the giving of possession of the property to the purchaser or last redemptioner
unless a third party is actually holding the property adverse to the judgment obligor, ratiocinating that
the provision applies only to execution sales and not to extrajudicial foreclosures of real estate
mortgage under Act 3135.

Issue: W/N a case for annulment of foreclosure is a bar to issuance of writ of possession.

Is there a legal obstacle/impediment to place Cherdan in possession of the property?

Held: YES. It is settled that the buyer in a foreclosure sale becomes the absolute owner of the property
purchased if it is not redeemed within one year after the registration of the sale.

As such, he is entitled to the possession of the property and can demand that he be placed in
possession at any time following the consolidation of ownership in his name and the issuance to him
of a new TCT.

Time and again, we have held that it is ministerial upon the court to issue a writ of possession after the
foreclosure sale and during the period of redemption. Upon the filing of an ex parte motion and the
approval of the corresponding bond, the court issues the order for a writ of possession. The writ of
possession issues as a matter of course even without the filing and approval of a bond after
consolidation of ownership and the issuance of a new TCT in the name of the purchaser

The third party’s possession of the property is legally presumed to be based on a just title, a
presumption which may be overcome by the purchaser in a judicial proceeding for recovery of the
property. Through such a judicial proceeding, the nature of the adverse possession by the third party
may be determined, after such third party is accorded due process and the opportunity to be heard.
The third party may be ejected from the property only after he has been given an opportunity to be
heard, conformably with the time-honored principle of due process. The Civil Code protects the actual
31

possessor of a property, as Article 433 thereof provides:

Art. 433. Actual possession under claim of ownership raises disputable presumption of ownership. The
true owner must resort to judicial process for the recovery of the property.
One who claims to be the owner of a property possessed by another must bring the appropriate judicial
action for its physical recovery. The "judicial process" could mean no less than an ejectment suit or a
reivindicatory action, in which the ownership claims of the contending parties may be properly heard
and adjudicated. 32

The ex parte petition for the issuance of a writ of possession filed by respondent, strictly speaking, is
not the kind of judicial process contemplated in Article 433 of the Civil Code. Even if the same may be
considered a judicial proceeding for the enforcement of one’s right of possession as purchaser in a
foreclosure sale, it is not an ordinary suit filed in court, by which one party sues another for the
enforcement or protection of a right, or the prevention or redress of a wrong.

Article 434
Magalang vs. Spouses Heretape G.R. No. 199558 August 14, 2019

for recovery of possession and ownership and/or declaration of nullity of acquisition of property:

Petitioner's Complaint

Spouses Kawasa Magalang and Mona Wahab were the owners of Lot 1064, Pls-397-D, a 10-hectare
property located at Salabaca, Ampatuan, Cotabato in which Kawasa inherited his grandparents and
forefathers.

In the early 1970s, Kawasa Magalang and his family were forced to evacuate the lot because of the
Ilaga-Blackshirt conflict

Spouses Lucibar Heretape and Rosalina Funa, Spouses Nestor Heretape and Rosa Rogador, and
Roberto Landero took advantage of the situation and usurped the whole 10-hectare lot. In connivance
with these persons, Geodetic Engineer Eusebio Fortinez caused the subdivision of the lot into three
parts

using falsified free patent applications and fraudulent Bureau of Lands documents and deeds of transfer
of rights, Spouses Lucibar Heretape and Rosalina Funa, et. al. succeeded in obtaining free patent titles
to portions of the lot.

Respondent's Answer

At the time of the execution of the memorandum of agreement, Kawasa Magalang misrepresented
himself as the lot owner. When Kawasa Magalang later abandoned the lot, a certain Pedro Deansin,
claimed to be the real owner and demanded the respondents to vacate the lot. Pedro Deansin showed
them a Deed of Transfer of Rights executed by a certain Gomongon Batolawan.

Since Kawasa Magalang could no longer be located, Nestor Heretape, Lucibar Heretape's son, opted
to buy 5 hectares from Pedro Deansin (one-half of the lot) and sold 2.5 hectares to his father Lucibar
Heretape. Pedro Deansin sold the remaining 5 hectares to Roberto Landero. Subsequently, they
applied for and were awarded certificates of title to their respective lots.
Petitioners filed a complaint against the respondents.

Petitioner's Evidence

Petitioner Kawasa Magalang essentially testified that he inherited the 10-hectare lot from his
grandparents and forefathers. He had planted coconut, banana, bamboo trees and palay thereon. He
10 11

mortgaged to Lucibar Heretape, for P1,310.00, 2.5 hectares of the lot. The mortgage was for a period
of more than one year. For this purpose, he and Lucibar Heretape executed a memorandum of
agreement. He subsequently offered to pay back the loan but Lucibar Heretape repeatedly refused it. 12

Roberto Landero, Nestor Heretape, and Rosa Rogador usurped the remaining 2.5 hectares. He did 13

not know Pedro Deansin nor was he aware of any case involving this person with the Bureau of Lands. 14

Respondents' Evidence

Nestor Heretape testified that he and his father Lucibar Heretape each owned a 2.5 hectare lot. In
1969, his father worked on a 2.5-hectare lot, which Kawasa Magalang mortgaged to him. In 1970,
Pedro Deansin showed up, claiming to be the owner of the lot measuring 10 hectares. He opted to buy
2.5 hectares of the lot, including the 2.5 hectares which Kawasa Magalang mortgage to his father. In
the end, he bought 5 hectares of the entire lot. He later sold 2.5 hectares to his father. They were told
that since Kawasa Magalang lost the case before the Bureau of Lands, Kawasa Magalang voluntarily
demolished his house and left the place. 20
Roberto Landero testified that he bought 5 hectares of the lot from Pedro Deansin through a
corresponding deed of sale. Thereafter, he caused the land to be titled. He was never disturbed in his
possession of the land. He only came to know of Kawasa Magalang when' the instant case was filed
against him.

RTC:
Kawasa Magalang's daughter Sabpia Magalang Wahalon testified that she and her five siblings had
previously lived on their father's 10-hectare lot. Her father paid taxes on the property as shown by a tax
declaration and tax receipts.

Trial Court: ruled in petitioners' favor; gave full credence to petitioners' testimonial evidence and
declared inadmissible respondents' documentary evidence for being mere photocopies.

1. Ordered the respondents to vacate the said lots and to remove and/or demolish all improvements

2. Declared null and void the Deed of Transfer of Rights and OCTs

3. To surrender the owner's duplicate copy of Original Certificate of Title 4. Directed the Register of
Deeds of Sultan Kudarat to cancel COTS of respondents

Respondents went to the Court of Appeals on two separate appeals. One was pursued by Spouses
Lucibar Heretape and Rosalina Funa and Spouses Nestor Heretape and Rosa Rogador; the other, by
Roberto Landero.

The first group faulted the trial court for: a) giving credence to the testimonies of Kawasa Magalang and
his daughter Sabpia Magalang Wahalon, both claiming that they acquired the property through
prescription; and b) declaring most of their documentary evidence dubious, hence, inadmissible.

On the other hand, Roberto Landero faulted the trial court for: 1) refusing to rule that petitioners had no
cause of action against him; 2) not dismissing the complaint on ground of prescription; 3) allowing
petitioners to collaterally attack his title; and 4) imposing on him the burden to show that his title was
not acquired through fraud.

. CA: he Court of Appeals reversed and dismissed the complaint.

It held that in the action for reconveyance below, petitioners bore the burden of proving, by clear and
convincing evidence, that respondents fraudulently secured their respective patents and titles to
portions of Lot

ISSUE:

Are petitioners entitled to reconveyance of the entire Lot/ 3 subdivided lots - NO

RULING:

We deny the petition.

The Rules of Court requires that only questions of law should be raised in petitions filed under Rule
45. This court is not a trier of facts. It will not entertain questions of fact as the factual findings of the
55

appellate courts are final, binding, or conclusive on the parties and upon this court when supported by
56

substantial evidence.

The party seeking to recover the property must prove, by clear and convincing evidence, that he or she
is entitled to the property, and that the adverse party has committed fraud in obtaining his or her title.

Surely, bare allegations of fraud are not enough. "Intentional acts to deceive and deprive another of
66

his right, or in some manner injure him, must be specifically alleged and proved." In the absence of
such required proof, the complaint for reconveyance will not prosper.

Art. 434. In an action to recover, the property must be identified, and the plaintiff must rely on the
strength of his title and not on the weakness of the defendant's claim.

In other words, the person who claims a better right of ownership to the property sought to be recovered
must prove two things: first, the identity of the land claimed; and second, his title thereto.
 As for the first requisite, there is no doubt: that the land sought to be reconveyed is Lot 1064, a
10-hectare property located at Salabaca, Ampatuan, Cotabato, which was later subdivided into
several lots (Lot 1064-A, Lot 2238-A, and Lot 2238-B).

As to the second requisite pertaining to ownership, the parties have conflicting claims.

Petitioners claim to be the real owners of Lot 1064 and presented in evidence tax receipts (1963-
1967) and Tax Declaration. These pieces of evidence, however, cannot prevail over
respondents' respective OCT to the lots in question.

For the Torrens title is conclusive evidence with respect to the ownership of the land described
therein, and other matters which can be litigated and decided in land registration proceedings.

As such, the titleholder is entitled to all the attributes of ownership of the property, including
possession. Petitioners' single tax declarations and old tax receipts dated 1963 - 1967 are not
considered evidence of ownership, hence, the same cannot defeat respondents' certificates of
title to the lots in question. More so because the certificates of title issued in the names of Lucibar
Heretape, Nestor Heretape, and. Roberto Landero, came at a much later date than the tax
declaration and tax receipts.

Petitioners also impute fraud on respondents who allegedly acquired possession and ownership of the
land after petitioner Kawasa Magalang and his family were forced to evacuate the lot back in the 70s
and refused to return the lots to Kawasa Magalang despite demand.

Lastly, petitioners assert they had acquired ownership of the lot by reason of prescription. Kawasa
Magalang testified that he inherited the 10-hectare lot from his grandparents and forefathers, and he
had planted coconut, banana, bamboo trees and palay thereon. His daughter Sabpia Magalang
Wahalon testified that she and her five siblings had previously lived on their father's 10-hectare lot. The
testimony did not establish that petitioners indeed acquired ownership of the lot by prescription. The
testimonies are mere general statements. They do not at all prove that petitioners and their
predecessors-in-interest had been in open, continuous, exclusive, and notorious possession and
occupation of the subject land for more than thirty years.

The CA did not err in dismissing petitioners' complaint for recovery of possession and ownership and/or
declaration of nullity of acquisition of property. Petition is DENIED. The Decision of the CA is
AFFIRMED.

Gemina vs. Heirs of Espejo, Jr. G.R. No. 232682 September 13, 2021

The present controversy involved a property located at 156 Session Road, Woodcrest Homes, Talanav,
Area B, Batasan Hills, Quezon City (subject property).

According to Gemina, he purchased, owned, Occupied with his family, and possessed the subject
property openly, continuously, peacefully, and in the concept of an owner since 1978.

To buttress his contention, he presented the following;

(a) Deed of Absolute Sale (Quitclaim) dated May 16, 1978;
[6]

(b) pictures of fruit-bearing trees such as mango tree, sampaloc tree, and coconut tree that he planted
on the subject prqperty; [7]

(c) Building Permit from the Office of the Building Official in Quezon City as proof that he constructed
[8]

a residential house on the subject property;

(d) Notice of Assessment of Real Property; [9]

(e) Sworn Statement of the value of real property;

[10]

(f) Tax Declaration No. C-139-07819; [11]

(g) several Real Property Tax Bill-Receipt; [12]

(h) Transfer Certificate of Title (TCT) No. 252774 in the name of vendor Ana De Guia San Pedro
[13]

(Ana);
(i) Deed of Conditional Sale dated November 20, 1995 between Ana and Gemina;
[14]

(j) Information Sheet of the Batasan Hills Homeowners Association, Inc. to Drove that he held the
[15]

Director and the Treasurer positions of the homeowners association where the subject property is
located; and
(k) photocopies of billings or statement of accounts to bolster his claim of actual presence on the subject
property.

On the other hand, the heirs of Espejo averred that they are co-owners of the subject property which is
covered by TCT No. RIV786U (93809) (TCT 93809) in the name of Gerardo V. Espejo, Jr. (Gerardo)
and Nenafe, and with Tax Declaration No. B-139-03384 also in the names of Gerardo and Nenafe.
When Gerardo died in 1975, he was survived by his wife Ma. Teresa R. Espejo (Teresa) and children
Jaime Gerardo Francisco (Jaime) and Rhodora Patrice (Rhodora), collectively referred to as the heirs
of Espejo.

the Espejo heirs, through their representative, sent Gemina a demand letter asserting their ownership
over the subject property, and demanding him and his family to vacate said property because they have
been unlawfully occupying the lot where the latter's house was built.

The Espejos filed an action for recovery of possession and prayed for the trial court to order Gemina
and all persons claiming in his behalf to vacate and surrender possession of the subject property, and
to pay reasonable compensation from the time that their possession have become unlawful, among
others.

Gemina's counsel still failed to attend the said pre-trial schedule.

the heirs of Espejo's ex parte presentation of evidence proceeded as scheduled.

Ruling of the Regional Trial Court:

the trial court ruled in favor of the heirs of Espejo based on preponderance of evidence. It held that the
latter have the better right to possess the subject property. Following the two requisites of Article 434 [30]

of the Civil Code, the Hspejos readily established the identity of the property in question, as well as
their title over the subject property.

The trial court deemed the following documents presented by the Espejo heirs as sufficient proof as to
the identity of the property: (a) the Judicial Affidavit of Ma. Teresa R. Espejo: (b) the testimony of
[31]

Teresa; (c) a Deed of Absolute Sale between Mariano J. Garcia and Dr. Gerardo D. Espejo; (d)
[32] [33]

Transfer of Rights between Dr. Gerardo D. Espejo, Sr. and Gerardo V. Espejo, Jr.; and (e) Tax
[34]

declaration showing that the owner of the subject property is Gerardo. It concluded that there is no
discrepancy as to the boundaries and description of the subject property among these documents.

To strengthen their title over the subject property, the Espcjos produced these documents, viz.: (a)
Marriage Contract between Gerardo and Teresa; (b) Birth Certificate of Jaime: (c) Birth Certificate of
[35] [36]

Rhodora; (d) Gerardo's Certificate of Death; and (e) TCT 93809 in the name of Gerardo and
[37] [38]

Nenafe. These documents clearly established the relationship of Teresa as wife of Gerardo, and
[39]

Jaime and Rhodora as children of Gerardo. Being compulsory heirs, they immediately succeeded to
Gerardo's rights and properties at the moment of his death.

Moreover, the trial court held that as between the TCT 93809 in the hands of the Espejos and the self-
serving claim of Gemina that he purchased the subject property in 1978, the TCT 93809 of the Espejo
heirs is superior as it serves as an indefeasible and incontrovertible title to the subject property in favor
of the person whose name appears therein. One who has Torrens title over the land is entitled to
possession thereof.

Ruling of the Court of Appeals:

The appellate court, in its Decision dated February 22, 2017, affirmed the ruling of the trial court, with
[41]

modification as to the rate of interest and cancellation of the award of attorney's fees.

The appellate court held that Gemina could no longer question the propriety of the trial court's Order
allowing the Espejos to present evidence ex parte since he already filed a motion for reconsideration
albeit it was denied by the court a quo for lack of notice of hearing.

The appellate court likewise rejected Gemina's contention on the insufficiency of evidence as to the
identity of the subject property since it was never raised as a defense in Gemina's answer or was it
brought up as an issue before the court a quo. It ruled that defenses not raised in the answer are
deemed waived. Moreover, the appellate court deemed the technical description in TCT 93809 coupled
with the testimony of Teresa as sufficient to establish the location, area and boundaries of the subject
property.

Lastly, the appellate court found the documentary evidence submitted by the heirs of Espejo to have
satisfactorily established their better right of possession over the subject property.

ISSUE
WHETHER THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE RULING AGAINST
THE PETITIONER DESPITE RESPONDENTS' FAILURE TO PROVE THE IDENTITY OF THE LAND.
yes

RULING:
The identity of the property and the title of the claimant must be ascertained in go action to recover
possession of real property pursuant to Article 434 of the Civil Code.

In an action to recover possession of real property under Article 434 of the New Civil Code, the plaintiff
must establish his title and the identity of the property because of the possibility that neither the plaintiff
nor the defendant is entitled or is the true owner of the property in dispute. A technical description of
the property, citing its metes and bounds, cannot stand alone, nor can it be considered foolproof
evidence pointing to the subject property

If only to shed light on a few questions of law to serve as guide, Article 434 of the Civil Code is controlling
in this case. It provides that "[i]n an action to recover, the property must be identified, and the plaintiff"
must rely on the strength of his title and not on the weakness of the defendant's claim." It is hornbook
doctrine that the entitlement to the possession of real property belongs to its registered owner.
However, the registered owner must seek proper judicial remedy and comply with the requisites of the
chosen action in order to recover possession of a real property from the occupant who has actual and
physical possession thereof. [61]

Furthermore, it must be emphasized that the plaintiff must not bank on the weakness of the defendant's
title, hence, must establish his title and the identity of the property because of the possibility that neither
the plaintiff nor the defendant is entitled or even more the true owner of the property in dispute.

In this case, while the subject property was identified to be the land located at 156 Session Road,
Woodcrest Homes, Talanay, Area B, Batasan Hills, Quezon City, however, the fallo of the trial court's
Decision refers to another property, the one situated in 156 Session Road, Garland Subdivision,
Talanay, Area B, Batasan Hills, Quezon City. This all the more created ambiguity as to the exact identity
of the disputed property.

Hence, to finally resolve the conflicting claims of the parties, Gemina must be given the chance to
present his evidence. The court of origin, the RTC, Branch 80 of Quezon City is directed to ascertain
and establish, based on the existing evidence on record and on those that will be presented and
received in its proceedings, the following:

(1) Whether the technical description as provided in TCT 93809 covers the subject property at, or in
particular, 156 Session Road, Woodcrest Homes, Talanay, Area B, Batasan Hills, Quezon City; and

(2) Other matters relevant in the determination of who between the Espejos and Gemina is entitled to
the possession of the subject property based on the proffered evidence of both parties.

The rigid application of procedural rules should not result to straight-jacketing the administration
justice, This Court deems it proper and just that Gemina and all other persons claiming rights under
[64]

his name be allowed to present their evidence before the RTC to give them full opportunity to establish
the merits of their defense rather than lose the subject property which has been in their physical and
actual possession for years, and where they have planted fruit-bearing trees and even built their
residence. The ends of justice, fairness and equity will be best served if both parties are heard with
their evidence and the controversies are settled on the merits and not on mere technicalities of the law.

WHEREFORE, the Petition is GRANTED. This case is hereby REMANDED to the Regional Trial Court,

Morales vs. De Guia G.R. No. 247367 December 05, 2022

In 1966, Abner De Guia bought an unregistered parcel of land from Beatriz and Esperidion Sabangan.
The sale is evidenced by a Deed of Sale of Miscellaneous Improvements and Transfer of Possessory
Rights over Land. The lot had a two-storey residential house which was submerged during the Mt.
Pinatubo eruption.

In 1968, former Mayor Amelia Gordon asked Abner De Guia if he could provide a place where
Dominador Morales and his family (Morales family) could stay. Abner De Guia agreed.

On May 9, 1975, Dominador Morales and Diana de Guia, Abner's wife, executed an Agreement where
Dominador acknowledged the superior right and interest of Abner as owner of the property. Dominador
also agreed to act as the overseer and tenant of the property. In return, Abner allowed the Morales
Family to stay on the property free of charge. In the agreement, Dominador agreed to vacate the
property upon reasonable notice.

In 1975, Abner and his family migrated to the United States of America (USA). There he became a
naturalized American citizen. While abroad, Abner trusted Dominador to take good care of the property.
However, unknown to Abner, Dominador declared portions of the property under Dominador and his
children's names for tax purposes. They constructed a bungalow on the property in place of the two-
storey residential house. Thus, on December 14, 2000, Abner, represented by his Attorney-fact,
Nomeriano de Guia (Nomeriano), filed an Action for Recovery of Possession and Ownership of Real
Property, Annulment of Documents and Damages against the Morales Family and. Dominador claimed
that:

a) Abner is a naturalized American citizen. Since he lost his Philippine citizenship, he is disqualified to
acquire and own lands of the public domain.

b) Abner offered Dominador to live in the property in exchange for the latter's services as his caretaker.
They argued that they looked after the property because Abner assured them that he would give them
a portion thereof. And, during Martial Law, Abner instructed Dominador and his workers to apply for
miscellaneous sales applications before the Bureau of Lands covering portions of the property.

c) In 1975, Abner's wife convinced Dominador to sign the Agreement in exchange for the property

ISSUE: Whether Maria Luisa Morales and her family have established that Abner gave them the portion
of the property which they occupied.

RULING:

NO. Maria Luisa and her family have not established that Abner gave them the portion of the property
which they occupied.

In the case, Abner filed a complaint against Dominador for the recovery of possession and ownership
of an unregistered land, also known as accion reivindicatoria.

Under Article 434 of the New Civil Code, to successfully maintain an action to recover the ownership
of a real property, the person who claims a better right to it must prove two things: first, the identity of
the land claimed and second, his or her title thereto. In other words, accion reivindicatoria is an action
whereby plaintiff alleges ownership over a parcel of land and seeks recovery of its full possession.

It is a suit to recover possession of a parcel of land as an element of ownership. Here, he was able to
prove that he acquired the property through Deed of Sale of Miscellaneous Improvements and Transfer
of Possessory Rights over Land.

From the inception of their stay and even during the pendency of the case, Maria Luisa and her family
never denied that they occupied and possessed the property as overseers and caretakers of Abner. As
such, they cannot acquire ownership over the property even by acquisitive prescription.

In Samela v. Manotok Services, Inc., the Court held that "one cannot recognize the right of another,
and at the same time claim adverse possession which can ripen to ownership, thru acquisitive
prescription." For prescription to set in, the possession, must be adverse, continuous, public, and to the
exclusion of others. The possession must be that in the concept of an owner, and it must be public,
peaceful, and uninterrupted. Acts of a possessory character by virtue of a license or mere tolerance on
the part of the real owner are not sufficient. Maria Luisa and her family's admission that they are
caretakers of the property belies their claim of ownership. Their possession, no matter how long, would
not ripen into ownership because their possession at the inception and even up to the present was that
of a caretaker or overseer of the property.

Article 1403(2) of the New Civil Code, or otherwise known as the Statute of Frauds, requires that
covered transactions must be reduced in writing, otherwise the same would not be enforceable by
action. In other words, Maria Luisa's assertion that Abner already agreed to give to them the portion
they occupied must be evidenced by a written document, otherwise their claim is unenforceable. The
Court notes that Abner, through his attorney-in-fact, Nomeriano, executed Deeds of Transfer of
Possessor; Rights in favor of several persons over various pm1ions of his property. Maria Luisa's bare
assertion that Abner verbally stated that the portion on which they built their bungalow was already
given to them does not hold water as it lacks the formalities required by law. In sum, Maria Luisa and
her family failed to adduce any evidence on the manner by which they supposedly acquired ownership
over the disputed portion. Therefore, Abner, as the rightful owner of the property, is entitled to recover
possession from them.

Article 436

Sangalang vs. Intermediate Appellate Court G.R. No. 71169 August 25, 1989
FACTS:

Bel-Air Village is located north of Buendia Avenue extension across a stretch of commercial block from
Reposo Street in the west up to Zodiac Street in the east. When Bel-Air Village was planned, this block
between Reposo and Zodiac Streets adjoining Buendia Avenue in front of the village was designated
as a commercial block. Bel-Air Village was owned and developed into a residential subdivision in the
1950s by Makati Development Corporation (MDC), which in 1968 was merged with Ayala Corporation.

Spouses Sangalang, Spouses Gaston ,Spouses Briones while Bel-Air Village Association, Inc. (BAVA)
is the homeowners' association in Bel-Air Village which takes care of the sanitation, security, traffic
regulations and general welfare of the village.

The lots which were acquired by the Sangalangs, the Gastons, the Brioneses in 1960, 1957 and 1958,
respectively, all sold by MDC subject to certain conditions and easements contained in Deed
Restrictions which formed a part of each deed of sale (i.e. being automatic members of Bel-Air
Association who must abide by the rules and regulations laid down by the Association [as per sanitation,
security and general welfare of the community];

that lots cannot be subdivided and only used for residential purposes;

→ On 4 April 1975, Makati enacted Ordinance 81, providing for the zonification of Makati, which
classified Bel-Air Village as a Class A Residential Zone, with its boundary in the south extending to the
center line of Jupiter Street (Chapter 3, Article 1, Section 3.03, paragraph F).

The Buendia Avenue extension area was classified as Administrative Office Zone with its boundary in
the North-North East Extending also up to the center line of Jupiter Street (Chapter 3, Article 1, Section
3.05, paragraph C). The Residential Zone and the Administrative Office Zone have a common boundary
along the center line of Jupiter Street.

The zoning was later followed under the Comprehensive Zoning Ordinance for the National Capital
Region adopted by the Metro Manila Commission as Ordinance 81-01 on 14 March 1981, with
modification that Bel-Air Village is simply bounded in the South-Southeast by Jupiter Street, and the
block-deep strip along the northwest side of Buendia Avenue Extension from Reposo to EDSA as High
Intensity Commercial Zone.

Under the zoning classification, Jupiter Street is a common boundary of Bel-Air Village and the
commercial zone.

→ On 17 January 1977, the Office of the Mayor of Makati directed BAVA, in the interest of public welfare
and purpose of easing traffic congestion, the opening of the Amapola (Estrella-Mercedes; Palma gate-
Villena), Mercedes (EDSA- Imelda/Amapola junction), Zodiac (Mercedes-Buendia), Jupiter (Zodiac-
Reposo, connecting Metropolitan avenue to Pasong Tamo and V. Cruz extension), Neptune (Makati
ave.-Reposo), Orbit (F.Zobel/ Candelaria intersection -Jupiter Paseo de Roxas; Mercedes-Buendia)
streets of Bel-Air Village for public use.

On 10 February, BAVA replied, expressing concern of the residents about the opening of the streets to
general public and requesting the indefinite postponement of the plan to open Jupiter St. to public
vehicles.

BAVA, however, voluntarily opened the other streets. On 12 August 1977, the municipal officials of
Makati allegedly opened, destroyed and removed the gates constructed at the corner of Reposo St.
and Jupiter St. as well as gates/fences constructed at Jupiter Street and Makati Avenue forcibly; thereby
opening Jupiter street to public traffic. Increased traffic was observed along Jupiter Street after its
opening to public use.

The motion for reconsideration (G.R. No. 71169), filed by the Sangalangs, is anchored on two grounds:
(1) that contrary to our decision, Jupiter Street is for the exclusive use of Bel-Air Village residents; and
(b) that the Ayala Corporation did contrive to acquire membership at the Bel-Air Village Association
(BAVA) purposely to bargain for access to Jupiter Street by the general public. Subsequently, BAVA
informed the Court that it was adopting the Sangalangs’ motion for reconsideration

ISSUE:

Whether or not the opening of Orbit Street to traffic by the mayor was warranted by the demands of the
common good and a valid exercise of police power. YES
RULING:
As asserted in Sangalang, the opening of Jupiter Street was warranted by the demands of the common
good, in terms of traffic decongestion and public convenience. SC also uphold the opening of Orbit
Street for the same rationale. The act of the mayor now challenged is that of police power which is the
state's authority" to enact legislation that may interfere with the personal liberty or property in order to
promote the general welfare." It consists of the (1) imposition of restraint upon liberty and property (2)
in order to foster the common good.

→ The opening of Orbit Street is under police power which is unlike eminent domain, it is exercised
without just compensation. Art. 436 of the Civil Code states that when any property is condemned or
seized by competent authority in the interest of health, safety or security, the owner thereof shall not
be entitled to compensation, unless he can show that such condemnation or seizure is unjustifiable.

The aggrieved party has not shown that there is unjustifiable reasons for the exercise of the police
power. The fact that it has led to the loss of privacy of BAVA residents is no argument against the
municipality's effort to ease vehicular traffic in Makati.

→ The gate in question being a nuisance, which could be legally abated by summary means. The fact
that it was accomplished summarily does not lend to it a show of arrogance because summary method
is allowed by law. The mayor was able to notify the BAVA that Orbit and Jupiter streets would be opened
up.

→ Ordinance No. 17 as amended by Resolution No 139 which requires a Mayor's permit before any
construction of any kind shall be built, erected or constructed in any place in the municipality is a valid
justification for the questioned act of the mayor. The fact that some time had elapsed before the Mayor
acted, cannot render the ordinance unenforceable or void.

→ Ayala Corporation is not liable for damages as a result of the destruction of the perimeter wall. Jupiter
Street lies as the boundary between Bel-Air Village and Ayala Corporation's commercial section, it had
been considered as a mercial zones of Ayala Corporation's real estate development

WHEREFORE, the petition in G.R. No. 60727 is GRANTED;

The lone issue in G.R. No. 67027 is whether or not the Mayor of Makati could have validly opened
Jupiter and Orbit Streets to vehicular traffic. The facts, as stated in the assailed decision of the
respondent court

the motions for reconsiderations in G.R. Nos. 71169, 74376, 76394, 78182, and 82281 are DENIED
with FINALITY.

Article 437

National Power Corporation vs. Ibrahim G.R. No. 168732 June 29, 2007

Doctrine: The ownership of the land extends to the surface as well as to the subsoil under it

Per NCC 437: The owner of a parcel of land is the owner of its surface and of everything under it, and
he can construct thereon any works or make any plantations and excavations which he may deem
proper, without detriment to servitudes and subject to special laws and ordinances. He cannot complain
of the reasonable requirements of aerial navigation

Rights over lands are indivisible and require and definitive and categorical classification

The landowner's right extends to such height or where it is possible for them to obtain some benefit or
enjoyment and is extinguished beyond such limit as there would be no more interest protected by law

Facts:

Ibrahim owns a parcel of land located in Lanao del Norte.

In 1978, NAPOCOR took possession of the sub-terrain area of the land and constructed underground
tunnels on the said property. to build its Aqua I Hydroelectric Plant Project, without paying any
compensation, allegedly under the mistaken belief that it was public land.

The tunnels were apparently being used by NAPOCOR in siphoning the water of Lake Lanao and in
the operation of NAPOCOR's Agus projects.
In 1991, Maruhom (one of the co-heirs of Ibrahim) requested Marawi City Water District for a permit to
construct or install a motorized deep well on the parcel of land but it was rejected on the grounds that
the construction would cause danger to lives and property by reason of the presence of the
underground tunnels.

Maruhom demanded NAPOCOR to pay damages and to vacate the sub-terrain portion of the land.

Issue: WON Ibrahim is the rightful owner of the sub-terrain area of the land. If yes, are they entitled to
the payment of just compensation.

Held: YES. The sub-terrain portion of the property belongs to Ibrahim.

The Supreme Court cited Article 437 of the Civil Code which provides that: The owner of a parcel of
land is the owner of its surface and of everything under it, and he can construct thereon any works or
make any plantations and excavations which he may deem proper, without detriment to servitudes and
subject to special laws and ordinances. xxx

Hence, the ownership of land extends to the surface as well as to the subsoil under it. Therefore,
Ibrahim owns the property as well as the sub-terrain area of the land where the underground tunnels
were constructed.

On the issue of just compensation, the Supreme Court also said that Ibrahim should be paid a just
compensation.

Ibrahim could have dug upon their property and built motorized deep wells but was prevented from
doing so by the authorities because of the construction of the tunnels underneath the surface of the
land.

Ibrahim still had a legal interest in the sub-terrain portion insofar as they could have excavated the
same for the construction of the deep wells. It has been shown that the underground tunnels have
deprived the plaintiffs of the lawful use of the land and considerably reduced its value.

It was held that: If the government takes property without expropriation and devotes the property to
public use, after many years, the property owner may demand payment of just compensation in the
event restoration of possession is neither convenient nor feasible. This is in accordance with the
principle that that persons shall not be deprived of their property except by competent authority and for
public use and always upon payment of just compensation.

Philippine Long Distance Telephone Company vs. Citi Appliance M.C. Corporation G.R. No. 214546
October 09, 2019

Facts: Since 1992, Respondent Citi Appliance has owned a parcel of land in Cebu City. Sometime in
2003, it decided to construct a 16-storey commercial building on it.

The Cebu City Zoning Board required respondent to construct a one-level parking area. To comply with
this requirement, respondent had to make a deep excavation to lay the foundation of the parking lot. It
discovered telephone lines, cables, and manholes underground encroaching the respondent’s property
which had been placed by petitioner PLDT sometime in 1983.

Respondent Citi Appliance demanded PLDT to remove the underground telephone lines, cables, and
manholes, or to shoulder the parking exemption fee of P3.75M. Citi Appliance then filed a complaint for
ejectment against PLDT after the latter still refused to comply.

In its Answer, PLDT alleged that its telephone lines, cables, and manholes did not encroach on Citi
Appliance's property as they were properly positioned alongside and underneath a public sidewalk.

It later filed an Amended Answer, arguing that the case should be dismissed since the action for forcible
entry had prescribed. It expounded in its Position Paper that the one-year prescriptive period within
which to bring an action for forcible entry based on stealth should be reckoned from the discovery of
the alleged unlawful entry, not the last demand to vacate.

Moreover, PLDT argued that the area in question was part of public domain, it being a sidewalk.
Assuming that the property did belong to Citi Appliance, PLDT averred that it had the right of eminent
domain or to exercise its rights as a builder in good faith.

Issue:
 I.Whether or not the subterranean portion of a titled property is included in the rights of the
surface owner. (YES)
II. Whether petitioner PLDT is a builder in good faith (NO)
Ruling:
I.
Rights over lands are indivisible. It is well-settled that the owner of a parcel of land has rights
not only to the land's surface, but also to everything underneath and the airspace above it up to a
reasonable height. Article 437 of the Civil Code states:
ARTICLE 437. The owner of a parcel of land is the owner of its surface and of everything under
it, and he can construct thereon any works or make any plantations and excavations which he
may deem proper, without detriment to servitudes and subject to special laws and ordinances.
He cannot complain of the reasonable requirements of aerial navigation.

In this case, the existence of petitioner's cables affected the right of the surface owner to make
use of its right to possess. This can be considered a burden, which may be removed by forcible entry
or unlawful detainer actions.

II.
Petitioner argues that it should be allowed to exercise its right of eminent domain under its
franchise or its right: as a builder in good faith. In claiming so, petitioner avers that when it installed the
cables and lines underground, it was acting in good faith, believing that the land was underneath the
public sidewalk. Moreover, transferring the cables and lines would cost millions of pesos and
inconvenience its subscribers. On the other hand, respondent contends that these arguments were
raised only on appeal.

The records show that these arguments were already raised by petitioner in its Answer and
Position Paper, and were even addressed in the Municipal Trial Court in Cities' Decision. Thus, this
Court may proceed to resolve the substantive issues.

On asserting its right as a builder in good faith, petitioner cited Article 448 of the Civil Code,
which provides:
ARTICLE 448. The owner of the land on which anything has been built, sown or planted in good
faith, shall have the right to appropriate as his own the works, sowing or planting, after payment
of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to
pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter
cannot be obliged to buy the land if its value is considerably more than that of the building or
trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to
appropriate the building or trees after proper indemnity. The parties shall agree upon the terms
of the lease and in case of disagreement, the court shall fix the terms thereof.

This provision refers to a land owned by two (2) or more parties, one (1) of whom has built some
works, sown, or planted something. Under Article 526 of the Civil Code, the rule on good faith is used
in determining whether a builder, sower, or planter acted in good faith.

In Mercado v. Court of Appeals, this Court ruled that a person claiming to be a builder in good
faith must be a possessor in the concept of an owner. Thus:
To be deemed a builder in good faith, it is essential that a person assert title to the land on which
he builds; i.e., that he be a possessor in concept of owner, and that he be unaware "that there
exists in his title or mode of acquisition any flaw which invalidates it." It is such a builder in good
faith who is given the right to retain the thing, even as against the real owner, until he has been
reimbursed in full not only for the necessary expenses but also for useful expenses. On the other
hand, unlike the builder in good faith, a lessee who "makes in good faith useful improvements
which are suitable to the use for which the lease is intended, without altering the form or
substance of the property leased," can only claim payment of "one-half of the value of the
improvements" or, "should the lessor refuse to reimburse said, amount, ... remove the
improvements, even though the principal thing may suffer damage thereby." (Citations omitted)

In this case, petitioner's assertion of right over the property is not in the concept of an owner. In
contrast, petitioner claims that the property is owned either by the government or a certain Teofilo Pilapil
when it installed the lines and cables. Thus, petitioner's argument that it should be allowed to exercise
its right under Article 448 is untenable.

Lloyds Industrial Richfield Corporation vs. National Power Corporation G.R. No. 190207 June 30, 2021
Lloyds Richfield is a cement manufacturing corporation. With a plant site in Danao City, it purchased
parcels of land within its vicinity and quarried limestones from these areas, which would then be used
to manufacture cement.

Among those parcels of land it purchased were adjoining lots in Dawis Norte and Dawis Sur, Carmen,
Cebu.

Sometime before June 25, 1996,[8] the National Power Corporation entered into negotiations with
Lloyds Richfield to create an easement of right of way over the parcels of land. Transmission lines
would be constructed over the parcels of land for the 230 KV Leyte-Cebu Interconnection Project.[9] A
location map drawn by the National Power Corporation depicted the lots that would be affected by the
project, with the lots owned by Lloyds Richfield

When negotiations failed, the National Power Corporation filed a Complaint[11] for expropriation before
the Regional Trial Court of Danao City. It also filed an ex parte motion, upon which the trial court issued
a Writ of Possession allowing it to take immediate possession of Lloyds Richfield's properties.

Lloyds Richfield initially moved to dismiss the case, but the trial court denied it.[13] It then filed its
Answer,[14] demanding by way of compulsory claim that the National Power Corporation pay the fair
market value of the parcels of land, since the construction of transmission lines over its properties would
render the properties useless to it. It also demanded to be paid the fair market value ofthe limestone
deposits in the parcels of land.

A Committee on Appraisal was then convened to determine the just compensation for the parcels of
land and the limestone deposits.

the Committee recommended to increase the number of lots to be expropriated from seven to 11

The National Power Corporation opposed the Amended Commissioners' Report. It insisted that
expropriating 11 lots would be improper since, as it had said in its Complaint, only seven were needed
to build the transmission lines. It added that it could not be made to pay just compensation for the
limestone deposits as these were minerals, which were owned not by Lloyds Richfield, but by the State.

Lastly, it contended that it may only acquire an easement of right of way over the parcels of land
pursuant to Republic Act No. 6395, and thus, may only pay an easement fee equivalent to 10% of the
market value of the lands to be expropriated.

the Regional Trial Court ordered the lots condemned in favor of the National Power Corporation.

The trial court said Lloyds Richfield was entitled to an amount equivalent to the fair market value of the
lands to be expropriated, not just an easement fee.
The trial court added that the National Power Corporation must pay just compensation for all of Lloyds
Richfield's 11 lots, not just the original seven prayed for in the Complaint. With the safety zone increased
based on the Amended Commissioners' Report, not only would Lloyds Richfield be deprived of
conducting blasting works in the seven lots, but also in the other four lots

The trial court also noted that the National Power Corporation may not refuse to expropriate these four
additional lots, considering that it had been given several chances to present evidence controverting
the safety zone increase, but still failed to do so.

As to whether the National Power Corporation should pay just compensation for the limestone deposits,
the trial court said that while the State owned minerals found in Philippine soil, it allowed Lloyds
Richfield to quarry the limestones found in the parcels of land to be expropriated. Since, if not for the
transmission lines, it would not have to acquire limestones from some other source, Lloyds Richfield
was deemed indefinitely deprived of its right over the limestone deposits in its properties,

The Court of Appeals agreed that just compensation must be paid for all 11 parcels of land, not just an
easement fee.

unlike the trial court, the Court of Appeals held that Lloyds Richfield was not entitled to just
compensation for the value of the limestone deposits. Regardless of the Mineral Production Sharing
Agreement entered into between Lloyds Richfield and the Republic of the Philippines, the Court of
Appeals emphasized that minerals such as limestones are owned by the State. More, it noted that per
the agreement, Lloyds Richfield could "only acquire land or surface rights over the mining area but not
any title over the contract or mining area itself."
Lloyds Richfield contends that the Court of Appeals erred in deleting the award of just compensation
for the limestone deposits. The ruling that the State owns all minerals in Philippine soil is allegedly
contrary to Article 437[56] of the Civil Code, which states that the owner of a parcel ofland is the owner
of its surface and everything under it.[57] It then cites Benguet Consolidated, where this Court held that
the filing of an expropriation proceeding means that the property is no longer part of the public domain
but private property.

ISSUE:
whether or not Lloyds Richfield Industrial Corporation is entitled to just compensation for the value of
the limestone deposits found in its lots - NO

Ruling:
Lloyds Richfield, however, is not entitled to just compensation for the limestone deposits in its
properties.

Under Article XII, Section 2 of the Constitution, the State owns all minerals found in Philippine soil.
While Lloyds Richfield has title to the properties, it does not own the minerals underneath them, as
shown by the permits and the Mineral Production Sharing Agreement it had to secure from the
government to conduct quarrying activities in its properties.

Article 437 of the Civil Code, which provides that the owner of a parcel of land is the owner of its
surface and everything under it, is not without limitations. For one, it is a statute that cannot trump a
constitutional provision. Article 437 itself provides that it is "subject to special laws and ordinances."
Certainly, the Constitution can be considered a special law, if not the fundamental law, to which all
statutes must conform.

Furthermore, in Republic v. Court of Appeals, this Court held that an owner of a parcel of land may
even be ousted of ownership of their land should minerals be found underneath it, in which case, they
shall be paid just compensation for the taking of the land—-not for the taking of the minerals underneath
it. Said this Court:

The rule simply reserves to the State all minerals that may be found in public and even private land
devoted to "agricultural, industrial, commercial, residential or (for) any purpose other than mining."
Thus, if a person is the owner of agricultural land in which minerals are discovered, his ownership of
such land does not give him the right to extract or utilize the said minerals without the permission of the
State to which such minerals belong.

... [O]nce minerals are discovered in the land, whatever the use to which it is being devoted at the time,
such use may be discontinued by the State to enable it to extract the minerals therein in the exercise
of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any
private party, including the registered owner thereof, for any other purpose that will impede the mining
operations to be undertaken therein.
Ibrahim, however, does not apply here. There was no extraction of minerals conducted in Ibrahim,
unlike here, which involved the quarrying of limestones, a mineral.

Therefore, the Court of Appeals correctly deleted the award of just compensation for the limestone
deposits.
The Court of Appeals' deletion of the award of just compensation for the value of limestone deposits is
AFFIRMED.

Article 440

Villasi vs. Spouses Garcia G.R. No. 190106 January 15, 2014

Facts:

Petitioner Magdalena Villasi, engaged the services of the respondent Fil-Garcia Construction, Inc. to
construct a 7-storey condominium building located at Aurora Blvd. Cubao Quezon City.

For failure of Villasi to fully pay the contract price despite the FGCI's several demands, it initiated a
collection suit for sum of money before the RTC of Quezon City.

In her answer Villasi averred that she delivered the total amount owed but Fil-Garcia Construction,
FGCI was only able to construct a portion of the building. RTC ruled in favor of FGCI.

On appeal, CA reversed the RTC's decision, stating that Villasi made an overpayment, thereby ordering
FGCI to return the amount paid in excess.
Thereafter Villasi moved for the execution of CA decision. Thus, the sheriff levied a building located in
No, 40 Kalayaan Ave., and registered in the name of Sps Garcia only for tax purposes.

While the building was declared for taxation purposes in the name of FGCI, the lots in which it was
erected were registered in the names of the Spouses Filomeno Garcia and Ermelinda Halili-Garcia
(Spouses Garcia). After the mandatory posting and publication of notice of sale on execution of real
property were complied with, a public auction

Public auction of theses properties was scheduled.

On motion Garcia, the sale of execution was suspended. Garcia asserts the assessor mistakenly
assessed and sheriff mistakenly levied the building that lawfully belongs to them, and cannot be levied
upon not being owned by the judgement debtor.

Meanwhile Villasi insist that the levy effected by the Sheriff was proper since the subject property
belongs to the FGCI as evidenced by the tax declaration

Issue:

Won sheriff mistakenly levied the building that lawfully belongs to third persons - sps garcia

Ruling: NO.

While it is a hornbook doctrine that the accessory follows the principal, that is, the ownership of the
property gives the right by accession to everything which is produced thereby, or which is incorporated
or attached thereto, either naturally or artificially, such rule is not without exception. - New Civil Code,
Art. 440.

The rule on accession is not an iron-clad dictum. On instances where this Court was confronted with
cases requiring judicial determination of the ownership of the building separate from the lot, it never
hesitated to disregard such rule.

The case at bar is of similar import. When there are factual and evidentiary evidence to prove that the
building and the lot on which it stands are owned by different persons, they shall be treated separately.
As such, the building or the lot, as the case may be, can be made liable to answer for the obligation of
its respective owner.

In cases where there is a clear and convincing evidence to prove that the principal and the accessory
are not owned by one and the same person or entity, the presumption shall not be applied and the
actual ownership shall be upheld.

In this case, while petitioner may have proven his ownership of the land, as there can be no other piece
of evidence more worthy of credence than a Torrens certificate of title, yet he failed to present any
evidence to substantiate his claim of ownership or right to the possession of the building.

as the party asserting their title, the Spouses Garcia failed to prove that they have a bona fide title to
the building in question. Aside from their postulation that as title holders of the land, the law presumes
them to be owners of the improvements built thereon, the Spouses Garcia were unable to adduce
credible evidence to prove their ownership of the property.

In contrast, Villasi was able to satisfactorily establish the ownership of FGCI thru the pieces of evidence
she appended to her opposition, which is the building permit named under FGCI issued by the City
Engineering of Quezon City.

Therefore, when there are factual and evidentiary evidence to prove that the building and the lot on
which it stands are owned by different persons, they shall be treated separately.

As such, the building, or the lot, as the case may be, can be made liable to answer for the obligation of
its respective owner.

Thus, petition was granted, and the Deputy Sheriff is hereby directed to proceed with the conduct of
the sale on execution of the levied building.

Article 445 to Article 456

Pacific Farms, Inc. vs. Esguerra et al and CARRIED LUMBER COMPANY, defendant-appellant. G.R.
No. L-21783 November 29, 1969

Facts:

Carried Lumber Company sold and delivered lumber and construction materials to the Insular Farms -
Pacific Farms predecessor-in-interest over the said buildings., Inc. which the latter used in the
construction of the aforementioned six buildings at its compound.

However, the value of the materials was not paid by Insular Farms, Inc. Company instituted civil case
with the Court of First Instance of Pangasinan to recover the said unpaid balance from the Insular
Farms, Inc. Trial court rendered judgment sustaining the Company's claim. The judgment debtor did
not appeal; so the corresponding writ of execution was issued.

PacificFarms, Inc.filed a third party claim, asserting ownership over levied buildings which it acquired
from Insular Farms by virtue of a deed of absolute sale. Thereafter, sheriff proceeded with public
auction.

On August 23, 1961 the trial court rendered judgment sustaining the Company's claim. The judgment
debtor did not appeal; so on December 19, 1961 the corresponding writ of execution was issued. On
January 16, 1962 the defendant sheriff levied upon the six buildings.

Meanwhile, PacificFarms filed a complaint against the Company and the sheriff with the court a quo,
praying that judgment be rendered, (a) declaring null and void the levy and judicial sale of the six
buildings, and (b) adjudging the defendants jointly and severally liable to the plaintiff in the sum of
P2,000 by way of actual damages and for such amount as the court may deem proper and just to
impose by way of exemplary damages and for costs of the suit.

Trial Court rendered judgment annulling the levy of January 16, 1962 and the certificate of sale of
February 12, 1962. The court, however, denied the plaintiff's claim for actual and exemplary damages
on the ground that it was not "prepared to find that there was gross negligence or bad faith on the part
of any of the defendants."
Hence this appeal, imputing errors which, according to the appellant's formulation, are the following:
1. The lower court erred in holding that the credit of the defendant-appellant, Carried Lumber Company,
against the Insular Farms, Inc., consisting of the value of lumber and construction materials used in the
buildings which were later acquired by the Pacific Farms, Inc., the appellee, was not a statutory lien on
those buildings; .
2. The lower court, likewise, erred in holding that the doctrine laid down in De Barretto, et al. vs.
Villanueva, et al. (G.R. No. L-14938, December 29, 1962) is applicable to the facts of this case as found
by said court; and .
3. The lower court erred, finally, in declaring that the sale at public auction conducted by the defendant
deputy provincial sheriff of Pangasinan, covering the six buildings described in the certificate of sale
dated February 12, 1962, was null and void.

Issue:

Whether or not the appellant acted correctly in bringing an action against the Insular Farms, Inc. and
enforcing its right of reimbursement.

Held:

Yes, the appellant acted correctly in bringing an action (D-775) against the Insular Farms, Inc. and
enforcing its right of reimbursement through the execution of the final judgment it obtained in the said
case against the six buildings in the possession of the appellee who now stands to benefit therefrom.

It follows, as a necessary corollary, that the sale at public auction conducted by the defendant sheriff
of the six buildings described in the certificate of sale dated February 12, 1962, exhibit 7, was valid and
effective.

Also, the application by analogy of the rules of accession would suffice for a just adjudication. Article
447 of the Civil Code provides:

The owner of the land who makes thereon personally or through another, plantings, constructions or
works with the materials of another, shall pay their value; and, if he acted in bad faith, he shall also be
obliged to the reparation of damages. The owner of the materials shall have the right to remove them
only in case he can do so without injury to the work constructed, or without the plantings, constructions
or works being destroyed.
However, if the landowner acted in bad faith, the owner of the materials may remove them in any event
with a right to be indemnified for damages.

The above quoted legal provision contemplates a principal and an accessory, the land being considered
the principal, and the plantings, constructions or works, the accessory. The owner of the land who in
good faith-whether personally or through another-makes constructions or works thereon, using
materials belonging to somebody else, becomes the owner of the said materials with the obligation
however of praying for their value.2 The owner of the materials, on the other hand, is entitled to remove
them, provided no substantial injury is caused to the landowner. Otherwise, he has the right to
reimbursement for the value of his materials.

Depra vs. Dumlao G.R. No. 57348 May 16, 1985

FACTS: Dumlao is the owner of a parcel of land in Iloilo, while owns the lot adjoining his. Dumlao built
his house on his own land, but the kitchen encroached about 34 sq.m on Depra's property.

After the encroachment was discovered in a relocation survey of DEPRA's lot made on November
2,1972, his mother, Beatriz Depra after writing a demand letter asking DUMLAO to move back from his
encroachment, filed an action for Unlawful Detainer

After trial, the Municipal Court found that DUMLAO was a builder in good faith, and applying Article 448
of the Civil Code,

The lower court found that Dumlao was a builder in good faith, and ordered him to pay rent
(PhP5.00/month) - forced lease between the parties.

Depra refused to accept the rentals so Dumlao deposited this with the MTC. Neither party appealed
judgment so this became final and executory.

On July 15,1974, DEPRA filed a Complaint for Quieting of Title against DUMLAO before the then Court
of First Instance of Iloilo, Branch IV (Trial Court), involving the very same 34 square meters, which was
the bone of contention in the Municipal Court. DUMLAO, in his Answer, admitted the encroachment but
alleged, in the main, that the present suit is barred by res judicata by virtue of the Decision of the
Municipal Court, which had become final and executory.

Rebutting the argument of res judicata relied upon by DUMLAO, DEPRA claims that the Decision of
the Municipal Court was null and void ab initio because its jurisdiction is limited to the sole issue of
possession, whereas decisions affecting lease, which is an encumbrance on real property, may only
be rendered by Courts of First Instance.

ISSUE:

1. Whether or not res judicata would apply to the case at bar?

2. Whether or not the land owner can be compelled to accept rent payments by the court (with both LO
and BPS being in good faith)?

HELD:

1. Res judicata would not apply should the first case be one for ejectment and the other for quieting of
title. Article 448 of the Civil Code provides that the land owner has 2 options - to buy the building or to
sell/rent his land. This is so because the rights of the owner of the land is older, and by the principle of
accession, he also has a right to the accessories.

2.The Court remanded the case to the RTC to determine the fair price of the land, the expenses incurred
by the BPS (Dumlao), the increase in value of the land, and whether the value of the land is considerably
more than the value of the kitchen built on it. The RTC shall then give Depra 15 days to exercise such
option.

Owner of the land on which improvement was built by another in good faith is entitled to removal of
improvement only after landowner has opted to sell the land and the builder refused to pay for the
same. ART. 448. The owner of the land on which anything has been built sown or planted in good faith,
shall have the right to appropriate as his own the works, sowing or planting, after payment of the
indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price
of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if 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.

After said amounts shall have been determined by competent evidence, the Regional, Trial Court shall
render judgment, as follows:

a) The trial Court shall grant DEPRA a period of fifteen (15) days within which to exercise his option
under the law (Article 448, Civil Code), whether to appropriate the kitchen as his own by paying to
DUMLAO either the amount of tile expenses spent by DUMLAO f or the building of the kitchen, or the
increase in value ("plus value") which the said area of 34 square meters may have acquired by reason
thereof, or to oblige DUMLAO to pay the price of said area. The amounts to be respectively paid by
DUMLAO and DEPRA, in accordance with the option thus exercised by written notice of the other party
and to the Court, shall be paid by the obligor within fifteen (15) days from such notice of the option by
tendering the amount to the Court in favor of the party entitled to receive it;

b) The trial Court shall further order that if DEPRA exercises the option to oblige DUMLAO to pay the
price of the land but the latter rejects such purchase because, as found by the trial Court, the value of
the land is considerably more than that of the kitchen, DUMLAO shall give written notice of such
rejection to DEPRA and to the Court within fifteen (15) days from notice of DEPRA's option to sell the
land. In that event, the parties shall be given a period of fifteen (15) days from such notice of rejection
within which to agree upon the terms of the lease, and give the Court formal written notice of such
agreement and its provisos. If no agreement is reached by the parties, the trial Court, within fifteen (15)
days from and after the termination of the said period fixed for negotiation, shall then fix the terms of
the lease, provided that the monthly rental to be fixed by the Court shall not be less than Ten Pesos
(P10.00) per month, payable within the first five (5) days of each calendar month. The period for the
forced lease shall not be more than two (2) years, counted from the finality of the judgment, considering
the long period of time since 1952 that DUMLAO has occupied the subject area. The rental thus fixed
shall be increased by ten percent (10%) for the second year of the forced lease. DUMLAO shall not
make any further constructions or improvements on the kitchen. Upon expiration of the two-year period,
or upon default by DUMLAO in the payment of rentals for two (2) consecutive months, DEPRA shall be
entitled to terminate the forced lease, to recover his land, and to have the kitchen removed by DUMLAO
or at the latter's expense. The rentals herein provided shall be tendered by DUMLAO to the Court for
payment to DEPRA, and such tender shall constitute evidence of whether or not compliance was made
within the period fixed by the Court.

c) In any event, DUMLAO shall pay DEPRA an amount computed at Ten Pesos (P10.00) per month as
reasonable compensation for the occupancy of DEPRA's land for the period counted from 1952, the
year DUMLAO occupied the subject area, up to the commencement date of the forced lease referred
to in the preceding paragraph;

d) The periods to be fixed by the trial Court in its Precision shall be inextendible, and upon failure of the
party obliged to tender to the trial Court the amount due to the obligee, the party entitled to such
payment shall be entitled to an order of execution for the enforcement of payment of the amount due
and for compliance with such other acts as may be required by the prestation due the obligee.

Philippine National Bank v. De Jesus

Parties:
Philippine National Bank - Petitioner
Generoso De Jesus, represented by his Attorney-in-Fact, Christian De Jesus - Respondent
Facts:
• Respondent filed a complaint against petitioner before the Regional Trial Court of Occidental
Mindoro for recovery of ownership and possession of a 124-square-meter portion of land
encroached upon by petitioner's building.
• Respondent claimed ownership of the land covered by Transfer Certificate of Title (TCT) No. T-
17197 and discovered the encroachment upon verification survey.
• Petitioner PNB alleged that the encroachment existed when it acquired the property and claimed
to have accepted an offer from the then Mayor Bienvenido Ignacio to purchase the encroached
area.
• The trial court ruled in favor of respondent de jesus, declaring him the rightful owner of the
disputed portion and ordering petitioner to vacate and remove the improvement.
• The Court of Appeals affirmed the trial court's decision but deleted the award of damages and
litigation expenses.
Arguments of the Parties:
 •
Petitioner argued that it should be considered a builder in good faith and invoked Article 448 of
the Civil Code, which entitles a builder in good faith to certain rights when building on another's
land.
• The trial and appellate courts rejected petitioner's claim of good faith, emphasizing that petitioner
was aware of the encroachment prior to its acquisition of the property.
• Respondent contended that petitioner's awareness of the encroachment negated its claim of
good faith, making Article 448 inapplicable.
Issues:
• Whether Philippine National Bank can be considered a builder in good faith under Article 448 of
the Civil Code. -NO
•
• Whether the provisions of Article 448 are applicable in the present case.-NO

Ruling of the Court:

I. The Supreme Court affirmed the decision of the Court of Appeals, holding that Philippine National
Bank cannot be considered a builder in good faith.
A builder in good faith can, under the foregoing provisions, compel the landowner to make a choice
between appropriating the building by paying the proper indemnity or obliging the builder to pay the
price of the land. The choice belongs to the owner of the land, a rule that accords with the principle of
accession, i.e., that the accessory follows the principal and not the other way around. [2]

Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. He much
choose one. He cannot, for instance, compel the owner of the building to instead remove it from the
land. In order, however, that the builder can invoke that accruing benefit and enjoy his corresponding
[3]

right to demand that a choice be made by the landowner, he should be able to prove good faith on his
part.

Good faith, here understood, 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. The essence of good faith lies in an honest belief in the
[4]

validity of one's right, ignorance of a superior claim, and absence of intention to overreach another. [5]

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. [6]

II.
Given the findings of both the trial court and the appellate court, it should be evident enough that
petitioner would fall much too short from its claim of good faith. Evidently, petitioner was quite aware,
and indeed advised, prior to its acquisition of the land and building from Ignacio that a part of the
building sold to it stood on the land not covered by the land conveyed to it.
Equally significant is the fact that the building, constructed on the land by Ignacio, has in actuality been
part of the property transferred to petitioner. Article 448, of the Civil Code refers to a piece of land
whose ownership is claimed by two or more parties, one of whom has built some works (or sown or
planted something) and not to a case where the owner of the land is the builder, sower, or planter who
then later loses ownership of the land by sale or otherwise for, elsewise stated, "where the true owner
himself is the builder of works on his own land, the issue of good faith or bad faith is entirely irrelevant."
[7]

In fine, petitioner is not in a valid position to invoke the provisions of Article 448 of the Civil Code. The
Court commiserates with petitioner in its present predicament; upon the other hand, respondent, too,
is entitled to his rights under the law, particularly after having long been deprived of the enjoyment of
his property.
Nevertheless, the Court expresses hope that the parties will still be able to come up with an
arrangement that can be mutually suitable and acceptable to them.
Conclusion:
The decision of the Court of Appeals was affirmed, denying Philippine National Bank's claim of good
faith and upholding the trial court's ruling in favor of Generoso De Jesus.

Feliciano vs. Spouses Zaldivar G.R. No. 162593 September 26, 2006

Respondents and Remegia are in mutual bad faith

FACTS:
The case involves a dispute over the ownership of a parcel of land in Cagayan de Oro City.
The petitioner, Remegia Y. Feliciano, filed a complaint for the nullity of a Transfer Certificate of Title
(TCT) and reconveyance of the property against the respondents, Aurelio and Luz Zaldivar.
 According to Remegia Feleciano, the 243-sq-m portion (subject lot) was originally leased from her by
Pio Dalman, Aurelio’s father-in-law, for P5.00 a month, later increased to P100.00 a month in 1960.
She further alleged that she was going to mortgage the subject lot to Ignacio Gil for P100.00, which,
however, did not push through because Gil took back the money without returning the receipt she had
signed as evidence of the supposed mortgage contract.
Thereafter, in 1974, Aurelio filed with the then Court of First Instance of Misamis Oriental a petition for
partial cancellation of TCT No. T-8502. It was allegedly made to appear therein that Aurelio and his
spouse Luz acquired the subject lot from Dalman who, in turn, purchased it from Gil. The petition was
granted and TCT No. T-17993 was issued in Aurelio’s name.
Remegia denied that she sold the subject lot either to Gil or Dalman.
She likewise impugned as falsified the joint affidavit of confirmation of sale that she and her uncle,
Narciso Labuntog, purportedly executed before a notary public, where Remegia appears to have
confirmed the sale of the subject property to Gil. She alleged that she never parted with the certificate
of title and that it was never lost. As proof that the sale of the subject lot never transpired, Remegia
pointed out that the transaction was not annotated on TCT No. T-8502.
In their answer, the spouses Zaldivar denied the material allegations in the complaint and raised the
affirmative defense that Aurelio is the absolute owner and possessor of the subject lot as evidenced by
TCT No. 17993 and Tax Declaration No. 26864 covering the same.
Aurelio claimed that he acquired the subject lot by purchase from Dalman who, in turn, bought the same
from Gil on April 4, 1951.
Gil allegedly purchased the subject lot from Remegia and this sale was allegedly conformed and ratified
by the latter and her uncle, Narciso Labuntog, before a notary public on December 3, 1965.
respondents had built their house on the subject lot and, despite knowledge thereof, Remegia did not
lift a finger to prevent it.
Remegia claimed that she was the registered owner of the land covered by TCT No. T-8502, but Aurelio
fraudulently obtained TCT No. T-17993 covering a portion of her land.

Remegia alleged that she never sold the land to anyone and that the sale was falsified.
After due trial, the RTC rendered judgment in favor of Remegia Feleciano. It declared that TCT No.
17993 in the name of Aurelio was null and void for having been obtained through misrepresentation,
fraud or evident bad faith by claiming in his affidavit that Remegia’s title (TCT No. T-8502) had been
lost, when in fact it still existed.

On appeal, the CA reversed the decision of the RTC and ruled in favor of the spouses Zaldivar. In holding
that Remegia sold to Gil a 243 sq m portion of the lot covered by TCT No. T-8502, the appellate court
gave credence to Exhibit "5," the deed of sale presented by the spouses Zaldivar to prove the
transaction. The CA likewise found that Gil thereafter sold the subject property to Dalman who took
actual possession thereof.
ISSUE:
W/N the CA erred in concluding that petitioner's claim of ownership over the subject lot was barred by
estoppel or laches. -YES

RULING:
As registered owners of the lots in question, the private respondents have a right to eject any person
illegally occupying their property. This right is imprescriptible. Even if it be supposed that they were
aware of the petitioner's occupation of the property, and regardless of the length of that possession,
the lawful owners have a right to demand the return of their property at any time as long as the
possession was unauthorized or merely tolerated, if at all. This right is never barred by laches.

Nonetheless, the Court is not unmindful of the fact that respondents had built their house on the subject
lot and, despite knowledge thereof, Remegia did not lift a finger to prevent it. Article 453 of the Civil
Code is applicable to their case:

ART. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the
land of another, but also on the part of the owner of such land, the rights of one and the other shall be
the same as though both had acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the act was done with his
knowledge and without opposition on his part.

Under the circumstances, respondents and Remegia are in mutual bad faith and, as such, would entitle
the former to the application of Article 448 of the Civil Code governing builders in good faith:

ART. 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 54629 and 548,30 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 a case, he shall
pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after
the proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement,
the court shall fix the terms thereof.

Following the above provision, 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.

Consequently, the petitioners are obliged to exercise either of the following options:

(1) to appropriate the improvements, including the house, built by the respondents on the subject lot by
paying the indemnity required by law, or

(2) sell the subject lot to the respondents.

Petitioners cannot refuse to exercise either option and compel respondents to remove their house from
the land. In case petitioners choose to exercise the second option, respondents are not obliged to
purchase the subject lot if its value is considerably more than the improvements thereon and in which
case, respondents must pay rent to petitioners. If they are unable to agree on the terms of the lease,
the court shall fix the terms thereof.

Sulo Sa Nayon, Inc. vs. Nayong Pilipino Foundation G.R. No. 170923 January 20, 2009

Facts

Respondent Nayong Pilipino FOundation leased a portion of the Nayong Pilipino Complex to petitioner
Sulo sa Nayon, Inc. for the construction and operation of a hotel building, to be known as the Philippine
Village Hotel.

Petitioners Sulo sa Nayon INC. sent respondent a letter notifying the latter of their intention to renew
the contract for another 25 years.

Accordingly, the parties executed a Voluntary Addendum to the Lease Agreement. Under the new
agreement, petitioner PVHI was bound to pay the monthly rental on a per square meter basis which
shall be subject to an increase of 20% at the end of every 3-year period.

Petitioners defaulted in the payment of their monthly rental. Hence respondent filed a complaint for
unlawful detainer before the MeTC. Petitioners were ordered to vacate the premises and pay rental
arrearages.

Respondent appealed to the CA which held that the RTC erroneously applied the rules on accession,
as found in Articles 448 and 546 of the Civil Code when it held that petitioners were builders in good
faith and, thus, have the right to indemnity.

judgment is hereby rendered in favor of Nayong Pilipino Foundation, and against the defendant
Philippine Village Hotel, Inc[.], and all persons claiming rights under it, ordering the latter to:
1. VACATE the subject premises and surrender possession thereof to plaintiff;
2. PAY plaintiff its rental arrearages in the sum of TWENTY SIX MILLION ONE HUNDRED EIGHTY
THREE THOUSAND TWO HUNDRED TWENTY FIVE PESOS AND 14/100 (P26,183,225.14) incurred
as of July 31, 2001;

Issue: WON the petitioners are builders in good faith. - NO

Ruling:

The Supreme Court upheld the ruling of the CA and cited the late Senator Arturo M. Tolentino,
explanation:

This article [Article 448] is manifestly intended to apply only to a case where one builds, plants, or sows
on land in which he believes himself to have a claim of title, and not to lands where the only interest of
the builder, planter or sower is that of a holder, such as a tenant.

In the case at bar, petitioners have no adverse claim or title to the land. In fact, as lessees, they
recognize that the respondent is the owner of the land. What petitioners insist is that because of the
improvements, which are of substantial value, that they have introduced on the leased premises with
the permission of respondent, they should be considered builders in good faith who have the right to
retain possession of the property until reimbursement by respondent.

The Supreme Court affirms the ruling of the CA that introduction of valuable improvements on the
leased premises does not give the petitioners the right of retention and reimbursement which rightfully
belongs to a builder in good faith. Otherwise, such a situation would allow the lessee to easily "improve"
the lessor out of its property. It reiterated the doctrine that a lessee is neither a builder in good faith nor
in bad faith that would call for the application of Articles 448 and 546 of the Civil Code.

Torbela vs. Spouses Rosario G.R. No. 140528 December 07, 2011
FACTS:
The controversy began with a parcel of land known as Lot 356-A. It was originally part of a larger parcel
of land, known as Lot 356 registered in the name of Valeriano.
Under unexplained circumstances, Valeriano gave Lot 356-A to his sister Marta who was then married
to Eugenio Torbela (spouses Torbela). Upon the deaths of the spouses Torbela, Lot 356-A was
adjudicated in equal shares among their children, the Torbela siblings.

On Dec. 12, 1965, the Torbela siblings executed a Deed of Absolute Quitclaim (It merely states that
the seller transfers any ownership interest to the buyer.) over Lot 356-A in favor of Dr. Rosario. Four
days later, Valeriano's name was partially cancelled as to Lot 356-A and TCT 52751 was issued in Dr.
Rosario's name covering the said property.

Another Deed of Absolute Quitclaim was subsequently executed on Dec. 28, 1964, this time by Dr.
Rosario, acknowledging that he only borrowed Lot 356-A from the Torbela siblings and was already
returning the same to the latter.
The Deed was notarized but was not immediately annotated on TCT 52751. Following the issuance of
the TCT, Dr. Rosario obtained a loan from DBP secured by a mortgage constituted on Lot 356-A. The
mortgage was annotated on the TCT. The proceeds of the loan were used for the construction of
improvements on the said lot.

On May 17, 1967, the Torbela siblings had Dr. Rosario's Deed of Absolute Quitclaim annotated on TCT
52751 as Entry No. 274471-274472. Eventually, the construction of a four-storey building on Lot 356-
A was completed. The building was initially used as a hospital, but was later converted to a commercial
building.

Dr. Rosario was able to fully pay his loan from DBP. Consequently, the mortgage was cancelled in
favor of the former and ratified before a notary public. In the meantime, Dr. Rosario acquired another
loan from the PNB. The loan was secured by mortgages on three properties, one of which was Lot 356-
A. The amended loan agreement and mortgage on the said lot was annotated on March 6, 1981.

On Dec. 8, 1981, the spouses Rosario acquired a third loan from Banco Filipino. To secure said loan,
the spouses Rosario again constituted mortgages on the same three properties aforementioned, one
of which was Lot 356-A. Because Banco Filipino paid the balance of Dr. Rosario's loan from PNB, the
mortgage on Lot 356-A in favor of PNB was cancelled.

On Feb. 13, 1986, the Torbelas filed before the RTC a Complaint for recovery of ownership and
possession of Lot 356-A, against the spouses Rosario, which was docketed as Civil Case U-4359.

The spouses Rosario afterwards failed to pay their loan from Banco Filipino. Consequently, the latter
extrajudicially foreclosed the mortgages on the three properties. The Certificate of Sale in favor of
Banco Filipino was annotated on TCT 52751.

The Torbela siblings tried to redeem Lot 356-A from Banco Filipino, but their efforts were unsuccessful.
Upon the expiration of the one-year redemption period, the Certificate of Final Sale covering all three
foreclosed properties was executed.

The Torbelas thereafter filed before the RTC a Complaint for the annulment of the Certificate of Final
Sale against Banco Filipino. The case was docketed as Civil Case U-4733. Meanwhile, Banco Filipino
filed before the RTC a Petition for the issuance of a writ of possession, docketed as Pet. Case U-822.
The RTC jointly heard the three cases and declared that the mortgage over Lot 356-A covered by TCT
52751 was valid and declared Banco Filipino as the owner of the said lot.
The Court of Appeals, in a Resolution dated October 22, 1999, denied the separate Motions for
44

Reconsideration of the Torbela siblings and Dr. Rosario.

The Torbelas and Dr. Rosario appealed before the CA but likewise met the same fate.
ISSUE:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RESPONDENT
BANCO FILIPINO SAVINGS AND MORTGAGE BANK IS A MORTGAGEE IN GOOD FAITH.

The rules on accession shall govern the improvements on Lot No. 356-A and the rents thereof.
When it comes to the improvements on Lot No. 356-A, both the Torbela siblings (as landowners) and
Dr. Rosario (as builder) are deemed in bad faith.
The Torbela siblings were aware of the construction of a building by Dr. Rosario on Lot No. 356-A,
while Dr. Rosario proceeded with the said construction despite his knowledge that Lot No. 356-A
belonged to the Torbela siblings. This is the case contemplated under Article 453 of the Civil Code,
which reads:
ART. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the
land of another, but also on the part of the owner of such land, the rights of one and the other shall be
the same as though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner whenever the act was done with his
knowledge and without opposition on his part. (Emphasis supplied.)
When both the landowner and the builder are in good faith, the following rules govern:
ART. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall
have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity
provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy
the land if 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.
ART. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good
faith may retain the thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right of retention,
the person who has defeated him in the possession having the option of refunding the amount of the
expenses or of paying the increase in value which the thing may have acquired by reason thereof.
ART. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the possessor in good
faith; but he may remove the ornaments with which he has embellished the principal thing if it suffers
no injury thereby, and if his successor in the possession does not prefer to refund the amount
expended.
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. Where, however, the planter, builder, or sower has acted in
good faith, a conflict of rights arises between the owners and it becomes necessary to protect the owner
of the improvements without causing injustice to the owner of the land. In view of the impracticability of
creating what Manresa calls a state of "forced co-ownership," the law has provided a just and equitable
solution by giving the owner of the land the option to acquire the improvements after payment of the
proper indemnity or to oblige the builder or planter to pay for the land and the sower to pay the proper
rent. It is the owner of the land who is allowed to exercise the option because his right is older and
because, by the principle of accession, he is entitled to the ownership of the accessory thing. 85

The landowner has to make a choice between appropriating the building by paying the proper indemnity
or obliging the builder to pay the price of the land. But even as the option lies with the landowner, the
grant to him, nevertheless, is preclusive. He must choose one. He cannot, for instance, compel the
owner of the building to remove the building from the land without first exercising either option. It is only
if the owner chooses to sell his land, and the builder or planter fails to purchase it where its value is not
more than the value of the improvements, that the owner may remove the improvements from the land.
The owner is entitled to such remotion only when, after having chosen to sell his land, the other party
fails to pay for the same.86

This case then must be remanded to the RTC for the determination of matters necessary for the proper
application of Article 448, in relation to Article 546, of the Civil Code. Such matters include the option
that the Torbela siblings will choose; the amount of indemnity that they will pay if they decide to
appropriate the improvements on Lot No. 356-A; the value of Lot No. 356-A if they prefer to sell it to Dr.
Rosario; or the reasonable rent if they opt to sell Lot No. 356-A to Dr. Rosario but the value of the land
is considerably more than the improvements.
The determination made by the Court of Appeals in its Decision dated June 29, 1999 that the current
value of Lot No. 356-A is ₱1,200,000.00 is not supported by any evidence on record.
Should the Torbela siblings choose to appropriate the improvements on Lot No. 356-A, the following
ruling of the Court in Pecson v. Court of Appeals is relevant in the determination of the amount of
87

indemnity under Article 546 of the Civil Code:

Article 546 does not specifically state how the value of the useful improvements should be determined.
The respondent court and the private respondents espouse the belief that the cost of construction of
the apartment building in 1965, and not its current market value, is sufficient reimbursement for
necessary and useful improvements made by the petitioner. This position is, however, not in
consonance with previous rulings of this Court in similar cases. In Javier vs. Concepcion, Jr., this Court
pegged the value of the useful improvements consisting of various fruits, bamboos, a house and
camarin made of strong material based on the market value of the said improvements.
The objective of Article 546 of the Civil Code is to administer justice between the parties involved. In
this regard, this Court had long ago stated in Rivera vs. Roman Catholic Archbishop of Manila that the
said provision was formulated in trying to adjust the rights of the owner and possessor in good faith of
a piece of land, to administer complete justice to both of them in such a way as neither one nor the
other may enrich himself of that which does not belong to him. Guided by this precept, it is therefore
the current market value of the improvements which should be made the basis of reimbursement. A
contrary ruling would unjustly enrich the private respondents who would otherwise be allowed to acquire
a highly valued income-yielding four-unit apartment building for a measly amount. Consequently, the
parties should therefore be allowed to adduce evidence on the present market value of the apartment
building upon which the trial court should base its finding as to the amount of reimbursement to be paid
by the landowner.

Still following the rules of accession, civil fruits, such as rents, belong to the owner of the building.
89

Thus, Dr. Rosario has a right to the rents of the improvements on Lot No. 356-A and is under no
obligation to render an accounting of the same to anyone. In fact, it is the Torbela siblings who are
required to account for the rents they had collected from the lessees of the commercial building and
turn over any balance to Dr. Rosario. Dr. Rosario’s right to the rents of the improvements on Lot No.
356-A shall continue until the Torbela siblings have chosen their option under Article 448 of the Civil
Code. And in case the Torbela siblings decide to appropriate the improvements, Dr. Rosario shall have
the right to retain said improvements, as well as the rents thereof, until the indemnity for the same has
been paid.

Communities Cagayan, Inc. vs. SPS Arsenio NANOL G.R. No. 176791 November 14, 2012

Facts:
In 1994, respondent-spouses Arsenio and Angeles Nanol entered into a Contract to Sell with petitioner
Communities Cagayan Inc., whereby the latter agreed to sell to respondent-spouses a house and Lots
17 and 19.

Respondents, however, did not avail of petitioner's in-house financing and instead opted for a loan from
Capitol Development Bank, petitioner's sister company, using the property as collateral.

To facilitate the loan, a simulated sale over the property was executed by petitioner in favor of
respondent- spouses resulting to the transfer in the names of respondent-spouses of the subject
properties.

The loan, however, did not materialize due to the banks collapse and closure before it could release
the loan. Thus, on 1997, respondent-spouses entered into another Contract to Sell with petitioner over
the same property, availing of the petitioner's in- house financing, undertaking to pay the loan over
fours years from 1997 to 2001.

Sometime in 200, respondent Arsenio demolished the original house and constructed a three-story
house allegedly valuing P3.5 million, more or less.

However, following his death, herein respondent Angeles did not anymore pay for the monthly
amortizations. Thus, on September 2003, petitioner sent respondent-spouses a notarized Notice of
Delinquency and Cancellation of Contract to Sell due to the latter's failure to pay.

On December 2003, petitioner filed before the MTC of CdO an action for unlawful detainer which did
not prosper since the titles of the properties were already registered under the names of respondent
spouses.

The petitioner then filed before the RTC a complaint for Cancellation of Title, Recovery of Possession,
Reconveyance and Damages against respondent-spouses. The trial court granted petitioner's
complaint but ordered petitioners to pay the total of spouses' monthly installments and the value of the
new house minus the cost of the original house.

Petitioner claims that there is no legal basis for the RTC to require petitioner to reimburse the cost of
the new house because respondent-spouses were in bad faith when they renovated and improved the
house, which was not yet their own.

Hence, this appeal.

ISSUE: WON RESPONDENT SPOUSES ARE ENTITILED TO REIMBURSEMENT OF THE

IMPROVEMENTS MADE ON THE PROPERTY.
Ruling:

Yes, respondent-spouses are entitled to reimbursement of the improvements made on the property.
Article 448 of the New Civil Code provides that "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 Article 546 and 548, or to oblige the one who
built or planted to pay the price of the land,

and the one who sowed, the proper rent.

However, the builder or planter cannot be obliged to buy the land if its value is considerably more than
that of the building or trees. In such case, he shall pay the reasonable rent, if the owner of the land
does not choose to appropriate the building or trees after proper indemnity. The parties shall agree
upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

This provision applies when the builder believes that he is the owner of the land or that by some title,
he has the right to build thereon, or that, at least, he has a claim of title thereto. However, in the case
of Spouses Macasaet v. Spouses Macasaet, the Court ruled that even if the petitioners knew that the
ownership of the land belonged to the parents, they are nevertheless covered by article 448 as builders
in good faith as the respondents fully consented to the improvements introduced by petitioners.

The ruling in Spouses Macasaet v. Spouses Macasaet is applicable in this case. First, good faith is
presumed on the part of the respondent-spouses. Second, petitioner failed to rebut this presumption.
Third, no evidence was presented to show that petitioner opposed or objected to the improvements
introduced by the respondent-spouses. Consequently, it can be validly presumed that petitioner
consented to the improvements being constructed. This presumption is bolstered by the fact that as the
subdivision developer, petitioner must have given the respondent-spouses permits to commence and
undertake the construction.

Under Article 453 of the Civil Code, it is understood that there is bad faith on the part of the landowner
whenever the act was done with his knowledge and without opposition on his part.

ISSUE: WON PETITIONER IS REQUIRED TO PAY FOR THE IMPROVEMENTS INTRODUCED BY

THE RESPONDENTS ON THE LAND.

Ruling:

Petitioner has the option to reimburse the builder or to sell the land to the same. Jurisprudence teaches
that the seller has two options under Article 448: (1) he may appropriate the improvements for himself
after reimbursing the buyer (the builder in good faith) the necessary and useful expenses under Article
546 and 548 of the Civil Code; or (2) he may sell the land to the buyer, unless its value is considerably
more than that of the improvements, in which case, the buyer shall pay the reasonable rent. The rule
that the choice under Article 448 of the Civil Code belongs to the owner of the land is in accord with the
principle of accession: that the accessory follows the principal and not the other way around. Even as
the option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot
refuse to exercise either option and compel instead the owner of the building to remove it from the land.

Spouses Aquino vs. Spouses Aguilar G.R. No. 182754 June 29, 2015

Doctrine: By law, 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. The presence of evidence that petitioners prohibited the
respondents from building their own structure on a portion of the property negates good faith on the
part on the latter. The fact that the petitioners did not thereafter remind respondents of this is of no
moment, what is crucial is that the petitioners left the respondents clear instructions not to build on the
land.

Facts:
Spouses Crispin and Teresa Aquino (petitioners) are the owners of a house and lot. Since 1981,
this property has been occupied by Teresa's sister, Josefina Aguilar and her family (respondents).
Respondents stayed on the property with the consent and approval of petitioners, who were then
residing in the United States.
While respondents were in possession of the property, the house previously constructed therein was
demolished, and a three-storey building built in its place. Respondents occupied half of the third floor
of this new building for the next 20 years without payment of rental.

Petitioners sent a letter to respondents informing them that an immediate family member needed to
use the premises and demanding the surrender of the property within 10 days from notice.

Respondents failed to heed this demand, prompting petitioners to file a Complaint for ejectment against
them before the office of the barangay captain of Guadalupe Viejo. The parties attempted to reach an
amicable settlement in accordance with Section 412 of the Local Government Code, but these efforts
proved unsuccessful.

Petitioners filed a Complaint with the MeTC of Makati City praying that respondents be ordered to (a)
vacate the portion of the building they were then occupying; and (b) pay petitioners a reasonable
amount for the use and enjoyment of the premises from the time the formal demand to vacate was
made.

In their Answer with Counterclaim, respondents claimed that they had contributed to the improvement
of the property and the construction of the building, both in terms of money and
management/supervision services.

Petitioners purportedly agreed to let them contribute to the costs of construction in exchange for the
exclusive use of a portion of the building. Since they were allegedly co-owners of the building and
builders in good faith, respondents claimed that they had the right to be compensated for the current
value of their contribution. Accordingly, they prayed for the dismissal of the Complaint and the award
of P5 million as compensation for their contributions to the construction of the building, as well as moral
damages, attorney's fees and costs of litigation.

Issue:
Whether respondents are builders in good faith?

Held:
No, the Spouses Aguilar cannot be considered as builders in good faith on account of their
admission that the subject lot belonged to the Spouses Aquino when they constructed the building.

At the onset, petitioners were aware of a flaw in their title and a limit to their right to possess the
property. By law, 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.

An examination of a letter sent by petitioners to Josefina Aguila abundantly shows that respondent's
occupancy of the property in question is by tolerance of the petitioners. Said letter expressly states that
the respondents are advised not to put up a shop, as the petitioners planned on disposing the property
for profit after a period of three or four years, thereby placing the respondents on notice that their
possession of the said property is temporary in nature and by mere generosity of the petitioners. The
letter likewise advised them to apply for a housing project so that by the time the property in question
is sold, they have a place to transfer to.

Respondents' contention that pursuant to Article 453 of the Civil Code, they should be considered
builders in good faith even if they have acted in bad faith, since their act of introducing improvements
to one-half of the third floor of the three storey building was with knowledge and without opposition on
the part of the petitioners, cannot be sustained, principally on the ground that as stated, they were
already forewarned as early not to introduce any improvements as the property is slated to be sold as
it was only bought for investment purposes.

The fact that the petitioners did not thereafter remind them of this is of no moment, as this letter was
not likewise withdrawn by a subsequent one or modified by the petitioners. That this sale did not
materialize is irrelevant. What is crucial is that petitioners left respondents clear instructions not to build
on the land.

In view of the foregoing, it was held that petitioners, as the owners of the land, have the right to
appropriate what has been built on the property, without any obligation to pay indemnity therefor, and
that respondents have no right to a refund of any improvement built therein, pursuant to Articles 449
and 450 of the Civil Code.
However, pursuant to Article 452 of the Civil Code, a builder in bad faith is entitled to recoup the
necessary expenses incurred for the preservation of the land. However, being builders in bad faith, they
do not have the right of retention over the premises. While the evidence presented does not establish
the amount of necessary expenses incurred by respondents during their stay in the property, the Court
noted that even petitioners do not deny that such expenses were incurred. Accordingly, the case was
remanded to the lower court for the determination of the necessary expenses of preservation of the
land, if any, incurred by respondents which expenses shall be reimbursed to them by petitioners.

Bliss Development Corp. vs. Diaz G.R. No. 213233 August 05, 2015

FACTS:

Petitioner executed a Deed of Sale over its property in favor of Sps. Melgazo, both of whom are now
deceased.

After some time, Rodolfo Nacua sent a letter to BDC, saying that Sps. Melgazo transferred to him their
rights over the property and expressed willingness to pay their outstanding obligations.

Before the property was fully paid, however, Nacua sold his rights to Olivia Garcia (Garcia), through a
Deed of Transfer of Rights. Later, Garcia transferred her rights to Elizabeth Reyes (Reyes). Reyes then
transferred her rights to Domingo Tapay (Tapay), who then later sold his rights to herein respondent
Montano Diaz (Diaz) for Six Hundred Thousand Pesos (P600,000.00)

Diaz, by virtue of the several deeds of transfer of rights to Tapay, paid BDC the amortizations due on
the property. BDC thereafter issued a permit to occupy the property in favor of Diaz.
Diaz then introduced improvements on the property. Later on, BDC executed a Contract to Sell in favor
of Diaz.

Edgar Arreza (Arreza) was claiming that the heirs of Sps. Melgazo sold to him the rights over the
property. BDC then placed Diaz’s account in “inactive status.” To resolve the conflicting claims of
[4]

Arreza and Diaz, BDC filed a complaint for Interpleader against them, before the RTC,

RTC ruled that the signatures of Sps. Melgazo transferring their rights to Nacua were mere forgeries.

Thus, it ruled that Arreza had a better right over the property. Diaz filed the present complaint for sum
of money against BDC and argued that BDC and Tapay's representations led him to believe that he
had a good title over the property, but due to the court's ruling in the interpleader case, he was
constrained to transfer the property to Arreza.

RTC dismissed the complaint but was reversed by CA and anchored its ruling on its finding that Diaz
is both a buyer in good faith and a builder in good faith.

Issue:

1.WHETHER THE CA ERRED IN DECLARING BDC IN BAD FAITH

2.Whether or Not Respondent is a purchaser for value and in good faith
3. WHETHER THE CA ERRED IN DECLARING THAT THERE WAS UNJUST ENRICHMENT ON THE
PART OF BDC
4. WHETHER DIAZ CAN STILL CLAIM REIMBURSEMENT for the improvements introduced by him
W/N Respondent Diaz is a purchaser and a builder in good faith

HELD:

1. No, Petitioner BDC acted in bad faith in dealing with respondent Diaz. As the CA correctly noted, it
is undisputed that Bliss knew about Arreza's claim in 1991. It even received amortization payments
from Arreza. Yet, Bliss acknowledged the transfer to Diaz and received the monthly amortizations paid
by Diaz. Also, Bliss is aware that should Arreza pursue his claim in court, Diaz may be evicted from the
property. This uncontroverted sequence of events led the CA to correctly rule that BDC, indeed, acted
in bad faith. When Diaz came forward and presented the deeds of transfer, including the deed of
transfer executed by Tapay in his favor, BDC was already well aware of a conflicting claim by Arreza.
Instead of waiting for the resolution on the matter, BDC immediately accepted the deed of transfer
presented by Diaz, as well as the amortizations he paid over the property. It was only in 1994 that BDC
filed the Interpleader case to resolve the conflicting case. This is nothing short of evident bad faith.

2. No. For one to be considered a purchaser in good faith, the following requisites must concur: (1) that
the purchaser buys the property of another without notice that some other person has a right to or
interest in such property; and (2) that the purchaser pays a full and fair price for the property at the time
of such purchase or before he or she has notice of the claim of another. We find that in the case at bar,
the first element is lacking. While it is true that the subject lot is registered lot, the doctrine of not going
beyond the face of the title does not apply in the case here, because what was subjected to a series of
sales was not the lot itself but the right to purchase the lot from BDC. The title remained in [BDC's]
name when Tapay offered to transfer his rights over the property to Diaz. Notably, the several transfers
themselves did not purport to be Deeds of Absolute Sale, but merely deeds of assignment of rights.
The subject of those deeds of assignment was never the real right over the subject property, but merely
the personal right to purchase it, if it were, the sale would have been void because Tapay never had
ownership over the subject property. Diaz failed to diligently inquire into the title of his predecessor
before entering into the contract of sale. As such, he cannot be considered a buyer in good faith. Had
he discharged this duty diligently, he would have found out that Nacua's right was without basis,
because it was founded on a forged deed. For his failure to inquire diligently and trace the source of
the right to purchase the property, Diaz cannot claim to be a purchaser in good faith and for value.

3. No. Petitioner BDC is liable to return the amortizations paid by respondent Diaz, under the doctrine
of unjust enrichment, Notwithstanding the fact that Diaz is not an innocent purchaser in good faith and
for value. Under Article 22 of the Civil Code, 21 there is unjust enrichment when (1) a person is unjustly
benefited and (2) such benefit is derived at the expense of or with damages to another. Allowing BDC
to keep the amortizations paid by Diaz is tantamount to unjust enrichment. It would result in BDC
receiving amortizations twice the amount it should have received, that is, the amortizations paid by Diaz
and Arreza. As a direct result of the final and executory ruling that Arreza is the rightful buyer of the
subject property, the buyer-seller relationship between Diaz and BDC is rendered null and void.

Consequently, there remains no valid consideration whatsoever for the payments made by Diaz to
BDC.

Respondent Diaz is not a purchaser

for value and in good faith

A careful review of the records of this case reveals that Diaz, in fact, failed to diligently inquire into the
title of his predecessor before entering into the contract of sale. As such, he cannot be considered a
buyer in good faith. There is no issue that despite the several transfers of rights from Nacua to Garcia
to Reyes to Tapay to Diaz, title over the property remained in BDC’s name.When Diaz transacted with
Tapay, it was also clear that what was being transferred was merely rights to purchase the property,
and not title over the lot itself; if it were, the sale would have been void because Tapay never had
ownership over the subject property. As the buyer in such a transaction, it was incumbent upon Diaz
not only to inquire as to the right of Tapay to transfer his rights, but also to trace the source of that right
to purchase the property. Had he discharged this duty diligently, he would have found out that Nacua’s
right was without basis, because it was founded on a forged deed. For his failure to inquire diligently
and trace the source of the right to purchase the property, Diaz cannot claim to be a purchaser in good
faith and for value.

4 Since, both parties being in bad faith, BDC is liable to Diaz for the value of the improvements he
introduced on the subject property. Art. 453 of the Civil Code commands that the rights of one and the
other shall be the same as though both had acted in good faith. Under Article 448, the landowner is
given the option, either to appropriate the improvement as his own upon payment of the proper amount
of indemnity or to sell the land to the possessor in good faith. Relatedly Article 546 provides that a
builder in good faith is entitled to full reimbursement for all the necessary and useful expenses incurred.
In this case, however, the option of selling the land to the builder in good faith is no longer viable in light
of the ruling in the interpleader case. Hence, there is only one thing left for [BDC] to do: indemnify Diaz
for the improvements introduced on the property.

Department of Education vs. Casibang G.R. No. 192268 January 27, 2016

A legal dispute arises between the Department of Education and the respondents over the possession
of a property, with the Supreme Court ruling in favor of the respondents and ordering compensation
based on the principle of tolerance and the provisions of the Civil Code.

FACTS:
In 1965, Juan Cepeda allowed the construction and operation of a school on a portion of his property
upon the request of the then Mayor Justo Cesar Caronan.

The school, now known as Solana North Central School, has been operating under the control and
supervision of the Department of Education (DepEd).
The respondents, who are descendants of Juan Cepeda, continued to tolerate the use and possession
of the property by the school even after Cepeda's death in 1983.

In 2000, the respondents entered and occupied a portion of the property.

The school officials demanded that the respondents vacate the property, but they refused and asserted
Cepeda's ownership of the lot.

The DepEd filed a complaint for forcible entry and damages against the respondents.
The Municipal Circuit Trial Court (MCTC) ruled in favor of the DepEd, which was affirmed by the
Regional Trial Court (RTC).

The respondents filed an action for recovery of possession and/or sum of money against the DepEd.

They claimed that they have been deprived of the use and enjoyment of the portion of the land occupied
by the school.

They argued that they are entitled to just compensation and reasonable rent for the use of the property.

The DepEd alleged that it owned the property because it was purchased by civic-minded residents of
Solana, Cagayan from Cepeda.

The respondents presented evidence such as the OCT, tax declarations, tax receipts, technical
description of the lot, and a certification from the Municipal Trial Court declaring that Lot 115 was
adjudicated to Cepeda.
The DepEd failed to present any evidence to support its claim of ownership or transfer of the property.

(RTC):
The RTC ruled in favor of the respondents, declaring them as the owners of the property.
The RTC ordered the reconveyance of the portion occupied by the school.

(CA)
The CA affirmed the decision of the RTC.

Petition for Review on Certiorari before the Supreme Court

The DepEd filed a petition for review on certiorari before the Supreme Court.
The DepEd argued that the respondents' right to recover the property is barred by prescription and/or
laches.

ISSUE:
1) Whether respondents have the right to recover possession of the property - YES
2) Whether their right is barred by prescription and/or laches - NO
Ruling:
Supreme Court ruled in favor of respondents and affirmed lower court's decision

1) Torrens title of respondents must prevail rather than the DepEd's unsubstantiated self-serving
claim that it acquired the property by virtue of a sale.
It is undisputed that the subject property is covered by OCT No. O-627, registered in the name of the
Juan Cepeda. A fundamental principle in land registration under the Torrens system is that a certificate
33

of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the
person whose name appears therein. Thus, the certificate of title becomes the best proof of ownership
34

of a parcel of land.

Unfortunately, the DepEd failed to present any evidence to support its claim that the disputed land was
indeed purchased by the residents. By the DepEd's admission, it was the fact that the then Mayor of
Solana, Cagayan convinced Cepeda to allow the school to occupy the property for its school site that
made it believe that the ownership of the property was already transferred to it. We are not swayed by
the DepEd's arguments.

Court based ruling on principle of tolerance and provisions of Article 448 of the Civil Code

Thus, the two options available to the respondents as landowners are: (a) they may appropriate the
improvements, after payment of indemnity representing the value of the improvements introduced and
the necessary and useful expenses defrayed on the subject lots; or (b) they may oblige the DepEd to
pay the price of the land. However, it is also provided under Article 448 that the builder cannot be
obliged to buy the land if its value is considerably more than that of the improvements and buildings. If
that is the case, the DepEd is not duty-bound to pay the price of the land should the value of the same
be considerably higher than the value of the improvement introduced by the DepEd on the subject
property. In which case, the law provides that the parties shall agree on the terms of the lease and, in
case of disagreement, the court shall fix the terms thereof.

2)Laches does not apply in this case. As registered owners of the lots in question, the respondents
have a right to eject any person illegally occupying their property. This right is imprescriptible. Even if it
be supposed that they were aware of the petitioner's occupation of the property, and regardless of the
length of that possession, the lawful owners have a right to demand the return of their property at any
time as long as the possession was unauthorized or merely tolerated, if at all. This right is never barred
by laches.

The Court explained that laches is the failure or neglect for an unreasonable and unexplained length of
time to assert a right.
Laches is an equitable doctrine that cannot work to defeat justice or perpetrate fraud and injustice.
The DepEd failed to prove that the respondents' possession of the property was by adverse claim or
that they had lost their right over the property through laches.
The Supreme Court ruled that the DepEd's possession of the property was by mere tolerance or
permission of the respondents.

The DepEd was bound by an implied promise to vacate the property upon demand. DepEd, as builder
in good faith, may be obliged to pay price of land or reasonable rent.

The Court cited Article 448 of the Civil Code, which allows the owner of the land to appropriate the
improvements introduced by the builder in good faith or to oblige the builder to pay the price of the land.
Since the occupation of the property by the DepEd was by mere tolerance, the respondents had the
option to oblige the DepEd to pay the price of the land or to require the DepEd to pay reasonable rent.

The Supreme Court remanded the case to the trial court to determine the value of the property.
If the value of the property is less than the value of the buildings and improvements, the DepEd is
ordered to pay that amount.

If the value of the property is greater, the DepEd is ordered to pay reasonable rent.
In case of disagreement, the trial court shall fix the amount of reasonable rent.

Padilla, Jr. vs. Malicsi G.R. No. 201354 September 21, 2016

FACTS:

Spouses Padilla, the petitioners, bought a parcel of land with an area of 150 square meters and had an
assessed value of more than Php 20,000.00 in Magsaysay Norte, Cabanatuan City in 1984.

Sometime in 1998, Spouses Padilla discovered that Leopoldo Malicsi, Lito Casino, and Agrifino Guanes
(Malicsi, et al.), the respondents, constructed houses on their lot.
Spouses Padilla made repeated verbal and written demands for Malicsi, et al. to vacate the premises
and pay a monthly rental of P2,000.00, but Malicsi, et al. refused to comply with the former's demands.
So, the matter was referred to the Katarungang Pambarangay. However, no settlement among the
parties happened.

On August 6, 2007, Spouses Padilla filed a complaint for recovery of possession against Malicsi, et al.,
along with three (3) others: Larry Marcelo, Diosdado dela Cruz, and Rolando Pascua.

In the Answer with Compulsory Counterclaim of Malicsi, et al., they alleged that they believed in all
honesty and good faith that the lot belonged to Toribia Vda. De Mossessgeld for she agreed that she
would sell them the areas occupied by their houses, provided that pending full payment, they would
pay her P40.00 per month as rent.

Between 1980 and 1983, the respondents constructed their respective houses on the lot in the belief
that they would eventually own the areas they were occupying. Malicsi and Casino even introduced
improvements to the houses they had built.

Spouses Padilla, exercising their option to sell the land to Malicsi, et al. under Article 448 of the Civil
Code in the amount of P5,000.00 per square meter, filed a Motion and Manifestation with Offer to Sell
which was declined by the respondents.
The Regional Trial Court ruled that Malicsi, et al. cannot be considered as builders in good faith. They
ordered the latter to vacate the premises, surrender the possession of the land to the petitioners and
pay jointly and severally the attomey's fees.

Malicsi, et al. appealed to the Court of Appeals which reversed and set aside the trial court's decision.
Then Spouses Padilla elevated the case to the Supreme Court.

ISSUE:
Whether or not Malicsi et al. are builders in good faith.

RULING:

No, Malicsi et al. are not builders in good faith. A builder in good faith is a builder who was not aware
of a defect or flaw in his or her title when he or she introduced improvements on a lot that turns out to
be owned by another.

In this case, the respondents assert that they believed De Mossessgeld when she told them that the
lot belonged to her. Yet, the records show that De Mossessgeld was a complete stranger to them. The
lack of blood relation should have been enough to put respondents on guard and convince them not to
rely on her claim of ownership.

If they had looked into the ownership of the lot, they would have easily discovered that it was titled to
petitioner Pablo M. Padilla, Jr.'s mother as early as 1963.

Moreover, the burden of proving the status of a purchaser in good faith lies on Malicsi et al. since they
are the ones who are asserting that status. It is not enough to invoke the ordinary presumption of good
faith because everyone is presumed to act in good faith. The respondents, as the party asserting the
status of builder in good faith, must substantiate their claim through preponderance of evidence.

However, aside from this naked and self-serving testimony, they failed to present any evidence to
bolster their claim and to adduce evidence that they entered into an agreement to sell with De
Mossessgeld, or that they paid her P40.00 per month as rent, pending full payment of the areas they
were occupying. Aside from that, respondents neither presented De Mossessgeld herself nor submitted
proof on which she might have based her purported ownership of the lot.

If De Mossessgeld proved elusive, respondents could then have presented statements from
disinterested third parties who could testify that it was so well-known in the community that De
Mossessgeld owned the lot that they had to believe her claim of ownership.

Respondents also failed to prove that they exercised the necessary diligence required by their situation.
They did not examine the tax declarations or the title to the property before they built on it. Failing to
substantiate their claim, respondents cannot be considered as builders in good faith.

Therefore, the benefits and rights provided under Article 448 of the Civil Code, which gives a builder in
good faith the right to compel the landowner to choose either to appropriate the building by paying the
indemnity required by law, or to sell the land to the builder, do not apply.

As builders in bad faith, respondents have no right to recover their expenses over the improvements
they have introduced to petitioners' lot under Article 449 of the Civil Code and are also not entitled to
recoup the necessary expenses incurred for the preservation of the land sine they neither alleged nor
presented evidence to show that they introduced improvements for the preservation of the land.
Therefore, petitioners as landowners became the owners of the improvements on the lot, including the
residential buildings constructed by respondents, if they chose to appropriate the accessions. However,
they could instead choose the demolition of the improvements at respondents' expense or compel
respondents to pay the price of the land under Article 450 of the Civil Code.

Considering that petitioners pray for the reinstatement of the Regional Trial Court Decision ordering
respondents to vacate the lot and surrender its possession to them, petitioners are deemed to have
chosen to appropriate the improvements built on their lot without any obligation to pay indemnity to
respondents.

Delos Santos vs. Abejon G.R. No. 215820 March 20, 2017

FACTS:
Abejon filed a Complaint for Cancellation of Title with collection of sum of money against Delos Santos
before the RTC.

The complaint alleged that Erlinda and her late husband Pedro Delos Santos borrowed money from
the Teresita Abejon, as evidenced by a Promissory Note.

As security for the loan, Erlinda and Pedro mortgaged their property, covered by a Transfer Certificate
of Title which mortgage was annotated on the title.

After Pedro died, Erlinda ended up being unable to pay the loan, and as such, agreed to sell the subject
land to Teresita. They executed a Deed of Sale and a Release of Mortgage, and eventually issued in
the name of "Teresita, Abejon."

Thereafter, Abejon constructed a three (3)-storey building worth ₱2,000,000.00 on the subject land.
Despite the foregoing, Erlinda ang her daughters refused to acknowledge the sale, pointing out that
since Pedro died in 1989, his signature in the Deed of Sale executed in 1992 was definitely forged

In defense, petitioners denied any participation relative to the spurious Deed of Sale, and instead,
maintained that it was Teresita who fabricated the same and caused its registration before the Register
of Deeds of Makati City.

Delos Santos asserted that Erlinda and Pedro never sold the subject land to Teresita, and that they did
not receive any demand for the payment, representing the loan, representing the construction cost of
the building.

Finally, they claimed that the improvements introduced by Teresita on the subject land were all
voluntary on her part.

The RTC ruled that Abejon should be reimbursed for the amount of the loan, as well as the expenses
incurred for the construction of the three (3)-storey building in view of petitioners' categorical admission
of their indebtedness to her, as well as the construction of the building from which they derived benefit
being the actual occupants of the property.

The CA affirmed the ruling of the RTC

that since petitioners admitted their indebtedness to Teresita during the pre-trial proceedings,
respondents should be allowed to recover the amount representing the same, including the appropriate
interest.

ISSUE: WON the CA correctly held that Delos Santos should be held liable to respondents?

RULING:

Petitioners knew of the defect in the execution of the Deed of Sale from the start, but nonetheless, still
acquiesced to the construction of the three (3)- storey building thereon.

Hence, they should likewise be considered as landowners in bad faith.

In this relation, Article 453 of the Civil Code provides that where both the landowner and the builder,
planter, or sower acted in bad faith, they shall be treated as if both of them were in good faith, viz.:

Article 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the
land of another, but also on the part of the owner of such land, the rights of one and the other shall be
the same as though both had acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the act was done with his
knowledge and without opposition on his part.

Whenever both the landowner and the builder/planter/sower are in good faith (or in bad faith, pursuant
to the afore-cited provision), the landowner is given two (2) options under Article 448 of the Civil Code,
namely: (a) he may appropriate the improvements for himself after reimbursing the buyer (the builder
in good faith) the necessary and useful expenses under Articles 546 and 548 of the Civil Code; or (b)
he may sell the land to the buyer, unless its value is considerably more than that of the improvements,
in which case, the buyer shall pay reasonable rent.
Espinoza vs. Mayandoc G.R. No. 211170 July 03, 2017

This is a Complaint for useful expenses under Articles 448 and 546 of the New Civil Code of the
Philippines.

FACTS:
A parcel of land originally owned by Eusebio Espinoza was divided among his heirs, Pastora, Domingo
and Pablo, after his death.

Pastora executed a Deed of Sale conveying her share to Leopoldo Espinoza.

On that same date, a fictitious deed of sale was executed by Domingo Espinoza, conveying the 3/4
share in favor of Erlinda Cayabyab.

Later on, a fictitious deed of sale was executed by Nemesio Cayabyab, Candida Cruz, Sps. Maximo
Espinoza and Winifreda De Vera and Leopoldo Espinoza over the land in favor of Sps. Antonio and
Erlinda Mayandoc.

The respondents built houses

As a result, petitioners filed an action for annulment of document in which RTC rendered a Decision
ordering respondents to reconvey the land in dispute. CA affirmed the decision with modification and
has become final.

Thus, respondents filed a complaint for reimbursement for useful expenses, pursuant to Articles 448
and 546 of the New Civil Code, alleging that the houses in question was built on the disputed land in
good faith.

The respondents believed themselves to be the owners of the land with a claim of title thereto and were
never prevented by the petitioners in constructing the house.

Petitioners argued that respondents can never be considered as builders in good faith because the
latter were aware that the deeds of sale over the land in question were fictitious.

Respondents, manifested their option to buy the land where the house stood, but petitioners expressed
that they were not interested to sell the land or to buy the house in question.

ISSUE:
WHETHER THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE PETITIONERS
WERE NOT ABLE TO PROVE BAD FAITH ON THE PART OF THE RESPONDENTS.

Ruling:

The petition lacks merit.

The findings of facts of the Court of Appeals are conclusive and binding on this Court and they carry
7

even more weight when the said court affirms the factual findings of the trial court.

To be deemed a builder in good faith, it is essential that a person asserts title to the land on which he
builds, i.e., that he be a possessor in the concept of owner, and that he be unaware that there exists in
his title or mode of acquisition any flaw which invalidates it.

The settled rule is - bad faith should be established by clear and convincing evidence since the law
always presumes good faith. In this particular case, petitioners were not able to prove that respondents
were in bad faith in constructing the house on the subject land. Bad faith does not simply connote bad
judgment or negligence.

It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong. It means breach
of a known duty through some motive, interest or ill will that partakes of the nature of fraud. For anyone
who claims that someone is in bad faith, the former has the duty to prove such.

Hence, petitioners err in their argument that respondents failed to prove that they are builders in good
faith in spite of the findings of the RTC and the CA that they are.

As such, Article 448 of the Civil Code must be applied. It applies when the builder believes that he is
the owner of the land or that by some title he has the right to build thereon, or that, at least, he has a
claim of title thereto.
In Tuatzs v. Spouses Escol, et al., this Court ruled that the seller (the owner of the land) has two options
under Article 448: (1) he may appropriate the improvements for himself after reimbursing the buyer (the
builder in good faith) the necessary and useful expenses under Articles 546 and 548 of the Civil Code;
or (2) he may sell the land to the buyer, unless its value is considerably more than that of the
improvements, in which case, the buyer shall pay reasonable rent, xxx

The rule that the choice under Article 448 of the Civil Code belongs to the owner of the land is in accord
with the principle of accession, i.e., that the accessory follows the principal and not the other way
around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. The
landowner cannot refuse to exercise either option and compel instead the owner of the building to
remove it from the land.

The raison d'etre for this provision has been enunciated thus: Where the builder, planter or sower has
acted in good faith, a conflict of rights arises between the owners, and it becomes necessary to protect
the owner of the improvements without causing injustice to the owner of the land. In view of the
impracticability of creating a state of forced co-ownership, the law has provided a just solution by giving
the owner of the land the option to acquire the improvements after payment of the proper indemnity, or
to oblige the builder or planter to pay for the land and the sower the proper rent. He cannot refuse to
exercise either option. It is the owner of the land who is authorized to exercise the option, because his
right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory
thing.

Pen Development Corporation vs. Martinez Leyba, Inc. G.R. No. 211845 August 09, 2017
Article 445 to Article 456

Facts:
Appellee Martinez Leyba, Inc. (Martinez) is a corporation organized and existing under Philippine laws
and the registered owner of three (3) contiguous parcels of land identified as Lot Nos. 29, 30 and 31
under Transfer Certificate of Title Nos. 250212, 25044 and 250243.

Pen Development Corporation and Las Brisas Resorts Corporation are also domestic corporations. It
merged into one corporate entity under the name Las Brisas Resmis Corporation (Las Brisas).

Las Brisas is the registered owner of a parcel of land under TCT No. 153101 which is situated adjacent
to the lMds owned by Martinez. Las Brisas occupied the said land in 1967 and fenced the same.

Martinez was informed that the fence of Las Brisas overlaps its property. So Martinez sent a Letter
informing Las Brisas that the fence it constructed encroaches on Martinez's land and requested Las
Brisas to refrain from further intruding on the same. Las Brisa did not respond to Martinez's letter and
continued developing its Las Brisas Resort.

Las Brisas, through a certain Paul Naidas, sent a letter to Martinez, claiming that it 'cannot trace the
origin of these titles' (pertaining to Martinez's land). So Martinez sought the services of a licensed
geodetic engineer to survey the boundaries of its land which revealed that the building and
improvements constructed by Las Brisas occupied portions of Martinez's lands.

Martinez sent a letter to Las Brisas demanding the latter to cease and desist from unlawfully holding
portions of Martinez's land occupied by Las Brisas structures and improvements. Despite the said
demand, no action was taken by Las Brisa.

Martinez filed a Complaint for Quieting of Title, Cancellation of Title and Recovery of Ownership with
Damages against Las Brisas before the Regional Trial Court.

In its Answer, Las Brisas denied that it encroached on Martinez's land and that it constructed the Las
Brisas Resort Complex within its land. It also alleged that it took possession thereof in good faith that
very same year; and that it is actually Martinez that was encroaching upon its land.

RTC:
RTC ruled that Las Brisas is a builder in bad faith hence, RTC ordered the cancellation or annulment
of portions of T.C.T. No. 153101.

The pieces evidence [sic] show that while defendant was in good faith when it bought the land from the
Republic Bank as a foreclosed property, such good faith ceased upon being informed in writing about
plaintiff's title or claim over the same land, and, worse, it acted with evident bad faith when it proceed
[sic] to build the structures on the land despite such notice.
 • Las Brisas’ T.C.T. No. 153101 is an instrument, record or claim which constitutes or casts
a cloud upon its T.C.T. Nos. 250242, 250243, and 250244.
• The mother title of Martinez was registered 58 years ahead of defendant's mother title.
Thus, while defendant's T.C.T. No. 153101 and its mother title are apparently valid and
effective in the sense that they were issued in consequence of a land registration
proceeding, they are in truth and in fact invalid, ineffective, voidable, and unforceable [sic]
insofar as it overlaps plaintiffs prior and subsisting titles.

CA:
Affirmed the decision of the RTC.

Petitioner argued that they are not builders in bad faith. That they relied on the validity of their title, TCT
153101; that until their title is nullified and invalidated, the same subsists. And that as builders in good
faith, they are entitled either to a) a refund and reimbursement of the necessary expenses, and full
retention of the land until they are paid by respondent, or b) removal of the improvements without
damage to respondent's property

Issue:
WON Pen Development Corporation are entitled to reimbursement.

Ruling:
No since the petitioners are builders in bad faith.

While petitioners may have been innocent purchasers for value with respect to their land, this does not
prove that they are equally innocent of the claim of encroachment upon respondent's lands.

Despite being apprised of the encroachment, petitioners turned a blind eye and deaf ear and continued
to construct on the disputed area.

They did not bother to conduct their own survey to put the issue to rest, and to avoid the possibility of
being adjudged as builders in bad faith upon land that did not belong to them.
Under the Civil Code,
Art. 449. 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.
Art. 450. Tue owner of the land on which anything has been built, planted or sown in bad faith may
demand the demolition of the work, or that the planting or sowing be removed, in order to replace things
in their former condition at the expense of the person who built, planted or sowed; or he may compel
the builder or planter to pay the price of the land, and the sower the proper rent.
Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the
builder planter or sower.
The right of the owner of the land to recover damages from a builder in bad faith is clearly provided for
in Article 451 of the Civil Code. Although said Article 451 does not elaborate on the basis for damages,
the Court perceives that it should reasonably correspond with the value of the properties lost or
destroyed as a result of the occupation in bad faith, as well as the fruits (natural, industrial or civil) from
those properties that the owner of the land reasonably expected to obtain.
The petitioners are not entitled to reimbursement for necessary expenses. Under Article 452 of the Civil
Code, the builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses
of preservation of the land. However, in this case, respondent's lands were not preserved: petitioners'
construction and use thereof caused damage, which must be undone or simply endured by respondent
by force of law and circumstance. Respondent did not in any way benefit from petitioners' occupation
of its lands.

Resolution of the Court of Appeals are AFFIRMED in toto

Leviste Management System, Inc. vs. Legaspi Towers 200, Inc. G.R. No. 199353 April 04, 2018
CASE LAW/DOCTRINE:
• Art. 448 and 546 of the Civil Code on builders in good faith are inapplicable in cases covered by the
Condominium Act.
• The land belongs to a condominium corporation wherein the builder, as a unit owner, is considered a
stockholder or member under Sec. 10 of the Condominium Act. The builder is already in co- ownership
with other unit owners as members or stockholders of the condominium corporation. The purchaser of
a condominium unit binds himself to a contract with other unit owners.

FACTS:
A builder must gain the consent of other registered owners and follow the by-rules of the condominium
before amending the Master Deed.
1. Legaspi Towers is a 7-floor condominium building with a deck roof and 2 levels above the deck roof,
as stated in the Master Deed, at Paseo De Roxas, Makati City with a unit on the roof deck and 2 levels
above said unit called Concession 2 and Concession 3. Concession 3 was bought by Leviste
Management System (Petitioner).
2. Petitioner sought to build another unit called Concession 4 on top of Concession 3 of the respondent
and was able to secure a buiding permit for its construction.
Due to this, Legaspi Corporation forbade the entry of Lemans' construction materials to be used in
Concession 4 in the condominium
However, Legaspi Towers 200 Inc. (Respondent) sent a notice to Petitioner that its construction was
illegal for being in violation of the Condominium Act and the By Laws of Legaspi Towers. but the latter
did not heed such. Petitioner filed a writ of mandatory injunction against Respondent.
3. The RTC affirmed Respondent wherein it found application of Art. 448 of the Civil Code and Depra
v. Dumlao". The "air space" above the unit actually belongs to Respondent.
4. Respondent sought to demolish Concession 4 at the expense of Petitioner. Respondent argued that
Petitioner should first get the consent of the registered owners of the condominium project before
amendment of the Master Deed under Sec. 4 of the Condominium Act. Petitioner argued that there
must be a determination of the required values under Depra before Respondent can take action.
5. RTC: Affirmed Respondent.
6. CA: Affirmed RTC Decision.
ISSUE(S): Whether Respondent can build Concession 4 on top of Petitioner's condominium building.

HELD: No. Petitioner contravened the Master Deed by adding a 3rd level above the roof deck and by
violating the Condominium Act and Respondent's by-laws.
RATIO:
• Instead of procuring the required consent of the registered owners under Sec. 4 of the Condominium
Act or having Concession 4 approved by the members in a regular or special meeting called for the
purpose under Respondent's by-laws, Petitioner merely had an internal agreement with the former
president of Respondent. This cannot bind corporations since they can act only through their Board of
Directors.
.
Art. 448 of the Civil Code on builders in good faith does not apply where there is contractual relation
between the parties. The RTC erred in considering Art. 448 and Art. 546 of the Civil Code in this case.
Article 448. The owner of the land on which anything has been built, sown or planted in good faith, shall
have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity
provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy
the land if 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. (3610)
Article 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good
faith may retain the thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right of retention,
the person who has defeated him in the possession having the option of refunding the amount of the
expenses or of paying the increase in value which the thing may have acquired by reason thereof.
(4530) The land belongs to a condominium corporation wherein the builder, as a unit owner, is
considered a stockholder or member under Sec. 10 of the Condominium Act. The builder is already in
co- ownership with other unit owners as members or stockholders of the condominium corporation.
Thus, the purchaser of a condominium unit binds himself to a contract with other unit owners.
Art. 448 and 546 of the Civil Code on builders in good faith are inapplicable in cases covered by the
Condominium Act where the owner of the land and the builder are already bound by specific legislation
on the subject property and by contract (the Master Deed and the By-Laws of the condominium
corporation).

Department of Education vs. Heirs of Banguilan G.R. No. 230399 June 20, 2018

Facts:
The heirs of Regino Banguilan filed a complaint for recovery of possession against the Department of
Education (DepEd) with the Regional Trial Court (RTC) of Tuguegarao City, Cagayan.

The heirs claimed ownership of the land where the Caritan Norte Elementary School (CNES) was built.

The petitioner admitted the establishment of CNES on the land but denied the heirs' claim of ownership
and demands for payment of rent
In its Answer, the petitioner admitted that sometime before the war, it had established CNES on land
[8]

located in Caritan Norte, Tuguegarao City and constructed school buildings on the said school site.
However, it denied respondents' claim of ownership and demands for payment of reasonable rent since
the school's occupation and possession over the property was in the concept of an owner for more than
fifty (50) years until 2001..

The trial court declared Regino as the undisputed owner of the property but ruled that the heirs' claim
was barred by laches.

The Court of Appeals (CA) reversed the decision of the trial court and granted the heirs the option to
appropriate the structures or oblige the petitioner to pay for the land.

Issue:
Whether or not the CA erred in ruling that the heirs' cause of action was not yet barred by laches.

Ruling:
The Supreme Court ruled that the CA did not err in its ruling.

Ratio:

Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which
could or should have been done earlier.
The determination of laches is based on equitable considerations in accordance with the particular
circumstances of each case.
The petitioner failed to establish the elements of laches.
The petitioner's possession of the property was merely being tolerated by the heirs and their
predecessor-in-interest.

Laches is inapplicable to registered lands covered by the Torrens System.

A certificate of title serves as evidence of an indefeasible and incontrovertible title to the property.

The heirs were the lawful possessors of the property and had the right to recover possession from the
petitioner.

As correctly ruled by the Court of Appeals, respondents may exercise their rights under Article 448, [46]

in relation to Article 546 of the New Civil Code. Said provision provides them with the option of either:
[47]

(1) appropriating the improvements, after payment of indemnity representing the value of the
improvements introduced and the necessary and useful expenses defrayed on the subject lots; or (2)
obliging the petitioner to pay the price of the land.

However, petitioner cannot be obliged to buy the land if its value is considerably more than that of the
improvements and buildings it built. In such a scenario, the petitioner may instead enter into a lease
agreement with respondent heirs and pay them reasonable rent. In case of disagreement, the Court
shall fix the terms thereof.

Nonetheless, considering that the subject lot is now being used as school premises by the Caritan
Norte Elementary School and permanent structures have already been erected thereon, respondent's
exercise of their rights under Article 448 and payment of indemnity pursuant to Article 546 would
undoubtedly hinder the Department of Education's prerogative of providing basic education to said
locality. In consonance with previous rulings by the Court, the petitioner's remedy to address such
[48]

inconvenience is to file an action for expropriation over said land.

Conclusion:
The Supreme Court ruled in favor of the heirs of Regino Banguilan and granted them the option to
appropriate the structures or oblige the Department of Education to pay for the land.
The petitioner's possession of the property was merely by tolerance and laches does not apply to
registered lands covered by the Torrens System.

Sps. Belvis, Sr. vs. Sps. Erola G.R. No. 239727 July 24, 2019

Facts:

On 2 July 2012, Spouses Erola sent a letter requiring Spouses Belvis to vacate the property within 30
days from receipt of the letter, but which Spouses Erola refused. A barangay conciliation proceeding
was carried out, but which was unsuccessful.
A complaint for unlawful detainer and damages was filed by Spouses Erola against Spouses Belvis
alleging that they are the owners of a 29,772 square meter lot in Barangay Malag-it, Pontevedra, Capiz
covered by TCT No. T-26108 and a tax declaration both in the name of Conrado V. Erola who allegedly
purchased the same in October 1978.

Meanwhile, Spouses Belvis claimed that the subject property was purchased by the late Rosario V.
Erola, mother of Cedia Erola-Belvis and Conrado Erola. Hence, an implied trust was allegedly created
over the ½ undivided hereditary share of petitioner Cecilia.

Conrado, however, allegedly succeeded in registering the property solely in his name.

On July 2, 2012, respondents sent petitioners a letter requiring the latter to vacate the property

For over 34 years, petitioners alleged that they possessed and cultivated the lot in the concept of an
owner, believing in good faith that they were co-owners of the subject lot.
16

The Municipal Circuit Trial Court (MCTC) ruled in favor of Sps. Erola. It held that Sps. Belvis failed to
present any evidence to prove that the property was purchased by the late Rosario and it was registered
solely in Conrado's name in trust for his co-heir and sister, Cecilia.

Likewise, it held that Sps. Belvis were not builders in good faith as their possession of the lot was by
mere tolerance, which was subject to an implied promise to vacate the same upon demand.

Similarly, the Regional Trial Court (RTC) held that Sps. Belvis failed to prove that Cecilia was a co-
owner. It further held that Sps. Belvis, being aware that the property was registered in Conrado's name,
could not be builders in good faith since they knew that there was a flaw in their supposed title when
the improvements were made.

The Court of Appeals denied the petition and likewise held that the evidence convincingly showed that
Sps. Belvis' occupation of the property was by mere tolerance. Hence, they had no right to retain
possession of the property under Article 448 of the Civil Code.

Issue:

Whether Sps. Belvis were builders in good faith under Article 448 and thus have a right to retain the
subject lot until payment of necessary, useful and luxurious expenses?

Held:
No, they are not builders in good faith. Nevertheless, they must be reimbursed for the necessary, useful
and luxurious expenses done on the property since the improvements were with the knowledge and
consent of the owner.

Sps. Belvis have no right to retain possession of the property under Article 448 as they were aware that
their tolerated possession could be terminated at any time. Thus, they could not have built on the
subject property in the concept of an owner.

Even assuming that Cecilia was a co-owner of the subject property, Article 448 would still be
inapplicable. The Court has held that Article 448 may not generally apply to a co-owner who builds,
plants, or sows on a property owned in common for then he did not build, plant, or sow upon land that
exclusively belongs to another.

Further, under Article 445 of the Civil Code, rights of accession with respect to immovable property
apply to "whatever is built, planted or sown on the land of another" A co-owner of a parcel of land,
however, builds on his own land and not that of another.

Nevertheless, while Sps. Belvis are not deemed builders in good faith, the CA and lower courts
overlooked the fact that Sps. Belvis constructed the improvements with the knowledge and consent of
respondents as they were close relatives. They, too, were not in good faith. Article 453 provides that "it
is understood that there is bad faith on the part of the landowner whenever the act was done with his
knowledge and without opposition on his part."

In exceptional cases, therefore, the Court has applied Article 448 to instances where a builder, planter,
or sower introduces improvements on titled land if with the knowledge and consent of the owner.
Thus, under Article 448 in relation to Articles 546 (necessary expenses) and 548 (luxurious expenses),
the landowners have the following options: (1) appropriate the improvements after payment of
indemnity representing the value of the improvements and the necessary, useful and luxurious
expenses or (2) oblige Sps. Belvis to pay the price of the land, if the value is not considerably more
than that of the improvements and buildings.

Decision: Petition is granted. The case is remanded to the court of origin for determination of facts and
which between the parties is entitled to the physical possession of the subject lot.

Sps. Yu vs. Topacio, Jr. G.R. No. 216024 September 18, 2019

FACTS:
The case arose from an Amended Complaint for Quieting of Title, Recovery of Possession,
Reconveyance and Damages, filed by respondent Eulogio A. Topacio, Jr.,

(Topacio) which seeks to nullify Transfer Certificates of Title (TCT) Nos. T- 490552 and T-289604, and
to recover possession of the properties covered respectively by the said TCTs, from petitioners spouses
Ernesto V. Yu and Elsie Yu (spouses Yu) and defendants a quo Benny Saulog and Spouses Jesus and
Lorinda Mupas, plus reasonable compensation for the use and occupation of the said parcels of land.

Topacio believed that said title issued to Spouses Yu is spurious, illegal and null and void as the same
was issued much later than his title.
Allegedly, said title of Spouses Yu casts a cloud on Topacio's title. Despite demand made by Topacio,
Spouses Yu failed to cease and desist from fencing and constructing a house on Topacio's property.

In their Answer with Counterclaim, Spouses Yu claimed that they are the owners of the property
covered by TCT No. T-490552 consisting of 606 square meters.

They have acquired the said property from spouses Asislo Martinez and Norma Linatoc by virtue of an
Absolute Deed of Sale dated June 10, 1994.

Topacio filed a Motion for Joint Survey which was granted by the RTC. Engr. Tañola submitted his
Report of Verification Survey, which in gist states, that Lot 7402-E registered in the name of Topacio,
Jr. and Lot 8142-New registered in the name of spouses Ernesto V. Yu and Elsie Yu, have the same
points and when plotted using their respective Tie Lines it appeared that they fall apart with each other.

Based on the actual verification survey, the property claimed by spouses Yu with existing structure and
with the total area of 450 square meters is inside the property of Topacio.

RTC rendered a Decision dismissing Topacio's Complaint because there was no sufficient proof that
spouses Yu acquired the property by means of fraud. Topacio moved to reconsider the RTC Decision
but the motion was denied.

Dissatisfied, Topacio filed an appeal with the CA, which modified the ruling of the RTC. The CA ordered
Spouses Yu to (1) vacate and transfer possession of the area of Lot 7402-E covered by TCT No. T-
348422 to plaintiff-appellant Topacio and to remove at their own expense any improvements they
introduced thereon; (2) pay plaintiff-appellant reasonable compensation in the amount of P5,000.00 per
month for the use and occupation of the portion of his property from November 29, 2000, the date of
judicial demand; and (3) to pay plaintiff-appellant the amount of P25,000.00 for and as attorney's fees
and the costs of this suit.

Spouses Yu filed a Motion for Reconsideration ascribing error on the part of the CA, which was denied.
Thus, the present action of Certiorari.

ISSUE:
WHETHER OR NOT SPS Yu were builders in good faith

HELD:

YEs.

from the technical description of both TCT No. 348422 and TCT No. 490552, as well as the survey
conducted, there is a clear showing of disparity in the location of the properties covered by the two
certificates of titles of both parties. In other words, the TCT of Topacio covers an entirely different parcel
of land than that of the TCT of spouses Yu.

This is not a case of double registration where two certificates of titles are issued to different persons
covering the same land in whole or in part.
We agree with the findings of the CA that the only plausible explanation for this is that spouses Yu took
possession of a lot different from the lot described in their Torrens title.

The records, however, do not show that the spouses Yu was in bad faith when they possessed the
disputed portion of Topacio's land. Spouses Yu were honestly convinced of the validity of their right to
possess the disputed property on the basis of their valid title to it.

Indeed, 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. 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.

Since spouses Yu had introduced improvements on the said portion of land in good faith, Topacio as
owner thereof, may exercise his option of choosing between appropriating as his own the structures
constructed thereon by spouses Yu by paying the proper indemnity or value; or obliging spouses Yu to
pay the price of the said lot if its value is considerably not more than that of the improvements.
Otherwise, reasonable rent must be paid by spouses Yu if Topacio did not choose to appropriate the
improvements, pursuant to Article 448 of the Civil Code.

Princess Rachel Development Corporation vs. Hill View Marketing Corporation G.R. No. 222482 June
02, 2020

FACTS:

Petitioner Princess Rachel Development Corporation (PRDC) filed a Complaint for Accion Publiciana
(An accion publiciana is an ordinary civil proceeding to recover the right of possession and determine
the better right of possession)

and Damages against respondents Hillview, Stefanie and Robert to expunge claims for damages
representing reasonable rentals.

PRDC has been in physical possession of the said properties as early as May 1996 and has religiously
paid its realty taxes.

It has been found out that Hillview, which owns the adjoining property, has encroached an area.
Respondents have built condominium units (Alargo Residences) on the encroached area without the
knowledge and consent PRDC.

PRDC alleged that the construction of the buildings on the encroached area was done in bad faith as
the respondents have full knowledge of the territorial boundaries of their respective properties. PRDC
sent respondents a demand letter requesting them to vacate the subject premises, but they ignored it.

Respondents counter that PRDC did not have prior physical possession over the disputed area and
that there is no manifestation of PRDC's claim of possession over the area in controversy as there was
no noticeable mark or boundary which delineated the adjoining properties.

Respondents contend that Hillview is both a buyer and builder in good faith, having bought the land
free from any liens or encumbrances, and having constructed structures within the premises of the land
which they bought from the Tirols.

ISSUE: Whether or not Hillview is a builder in bad faith.

RULING:

Yes. Hillview is a builder in bad faith.

It is clear that to be deemed a builder in good faith, it is essential that a person asserts title to the land
on which he builds that he be a possessor in the concept of owner, and that he be unaware that there
exists in his title or mode of acquisition any flaw which invalidates it.

In this case, however, the encroachment is substantial, visible to the naked eye and not merely
negligible which Hillview could no longer assert ignorance to such accusation.
Hillview was informed of the intrusion but still proceeded with the development. He took advantage of
the vacant lot of PRDC and proceeded with the construction which remained unhampered without the
knowledge of PRDC.

As a large party developer, Hillview could have easily dispensed and verified the definite boundaries of
the property it sought to improve to avoid encroachment.

The Court held that Hillview was not unaware that it possessed the encroached portion improperly or
wrongfully. Thus, evidence shows that Hillview is a builder in bad faith.

City of Valenzuela vs. Roman Catholic Archbishop of Manila G.R. No. 236900 April 28, 2021

City of Valenzuela vs. Roman Catholic Archbishop of Manila

G.R. No. 236900 April 28, 2021
https://lawphil.net/judjuris/juri2021/apr2021/gr_236900_2021.html
Doctrine:
The case highlights the principle that a builder in bad faith is one who is aware of flaws in their title or
mode of acquisition that invalidate it. In this case, the City of Valenzuela was found to be a builder in
bad faith as they were aware of the Archbishop's claim to the land but continued to occupy and construct
on it.
Facts:
• On March 30, 1955, Pastor B. Constantino (Constantino) executed a Deed of Donation
transferring to respondent a parcel of land located at Barangay Marulas, with an area of 2,000
sq.m. The deed contained a provision that the lot would be a site for a church and convent. The
subject land was subsequently registered in the name of respondent under TCT No. T-25538
(T-71534).
• On several occasions, Constantino also executed several Deeds of Donation in favor of the City
of Valenzuela (petitioner) covering several lots, some of which are also in Barangay Marulas.

• On April 25, 2000, respondent, represented by the Roman Catholic Bishop of Malolos, Inc.
(RCBMI), filed a Complaint for Recovery of Possession and Damages before the RTC against
petitioner.
• Respondent prayed for the reconveyance of the land and the demolition of all improvements
built thereon by petitioner at its expense.
• Respondent alleged that sometime in 1992 and 1993, petitioner, through the then incumbent
Barangay Captain of Barangay Marulas, Ernesto De Guzman (De Guzman), occupied and used
1,189 sq.m. of the property, bequeathed to the church by Constantino, where a two-storey
building and a sports complex were built without respondent's consent. The said two-storey
building was used as the Barangay Hall of Marulas and Police/Fire Station of petitioner.
• De Guzman representing the Petitioner, in his Answer, denied the allegations of bad faith,
claiming that the property in question has been occupied and possessed by petitioner in good
faith since 1962. Moreover, he averred that the claim of respondent had already prescribed and
laches has set in.
• In a Decision dated September 30, 2014, the RTC ruled in favor of respondent. The trial court
found petitioner in bad faith for refusing to vacate the subject property despite demands from
respondent and to pay damages and atty’s fees.
• CA dismissed the appeal and affirmed with modifications the ruling of the RTC to deliver the
possession thereof to the plaintiff-appellee and to remove at their expense all improvements
they have constructed thereon within sixty (60) days from finality of the decision.
ISSUE:
Whether or not the CA correctly held that petitioner is a builder in bad faith and therefore liable to pay
damages.

HELD:
Yes, CA correctly held that the petitioner is a builder in bad faith. Bad faith contemplates a state of mind
affirmatively operating with furtive deign or some motive of self-interest or ill will for ulterior purposes.
To be deemed a builder in good faith, it is essential that a person asserts title to the land on which he
builds, i.e., that he be a possessor in the concept of owner, and that he be unaware that there exists in
his title or mode of acquisition any flaw which invalidates it.
The factual circumstances surrounding the instant case led the Court to inevitably conclude that
petitioner was a builder in bad faith.
While this Court agrees that petitioner was in good faith in the beginning when they built the structures,
relying on the Deed of Donation by Constantino, it is undisputed that petitioner was made aware of the
claim of respondent on May 21, 1998 upon receipt of respondent's demand letter. Despite this,
petitioner still pushed through with the construction of the expansion of the sports complex on the
subject lot. Such act of petitioner constitutes bad faith.
A builder in good faith is unaware that there exists in his title any flaw which invalidates it; otherwise,
he is considered a builder in bad faith.
The Civil Code provides:
Art. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted
or sown without right of indemnity.
Art. 450. The owner of the land on which anything has been built, planted or sown in bad faith may
demand the demolition of the work, or that the planting or sowing be removed, in order to replace things
in their former condition at the expense of the person who built, planted or sowed; or he may compel
the builder or planter to pay the price of the land, and the sower the proper rent.
Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the
builder, planter or sower.
Based on these provisions, the owner of the land has three alternative rights: (1) to appropriate what
has been built without any obligation to pay indemnity therefor, or (2) to demand that the builder remove
what he had built, or (3) to compel the builder to pay the value of the land. In any case, the landowner
is entitled to damages under Article 451.
Considering that respondent prays for the affirmation of the Decision of the CA which also affirmed the
Decision of the RTC, respondent is deemed to have chosen the second option or to demand that the
builder remove what it had built.
Award of damages. Article 451 of the Civil Code grants the landowner the right to recover damages
from a builder in bad faith. While it does not provide the basis for damages, the amount thereof should
reasonably correspond with the value of the properties lost or destroyed as a result of the occupation
in bad faith, as well as the fruits from those properties that the landowner reasonably expected to obtain.
Moreover, since Article 451 of the New Civil Code guarantees the award of damages in favor of the
landowner and as further punishment for the builder's bad faith, we find it proper to award nominal
damages. Nominal damages are awarded in cases where property right was invaded.
Dispositive Portion:
Since petitioner violated the property rights of respondent, the Court finds that nominal damages in the
amount of P100,000.00 is warranted under the circumstances. Petitioner is also ordered to pay the sum
of P100,000.00 as attorney's fees. WHEREFORE, premises considered, the Petition is DENIED. The
Decision dated September 14, 2017 and the Resolution dated January 18, 2018 of the Court of Appeals
in CA-G.R. CV No. 104618, affirming the Decision dated September 30, 2014 and the Order dated
February 2, 2015 of the Regional Trial Court of Valenzuela City, Branch 172 in Civil Case No. 143-V-
00 are hereby AFFIRMED with MODIFICATIONS. The City Government of Valenzuela, its agents,
representatives, or any person or persons acting on their authority, their heirs, successors-in-interest
and all those claiming rights under them, upon finality of this Decision, are hereby ordered to
immediately VACATE the subject property and DELIVER its peaceful possession to respondent,
Roman Catholic Archbishop of Manila.
Petitioner is likewise ordered to PAY respondent P10,000.00 as monthly rental plus interest thereon at
the rate of 6% per annum, to be computed from April 25, 2000 until possession of the land is delivered
to respondent.
Petitioner is further ordered to PAY respondent P100,000.00 representing nominal damages and
additional P100,000.00 as attorney's fees.

Agapito vs. Agapito G.R. No. 255157 July 04, 2022

In a dispute over a parcel of land, the Supreme Court rules that Onesimo Agapito is a builder in good
faith and entitled to reimbursement for the improvements made to the property, remanding the case for
further proceedings to determine the value of the improvements.

FACTS:
Onesimo Agapito and Marilyn F. Agapito are involved in a dispute over a parcel of land.
Marilyn filed a complaint for unlawful detainer against Onesimo, claiming that she is the registered
owner of the property and that Onesimo has occupied it without paying rent.

Onesimo argued that he has been in possession of the property since the 1980s and that he built a
house on it with Marilyn's knowledge and consent.

Marilyn demanded that Onesimo vacate the property, but Onesimo insisted on his right to
reimbursement for the value of the house and improvements he made.

Issue:
Is Onesimo a builder in good faith and entitled to reimbursement for the improvements made to the
property?

Ruling:
The Supreme Court ruled in favor of Onesimo.
Onesimo is considered a builder in good faith since he built the house on the property with Marilyn's
knowledge and consent.

As a builder in good faith, Onesimo is entitled to reimbursement for the value of the improvements and
to the right of retention pending reimbursement.
The case is remanded to determine the value of the improvements.

The Court applied Article 448 of the Civil Code, which states that a builder in good faith is entitled to
reimbursement for necessary and useful expenses and to the right of retention.
The Court also considered Article 546, which allows the builder in good faith to remove the
improvements if it can be done without damage to the property.
The Court found that both Onesimo and Marilyn are in bad faith since Marilyn knew about the
construction of the house and did not object to it.
Therefore, Marilyn may appropriate the improvements after reimbursing Onesimo for the necessary
and useful expenses.

The case is remanded to determine the value of the improvements.

Duenas vs. Metropolitan Bank and Trust Company G.R. No. 209463 November 29, 2022 …..

FACTS:

The three parcels of land with an area of 1,411 square meters, were registered in the name of Dolores
Sola under TCT Nos.: 79864, 79865 and 79866. On May 22, 1978,

the three TCT numbers were cancelled and TCT Nos.: S-68301, S-68302, S-68303 were issued in the
name of Bellever Brothers, Inc. (BBI).

Later, BBI contracted a loan in the total amount of Php 2,500,000.00 from Manotoc Securities Inc.
(MSI), and mortgaged the subject three lots.

On June 12, 1978, Dolores filed a complaint before the RTC against BBI and MSI to rescind and/or
declare the nullity of the sale of the subject three lots, and to cancel BBI's titles over them.

On June 12, 1978, Dolores caused the annotation of a Notice of Lis Pendens on TCT Nos. S-68301,
S- 68302 and S-68303. During the pendency of the Civil Case, Dolores died and was substituted by
her daughter, Carmen Egido.

On September 18, 1981, a Writ of Preliminary Injunction was issued by RTC Pasig, and annotated
under Entry No. 47764 on TCT Nos. S-68301, S-68302, and S-68303.

On July 19, 1989, the Civil Case filed by Dolores was temporarily archived by RTC Pasig. Carmen
authorized petitioner Florencia Duenas to enter into a settlement of the Civil case which involved the
subject three lots.

On August 6, 1991, Carmen assigned all her rights over the subject three lots in favor of Florencia.

MSI was dissolved and placed under receivership or liquidation. Thereafter, Florencia submitted before
the SEC a Letter Proposal for Amicable Settlement of the Civil Case involving the three subject lots.

While Florencia and MSI's receiver or liquidator were in the process of negotiating a compromise
agreement, they discovered that TCT Nos. S-6803, S-68302 and S-68301 in the name of BBI were
cancelled by Mila Flores of the Register of Deeds, Makati City.

Adelaida Bernal, acting as alleged representative of MSI, executed an Affidavit of Loss of TCT Nos. S-
6803, S-68302 and S-68301 and filed a petition for the issuance of a new owner's duplicate copy of the
said titles before the RTC, Makati City.

On March 12, 1992, RTC - Makati issued an order for the Register of Deeds, Makati City to immediately
issue an owner's duplicate copy of TCT Nos. S-6803, S-68302 and S- 68301 in lieu of the lost titles.

Thereafter, Bernal and BBI presented a falsified Decision allegedly issued by RTC Pasig in the Civil
Case covering the three parcels of lot, and an Absolute Deed of Sale to cancel Entry Nos. 83066, 84647
and 47764 annotated on TCT Nos. S-6803, S-68302 and S-68301, and to subsequently cause the
issuance of the new titles, i.e., TCT Nos. 178934, 178935, and 178936 on March 19, 1992 in the name
of Bernal.
The spouses Daniel and Florencia Duenas caused the annotation of their affidavit of adverse claim
dated August 31, 1992 under Entry No. 48918 on Bernal's certificates of title.

The Duenas Spouses also commenced Civil Case No.92-2831 before the RTC Makati City for the
declaration of nullity of Bernal's certificates of title and the absolute deed of sale dated December 18,
1985.

The annotation of notice of lis pendens under Entry No. 50908 followed. Nevertheless, the annotation
was cancelled pursuant to Orders of the RTC Makati dated January 25, 1993 and February 24, 1993,

Aggrieved, the Duenas Spouses filed a petition for certiorari before the Court of Appeals.

On March 11, 1993, the Court of Appeals temporarily enjoined the implementation of the orders of RTC
Makati. On October 29,1993, the Court of Appeals finally ruled in favor of Duenas Spouses. Its decision
became final and executory on November 29,1993.

Despite the Court of Appeals' favorable ruling and prior temporary restraining order, the Duenas
Spouses claimed that RTC Makati still issued a certificate of finality of its January 25, 1993 order which
cancelled the notice of lis pendens under Entry No.50908. As a result, Penelope Ison of the Register
of Deeds of Makati city cancelled the said annotation on the certificates of title of Bernal.

On April 23, 1993, Bernal executed an absolute deed of sale over the lots in favor of AF Realty
Development.

On April 28, 1993, Inocencio Domingo of the Makati City Register of Deeds cancelled the certificates
of title of Bernal, including the annotation of the affidavit of adverse claim of the Duenas Spouses, and
consequently issued a new set of titles under AF Realty's name.

On February 22, 1994, the Duenas Spouses commenced Civil Case No.94-751 for the declaration of
nullity of AF Realty's titles and the accompanying absolute deed of sale in AF Realty's favor, which also
included claims for damages against Bernal, AF Realty, Ison, and Domingo before the RTC

Makati City Branch 60. On February 23, 1993, the Duenas Spouses caused the annotation of a notice
of lis pendens under Entry No. 81678 on the certificates of title of AF Realty.

However, AF Realty sold the lots to MBTC on January 31, 1994. The Duenas Spouses only discovered
the sale on June 8, 1994. Thus, they failed an amended complaint in Civil Case No.94-751, impleading
Metro Bank Trust Co. and its executive vice-president as additional defendants.

On June 15, 1994, a new set of certificates of title under MBTC's name was issued. MBTC insisted that
it was a purchase in good faith and for value.

Allegedly, the certificates of title under AF Realty's name were deprived of any lien or encumbrance
during the time of sale on January 31, 1994. Besides, the notice of lis pendens was annotated in the
certificates of title of AF Realty's on February 23, 1994. Accordingly, the bank had every right to depend
on the titles presented and was not obligated to look beyond it to ascertain any defect in its issuance.

ISSUE/S:
1. WHETHER OR NOT AF REALTY IS A PURCHASER IN GOOD FAITH.

2. WHETHER OR NOT MBTC IS AN INNOCENT PURCHASER FOR VALUE.

RTC BRANCH 60 RULING

On January 15, 2002, RTC Branch 60 ruled in favor of the Duenas Spouses in Civil Case No. 94-751.
Bernal resorted to a fraudulent scheme that unlawfully deprived Manotoc Securities and the Duenas
Spouses of their interest in the properties. Nevertheless, the lots were already conveyed to MBTC,
which, on the other hand, bought the three parcels of land free from liens and encumbrances. Therefor,
the Duenas Spouses and Manotoc Securities' proper recourse is to go against the party responsible
for the fraud, and those, who, by their negligence, allowed the title to pass into the hands of innocent
purchasers as provided under Act No. 496, Section 55 (PD No. 1529)

On April 23, 2003, Branch 60 partially granted Duenas Spouses and Manotoc Securities's motion for
reconsideration for only in terms of amount of damages awarded.
COURT OF APPEALS RULING:
On May 15, 2013, it affirmed the RTC's decision in toto and upheld that MBTC is a purchaser in good
faith. Further, the sale between MBTC and AF Realty had already been consummated when the notice
of lis pendens was annotated in the relevant certificates of title. It further explained that even a
fraudulent document may become the root of valid title if the property has already been conveyed from
the owner's name to that of the forger. Thus, a person dealing with a registered property in good faith
obtains a valid title from the forger and will therefore be protected under the Torrens System.
During the pendency of the appeal, Daniel Duenas died and was substituted by his heirs, Florencia and
Daphne Montefalcon. The CA denied the heirs' motion for reconsideration.

RULING OF THE SUPREME COURT:

ISSUE NO.1: NO. AF REALTY IS NOT A PURCHASE IN GOOD FAITH AND FOR VALUE in light of
the existing annotation of the affidavit of adverse claim of the Duenas Spouses in Bernal's certificates
of title at the time of sale on April 23, 1993. The cancellation of said annotation only occurred when AF
Realty registered the deed of absolute sale in its favor with the Register of Deeds on April 28, 1993.

INNOCENT PURCHASER IN GOOD FAITH AND FOR VALUE:

The prevailing rule in dealing with registered lands is that one need not inquire beyond the four corners
of the Torrens certificate of title. The purpose of the Torrens System is to obviate possible conflicts of
title by giving the public the right to rely upon the face of the Torrens certificate and to dispense, as a
rule, with the necessity of inquiring further. P.D. 1529 Section 44, expressly recognizes innocent
purchasers in good faith and for value and their right to rely on a clean title.

To be accorded the protection in Section 44, a buyer of registered land must comply with two
parameters: (a) payment of value, i.e., a full and fair price for the property and (b) the buyer must have
purchased the property in good faith. In essence, good faith is a state of mind consisting of honesty in
belief or purpose, faithfulness to one's duty or obligation, observance of reasonable commercial
standards of fair dealing in a given trade or business, or absence of intent to defraud or to seek
unconscionable advantage. Leong vs. See: An innocent purchaser for value refers to someone who
buys the property of another without notice that some other person has a right to or interest in it, and
who pays a full and fair price

at the time of the purchase or before receiving any notice of another person's claim. One claiming to
be an innocent purchaser for value has the burden of proving such status.
SECTION 32, PD 1529 includes in the definition of an innocent purchaser for value the innocent lessee,
mortgagee, or other encumbrancer for value.

Nothing in the records would show that AFRDI or any of its officers or representatives inquired into the
veracity of petitioner Florencia's claim of ownership over the subject three lots by virtue of her affidavit
of adverse claim dated August 31, 1992. AFRDI, cannot therefore, seek the protection accorded by law
to innocent purchasers in good faith and for value on the pretext that the Affidavit of Adverse Claim
dated August 31, 1992 was already cancelled on April 28, 1993.

AFRDI already had a prior knowledge of Petitioner Florencia's claim of ownership over the subject three
lots when it purchased the subject properties from Bernal. Thus, AFRDI cannot simply rely on the
certificates of title when the said titles were not clearly free from any lien or encumbrance.

Besides, Entry No. 63539 that cancelled Entry No. 48918 or the Affidavit of Adverse Claim dated
October 31, 1992 was not even clear on what ground or under whose order the said adverse claim was
cancelled. What is clear is that AFRDI registered its Deed of Absolute Sale dated April 23, 1993 on
April 28, 1993 which coincided with the cancellation of the Affidavit of Adverse Claim dated August 31,
1992 by Domingo of the Register of Deeds, Makati City.

The records are lacking of any showing that AFRDI or Bernal filed a verified petition to cancel petitioner
Florencia's affidavit of adverse claim dated August 31, 1992. Notwithstanding the 30-day validity of the
adverse claim from the date of its registration, this does not negate the fact that AFRDI was aware of
its annotation on Bernal's titles at the time of its purchase. AFRDI cannot therefore refute such
knowledge and invoke the cloak of protection accorded to an innocent purchaser for its failure to
exercise the diligence of a reasonably prudent person in employing precautionary measures to ensure
the legality of the titles of the properties it intends to purchase.

ISSUE NO. 2. :NO. MBTC IS NOT AN INNOCENT PURCHASER FOR VALUE AT THE TIME OF THE
EXECUTION OF THE DEED OF ABSOLUTE SALE DATED JANUARY 31.1994.
Banks assume a degree of prudence and diligence higher than that of a good father of a family,because
their business is imbued with public interest and is inherently fiduciary. Banking institutions are enjoined
to exert a higher degree of diligence, care, and prudence than ordinary individuals in handling real
estate transactions. When the purchaser or mortgagee is a bank, the rule on innocent purchasers or
mortgagees for value is applied more strictly. A banking institution cannot, therefore simply rely on the
face of the certificate of title and assume that because the certificate of title is free from any lien or
encumbrances, it is relieved from the responsibility of taking further steps to verify the title and inspect
the properties. It is expected to verify the genuineness of the title and investigate who is/are real owner/s
and actual possessors.

While MBTC examined TCT Nos. 185022, 185023 and 185204 covering the subject properties and
found that they were clean on its face and free from any annotations at the time of sale on January 31,
1994, and relied on the representations of its Department of Internal Affairs that the titles were
authentic, the banking institution should have flagged the numerous cancelled annotations - consisting
of several pages of the TCTs - which, albeit already cancelled, forewarn of a long history of disputes
plaguing the three subject lots. MBTC should have been further put into alert when it conducted a
physical inspection of the three subject lots and found the same to be occupied by informal settlers.
Had MBTC earnestly exerted the required diligence and further investigated the status of the property
by utilizing the vast resources in its disposal instead of acting in undue haste, it would have discovered
the defects plaguing the titles of the subject three lots. However, it miserably failed to do so. Verily, at
the time of the purchase, MBTC is a buyer in bad faith and therefore has no rights over the three subject
lots.
To be considered an innocent purchaser for value under Section 44 of PD 1529, one must possess
good faith from the time one acquires registered land until registration of the acquisition under their
name. The buyer must purchase the property and register the deed of conveyance without notice that
some other person has a right to, or interest in, such property and pay a full and fair price for the same,
at the time of such purchase, or before he or she has notice of the claim or interest of some other
persons in the property. The property must be bought for consideration; and purchaser should have
knowledge or notice of adverse claim or interest until registration. In the event a buyer of registered
land who has yet to register the conveyance be made aware of any claim or interest of some other
person in the property, or of any defect or restriction in the title of the seller or in his or her capacity to
convey title, the buyer shall no longer be considered to be in good faith even if he or she subsequently
registers the conveyance.
A purchaser is deemed the registered owner once he or she:
a.files a duly notarized valid deed of sale:
b.) the sale is entered into thee day book:
c.) the buyer surrenders or presents the owner's duplicate certificate of title covering the land sold. and
d.) pays the registration fees.
In cases of involuntary registration, an entry thereof in the day book is a sufficient notice to all persons
even if the owner's duplicate certificate of title is not presented to the register of deeds.
In Levin vs. Bass, in case of voluntary registration of documents an innocent purchaser for value
registered land becomes the registered owner, and in contemplation of law, the holder of a certificate
of title, the moment he presents and files a duly notarized and valid deed of sale and the same is
entered in the day book and at the same time he surrenders or presents the owner's duplicate certificate
of title covering the land sold and pays the registration fees, because what remains to be done lies not
within his power to perform. The register of deeds is duty bound to perform it.
MBTC was charged with knowledge of the Notice of Lis Pendens dated February 23, 1994, MBTC,
cannot therefore, claim ownership over petitioner's share, i.e., 60% of the subject three lots. Since
MBTC registered the deed of absolute sale dated January 31, 1994 with knowledge of the pendency
of Civil Case No.94-751 as per Notice of Lis Pendens dated February 23, 1994 involving the nullification
of AFRDI's titles, MBTC merely holds or possesses the 60% portion of the subject property in trust for
its lawful owner.
AWARDS/ORDERS:
The petition is Granted. The March 15, 2014 Decision and October 8, 2013 Resolution of the CA are
reversed and SET ASIDE insofar as the rights of petitioners Florencia Duenas and Daphne Duenas-
Montefalcon over the subject three lots are concerned.
1. Petitioners Florencia Duenas and Daphne are entitled to the recovery and possession of 60% of the
subject three lots. Thus, Transfer Certificates of Title Nos. 195231, 195232 and 195233 in the name of
Metropolitan Bank, and Transfer Certificates of Title Nos. 185022, 185023, and 185024 in the name of
AF Realty Development are declared VOID.
2. Respondent MBTC and all persons claiming rights under it are hereby ordered to immediately
VACATE 60% of the subject property and DELIVER its peaceful possession to petitioners;
3. To remove or demolish what has been built on 60% portion of the subject three lots at its expense.
The Register of Deeds, Makati City is ordered to cancel :
a.) Transfer Certificates of Title Nos. 195231, 195232 ad 195233 in the name of MBTC;
b.) Transfer Certificates of Title Nos.185022, 185023, and 185024 in the name of AF RDI;
c.) Transfer Certificates of Title Nos. S-68301, $68302 and S-68303 in the name of Bellever Brothers,
Inc.
d.) To issue new Transfer Certificates of titles in the names of Petitioners Florencia Duenas and
Daphne, and MBTC subject to the partition of 60% and 40% respectively, agreed upon by petitioner
Florencia Duenas and Manotoc Securities, Inc. and approved by the RTC Pasig City, in its September
22, 1995 Decision in Civil Case No. 29872;
Metropolitan Bank and Trust Company is ORDERED to pay petitioners Florencia and Daphne Duenas
the amount of Php 5,000,000.00 as temperate damages; MBTC and AFRDI to pay petitioners Php
200,000.00 as moral damages, Php 150,000.00 as attorney's fees;
AFRDI to reimburse respondent MBTC the amount of 60% of PHP 39,308,000.00, the purchase price
paid.

Article 457

Republic of the Philippines vs. Santos III G.R. No. 160453 November 12, 2012

Facts:

Alleging continuous and adverse possession of more than ten years, respondent Arcadio Ivan A.
Santos III (Arcadiolvan) applied on March 7, 1997 for the registration of Lot 4998-B (the property) in
the Regional Trial Court (RTC) in Parafiaque City.

The property, which had an area of 1,045 square meters, more or less, was located in Barangay San
Dionisio, Parañaque City, and was bounded in the Northeast by Lot 4079 belonging to respondent
Arcadio C.Santos, Jr. (Arcadio, Jr.), in the Southeast by the Parañaque River, in the Southwest by an
abandoned road, and inthe Northwest by Lot 4998-A also owned by Arcadio Ivan

On May 21, 1998, Arcadio Ivan amended his application for land registration to include Arcadio, Jr. as
his co- applicant because of the latter's co-ownership of the property.

He alleged that the property had been formed through accretion and had been in their joint open,
notorious, public, continuous and adverse possession for more than 30 years.

The City of Parañaque (the City) opposed the application for land registration, stating that it needed the
property for its flood control program; that the property was within the legal casement of 20 meters from
the river bank; and that assuming that the property was not covered by the legal casement, title to the
property could not be registered in favor of the applicants for the reason that the property was an
orchard that had dried up and had not resulted from accretion,

On May 10, 2000 the RTC granted the application for land registration, disposing

WHEREFORE, the Court hereby declares the applicants, ARCADIO IVANA. SANTOS, III and
ARCADIOC. SANTOS, JR,both Filipinos and of legal age, as the TRUE and ABSOLUTE OWNERS of
the land being applied for which is situated in the Barangay of San Dionisio, City of Parañaque with an
area of one thousand forty five (1045) square metersmore or less and covered by Subdivision Plan
Csd-00-000343, being a portion of Lot 4998, Cad 299, Case 4, Parañaque Cadastre, LRC Rec. No.
and orders the registration of Lot 4998-B

With this, the Republic, through the Office of the Solicitor General (OSG), appealed. The CA grossly
erred in applying Article 457 of the Civil Code to respondents' benefit.
Article 457 of the Civil Code provides that "(to the owners of lands adjoining the banks of rivers belong
the accretion which they gradually receive from the effects of the currents of the waters.

"In ruling for respondents, the RTC pronounced that on the basis of the evidence presented by the
applicants, the Court finds that Arcadio Ivan A. Santos III and Arcadio C. Santos, Jr., are the owners of
the land subject of this application which was previously a part of the Parañaque River which became
an orchard after it dried up and further considering that Lot 4 which adjoins the same property is owned
by applicant, Arcadio C. Santos, Jr., after it was obtained by him through inheritance from his mother,
Concepcion Cruz, now deceased.

The CA upheld the RTC's pronouncement, and stated that it could not be denied that "to the owners of
the lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects
of the current of the waters" (Article 457 New Civil Code) as in this case, Arcadio Ivan Santos III and
Arcadio Santos, Jr., are the owners of the land which was previously part of the Parañaque River which
became an orchard after it dried up and considering that Lot 4 which adjoins the same property is
owned by the applicant which was obtained by the latter from his mother

The Republic submits, however, that the application by both lower courts of Article 457 of the Civil Code
waserroneous in the face of the fact that respondents evidence did not establish accretion, but instead
the drying up of the Parañaque River

Issue:
Whether or not respondents could claim the property by virtue of acquisitive prescription (section 14(1)
of PD 1529)

Held:
NO. (By law, accretion-the gradual and imperceptible deposit made through the effects of the current
of the water- belongs to the owner of the land adjacent to the banks of rivers where it forms.

The drying up of the river is not accretion. Hence, the dried-up river bed belongs to the State as property
of public dominion, not to the riparian owner, unless a law vests the ownership in some other person.

Respondents as the applicants for land registration carried the burden of proof to establish the merits
of their application by a preponderance of evidence, by which is meant such evidence that is of greater
weight, or more
Republic of the Philippines vs. Tongson, Sr. G.R. No. 233304 July 28, 2020

FACTS:
Involves a Petition for Review on Certiorari filed against the Court of Appeals (CA) – Cebu City's
decision and resolution, which affirmed the Regional Trial Court (RTC) of Himamaylan City's Amended
Decision in a land registration case.
Ernesto Q. Tongson, Sr., Norma Limsiaco, and their children applied for the registration of a parcel of
land, claiming it was formed by accretion from alluvial deposits caused by the Aguisan River.
They presented certifications from the City Environment and Natural Resources Office (CENRO) and
the Department of Environment and Natural Resources (DENR) supporting their claim.
The Office of the Solicitor General (OSG) did not oppose the application, and no interested party
contested it.
The RTC granted the application, which the OSG appealed.
However, the CA upheld the RTC's decision, citing the evidence presented by the applicants and the
legal presumption that accretion belongs to the riparian owner.
ISSUE:

W/N Tongson sr. provided sufficient evidence to support their claim that the parcel of land they sought
to register was formed by accretion from alluvial deposits caused by the Aguisan River.
Ruling:
The Supreme Court, in reviewing the case, found that the applicants failed to provide sufficient evidence
to support their claim of accretion. While they presented certifications from government agencies, these
were not enough to conclusively prove accretion.
The court emphasized that competent officers from these agencies should have testified on the facts
stated in the certifications.
Additionally, the court noted that the size of the land claimed to be an accretion was not sufficient
evidence to establish the improbability of gradual accretion. The court ruled in favor of the petitioner,
setting aside the CA's decision and denying the applicants' land registration for failure to adequately
substantiate their claim of accretion.
In this case, the Court cited Article 457 of the Civil Code, which states that the addition to the land
formed by alluvion belongs automatically to the riparian owner as a natural incident to ownership.
The Court noted the legal principle that accretion benefits a riparian owner when certain requisites are
present, such as gradual and imperceptible deposit resulting from the effects of the water current, and
that the land where accretion takes place is adjacent to the bank of the river.
However, the Court emphasized that these requisites must be sufficiently established by the riparian
owners applying for land registration over the additional portion. Therefore, the Court's discussion of
Article 457 underscored the importance of proving the existence of accretion and meeting the
necessary conditions for it to apply in the case at hand.

Manigbas vs. Abel G.R. No. 222123 June 28, 2021

FACTS:
Aquilino Manigbas is the petitioner in this case, while Melo Abel, Froilan Ylagan, and Dennis de
Guzman are the respondents.

The case involves a dispute over a parcel of land, particularly Lot 2070-K in Barangay San Agustin I,
Naujan, Oriental Mindoro, owned by Aquilino Manigbas.

A portion of Lot 2070-K serves as a barangay road, which was supposedly constructed by the Provincial
Government of Oriental Mindoro without just compensation to Manigbas.

There is also a 0.3112-hectare land accreted from the San Agustin River (accreted lot), which is the
subject of the controversy.
Aquilino Manigbas initiated proceedings to validate his ownership claim over the accreted lot, including
filing a survey authority request and a free patent application.

Accordingly, Proposed Survey Plan No. F-045208-675 (Proposed Survey Plan) was drawn up for the
accreted lot, to which Manigbas later on filed Free Patent Application No. 045208-675 (FPA)

Respondents, Melo Abel, Froilan Ylagan, and Dennis de Guzman, filed protests against Manigbas's
ownership claim, citing irregularities in the survey and pointing out legal easement restrictions.

The DENR-MIMAROPA initially sided with the respondents, but Manigbas appealed, leading to
conflicting decisions and orders from various levels of the DENR and eventually to the Office of the
President.

The Office of the President dismissed Manigbas's appeal, leading him to file a petition for review with
the Court of Appeals, which affirmed the decision of the Office of the President.

Manigbas then filed a Petition for Review on Certiorari with the Supreme Court, arguing that the Court
of Appeals erred in its decision.

ISSUE:
w/n Court of Appeals erred in withholding the Proposed Survey Plan from Manigbas based on the
allegation that the accreted lot adjoins the barangay road. - YES
Ruling:
• The Court grants the petition and rules in favor of Manigbas, finding that the Court of Appeals
erred in its decision.
• The Court explains the concept of alluvion and the requisites for a riparian owner to claim
ownership over accreted land.

• The Court clarifies that the registration of accreted land is a separate step from the process of
alluvion and that the land registration court cannot confer ownership over what is already owned
by the riparian owner.

• The Court emphasizes that the Proposed Survey Plan should be issued to Manigbas, subject to
the legal easement along the banks of the San Agustin River.

• The Court also notes that the Provincial Government of Oriental Mindoro has not completed just
compensation to Manigbas for the barangay road, and therefore, title to the road remains with
Manigbas.

• The Court concludes that the issue in the case is the issuance of the Proposed Survey Plan and
that the question of riparian ownership should be addressed in the land registration proceedings.
• The Court reverses the decision of the Court of Appeals and directs the DENR-MIMAROPA to
give due course to and issue the Proposed Survey Plan to Manigbas, subject to the legal
easement.
• Manigbas is then allowed to file the necessary land registration proceedings to confirm his
ownership over the accreted lot.

The Court grants the instant Petition for Review on Certiorari, ruling in favor of Manigbas, and finding
that the Court of Appeals ruled contrary to established law and jurisprudence.
Alluvion In Relation To Land
Registration Proceedings And
Legal Easement

Article 457 of the Civil Code provides: "To the owners of lands adjoining the banks of rivers belong the
accretion which they gradually receive from the effects of the current of the waters." This provision
pertains to alluvion, a mode of acquiring property which gives to the owners of lands adjoining the
40

banks of rivers or streams any accretion which is gradually received from the effects of the current of
waters. These accretions belong to riparian owners upon whose lands the alluvial deposits were
41

made. 42

The reason for this principle is, if lands bordering on streams are exposed to floods and other damage
due to the destructive force of the waters, and if by virtue of law they are subject to encumbrances and
various kinds of easements, it is only just that such risks or dangers as may prejudice the owners
thereof should in some way be compensated by the right of accretion. 43
Accretion benefits a riparian owner when the following requisites are present: (1) that the deposit be
gradual and imperceptible; (2) that it resulted from the effects of the current of the water; and (3) that
the land where accretion takes place is adjacent to the bank of a river
However, for a riparian owner to definitively validate ownership over the accreted land, the registration
thereof is a subsequent step entirely distinct from alluvion itself. The Court, in Grande v. Court of
Appeals, summarized the distinctions:
46

x x x The question is whether the accretion becomes automatically registered land just because the lot
which receives it is covered by a Torrens title thereby making the alluvial property imprescriptible.
We agree with the Court of Appeals that it does not, just as an unregistered land purchased by the
registered owner of the adjoining land does not, by extension, become ipso facto registered land.
Ownership of a piece of land is one thing. and registration under the Torrens system of that ownership
is quite another. Ownership over the accretion received by the land adjoining a river is governed by the
Civil Code. Imprescriptibility of registered land is provided in the registration law. Registration under the
Land Registration and Cadastral Acts does not vest or give title to the land. but merely confirms and
thereafter protects the title already possessed by the owner, making it imprescriptible by occupation of
third parties. But to obtain this protection, the land must be placed under the operation of the registration
laws wherein certain judicial procedures have been provided.

Article 459

Agustin vs. Intermediate Appellate Court G.R. Nos. 66075-76 July 05, 1990
the private respondents are Maria Melad, Timoteo Melad, Pablo Binayug, and Geronima Ubina
the petitioners, are Eulogio Agustin, the heirs of Baldomero Langcay, Arturo Balisi, and Juan Langcay.

FACTS:

The lands east of the Cagayan River were covered by the Tuguegarao Cadastre wherein petitioner
Eulogio Agustin was issued OCT for the land owned by him thereof.

On the other hand, all lands west of the said river were covered by the Solana Cadastre where
respondents ( Maria Melad et al) occupy portions thereof.

• In 1925, an OCT was issued for land in the east of the Cagayan River owned by defendant-petitioner
Eulogio Agustin.

As years went by, the Cagayan River moved gradually eastwards, depositing silt (fine sand) on the
western bank. Such continued until 1968.

• In 1950, all lands west of the river were included in Solana Cadastre. Among these occupying lands
covered were plaintiffs-private respondents, Pablo Binayug, who owns 13 lots, and Maria Melad, who
owns 1 lot.

• Through the years, the Cagayan River eroded lands of the Tuguegarao Cadastre on its eastern bank
among which was defendant-petitioner Eulogio Agustin's lot, depositing the alluvium as accretion on
the land possessed by Pablo Binayug on the western bank.

However, in 1968, after a big flood, the Cagayan River changed its course, returned to its 1919 bed,
and in the process, cut across the lands of Melan, and the spouses Binayug and Ubina, whose lands
were transferred on the eastern side of the river.

The respondents (Maria Melad et al owner of lands on the west) filed a complaint to recover said lots.

TRIAL COURT: Commands the petitioner to vacate their lots of Solana Cadastre together with its
accretion in favor of the private respondents.

IAC: Affirmed in toto the judgment of the trial court. Declared that the lot in question had become part
of private respondent's estate as a result of accretion and that their ownership is not affected by the
sudden and abrupt change in the course of Cagayan River when it reverted to its old bed.

ISSUE: WON the land in question had become part of private respondent's estate as a result of
accretion.

HELD: Yes.
The petition of Agustin is unmeritorious and must be denied.

Accretion benefits a riparian owner when the following requisites are present:
(1) That the deposit be gradual and imperceptible;
(2) That it resulted from the effect of the current of the water, and
(3) That the land where accretion takes place is adjacent to the bank of a river.

In the present case, all these requisites of accretion are present.

Accretions belong to the riparian owners upon whose lands the alluvial deposits were made. The reason
for this principle is because, if lands bordering on streams are exposed to floods and other damage
due to the destructive force of the waters, and if by virtue of law they are subject to encumbrances and
various kinds of easements, it is only just that such risks or dangers as may prejudice the owners
thereof should in some way be compensated by the right of accretion.

The private respondents' ownership of the accretion to their lands was not lost upon the sudden and
abrupt change of the course of the Cagayan River in 1968 or 1969 when it reverted to its old 1919 bed,
and separated or transferred said accretions to the other side (or eastern bank) of the river. Article 459
& 463 apply to this situation.

1 "Art. 459. Whenever the current of a river, creek or torrent segregates from an estate on its bank a
known portion of land and transfers it to another estate, the owner of the land to which the segregated
portion belonged retains the ownership of it, provided that he removes the same within two years."

2 "Art. 463. Whenever the current of a river divides itself into branches, leaving a piece of land or part
thereof isolated, the owner of the land retains his ownership. He also retains it if a portion of land is
separated from the estate by the current.

The sudden change of course of the Cagayan River as a result of a strong typhoon in 1968 caused a
portion of the lands of the private respondent to be "separated from the estate by the current." The
private respondents retained the ownership of the portion that was transferred by avulsion to the other
side of the river.

Article 461

Bagaipo vs. Court of Appeals G.R. No. 116290 December 8, 2000

FACTS:

Petitioner Dionisia P. Bagaipo is the registered owner of Lot which is located southeast of Davao river.

While respondent Leanor Lozano is the owner of a registered parcel of land located across and opposite
the southeast portion of petitioner's lot facing the Davao River.

On May 26, 1989, Bagalpo filed a complaint for Recovery of Possession with Mandatory Writ of
Preliminary Injunction and Damages against Lozano for: (1) the surrender of possession by Lozano of
a certain portion of land measuring 29,162 square meters which is supposedly included in the area
belonging to Bagalpo under TCT No. T-15757; and (2) the recovery of a land area measuring 37,901
square meters which Bagalpo allegedly lost when the Davao River traversed her property.

Bagaipo contended that as a result of a change in course of the said river, her property became divided
into three lots, namely: Lots 115-A, 115-8 and 415-C. In January 1988, Bagalpo commissioned a
resurvey of Lot 115 and presented before the trial court a survey plan prepared by Geodetic Engineer
Gersacio A. Magno which concluded that the land presently located across the river and parallel to
Bagalpo's property still belonged to the latter and not to Lozano who planted some 350 fruit-bearing
trees on Lot 415-C and the old abandoned river bed.

For his part, Lozano insisted that the land claimed by Bagaipo is actually an accretion to their titled
property. He asserted that the Davao River did not change its course and that the reduction in Bagalpo's
domain was caused by gradual erosion due to the current of the Davao River.

Lozano added that it is also because of the river's natural action that silt slowly deposited and added
to his land over a long period of time.

He further averred that this accretion continues up to the present and that registration proceedings
Instituted by him over the alluvial formation could not be concluded precisely because it continued to
Increase in size.
The Trial Court, upon inspection, found that the decrease in land area was brought about by erosion
and not a change in the river's course. CA affirmed the TC ruling. - Art. 457.

ISSUE:
W/N there was a change in the river's course which resulted to avulsion.

HELD:
NO. The trial court and the appellate court both found that the decrease in land area was brought about
by erosion and not a change in the river's course.

This conclusion was reached after the trial judge observed during ocular Inspection that the banks
located on petitioner's land are sharp, craggy and very much higher than the land on the other side of
the river.

Additionally, the riverbank on respondent's side is lower and gently sloping. The lower land therefore
naturally received the alluvial soil carried by the river current.

These findings are factual, thus conclusive on this Court, unless there are strong and exceptional
reasons, or they are unsupported by the evidence on record, or the judgment itself is based on a
misapprehension of facts.

The decrease in petitioner's land area and the corresponding expansion of respondent's property were
the combined effect of erosion and accretion respectively.

Art. 461 of the Civil Code is inapplicable.

Petitioner cannot claim ownership over the old abandoned riverbed because the same is Inexistent.

The riverbed's former location cannot even be pinpointed with particularity since the movement of the
Davao River took place gradually over an unspecified period of time, up to the present.

The rule is well-settled that accretion benefits a riparian owner when the following requisites are
present: 1) That the deposit be gradual and imperceptible; 2) That it resulted from the effects of the
current of the water; and 3) That the land where accretion takes place is adjacent to the bank of the
river These requisites were sufficiently proven in favor of respondents. In the absence of evidence that
the change in the course of the river was sudden or that it occurred through avulsion, the presumption
is that the change was gradual and was caused by alluvium and erosion.

WHEREFORE, the assailed decision dated June 30, 1994, of the Court of Appeals in C.A.-G. R. CV
No. 37615, sustaining the judgment of the court a quo, is AFFIRMED. Costs against petitioner.
SO ORDERED.

Celestial vs. Cachopero G.R. No. 142595 October 15, 2003

Summary:

Petitioner and her brother were in a dispute over a parcel of land which was formerly a part of Salunayan
Creek, but has dried up because of the construction by the National Irrigation Administration.

Cachopero earlier filed a Miscellaneous Sales Application over the property with the Bureau of Lands,
saying that he had been occupying the land and that he already introduced improvements therein.

Opposing his application, Celestial claimed that she has preferential right over the land, basing it on
her right of accession (citing Article 370 of the Spanish Civil Code and Art. 461 of the NCC), her long-
term adverse possession, and her being the adjacent and riparian (situated on a bank of river) owner.

On the issue of whether she owns the property, the Court said that it is of public dominion and is outside
the commerce of men, therefore it is not susceptible to private appropriation and acquisitive
prescription.

She also could not invoke either of the Civil Code provisions because these are applicable only when
the river beds are abandoned through the natural change in the course of the waters. There wasn't
even a change in the course involved for the river just dried up.

FACTS:
Cachopero filed a Miscellaneous Sales Application (MSA) with the Bureau of Lands covering a 415
square meter parcel of land located at Barrio 8, Midsayap, Cotabato and formerly part of the Salunayan
Creek in Katingawan, Midsayap. He alleged that he had been occupying the land since 1968 whereon
he built a residential house and introduced other improvements.

Celestial filed a protest against the MSA, saying that she has preferential right over the land subject
thereof since it is adjacent to, and is the only outlet from, her residential house.

After an ocular inspection by the Bureau of Lands, it was found out that the land was formerly part of
the Salunayan Creek, but has dried up because of the NIA's construction of an irrigation canal.

Cachopero's application and her protest were denied because the local department of public works and
highways and the municipal government may need the land in the future.

However, Cachopero was allowed to stay on the land until such a time that the government needs the
land for road- expansion.

Celestial filed an action for ejectment against her brother, but they later reached a compromise.

Cachopero filed a second MSA with the regional Department of Environment and Natural Resources
(DENR) covering the same property, but this time he had the certification from the mayor and
indorsement from the district engineer that the land is no longer needed by the government and that it
is suitable for residential purposes.

However, his application was dismissed and though the regional director agrees that it's residential

ISSUE:

(b) Whether or not the land in question owned by one of the parties when it is classified as outside the
commerce of man

Ruling:

A dried up creek is property of public dominion and not susceptible to acquisitive prescription

As for Celestial's claim of ownership over the subject land, admittedly a dried-up bed of the Salunayan
Creek, based on
(1) her alleged long term adverse possession and that of her predecessor-in-interest, Marcelina
Basadre, even prior to October 22, 1966, when she purchased the adjoining property from the latter,
and
(2) the right of accession under Art. 370 of the Spanish Civil Code of 1889 and/or Article 461 of the
Civil Code, the same must fail.

Since property of public dominion is outside the commerce of man and not susceptible to private
appropriation and acquisitive prescription, the adverse possession which may be the basis of a grant
of title in the confirmation of an imperfect title refers only to alienable or disposable portions of the public
domain.

It is only after the Government has declared the land to be alienable and disposable agricultural land
that the year of entry, cultivation and exclusive and adverse possession can be counted for purposes
of an imperfect title

And both Article 370 of the Old Code and Article 461 of the present Civil Code are applicable only
when" [r]iver beds are abandoned through the natural change in the course of the waters." It is
uncontroverted, however, that, as found by both the Bureau of Lands and the DENR Regional Executive
Director, the subject land became dry as a result of the construction of an irrigation canal by the National
Irrigation Administration. Thus, in Ronquillo v. Court of Appeals, 59 this Court held:chanrob1es virtual
1aw library

The law is clear and unambiguous. It leaves no room for interpretation. Article 370 applies only if there
is a natural change in the course of the waters. The rules on alluvion do not apply to man-made or
artificial accretions nor to accretions to lands that adjoin canals or esteros or artificial drainage systems.
Considering our earlier finding that the dried-up portion of Estero Calubcub was actually caused by the
active intervention of man, it follows that Article 370 does not apply to the case at bar and, hence, the
Del Rosarios cannot be entitled thereto supposedly as riparian owners.
Thus, even granting that petitioner and his predecessors-in-interest had occupied the same since
1908, he still cannot claim title thereto by virtue of such possession since the subject parcels of land
were not yet alienable land at that time nor capable of private appropriation. The adverse possession
which may be the basis of a grant of title or confirmation of an imperfect title refers only to alienable or
disposable portions of the public domain.

Spouses Galang vs. Spouses Reyes G.R. No. 184746 August 15, 2012

Facts:

Spouses Reyes filed a case for the annulment of Original Certificate of Title against spouses Galang
with the Regional Trial Court, Antipolo, Rizal.

The Reyeses alleged that they owned two properties: (1) a subdivision project known as Ponderosa
Heights Subdivision (Ponderosa), and (2) an adjoining property covered by Transfer Certificate of Title
(TCT) that the properties were separated by the Marigman Creek, which dried up sometime in 1980
when it changed its course and passed through Ponderosa; that the Galangs, by employing
manipulation and fraud, were able to obtain a certificate of title over the dried up creek bed from the
Department of Environment and Natural Resources (DENR), through its Provincial Office (PENRO ).

The Galangs denied that the land subject of the complaint was part of a creek and countered that OCT
was issued to them after they had complied with the free patent requirements of the DENR, through
the PENRO; that they and their predecessor-in-interest had been in possession, occupation, cultivation,
and ownership of the land for quite some time; that the property described under TCT No. 185252
belonged to Apolonio Galang, their predecessor-in interest, under OCT No. 3991; that the property was
transferred in the names of the Reyeses through falsified document; that assuming ex gratia argumenti
that the creek had indeed changed its course and passed through Ponderosa, the Reyeses had already
claimed for themselves the portion of the dried creek which adjoined and co-existed with their property.

The RTC dismissed the complaint for lack of cause of action and for being an erroneous remedy. The
RTC stated that a title issued upon a patent may be annulled only on grounds of actual and intrinsic
fraud, and that the Reyeses presented no evidence of fraud despite their allegations that the Galangs
were not in possession of the property and that it was part of a dried creek.

There being no evidence, these contentions remained allegations and could not defeat the title of the
Galangs. In its Decision, dated April 9, 2008, the CA reversed and set aside the RTC decision and
ordered the cancellation of OCT No. P-928 and the reconveyance of the land to the Reyeses.

Issue:
Whether or not the Spouses Reyes could validly claim the subject land as consequence of the dried
Marigman creek. - NO

Ruling:
NO. Article 461 of the Civil Code, provides: River beds which are abandoned through the natural
change in the course of the waters ipso facto belong to the owners whose lands are occupied by the
new course in proportion to the area lost.

However, the owners of the lands adjoining the old bed shall have the right to acquire the same by
paying the value thereof, which value shall not exceed the value of the area occupied by the new bed.

If indeed a property was the former bed of a creek that changed its course and passed through the
property of the claimant, then, pursuant to Article 461, the ownership of the old bed left to dry by the
change of course was automatically acquired by the claimant.

Before such a conclusion can be reached, the fact of natural abandonment of the old course must be
shown, that is, it must be proven that the creek indeed changed its course without artificial or man-
made intervention.

Thus, the claimant, in this case the Reyeses, must prove three key elements by clear and convincing
evidence. These are:
(1) the old course of the creek,
(2) the new course of the creek, and
(3) the change of course of the creek from the old location to the new location by natural occurrence.

In this regard, the Reyeses failed to adduce indubitable evidence to prove the old course, its natural
abandonment and the new course. In the face of a Torrens title issued by the government, which is
presumed to have been regularly issued, the evidence of the Reyeses was clearly wanting.
Uncorroborated testimonial evidence will not suffice to convince the Court to order the reconveyance
of the property to them. In the case at bar, it is not clear whether or not the Marigman Creek dried-up
naturally back in 1980. Neither did private respondents submit any findings or report from the Bureau
of Lands or the DENR Regional Executive Director, who has the jurisdiction over the subject lot,
regarding the nature of change in the course of the creek's waters.

Since the propriety of the remedy taken by private respondents in the trial court and their legal
personality to file the aforesaid action depends on whether or not the litigated property in the present
case still forms part of the public domain, or had already been converted into a private land, the
identification of the actual portion of the land subject of the controversy becomes necessary and
indispensable in deciding the issues herein involved. Notably, private respondents failed to submit
during trial any convincing proof of a similar declaration by the government that a portion of the
Marigman Creek had already dried-up and that the same is already considered alienable and
disposable agricultural land which they could acquire through acquisitive prescription.

Article 462

Morandarte vs. Court of Appeals G.R. No. 123586 August 12, 2004

FACTS:

Republic filed a Complaint for Annulment of Title and Reversion against the Morandarte spouses on
the ground that the subject land includes a portion of the Miputak River which is outside the commerce
of man and beyond the authority of the Bureau of Lands (BOL) to dispose of.

In 1972, Morandarte filed an application for free patent. In 1976, BOL approved the free patent
application of and directed the issuance of a free patent in Moranderte's favor. Accordingly, Free Patent
No. (IX-8) 785 and OCT No. P-21972 were issued.

Subsequently, Morandarte caused a subdivision survey of the lot for the purpose of subdividing it into
two.

In 1987, Republic, through the Director of Lands, filed before the RTC a Complaint for Annulment of
Title and Reversion against the Morandarte spouses on the ground that the subject land includes a
portion of the Miputak River which cannot be validly awarded as it is outside the commerce of man and
beyond the authority of the BOL to dispose of.

It claimed that the Morandarte spouses deliberately and intentionally concealed such fact in the
application to ensure approval thereof, thus their title is void.

Morandarte spouses denied the allegations of the complaint and claimed that they were able to secure
the title in accordance and in compliance with the requirements of the law. They alleged that the land
is a portion of inherited property from Antonio L. Morandarte whose ownership thereof is covered by
Tax Declaration No. 2296.

As regards the Miputak River, they argued that the river changed its course brought about by the fact
that a portion of the Miputak River was leased by the Bureau of Fisheries (BOF) to a certain Realiza
whose rights were subsequently transferred to Lacaya, who constructed dikes that forced the river to
be directed into the lot. They also alleged that they indicated in their survey plan the actual location of
the Miputak River in relation to the property but the BOL returned the survey with the directive that the
existence of the river should not be indicated as the original survey did not show its existence, to which
they complied with by submitting a new survey plan which did not indicate the existence of the river.

In the alternative, they alleged that inclusion of the Miputak River should not render the title void; only
the portion of the property covered by the Miputak River should be nullified but their title to the remaining
portion should be maintained.

RTC - annulled the free patent - affirmed by CA

The RTC declared that while fraud in the procurement of the title was not established by the State,
Morandartes title is, nonetheless, void because it induces a portion of the Miputak River which is outside
the commerce of man and beyond the authority of the BOL to dispose of. In addition,

the RTC sustained the fishpond rights of the Lacaya spouses over a portion included in Morandartes
title based on a Deed of Transfer of Fishpond Rights.
CA affirmed believing that fraud and misrepresentation attended the application for free patent.

The Morandarte spouses argue that the CA failed to take into consideration the true state of the present
Miputak River in relation to Lot 7.

They contend that the Miputak River changed its course due to the closure of the river bed through the
construction of dikes by the Lacaya spouses, forcing the river to be diverted into Lot 6781-B. Thus, they
submit that the applicable provision is Article 77 of the Law of Waters, which provides that "[l]ands
accidentally inundated by the waters of lakes, or by creeks, rivers and other streams shall continue to
be the property of their respective owners."

Moreover, they vigorously contend that the CA erred in sustaining the validity of fishpond rights of the
Lacaya spouses. They aver that the Lacaya spouses violated the terms of the lease agreement by
constructing dikes for the fishponds which caused the Miputak River to traverse the property of the
Morandarte spouses.

ISSUE:

RESPONDENT COURT COMMITTED A GRAVE ERROR OF LAW IN APPLYING ARTICLE 462 OF

THE CIVIL CODE TO THIS CASE WHEN THE CHANGE IN COURSE OF THE OLD MIPUTAK RIVER
WAS NOT DUE TO NATURAL CAUSES BUT WAS ACCIDENTAL.

NO

The present controversy involves a portion of the public domain that was merely erroneously included
in the free patent. A different rule would apply where fraud is convincingly shown. The absence of clear
evidence of fraud will not invalidate the entire title of the Morandarte spouses.
The Morandarte spouses unsuccessfully harp on the inapplicability of Article 462 of the Civil Code by
claiming that the change of course of the Miputak River was due to a man-made cause and not by
natural means.
They offered no iota of evidence to substantiate this claim, other than the bare testimony of Beder
Morandarte. Neither is there proof that the movement of the river was caused by accident or calamity,
such as a typhoon, and not by the natural movements thereof. General statements, which are mere
conclusions of law and not proofs, are unavailing and cannot suffice.
Besides, at the time of the filing of the application for free patent in 1972, a portion of the Miputak River
was already in its present course, traversing Lot 1038, particularly Lot 7 of the amended plan submitted
by Morandarte.
We need not delve on the question of whether the Lacaya spouses violated the terms of the fishpond
lease agreement. It is not material in this case in the sense that it was not made an issue by the parties.
Neither is there evidence to corroborate the bare allegation of petitioners that the Lacaya spouses
constructed dikes for the fishponds which caused the Miputak River to traverse Lot 7. What is significant
here is the established fact that there was an existing fishpond lease agreement between Felipe Lacaya
and the Bureau of Fisheries at the time of Morandarte's application for free patent; in effect, proving
that the area covering the fishpond belongs to the Government and petitioners have no rights thereto.

Article 466

Aguirre vs. Pheng in his capacity as General Manager of the LEONORA & COMPANY, and NATIONAL
SHIPYARDS AND STEEL CORPORATION G.R. No. L-20851 September 03, 1966

FACT:

Vicente and Teresa Aldaba sold to Jesus Aguirre a circular bolted steel tank for P900.
However, Aguirre, failed to take physical possession of the tank, having been prevented from doing so
by the municipal authorities of Los Baños, Laguna (where the tank was located), in view of the claim of
ownership being made by the Bureau of Public Highways.

The Aldabas again sold the same tank Gabriel, for P900 who, in turn, sold it to the Leonora & Company
on for P2,500. After some alterations and improvements made on the tank, Leonora & Company was
able to sell the tank to National Shipyards & Steel Corporation (Nassco), for P14,500 after making
improvements - result of public bidding

Aguirre immediately filed with National Shipyards & Steel Corporation (Nassco) a formal notice of his
claim of ownership of the tank and payment of the purchase price to Leonora & Company was
suspended.
Then, Aguirre instituted a Civil Case against Leonora & Company and the Aldabas, for delivery to him
of the tank. Because of the suspension of payment of the purchase price, Leonora & Company filed
Civil Case No. 27988, against the Nassco, praying for the delivery of the purchase price of P14,500.00

In Civil Case No. 24914, the court held Aguirre as the lawful owner of the tank and ordered Nassco to
deliver it to Aguirre.

Failure to make such delivery, Nassco shall pay to the said Jesus Aguirre the original purchase price
of the tank in the amount of P900.00. This decision became final.

In Civil Case No. 27988, the CFI ordered Nassco to deliver to Aguirre such tank, but in the event that
delivery is not possible, to pay to Aguirre the purchase price of P900.00, and to Leonora and Co. the
amount of P11,299.00 which represents the costs of the improvements made by the said Leonora &
Co

Aguirre filed the present petition for review, alleging that the judgment of the Court of Appeals, ordering
the return to him of the sum of P900.00 (when the value of the property is at least P14,500.00), nullifies
the declaration of his ownership of the tank.

He contends that under Article 440 of the Civil Code, his ownership of the property entitles him to
everything that is produced thereby, or is incorporated or attached thereto, either naturally or artificially.
Thus, he reiterates the claim to the fair and reasonable value of the tank at the time of its delivery to
Nassco which is P14,500.00.

ISSUE:
WN Aguiire is entitled to the amount of 14,500 - the current value of the tank after the improvements of
Leonora & co - NO

Ruling:

NO. Petitioner is not entitled to the improvements made by Leonora and Company to the steel tank.
It is clear that this is a case of accession by specification: Leonora and Company, as purchaser acting
in good faith, spent P11,299 for the reconditioning of the tank which is later adjudged to belong to
petitioner Aguirre - Article 466
ordinarily, therefore, Aguirre, as owner of the tank, would be entitled to any accession thereto, the rule
is different where the works or improvements or the accession was made on the property by one who
acted in good faith

To uphold petitioner's contention that he is entitled to the sum of P14,500 the price of the tank in its
present condition, would be to allow him to enrich himself at the expense of another

It must also be remembered that the judgment in Civil Case No. 24914 of the Court of First Instance of
Manila, wherein Nassco was directed to pay to Aguirre the of P900.00, in case delivery of the same
tank is no longer possible, has already become final

Article 476 – Article 481

Robles vs. Court of Appeals G.R. No. 123509 March 14, 2000

FACTS:

Leon Robles owned a land in Morong, Rizal with an area of almost 10 K sq. m and he occupied it openly
and adversely, declared in his name in a tax declaration in 1916 and paid the taxes for it.

Silvino Robles inherited the land from Leon (his father) and Silvino's Widow, Maria Dela Cruz, inherited
it upon his death. They took adverse possession of the property and paid the taxes for it. The task of
cultivating the land was given to one Lucio Robles (who also erected a house thereat)

They entrusted the payment of the taxes of the said land to their co-heir and half brother Hilario Robles.

For an unknown reason, the tax declaration in Silverio Robles' name was cancelled and given to one
Exequiel Ballena (father of Andrea Robles, wife of defendant Hilario Robles)

Exequiel Ballena secured a loan from the Antipolo Rural Bank, using the tax declaration as security.
Somehow, the tax declaration was transferred to the name of Antipolo Rural Bank and later on, was
transferred to the name of defendant Hilario Robles and his wife.
In 1996, Andrea Robles secured a loan from the Cardona Rural Bank, Inc., using the tax declaration
as security. Andrea Robles testified without contradiction that somebody else, not her husband Hilario
Robles, signed the loan papers because Hilario Robles was working in Marinduque at that time as a
carpenter.

For failure to pay the mortgage debt, foreclosure proceedings were had and defendant Rural Bank
emerged as the highest bidder during the auction sale in October 1968.

The spouses Hilario Robles failed to redeem the property and so the tax declaration was transferred in
the name of defendant Rural Bank.

On September 25, 1987, defendant Rural Bank sold the same to the Spouses Vergel Santos and Ruth
Santos. Plaintiff then discovered the mortgage and attempted to redeem the property, but was
unsuccessful.

On May 10,1988, defendant spouses Santos took possession of the property in question and was able
to secure Free Patent n their names.

RTC-MORONG
Petitioners Lucio Robles, Emeteria Robles, Aludia Robles and Emilio Robles in a case for quieting of
title.

The real estate mortgage allegedly executed by Hilario Robles is not valid because his signature in the
mortgage deed was forged. This fact, which remains unrebutted, was admitted by Andrea Robles.
Also real estate mortgage executed in favor of the defendant Cardona Rural Bank, Inc. was not valid,
thus foreclosure is not valid, bank did not acquire any right and could not have transferred any right to
the spouses Santos.
• Petitioners were in open, exclusive and undisputed possession of alienable public lands for the
period prescribed by law (30 years). The land in question has become private land. Thus the
free patent is not valid since it has become private land BOL has no jurisdiction to dispose it.
CA: reversed the trial court
• petitioners no longer had any title to the subject property at the time they instituted the Complaint
for quieting of title. The loss of title is evidenced by the subsequent declaration of the subject
realty for taxation purposes in the name of Ballena and subsequently Rural Bank of Antipolo.
• Petitioners no longer had any title to speak of when Exequiel Ballena executed the November
7, 1966 Deed of Absolute Sale transferring the land in favor of the spouses Hilario and Andrea
Robles
• Serves as acts of repudiation of the co-ownership
• inaction for more than twenty (20) years - prescription set in (co-owner can claim prescription as
against the other co-owners)
Hence this petition
Petitioners allege that their title as owners and possessors of the disputed property is clouded by the
tax declaration and, subsequently, the free patent thereto granted to Spouses Vergel and Ruth Santos.

ISSUE:
WON CA erred when it ruled that petitioners no longer had title when they instituted the complaint for
quieting of title - Yes

RULING:
Art. 476 of the Civil Code provides:
Whenever there is cloud on title to real property or any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in
fact invalid, ineffective, voidable or unenforceable, and may be prejudicial to said title, an action may
be brought to remove such cloud or to quiet title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein.
Based on the above definition, an action to quiet title is a common-law remedy for the removal of any
cloud or doubt or uncertainty on the title to real property. It is essential for the plaintiff or complainant
to have a legal or an equitable title to or interest in the real property which is the subject matter of the
action.
Also, the deed, claim, encumbrance or proceeding that is being alleged as a cloud on plaintiff's title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.
The Court of Appeals failed to consider irregularities in the transactions involving the disputed property.
First, while it was declared in the name of Exequiel in 1962, there was no instrument or deed of
conveyance evidencing its transfer from the heirs of Silvino to him. This fact is important, considering
that the petitioners are alleging continued possession of the property.

Second, Exequiel was the father-in-law of Hilario, to whom petitioners had entrusted the payment of
the land taxes.

Third, considering that the subject property had been mortgaged by Exequiel to the Rural Bank of
Antipolo, and that it was foreclosed and in fact declared in the bank's name in 1965, why was he able
to sell it to Spouses Hilario and Andrea in 1966? Lastly, inasmuch as it was an unregistered parcel of
land, the Rural Bank of Cardona, Inc., did not observe due diligence in determining Hilario's title thereto.
The failure to show the indubitable title of Exequiel to the property in question is vital to the resolution
of the present Petition. It was from him that Hilario had allegedly derived his title thereto as owner, an
allegation which thereby enabled him to mortgage it to the Rural Bank of Cardona.

The occupation and the possession thereof by the petitioners and their predecessors-in-interest until
1962 was not disputed, and Exequiel's acquisition of the said property by prescription was not alleged.
Thus, the deed of conveyance purportedly evidencing the transfer of ownership and possession from
the heirs of Silvino to Exequiel should have been presented as the best proof of that transfer. No such
document was presented, however.
Therefore, there is merit to the contention of the petitioners that Hilario mortgaged the disputed property
to the Rural Bank of Cardona in his capacity as a mere co-owner thereof. Clearly, the said transaction
did not divest them of title to the property at the time of the institution of the Complaint for quieting of
title.
Contrary to the disquisition of the Court of Appeals, Hilario effected no clear and evident repudiation of
the co-ownership. It is a fundamental principle that a co-owner cannot acquire by prescription the share
of the other co-owners, absent any clear repudiation of the co-ownership.
In order that the title may prescribe in favor of a co-owner, the following requisites must concur: (1) the
co-owner has performed unequivocal acts of repudiation amounting to an ouster of the other co-
owners;
(2) such positive acts of repudiation have been made known to the other co-owner; and
(3) the evidence thereof is clear and convincing.
In the present case, Hilario did not have possession of the subject property; neither did he exclude the
petitioners from the use and the enjoyment thereof, as they had indisputably shared in its fruits.
Likewise, his act of entering into a mortgage contract with the bank cannot be construed to be a
repudiation of the co-ownership. As absolute owner of his undivided interest in the land, he had the
right to alienate his share, as he in fact did. Neither should his payment of land taxes in his name, as
agreed upon by the co-owners, be construed as a repudiation of the co-ownership.
The assertion that the declaration of ownership was tantamount to repudiation was belied by the
continued occupation and possession of the disputed property by the petitioners as owners.
Calacala vs. Republic of the Philippines G.R. No. 154415 July 28, 2005

FACTS:
Spouses Camilo and Conchita Calacala were the registered owners of the subject land. It was used as
a bond for the provisional release of an accused.
The accused failed to appear at the arraignment; the bondsman failed to present the accused. Hence,
the property forfeited in favor of the government.
The Republic was the highest bidder in the public auction. Spouses Calacala were given 1 year to
redeem the property. However, they never did up to their deaths.
Petitioners filed with the RTC a complaint for quieting of title and cancellation of Encumbrance against
Republic.
Republic moved to dismiss the complaint alleging that complainant failed to state a cause of action and
(2) prescription of petitioners' right to redeem.
Petitioners alleged that despite the lapse of nineteen (19) years, respondent did not secure the
necessary Certificate of Final Sale and Writ of Possession and failed to execute an Affidavit of
Consolidation of Ownership.
RTC: the trial court granted the Republic’s motion to dismiss and accordingly dismissed petitioners’
complaint.
ISSUE:
WON the action for quieting the title will prosper.
HELD: NO.
Under Article 476 of the New Civil Code, the remedy may be availed of only when, by reason of any
instrument, record, claim, encumbrance or proceeding, which appears valid but is, in fact, invalid,
ineffective, voidable or unenforceable, a cloud is thereby casts on the complainant’s title to real property
or any interest therein. The codal provision reads:
Art. 476 and 477 - Requisites for quieting of title:
1. The plaintiff or complainant has a legal or an equitable title to or interest in the real property subject
of the action.
2. The deed, claim, encumbrance or proceeding claimed to be casting cloud on his title must be shown
to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
In the case at bar:
These essential requisites are not present.
Petitioners are not holders of any legal title over the property subject of this case and are bereft of any
equitable claim thereon, this is essential in an action to quiet title.
Petitioners' predecessors-in-interest lost whatever right they had over land in question from the very
moment they failed to redeem it during the 1-year period of redemption.
The Republic's failure to do anything within ten (10) years or more following the registration of the
Sheriff's Certificate of Sale cannot give rise to a presumption that it has thereby waived or abandoned
its right of ownership or that it has prescribed, "for prescription does not lie against the government",
nor could it "be bound or estopped by the negligence or mistakes of its officials and employees".
Under the Rules of Court the expiration of that one-year period forecloses the owner's right to redeem,
thus making the sheriff's sale absolute. The issuance thereafter of a final deed of sale becomes a mere
formality, an act merely confirmatory of the title that is already in the purchaser and constituting official
evidence of that fact.
DENIED.

Ramos vs. Court of Appeals G.R. No. 132196 December 09, 2005

FACTS:
This case presents a tangled tale involving the conflicting accounts of petitioners and private
respondents over a piece of land sold by Gregorio Valdez (private respondents’ father) to petitioners
(Sps Ramos) in 1948 and which ostensibly became the subject of a compromise agreement in 1977.
Private respondents are the children[4] of Gregorio Valdez. In 1948, Gregorio Valdez sold the subject
land to petitioners.
The absolute deed of sale was subsequently annotated at the back of OCT No. 48824 as Entry No.
377847.
It is the contention of private respondents that as early as 1977, petitioners no longer owned subject
land as they had renounced their rights thereto as evidenced by a compromise agreement dated 02
June 1977.
Petitioner sps, in their Answer with Counterclaim, maintain that they remain owners of the subject land
as the compromise agreement being relied upon by private respondents refers to another piece of land.
Thus, they argue that the compromise agreement constitutes a cloud on their title. They prayed, among
other things, for the quieting of their title and that they be adjudged lawful owners of the subject land.
Sometime in 1991, Gregorio Valdez died. Private respondents allege that immediately after the death
of their father, petitioners (SPS RAMOS) disturbed their possession of subject land by cultivating the
same and by enclosing it with a fence.
petitioners did not heed their demands to vacate, they were constrained to file a case for Quieting of
Title, Ownership, Possession plus Damages with prayer for Writ of Preliminary Injunction.

RTC ruled in favor of the SPS petitioners by declaring them owners of the subject land by virtue of the
absolute deed of sale dated 06 January 1948.
Declaring the SPS Ramos to be the lawful owners of the land in question.
The Court of Appeals reversed the trial court's ruling. It held that the land renounced by petitioners was
the subject land and that it was made in favor of Gregorio Valdez,
Aggrieved by the ruling, and their motion for reconsideration having been denied by the Court of
Appeals, they went to the SC
The heirs of Valdez, allege that their father's obligation under the deed of absolute sale has been
extinguished or has been terminated by virtue of the compromise agreement dated 02 June 1977
whereby petitioners ostensibly renounced their rights over the subject property.
Petitioners, on the other hand, claim that the same compromise agreement constitutes a cloud on their
title.
ISSUE:
The main issue in this case is whether or not petitioner can enforce a compromise agreement to which
she was not a party.
Ruling:
In order to get to the bottom of this land dispute, the primary and most basic question that has to be
asked is this: Is the absolute deed of sale dated 06 January 1948 between petitioners and private
respondents’ predecessor-in-interest, Gregorio Valdez, annotated at the back of OCT No. 48824, a
cloud on such title that has to be removed under the grounds stated in the Civil Code?
Articles 476 and 478 of the Civil Code provide:
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in
truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an
action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein.
Art. 478. There may also be an action to quiet title or remove a cloud therefrom when the contract,
instrument or other obligation has been extinguished or has terminated, or has been barred by
extinctive prescription.
In regards to the compromise agreement
The persons whose names were typewritten on the compromise agreement signed above their names.
Gregorio Valdez’s name, on the other hand, as well as the role he played in the execution of the
document, was not typewritten on the document. His signature, however, appears on the same line as
the phrase "assisted by" just above the signature of Atty. Caldito. Petitioner Segundo Ramos swears
that he did not see Gregorio Valdez sign the document at the time of the execution of the same. 13

Witness for petitioners, Leonardo Quesora, who was present at the time of the execution of the
compromise agreement, likewise testified that he did not see Gregorio Valdez sign. Moreover, none of
14

the private respondents or their witnesses testified as to having witnessed Gregorio Valdez sign the
compromise agreement.
Contrary to the position taken by heirs, the reference to their father, Gregorio Valdez, seems to us to
be a mere description of the land being renounced.
Nothing in the compromise agreement would suggest that the renunciation of the subject land was to
be made in Gregorio Valdez’s favor. Verily, for this Court to interpret the stipulation as conferring some
right to a third person (i.e., stipulation pour autrui), the following requisites must concur:
1. There must be a stipulation in favor of a third person;
2. The stipulation in favor of a third person should be a part, not the whole, of the contract;
3. The contracting parties must have clearly and deliberately conferred a favor upon a third person, not
a mere incidental benefit or interest;
4. The third person must have communicated his acceptance to the obligor before its revocation; and
5. Neither of the contracting parties bears the legal representation or authorization of the third party

Supreme Court's Decision and Reasoning

• The Supreme Court reversed the ruling of the Court of Appeals and affirmed the decision of the
trial court, declaring the petitioners as the lawful owners of the land.
• The Court held that the compromise agreement cannot be enforced against the petitioners SPS
as they were not parties to it.
• A contract cannot be binding on someone who is not a party to it, even if they are aware of the
contract.
• The compromise agreement did not expressly state that the renunciation was in favor of Gregorio
Valdez, and his signature on the agreement did not indicate in what capacity he was signing.
• The reference to Gregorio Valdez in the compromise agreement was merely a description of the
land being renounced and did not confer any rights to him.
• Any benefit that accrued to Gregorio Valdez was merely incidental and not the purpose and
intent of the stipulating parties.
Conclusion
• The Supreme Court reversed the decision of the Court of Appeals and affirmed the decision of
the trial court, declaring the petitioners as the lawful owners of the land.
•
Spouses Ragasa vs. Spouses Roa G.R. No. 141964 June 30, 2006

SUMMARY:
Sps. Ragasa bought a property in installments and immediately took possession. Upon full payment,
the owner's copy of the TCT was turned over to them. When they tried to transfer the TCT in their name
years later they found out that the property was sold by defendant Ex-Officio Sheriff of Quezon City to
Sps. Roa. Sps Ragasa filed a case captioned "Annulment of Execution Sale and Damages" which the
RTC dismissed on the ground of prescription. The SC explained that the complaint of Sps. Ragasa is
actually a quieting of title which is imprescriptible if the plaintiff is in possession of the property.
FACTS:
May 10, 1989: Sps. Ragasa entered into a contract with Oakland Development Resources Corporation
for the purchase in installments of a piece of property, with improvements, in Diliman, QC.
They immediately took possession and resided thereat together with their relatives who continued to
occupy the same whenever the plaintiffs would leave for Italy where they both worked
March of 1992: they were able to fully pay for the agreed purchase price of the property and accordingly,
a Deed of Absolute Sale dated March 12, 1992 was executed by and between Oakland Development
Resources Corporation and the original owner's copy of TCT turned over to them.
However, despite the execution of the Deed of Absolute Sale, Oakland Development Resources
Corporation failed to cause the transfer of title to plaintiffs.
All the while the Sps Ragasa thought that the Deed of Absolute Sale and possession of the original of
the owner's copy of the TCT was more than sufficient to protect their rights and interests over the
property.
March 1999: upon learning that Oakland Development Resources Corporation was no longer functional
as a corporate entity, Consorcia decided to cause the transfer of registration of the TCT herself since
the vendor thereof was apparently in no position to undertake the same.
She learned from the Registry of Deeds for Quezon City that on April 14, 1995, the property in question
was sold by defendant Ex-Officio Sheriff of Quezon City to defendants Sps. Roa as the highest bidder
for the price and consideration of P511,000.00 as shown in the Sheriff's Final Deed of Sale.
the Sheriff's Deed of Sale reveal that the execution price of P511,000.00 is grossly inadequate to pay
for real properties listed therein with fair market values conservatively estimated at P3,000,000.00
Sps filed a case captioned "Annulment of Execution Sale and Damages."
Sps Roa filed a Motion To Dismiss on the grounds of prescription and laches.
RTC granted Motion To Dismiss.
RTC characterized the suit as an action "upon an injury to the rights of the plaintiff' which, according to
Article 1146 of the Civil Code, must be filed within four years. - prescribed
Seeking a reversal of the trial court’s order dismissing their complaint, petitioners proceeded forthwith
to this Court with the present petition for review on certiorari raising only a pure question of law.
5

ISSUE:
WN the granting of Motion to Dismiss proper?

Ruling:
No. That premise was erroneous. A reading of the allegations in petitioners’ complaint reveals that the
action was essentially one for quieting of title to real property under Article 476 of the Civil Code which
states:
Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in
fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may
be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud being cast upon title to real property or any interest
therein.
To make out an action to quiet title under the foregoing provision, the initiatory pleading has only to set
forth allegations showing that
(1) the plaintiff has "title to real property or any interest therein" and
7

(2) the defendant claims an interest therein adverse to the plaintiff’s arising from an "instrument, record,
claim, encumbrance, or proceeding which is apparently valid or effective but is in truth and in fact
invalid, ineffective, voidable, or unenforceable."
Thus, the averments in petitioners’ complaint that
(1) they acquired ownership of a piece of land by tradition or delivery as a consequence of sale and
(2) private respondents subsequently purchased the same piece of land at an allegedly void execution
sale were sufficient to make out an action to quiet title under Article 476.
This being the case, Article 1146 (which refers to actions "upon an injury to the rights of the plaintiff"
and "upon a quasi-delict") did not apply. Rather, considering petitioners’ allegation in their complaint
9

that "from May of 1989 up to the present date, plaintiffs [had been] in continuous and notorious
possession of the property…to the exclusion of others and in the concept of owner[s]" ― an assertion
10

private respondents never bothered to dispute ― our ruling in Sapto v. Fabiana should apply:
11

[I]t is an established rule of American jurisprudence (made applicable in this jurisdiction by Art. 480 of
the New Civil Code) that actions to quiet title to property in the possession of the plaintiff are
12

imprescriptible.

WHEREFORE, the petition is GRANTED. The February 3, 2000 order of the Regional Trial Court,
Branch 220, Quezon City dismissing petitioners’ complaint is hereby REVERSED and SET ASIDE. Let
this case be REMANDED to the court a quo for further proceedings.
SO ORDERED.

Tandog vs. Macapagal and the LANDS MANAGEMENT BUREAU G.R. No. 144208 September 11,
2007

FACTS:
The subject of the controversy is a land consisting of 147,991 square meters situated at Sitio Inarawan,
Barangay Inuman, San Isidro, Antipolo City.
The above-named petitioners claim that they and their predecessors-in-interest have been in actual,
open, continuous, exclusive, and notorious possession of the land since time immemorial. They trace
their rights to Casimiro Policarpio, unmarried, who died in 1945.
When petitioners decided to apply for the judicial registration of the property, they found that portions
of the land had been occupied by spouses Alfonso and Marina Calderon and Renato Macapagal,
respondents.
According to petitioners, spouses Calderon used falsified documents to justify their possession of
20,116 square meters of the land which they sold to the government. For his part, Renato Macapagal
applied for and was granted Free Patent.
Because of these incidents, petitioners filed with the Regional Trial Court, Bracnh 73, Antipolo City a
complaint for quieting of title, docketed as Civil Case No. 92-2418.
Respondent Marina Calderon, in her answer, specifically denied petitioners' allegations in their
complaint.
After petitioners had presented their evidence, spouses Calderon filed a demurrer to evidence
The Trial Court granted the motion for demurrer to evidence of respondents and dismissed the
complaint.
The Court of Appeals affirmed the decision of the RTC
“Under Article 476 of the Civil Code, a claimant must show that there is an instrument, record, claim,
encumbrance or proceeding which constitutes or casts a cloud, doubt, question or shadow upon the
owner’s title to or interest in real property. The ground or reason for filing a complaint for quieting of title
must therefore be "an instrument, record, claim, encumbrance or proceeding." Under the maxim
"expresio unius est exclusio alterius," these grounds are exclusive so that other reasons outside of the
purview of these reasons may not be considered valid for the same action. (Titong v. CA, G.R. No.
111141, March 6, 1998)
Petitioners contend that the allegations of spouses Calderon that they purchased their property and
Macapagal’s claim that he applied for a Free Patent are judicial admissions which they (petitioners)
consider as cloud upon their interest in the disputed property.
Hence, the present petition.

ISSUE:
Whether or not the allegations of herein respondents are judicial admissions, that can be considered
as cloud to the interest of herein petitioners in the disputed property. - NO

HELD:
Supreme Court Cited Article 476 of the Civil Code provides:
Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in
truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an
action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein.
As a general rule, a cloud which may be removed by suit to quiet title is not created by mere verbal or
parol assertion of ownership of or an interest in property.
This rule is subject to qualification, where there is a written or factual basis for the asserted right.
Thus, a claim of right based on acquisitive prescription or adverse possession has been held to
constitute a removable cloud on title.
While petitioners alleged that respondents' claim of adverse possession is a cloud on their (petitioners')
interest in the land, however, such allegation has not been proved.
The alleged falsified documents relied upon by respondents to justify their possession were merely
marked as exhibits but were never formally offered in evidence by petitioners.
We have consistently ruled that documents which may have been marked as exhibits during the
hearing, but which were not formally offered in evidence, cannot be considered as evidence, nor can
they be given any evidentiary value.
It is important that petitioners must first establish their legal or equitable title to, or interest in the real
property that is the subject matter of the action. Petitioners failed to do so.
Petitioners failed to do so. Parenthetically, they did not present any evidence to prove that Casimiro
Policarpio "existed" and that he is their predecessor-in-interest.
Their testimonies can not be considered declarations about pedigree. In order that pedigree may be
proved by acts or declarations of relatives under Section 39 of the Revised Rules of Evidence, it is
necessary that (a) the actor or declarant is dead or unable to testify; (b) the act or declaration is made
by a person related to the subject by birth or marriage; (c) the relationship between the declarant or the
actor and the subject is shown by evidence other than such act or declaration; and (d) the act or
declaration was made ante litem motam, or prior to the controversy. 6

Records show that petitioners failed to establish by evidence any or all the above requisites.
Petition is hereby denied.

Clado-Reyes vs. Spouses Limpe G.R. No. 163876 July 09, 2008

FACTS:
Subject of the present controversy is a 2,445- square meter portion of a certain lot in Guiguinto, Bulacan
covered by Transfer Certificate of Title (TCT) No. RT-32498 (T-199627), having a total lot area of
20,431 square meters, more or less.
On February 1, 1995, petitioners filed an action to quiet title, reconveyance and damages against
respondents and alleged that they have been occupying the disputed lot since 1945 through their
predecessor-in-interest, Mamerto B. Reyes.
They claimed that during his lifetime, Mamerto had accepted a verbal promise of the former lot owner,
Felipe Garcia, to give the disputed lot to him in exchange for the surrender of his tenancy rights as a
tiller thereof.

To prove that Mamerto was a former tenant of Felipe; that during his lifetime he had worked on the lot;
and that he owned and possessed the same, petitioners presented two documents, namely: (1)
Certification dated October 12, 1979 and (2) "Pagpapatunay" dated November 17, 1982 allegedly
executed by Simeon I. Garcia, the eldest son of Felipe, attesting to such facts.
Petitioners also alleged that whenever respondents visited the lot, respondent Julius Limpe would
promise to deliver the certificate of title to them. However, sometime in October 1994, petitioners
received a letter from respondents asserting ownership over the disputed lot.
In their answer, respondents contended that they are the legal owners of the lot by virtue of a Deed of
Exchange of Real Estate and Deed of Absolute Sale executed on July 5, 1974 and February 28, 1974,
respectively, between them and Farm-Tech Industries, Incorporated. To further assert ownership over
the lot, they presented TCT No. T-199627, Tax Declaration Nos. 15172 and 9529 and realty tax receipts
of the lot, which were all registered and declared in their names.
The trial court ruled in favor of respondents. Accordingly, the trial court ordered petitioners to reconvey
the disputed lot to respondents. The Court of Appeals affirmed the trial court's ruling and upheld
respondents' title over the disputed lot. Hence, this petition.
ISSUE: WON THE PETITIONERS HAVE A CAUSE OF ACTION TO QUIET TITLE, RECONVEYANCE
AND DAMAGES AGAINST RESPONDENTS.
HELD: The petition lacks merit. PETITION DENIED.
To begin with, an action for quieting of title originated in equity jurisprudence to secure an adjudication
that a claim of title to or an interest in property, adverse to that of the complainant, is invalid, so that the
complainant and those claiming under him may be forever free from any danger of hostile claim.
Thus, our courts are tasked to determine the respective rights of the contending parties, not only to put
things in their proper places, but also to benefit both parties, so that he who has the right would see
every cloud of doubt over the property dissipated, and he could afterwards without fear introduce the
improvements he may desire, to use and even to abuse the property as he may deem best.
Under Articles 476 and 477 the New Civil Code, there are two indispensable requisites in order that an
action to quiet title could prosper:
(1) that the plaintiff or complainant has a legal or an equitable title to or interest in the real property
subject of the action; and
(2) that the deed, claim, encumbrance or proceeding claimed to be casting cloud on his title must be
shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
To prove their case, petitioners merely cited Section 4 of Article XIII of the 1987 Constitution and
Section 2 of the Comprehensive Agrarian Reform Law and stated that their title was founded upon
those provisions.
They hardly argued on the matter. Neither was there positive evidence that
(1) that their predecessor had legal title, i.e., a certificate of land transfer;
(2) that the lot was an agricultural lot and not a commercial one as contended by respondents; and
(3) that they are qualified beneficiaries under the Agrarian Reform Law. Time and again we have held
that a mere allegation is not evidence, and he who alleges has the burden of proving the allegation with
the requisite quantum of evidence.
Next, the documentary evidence petitioners presented, namely, the "Certification" and "Pagpapatunay."
did not confirm their title over the disputed lot.
First, original copies of those documents were not presented in court.
Second, as the appellate court pointed out, Simeon I. Garcia, the declarant in those documents, was
not presented in court to prove the veracity of their contents.
Third, even a cursory examination of those documents would not show any transfer or intent to transfer
title or ownership of the disputed lot from the alleged owner, Felipe Garcia, to petitioners or their
predecessor-in-interest, Mamerto B. Reyes.
Fourth, petitioners did not bother to adduce evidence that Simeon I. Garcia, as the eldest son of the
late Felipe Garcia, inherited the entire lot as to effectively convey title or ownership over the disputed
lot, i.e. thru extrajudicial settlement of the estate of the late Felipe Garcia.
Accordingly, we agree that the documents allegedly executed by Simeon I. Garcia are purely hearsay
and have no probative value.
In contrast, respondents presented evidence which clearly preponderates in their favor.
First, the transfer certificate of title, tax declarations and realty tax receipts were all in their names.
Second, pursuant to the Torrens System, TCT No. RT-32498 (T-199627) enjoys the conclusive
presumption of validity and is the best proof of ownership of the lot.
Third, although tax declarations or realty tax receipts are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in the concept of an owner, for no one in his right
mind would be paying taxes for a property that is not in his actual or at least constructive possession.
As we previously held, such realty tax payments constitute proof that the holder has a claim of title over
the property.
Worth stressing, in civil cases, the plaintiff must establish his cause of action by preponderance of
evidence; otherwise, his suit will not prosper. After carefully considering the arguments of the parties,
as well as their respective evidence, we unanimously agree that the petitioners were not able to prove
that they have any legal or equitable title over the disputed lot.

Green Acres Holdings, Inc. vs. Cabral G.R. No. 175542 & 183205 June 05, 2013

FACTS:
Victoria Cabral owned a parcel of land covered by a Transfer Certificate of Title under the coverage of
PD No. 27. To the detriment of Cabral, Spouses Morada were later issued three Emancipation Patents,
one of which they converted under Transfer Certificate of Title.
Alleging that the Emancipation Patents issued to the spouses Moraga were obtained through fraud,
Cabral filed a complaint before the Provincial Agrarian Reform Adjudicator (PARAD) seeking for the
cancellation of such Emancipation Patents. The complaint being dismissed due to lack of merit, Cabral
appealed to the Department of Agrarian Reform Adjudication Board (DARAB).
While the appeal was pending, spouses Morada subdivided into three smaller lots the one which was
under TCT. These lots which are the properties subject of this case were later on sold to Filcon Ready
Mixed, Inc. Because of the fact that the titles were free from any annotations, liens, notices, claims or
encumbrances, Green Acres Holdings, Inc. was attracted to purchase the subject properties from
Filcon.
Thereafter, titles of Filcon were cancelled and new titles in the name of Green Acres were issued by
the Register of Deeds. Confident enough, the new owner of the lots constructed a warehouse and
building complex on the same.
Not so long after, the judgment of DARAB in favor of Cabral was rendered, ordering the cancellation of
the tiles issued in the names of spouses Moraga and Filcon for having been illegally acquired, and thus
vacate the premises of the lands in question. Furthermore, DARAB directed the Register of Deeds to
restore TCT in the name of Victoria Cabral.
Upon learning the DARAB decision and feared that its titles might be disturbed, Green Acres, through
a letter, reminded Filcon of its warranties under the deed of sale. On its reply, Filcon uttered that it had
also no knowledge of the legal infirmity in the titles. In fact, it was able to secure as collateral the subject
properties to a loan from Philippine Commercial International Bank (PCI Bank). For its security and
protection, Green Acres filed a Complaint for quieting of Title, Damages with Preliminary Injunction and
Writ of Preliminary Attachment before a Regional Trial Court, against Cabral, Spouses Morada, Filcon,
the DARAB, and the Registry of Deeds.
Green Acres had the following contentions:
1. It was a purchaser in good faith and for value;
2. It had no notice or knowledge or any adverse claim, lien, or encumbrance on the properties; and
3. It was neither a party nor did it have notice to the DARAB proceedings and decision which cast
cloud on its titles.
Green Acres supported its claims with evidences. On her part, Cabral filed a Demurrer of Evidence
arguing that Green Acres failed to prove that it was a purchaser in good faith and for value; that the
complaint is not appropriate for quieting of title since it omitted to assail her titles over subject property;
and that the trial court has no jurisdiction over the subject property.
The trial court granted the demurrer and dismissed the case. The losing party filed a motion for
reconsideration but then again, denied, thus, an appeal was filed with the Court of Appeals.
Unfortunately, CA dismissed Green Acres' appeal holding that the trial court had no authority to interfere
with the proceedings of a court of equal jurisdiction, much less to annul the final judgment of a co-equal
court. Furthermore, CA held that the only issue in an action to quiet title is whether there is a cloud in
a title to a real property because of any instrument, record, claim, encumbrance or a proceeding that
has a prima facie appearance of validity and the DARAB decision does not fall within said enumeration.
In the meantime, as no further recourse was sought, the DARAB decision became final and executory.
In connection to it, Cabral filed with the PARAD a Motion for Issuance of Writ or Execution of the DARAB
decision. However, it was denied for lack of merit causing Cabral to file a Motion for Recusation and a
Motion for Reconsideration which were both denied by the PARAD. Unsatisfied with the PARAD's
denial, Cabral filed a Notice of Appeal with the same quasi-judicial body, which was also denied. Still
uncontented, Cabral went to the CA to file a petition for certiorari under Rule 65 of the Rules of Court
seeking to annul the PARAD's previous decisions. CA denied the petition with ratiocination as follows:
• An execution can only be issued against a party of a case and not against a party who did not have
his day in court. To maintain otherwise would be to ignore the constitutional prohibition against depriving
a person of his property without due process of law;
• To apply the decision against Green Acres will amount to collateral attack against its titles because
nowhere in the case or decision that it was considered or passed upon.
• Green Acres had a valid and legitimate titles over the same since it was a purchaser in good faith and
for value when it acquired the properties from Filcon.
Hence, both parties elevated their causes to the Supreme Court seeking for the reversal of the CA's
decisions adverse to them.
ISSUES:
1. Whether or not the DARAB decision may be enforced against Green Acres.-NO
2. Whether or not said DARAB decision in favor of Cabral constitutes a cloud on Green Acres title over
the subject properties. -YES
RULING:
First Issue:
NO. The DARAB decision in favor of Cabral cannot be enforced against Green Acres since it was not
a party to its proceedings.
Neither were the Green Acres mentioned in such decision.
The principle that a person cannot be prejudiced by a ruling rendered in an action or proceeding in
which he was not made a party conforms to the constitutional guarantee of due process of law.
No man shall be affected by any proceeding to which he is a stranger, and strangers to a case are not
bound by any judgment rendered by the court. In the same manner, a writ of execution can be issued
only against a party and not against one who did not have his day in court. Only real parties in interest
in an action are bound by the judgment therein and by writs of execution issued pursuant thereto.
Second Issue:
YES. DARAB decision in favor of Cabral constitutes a cloud on Green Acres' title over the subject
properties. Article 476 of the Civil Code provides:
"Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in
fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may
be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein."
As Green Acres correctly points out, the DARAB decision, a final one at that, is both an "instrument"
and a "record."
Black's Law Dictionary defines an instrument as a document or writing which gives formal expression
to a legal act or agreement, for the purpose of creating, securing, modifying or terminating a right. A
"record", on the other hand, is defined as a written account of some act, court proceeding, transaction
or instrument drawn up under authority of law, by a proper officer, and designed to remain as a memorial
or permanent evidence of the matters to which it relates.
It is likewise a "claim" which is defined as a cause of action or a demand for money or property since
Cabral is asserting her right over the subject lots.
More importantly, it is a "proceeding" which is defined as a regular and orderly progress in form of law
including all possible steps in an action from its commencement to the execution of judgment and may
refer not only to a complete remedy but also to a mere procedural step that is part of a larger action or
special proceeding.
Quieting of title is a common law remedy for the removal of any cloud upon, doubt, or uncertainty
affecting title to real property.

For an action to quiet title to prosper, two indispensable requisites must concur:
(1) the plaintiff or complainant has a legal or equitable title or interest in the real property subject of the
action; and
(2) the deed, claim, encumbrance, or proceeding claimed to be casting a cloud on his title must be
shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
There is no dispute that the requisites to quiet a title were met by Green Acres.
WHEREFOR, its petition was GRANTED and the titles of subject property in dispute in the name of
Green Acres were made VALID and any cloud over such titles were REMOVED.

Heirs of Pocdo vs. Avila G.R. No. 199146 March 19, 2014

FACTS:
Pocdo Pool, who died in 1942, began his occupation and claim on three lots that were eventually
surveyed in his name.
These lots were the subject of a petition to reopen judicial proceedings filed by the Heirs of Pocdo Pool
with the CFI Baguio City.
The registration of the lots in the names of the petitioners were granted, but since the decision was not
implemented within the 10 years prescribed period, the Heirs filed their ancestral land claims with the
DENR.
The Certificates of Ancestral Lands Claims (CALS) were issued by the DENR for Lots 44 and 45, but
Lot 43 was not approved due to Memorandum Order issued by the DENR Secretary.
Polon Pocdo, an heir of Pocdo Pool, ceded his rights over the three lots to Pacifico Pocdo in exchange
for a one hectare lot to be taken from Lot 43.
However, Pacifico entered into a contract with Florencio Pax and Braulio Yaranon revoking the
agreement with Polon.
In the contract, the 4,875 square meters where Polon’s house was located became part of the 1-hectare
given to Pax and Yaranon in exchange for their services in the titling of Pacifico’s lands.
Polon authorized Avila to undertake the segregation of his land from Lot 43 in accord with the amicable
settlement. (Catulagan)
In exchange, Polon would award to her 2,000 square meters from the 1 hectare lot. After spending
time, money and effort in the execution of the survey, Avila gave the survey results to Polon prompting
Polon to execute a Waiver of Rights.
The CENRO of Baguio City issued in favor of Avila a Certificate of Exclusion.
The Heirs of Polon Pocdo and his wife Konon filed an affidavit of cancellation.
OIC-CENRO Teodoro Suaking canceled the Certificate of Exclusion. Avila complained to the Regional
Executive Director (RED) the unlawful cancellation of her Certificate,
RED issued a memorandum setting aside the revocation. Avila filed an administrative complaint against
Suaking, and RED dismissed the letter complaint of Avila and referred the administrative complaint to
the DENR Central Office.
RED set aside the order. The Affidavit of Cancellation was dismissed for lack of jurisdiction and the
validity of the Amicable Settlement.
The Affidavit of Cancellation dated April 27, 2002 filed by the heirs of Polon Pocdo was dismissed for
lack of jurisdiction and the validity of the Amicable Settlement, Catulagan and Deed of Waiver of Rights
were recognized. The letter dated April 28, 2000 and certification issued on May 31, 2000 by Suaking
were ordered cancelled.
The DENR Secretary affirmed his Order in [his] Decision of May 14, 2004 in DENR Case 5599, with
the modification that the TSAs fo[r] the appellee Avila could now be made the basis of disposition
through public bidding and the appellant may participate in the bidding if qualified.
Pacifico Pocdo, as the appellant, went on appeal to the Office of the President which resulted in an
affirmance of DENR Secretary’s decision on April 19, 2005 in OP Case 04-H-360.
As mentioned, having exhausted administrative remedies, the Heirs of Pacifico Pocdo challenged the
OP resolution before the Court of Appeals, but this petition was dismissed for having been filed late.
The Supreme Court dismissed the Heirs’appeal from this decision.
Before the Regional Trial Court of Baguio City, Branch 61 was filed by Pacifico Pocdo against Arsenia
Avila and Emelinda Chua in June 2000, just after the RED set aside Suaking’s revocation on April 28,
2000 and ordered the restoration of Avila’s Certificate of Exclusion. Since then, the judicial proceedings
have run parallel to the administrative case.
RTC dismissed the case for lack of jurisdiction. The trial court held that the DENR had already declared
the disputed property as public land, which the State, through the DENR, has the sole power to
dispose.
Thus, the claim of petitioners to quiet title is not proper since they do not have title over the disputed
property.
Petitioners appealed
The Court of Appeals ruled that petitioners, in raising the issue of quieting of title, failed to allege any
legal or equitable title to quiet.
On the validity of the Catulagan and the Waiver of Rights, the Court of Appeals held that petitioners
have no right to question these since they were not parties to said documents had not participated in
any manner in their execution. The Court of Appeals ruled that only the contracting parties are bound
by the stipulations of the said documents. Those not parties to the said documents, and for whose
benefit they were not expressly made, cannot maintain an action based on the said documents.
Thus, the Court ofAppeals affirmed the trial court’s resolution, subject to the right of petitioners to file
the appropriate action.
Petitioners contend that
THE COURT OFAPPEALS ERRED IN UPHOLDING THE DISMISSAL OF THE CASE BECAUSE
THERE ARE OTHER CAUSES OF ACTION OVER WHICH THE RTC HAS JURISDICTION, i.e.
RECOVERY OF POSSESSION, DECLARATION OF NULLITY OF DOCUMENTS.
ISSUE: Whether or not trial court had jurisdiction to quiet title
RULING: NO.
Having established that the disputed property is public land, the trial court was therefore correct in
dismissing the complaint to quiet title for lack of jurisdiction. The trial court had no jurisdiction to
determine who among the parties have better right over the disputed property which is admittedly still
part of the public domain.
As held in Dajunos v. Tandayag: 8

x x x The Tarucs’ action was for "quieting of title" and necessitated determination of the respective
rights of the litigants, both claimants to a free patent title, over a piece of property, admittedly public
land. The law, as relied upon by jurisprudence, lodges "the power of executive control, administration,
disposition and alienation of public lands with the Director of Lands subject, of course, to the control of
the Secretary of Agriculture and Natural Resources."
In an action for quieting of title, the complainant is seeking for an adjudication that a claim of title or
interest in property adverse to the claimant is invalid, to free him from the danger of hostile claim, and
to remove a cloud upon or quiet title to land where stale or unenforceable claims or demands exist.
Under Articles 476 and 477 of the Civil Code, the two indispensable requisites in an action to quiet title
are:
(1) that the plaintiff has a legal or equitable title to or interest in the real property subject of the action;
and
(2) that there is a cloud on his title by reason of any instrument, record, deed, claim, encumbrance or
proceeding, which must be shown to be in fact invalid or inoperative despite its prima facie appearance
of validity.
In this case, petitioners, claiming to be owners of the disputed property, allege that respondents are
unlawfully claiming the disputed property by using void documents. However, the records reveal that
petitioners do not have legal or equitable title over the disputed property, which forms part of Lot 43, a
public land within the Baguio Townsite Reservation. It is clear from the facts of the case that petitioners'
predecessors-in-interest, the heirs of Pocdo Pool, were not even granted a Certificate of Ancestral Land
Claim over Lot 43, which remains public land. Thus, the trial court had no other recourse but to dismiss
the case.

De Guzman vs. Tabangao Realty Incorporated G.R. No. 154262 February 11, 2015

Facts:
In1980, Serafin de Guzman and Josefino de Guzman applied for, and were granted, authority to
distribute oil and lubricating products manufactured and marketed by Filipinas Shell Petroleum
Corporation (FSPC).
In the course of their business, Serafin and Josefino purchased on credit oil and lubricating products
from FSPC, but they eventually failed to pay for their credit purchases from FSPC. Thus, FSPC filed
before the RTC of Manila a complaint for sum of money against Serafin and Josefino, eventually FSPC
levied upon a parcel of land owned by Serafin and his wife, which was sold at a public auction to
Tabangao Realty Incorporated. The Sheriff's Certificate of Sale was annotated on the title. The spouses
De Guzman did not redeem the subject property within one year from registration of the Sherifff's
Certificate of Sale on the transfer Certificate of Title.
On October 19, 2001, petitioners filed a Complaint for quieting of title against respondent alleging that
they are the intestate heirs of the De Guzman spouses and that they are the proper owners of the
property. Instead of filing an answer, the respondent filed a motion to dismiss that the complaint failed
to state a cause of action.
The Regional Trial Court granted the motion.

Issue:
Whether the trial court committed an error in dismissing the petitioner's complaint for quieting of title on
the ground of failure to state a cause of action;

Ruling:
The Court rules in the negative.
Under the Civil Code, the remedy may be availed of under the following circumstances:

Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason
of any instrument, record, claim, encumbrance or proceeding which is apparently valid or
effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may
be prejudicial to said title, an action may be brought to remove such cloud or to quiet the
title.

An action may also be brought to prevent a cloud from being cast upon title to real property
or any interest therein.

Art. 478. There may also be an action to quiet title or remove a cloud therefrom when the
contract, instrument or other obligation has been extinguished or has terminated, or has
been barred by extinctive prescription.

Article 477 of the Civil Code further provides that the plaintiff in an action to quiet title must have legal
or equitable title to or interest in the real property, which is the subject matter of the action, but need
not be in possession of said property.

For an action to quiet title to prosper, two indispensable requisites must concur: (1) the plaintiff or
complainant has a legal or equitable title or interest in the real property subject of the action; and (2)
the deed, claim, encumbrance, or proceeding claimed to be casting a cloud on his title must be shown
to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. 9
Petitioners Complaint failed to allege these two requisites for an action to quiet title.
Petitioners alleged in their Complaint that they were the children and only heirs of the deceased
spouses De Guzman and that the subject property was still registered in spouses De Guzman names
under TCT No. 3531.
However, these allegations are insufficient to establish the petitioner's title to the subject property.

It is worthy to note that petitioners also alleged in their Complaint that TCT No. 3531 bears the following
annotations:
(1) the writ of execution dated May 3, 1983 issued by RTC-Manila in Civil Case No. 120680, inscribed
on said certificate of title on July 1, 1983;
(2) Notice of Levy dated June 30, 1983 issued in the same case, inscribed on July 1, 1983;
(3) Sheriff�s Certificate of Sale dated February 4, 1988 in favor of respondent covering the subject
property, inscribed on April 13, 1988; and
(4) BIR Certification dated April 13, 1988 stating that respondent paid taxes on the sale, inscribed on
April 13, 1988. Petitioners attached to the Complaint copies of TCT No. 3531 with the aforementioned
annotations; and the Sheriff�s Certificate of Sale dated February 4, 1988 which stated that the
subject property was levied upon and sold in an execution sale to respondent for P70,000.00.

Equally notable is the absence of any allegation in the Complaint that Serafin and/or Josefino, as the
judgment obligors in Civil Case No. 120680, or their successors-in-interest, redeemed the subject
property from respondent within the one-year redemption period, which, reckoned from the date of
registration of the Sheriff�s Certificate of Sale on TCT No. 3531 on April 13, 1988, expired on April
13, 1989.

It must be remembered that the period of redemption is not a prescriptive period but a condition
precedent provided by law to restrict the right of the person exercising redemption. If no redemption is
10

made in the manner and within the period prescribed,

Heirs of Tappa vs. Heirs of Bacud G.R. No. 187633 April 04, 2016

Facts:
Petitioners Delfin Tappa and Maria Tappa filed a complaint for Quieting of Title, Recovery of Possession
and Damages against respondents.

Spouses Tappa alleged that they are the registered owners of Lot No. 3341, having been issued an
Original Certificate of Title by virtue of Free Patent. Delfin allegedly inherited the subject lot from his
father, Lorenzo. Spouses Tappa claimed that both Delfin and Lorenzo were in open, continuous,
notorious, exclusive possession of the lot since time immemorial.

Respondents claimed that the original owner of Lot No. 3341 was Genaro Tappa (Genaro) who had
two children, Lorenzo and Irene. Upon Genaro's death, the property passed on to Lorenzo and Irene
by operation of law; and they became ipso facto co-owners of the property.

As co owners, Lorenzo and Irene each owned 10,939 square meters of the lot as their respective
shares. Lorenzo had children namely, Delfin, Primitiva, and Fermina. Upon the death of Irene, her share
in tum passed to her heirs, Demetria, Juanita, Pantaleon and Jose Bacud.

Respondents presented before the RTC a joint affidavit dated April 29, 1963 (1963 Affidavit) signed by
Delfin, his sisters, Primitiva and Fermina, and their mother, Modesta Angoluan. The 1963 affidavit
stated that Genaro originally owned Lot No. 3341. It further stated that one-half of the property was
owned by Lorenzo; but that the whole property was declared as his, only for taxation purposes.
• Calabazaron (1 of the respondents) claimed that he became the owner of 2,520 square meters
of Lot No. 3341 by virtue of two Deeds of Sale executed in his favor by Demetria.
• Malupeng (1 of the r) claimed that he became the owner of 210 square meters of Lot No. 3341
by virtue of a Deed of Sale executed on November 30, 1970 by Pantaleon in his favor
• Bacud claimed ownership over 1,690 square meters of Lot No. 3341 in his own right as heir of
Irene

Respondents started occupying their respective portions after the sale was made to each of them. They
continued to occupy them despite several demands to vacate from Spouses Tappa.
Spouses Tappa claimed that the 1963 Affidavit was executed through force and intimidation.

RTC ruled in favor Sps Tappa.

• That the basic requirement of the law on quieting of title under Article 447 of the Civil Code was
met, thus: Delfin and Maria's title is clear and unequivocal, and its validity has never been
assailed by the defendants – nor has any evidence been adduced that successfully overcomes
the presumption of validity and legality that the title of Delfin and Maria enjoys
• there was no document in the hands of respondents as strong and persuasive as the title in the
name of the Spouses Tappa that will support respondents' claim of ownership and Irene's
antecedent ownership.
• hat the 1963 Affidavit contains nothing more than the allegations of the affiants and does not, by
itself, constitute proof of ownership of land, especially as against documents such as titles.
CA set aside the decision of the RTC.
CA ruled in favor of respondents and explained that their possession over Lot No. 3341 already ripened
into ownership through acquisitive prescription. That the free patent granted to Spouses Tappa
produced no legal effect because Lot No. 3341 was a private land.

Issue:
Whether or not the action by Sps Tappa for quieting of title should prosper.

Ruling:
No, the action for quieting of title should not prosper.

In the Philippine jurisdiction, the remedy is governed by Article 476 and 477 of the Civil Code. The rule
that for an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the
plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the
action; and (2) the deed, claim, encumbrance or proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.

Spouses Tappa failed to meet these two requisites. The first requisite is absent because Spouses
Tappa do not have a legal or an equitable title to or an interest in the property. The CA explained that
the free patent granted to Spouses Tappa produced no legal effect because Lot No. 3341 was a private
land. 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 Law applies only to lands of the public domain.

The second requisite for an action to quiet title is likewise wanting. The Court find that although an
instrument (the 1963 Affidavit) exists, and which allegedly casts cloud on Spouses Tappa's title, it was
not shown to be in fact invalid or ineffective against Spouses Tappa's rights to the property. Also, aside
from the testimony of Delfin Tappa, no other evidence was presented to prove the claim of force and
intimidation, hence, it is at most, self-serving.

A cloud on a title exists when (1) there is an instrument (deed, or contract) or record or claim or
encumbrance or proceeding; (2) which is apparently valid or effective; (3) but is, in truth and in fact,
invalid, ineffective, voidable, or unenforceable or extinguished (or terminated) or barred by extinctive
prescription; and (4) and may be prejudicial to the title.

The 1963 Affidavit is no doubt an instrument, which appears to be valid. It is dated and appears to be
executed and signed by Delfin, his mother, and sisters. It is also notarized by a public notary. It states
that Genaro originally owns the land described, and that one-half (l/2) of which is actually owned by
Irene as a co-heir. This is contrary to the claim of Spouses Tappa that the property was solely Lorenzo’s.
The 1963 Affidavit however, was not proven to be, in fact, invalid, ineffective, voidable, or
unenforceable, or extinguished (or terminated) or barred by extinctive prescription.

On the issue of collateral attack on the Certificate of Title

There is no collateral attack on the Certificate of Title. Spouses Tappa argue that respondents
collaterally attacked the certificate of title of Lot No. 3441 when they raised the issue of its validity.
Spouses Tappa used the same argument against the CA when it declared the certificate of title to be
without legal effect. The certificate of title was not collaterally attacked. Section 48 of PD 1529, provides
that "[a] certificate of title shall not be subject to collateral attack. It cannot be altered, modified, or
canceled except in a direct proceeding in accordance with law." This rule is not applicable in this case.

Mere issuance of a certificate of title in the name of any person does not foreclose the possibility that
the real property may be under co-ownership with persons not named in the certificate, or that the
registrant may only be a trustee, or that other parties may have acquired interest over the property
subsequent to the issuance of the certificate of title. Stated differently, placing a parcel of land under
the mantle of the Torrens system does not mean that ownership thereof can no longer be disputed.
The certificate cannot always be considered as conclusive evidence of ownership.

the Decision of the Court of Appeals is AFFIRMED.

Municipal Rural Bank of Libmanan, Camarines Sur vs. Ordoñez G.R. No. 204663 September 27, 2017

FACTS
Respondent Virginia Ordoñez filed an action with the RTC a complaint for Quieting of Title against
petitioner Municipal Rural Bank of Libmanan, Camarines Sur.
Respondent argued that she is the owner of a 2,174-square-meter parcel of land in Fundado,
Libmanan, Camarines Sur; she acquired the property through inheritance; she and her predecessors-
in-interest had been in open, peaceful, adverse, uninterrupted possession of the subject land in the
concept of an owner since time immemorial; and petitioner's claim of ownership is unfounded,
unmeritorious invalid and based upon an instrument which is null and void or, otherwise,
unenforceable.
Respondent prayed that she be declared the absolute owner and, thus, entitled to the lawful possession
of the subject property. She also asked the trial court to order petitioner to pay attorney's fees and
monthly rentals.
For the Petitioner's argument, it stated that in fact, the true and absolute owner of the subject land; and
the property was previously owned by one Roberto Hermita (Roberto) who mortgaged the said land to
petitioner but subsequently failed to satisfy his obligation causing petitioner to foreclose the mortgage
and subsequently acquire the property and transfer title over it in its name.
The RTC ruled in favor of petitioner, having opined that petitioner's manager before entering into the
contract of mortgage with Roberto Hermita did its best to ascertain Roberto's claim of ownership and
possession by conducting the requisite investigation.
Upon appeal, the CA reversed the decision, declaring the real estate mortgage executed by Roberto
and petitioner null and void.
The bases for which were that
(1) respondent was able to prove that her predecessors-in-interest had possession of the subject land
prior to that of petitioner's predecessor-in-interest;
(2) they declared the property for tax purposes as early as 1949, as compared to petitioner's
predecessor-in-interest who paid taxes thereon beginning only in 1970; and
(3) contrary to the findings of the RTC, the evidence preponderates in favor of herein respondent.
Hence this petition.
One of petitioner's arguments was that it exercised due diligence in ascertaining the status or condition
of a property offered to it as security for a loan must be a standard and indispensable part of its
operations before entering into a mortgage contract
ISSUE
• Whether Ordoñez had prior possession over the property through her caretaker, Roman
Zamudio. -

RULING
Supreme Court ruled in favor of Ordoñez
Before delving into the merits of the instant petition, the Court finds it apropos to restate the nature of
an action for quieting of title. Citing the case of Baricuatro, Jr. v. Court of Appeals, this Court, in
9

Herminio M. De Guzman, for himself and as Attorney-in-fact of: Nilo M. De Guzman, et at. v. Tabangao
Realty Inc., held, thus:
10

Regarding the nature of the action filed before the trial court, quieting of title is a common
law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to
real property. Originating in equity jurisprudence, its purpose is to secure "xxx an
adjudication that a claim of title to or an interest in property, adverse to that of the
 complainant, is invalid, so that the complainant and those claiming under him may be forever
afterward free from any danger of hostile claim." In an action for quieting of title, the
competent court is tasked to determine the respective rights of the complainant and other
claimants, "xxx not only to place things in their proper place, to make the one who has no
rights to said immovable respect and not disturb the other, but also for the benefit of both,
so that he who has the right would see every cloud of doubt over the property dissipated,
and he could afterwards without fear introduce the improvements he may desire, to use,
and even to abuse the property as he deems best xxx."
The Court, then, went on to discuss that:
Under the Civil Code, the remedy may be availed of under the following circumstances:
Art. 476. Whenever there is a cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance or proceeding
which is apparently valid or effective but is in truth and in fact invalid, ineffective,
voidable, or unenforceable, and may be prejudicial to said title, an action may
be brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to
real property or any interest therein.

Art. 478. There may also be an action to quiet title or remove a cloud therefrom
when the contract, instrument or other obligation has been extinguished or has
terminated, or has been barred by extinctive prescription.
Article 477 of the Civil Code further provides that the plaintiff in an action to quiet title must
have legal or equitable title to or interest in the real property, which is the subject matter of
the action, but need not be in possession of said property.

For an action to quiet title to prosper, two indispensable requisites must concur: (1) the
plaintiff or complainant has a legal or equitable title or interest in the real property subject of
the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting a
cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.
In the instant case, for reasons to be discussed hereunder, the Court agrees with the CA that herein
respondent was able to prove by preponderance of evidence that she has a legal or equitable title or
interest in the real property subject of the action and that the deed, claim, encumbrance, or proceeding
claimed to be casting a cloud on her title is, in fact, invalid or inoperative, despite its prima facie
appearance of validity or legal efficacy.

The Court does not agree.

First, the Court finds no cogent reason to depart from the conclusion of the CA that the testimony of
respondent's witness Perpetuo Parafina (Parafina), who is the owner of the land adjacent to the
disputed property, is clear that Zamudio was indeed the person assigned by respondent's mother as
caretaker of the questioned land. In fact, the RTC, in its Decision dated January 19, 2010, likewise
15

made a positive finding that Zamudio was, in fact, respondent's caretaker. Moreover, Parafina testified
that, since 1960, he knows the property as owned by respondent's mother. 16

The question that follows is whether Zamudio's occupation of the subject property as caretaker may be
considered as proof of respondent's and her predecessors-in-interest's prior possession of the said
land.
The Court rules in the affirmative.

For one to be considered in possession, one need not have actual or physical occupation of every
square inch of the property at all times. Possession can be acquired not only by material occupation,
17

but also by the fact that a thing is subject to the action of one's will or by the proper acts and legal
formalities established for acquiring such right. Possession can be acquired by juridical acts. These
18 19

are acts to which the law gives the force of acts of possession. In one case, this Court has considered
20 21

a claimant's act of assigning a caretaker over the disputed land, who cultivated the same and built a
hut thereon, as evidence of the claimant's possession of the said land.

In the present case, it has been established that respondent and her predecessors-in-interest
authorized Zamudio as caretaker of the subject land. Thus, Zamudio's occupation of the disputed land,
as respondent's caretaker, as early as 1975, is considered as evidence of the latter's occupation of the
said property. Petitioner's argument that respondent's possession must not be a mere fiction but must,
in fact, be actual is unavailing as this requirement is applicable only in proceedings for land registration
under Presidential Decree 1529, otherwise known as the Land Registration Decree, which is not the
case here. On the other hand, it was only in 1986 that petitioner's predecessor-in-interest started
occupying the same property.
Serrano vs. Espejo G.R. No. 210338 March 17, 2021

Facts:
The case involves a dispute over ownership of a 978-square meter parcel of land in Ilocos Norte,
Philippines. The respondents claimed ownership tracing it back to Evaristo Piedad, while the petitioners
contested this claim, asserting their ownership through Gregoria Bonoan Cabanos.
The dispute arose when the Serranos, through a Deed of Absolute Sale, sold a portion of the land to
the Dumlao spouses.
There were tax declarations on the same lots presented in this case
Alleging that the declaration made by the Serranos of their ownership over the subject property was
null and void and that Spouses Dumlao were purchasers in bad faith, respondents filed an action for
quieting of title against the Serranos and Rodolfo Sambrano, and the purchasers, Spouses Dumlao. 12

The complaint likewise sought the award for moral and exemplary damages, attorney's fees, and
litigation expenses.
Although the Serranos admitted the sale in favor of Spouses Dumlao, they denied respondents' claim
of ownership over the subject property and asserted that they inherited it from Estefania Serrano de
Cabanos (Estefania), who in turn, obtained it by virtue of a will from Gregoria B. Cabanos (Gregoria). 13

The Serranos countered that their predecessors-in-interest enjoyed actual, physical, and peaceful
possession of the subject property which was open and adverse to Evaristo; and that Evaristo even
acknowledged their ownership of the 978-sq.m. subject property which left only 963 sq.m. in Evaristo's
favor.
14

Meanwhile, Spouses Dumlao asserted their status as purchasers in good faith and for value of the
disputed area.
Ruling of the RTC
In the Decision dated December 18, 2008, the RTC dismissed respondents' complaint and petitioners'
20

compulsory counterclaim.
The RTC found the following facts: Gregoria and Ignacia Bonoan Cabanos (Ignacia), who married
Mariano Piedad, were sisters who were the co-owners of the entire 1,820-sq.m. property. Estefania is
Gregoria's daughter-in-law as she was the wife of Gregoria's only son, Andres. On the other hand, Luis
was the appointed administrator of the properties of Estefania. Luis and Carmelo are the children of
Modesto L. Serrano, the brother of Estefania.
It also declared that while tax declarations become strong evidence of ownership, it must also be
coupled with proof of actual possession which must be clear, complete, and conclusive�a fact which
Evaristo failed to conclusively prove as against the Serranos' unrefuted possession of the subject area
since 1956 at the behest of a caretaker, Laureano Agustin (Agustin).

Upon appeal, the CA, in a Decision dated February 27, 2013, reversed and set aside the RTC
25

Decision. The dispositive portion of the CA Decision reads:

WHEREFORE, above premises duly considered, the instant Appeal is hereby GRANTED. We,
therefore, REVERSE and SET ASIDE the assailed Decision dated December 18, 2008 of the
Regional Trial Court of Laoag City, Branch 11. Accordingly, a new judgment is entered as follows:
I.) Declaring plaintiffs-appellants Rosa P. Espejo, Manuela Corpuz and Salvador Corpuz as the lawful
owners of the lot in suit;
II.) Declaring as NULL and VOID the following acts:
(a) the tax declarations made by the defendants-appellees in their names over the 978-square meter
Lot No. 138 and the same be placed back either to the name/s of Evaristo Piedad or to plaintiffs-
appellants; and
(b) the defendants-appellees Carmelo Serrano and Luis Serrano's sale in favor of defendants-appellees
Manuel Dumlao and Susan Dumlao over an area of 678 square meters portion of the subject land.
III.) Ordering the defendants-appellees to jointly and solidarily pay the plaintiffs-appellants the amount
of P50,000.00 as and by way of attorney's fees.
SO ORDERED.
Contrary to the conclusions of the RTC, the CA emphasized that respondents were in possession of
the entire property long before the date when the Serranos declared a portion of it for taxation purposes.
It noted that other than the Serranos' bare assertion that Evaristo consented, participated in the
cadastral survey, and agreed to have a lesser share, no proof was presented to evince that there was
an onerous or gratuitous transmission of a portion of the entire property to Gregoria. It found quite
puzzling how the Serranos acquired tax declarations for the year 1985 and later on in 1994 without any
indubitable title over an existing deed transferring ownership to Gregoria when the property was still
declared under the name of Evaristo from 1926 up to 1949 until the year 1997. It further cited the fact
that the same property was provisionally declared in the name of Miguel and Presentacion B. Piedad
(Presentacion), siblings of Evaristo, with the latter's consent, when it was mortgaged to Laoag Rural
Bank.
As to the existence of two tax declarations covering the same property, the CA explained that it would
palpably appear that the certifications and tax declarations in favor of respondents issued by a
government agency, particularly the Office of the City Provincial Assessor, are spurious, but in the
absence of substantial proof that those were fraudulently obtained, the presumption of regularity
stands. There was also no evidence presented to counter the series of tax declarations in the name of
Evaristo.
The CA further ruled that, resultantly, the sale in favor of Spouses Dumlao was a patent nullity
considering that it found the respondents as the true owners of the entire property; and that the issue
as to whether Spouses Dumlao were purchasers in good faith or bad faith is irrelevant considering that
the subject property in question was an unregistered lot.

Issue:
The main issue was whether the Court of Appeals erred in granting the quieting of title in favor of the
respondents. - yes
Ruling:
An action for quieting of title has for its purpose the determination of the respective rights of the
complainant and the other claimants. Any instrument, record, claim, encumbrance or proceeding which
33

appears to be valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable,
and causes prejudice to a title to real property or any interest therein is considered a cloud thereto
which may be removed through an action for quieting of title. - Article 476 of the Civil Code of the
34

Philippines
This could include any action to prevent a cloud from being cast upon a title to real property or any
interest therein.
35

There are two indispensable requisites for an action to quiet title to prosper: (1) the plaintiff or
complainant has a legal or an equitable title to or interest in the real property subject of the action; and
(2) the deed, claim, encumbrance, or proceeding claimed to be casting a cloud on his/her title must be
shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
As to the first requisite:
Respondents failed to prove
their legal or equitable title over
the subject property.
In this case, respondents claim that Evaristo is the owner of the entire property and that they have been
in possession thereof in the concept of an owner openly, peacefully, and publicly as heirs of Evaristo. 38

They presented a series of tax declarations to support their claim over the entire property, with the
earliest one dating back to 1926 under Tax Declaration No. 39294-a-3 issued to Evaristo.
39

But respondents' claim of possession of the entire property in the concept of an owner openly,
peacefully and publicly as heirs of Evaristo is contrary to the evidence forwarded by petitioners which
showed that there were TD Nos. 535723 and 617187 in the name of the heirs of Gregoria which
40 41

covered the subject property for the years 1983 and 1985 to 1990. There was also TD No. 93-001-
00476 issued in 1994 in the name of the heirs of Gregoria Bonoan which cancelled TD No. 617187.
42

As a matter of fact, it was TD No. 93-001-00476 which was cancelled by the 1994 Affidavit with the
issuance of TD No. 93-001-00623 in the names of the Serranos in 1995. Even the 1994 Affidavit
43

recognized that the subject property was declared for taxation purposes under TD No. 617187.
Veritably, even before the 1994 Affidavit and TD No. 93-001-00623 of the Serranos, the heirs of
Gregoria already had tax declarations in their favor.
As to the second requisite:
The 1994 Affidavit was not
proven to be invalid or
ineffective.

The second requisite for an action to quiet title is likewise wanting. The Court finds that although the
1994 Affidavit of the Serranos exists and allegedly casts cloud on the title of respondents, it was not
shown to be in fact invalid or ineffective against respondents' rights to the property.

There is a cloud on a title when: (a) there is an instrument whether a deed, or a contract, or record or
claim or encumbrance or proceeding; (b) which is apparently valid or effective: (c) but is, in truth and in
fact, invalid, ineffective, voidable or unenforceable, extinguished or terminated, or barred by extinctive
prescription; and (d) which may be prejudicial to the title.

EDUVIGES B. ALMAZAN vs. PERLA E. BACOLOD, et al.

G.R. No. 227529 June 16, 2021
Gaerlan, J.:
FACTS:
 The petitioner is one of the registered owners of a 5,865 square meter parcel of land located at
Sta. Rosa, Laguna, and covered by Transfer Certificate of Title No. T-060-2012008993; subject
property was inherited by him and his co-owners from their grandfather, Agapito Almazan.
Sometime in 2010, the petitioner visited the subject property and found the respondents occupying the
same. He demanded them to vacate said subject property, but to no avail.
The respondents claimed that they are agricultural tenants of the subject property, which was
affirmed by the Provincial Agrarian Reform Adjudicator (PARAD) and Department of Agrarian Reform
Adjudicator (DARAB).
Petitioner filed before the RTC of Binan and claimed that he and his co-owners are not bound
by the PARAD and DARAB Decisions because the respondents were never their tenants and they did
not have a relationship with them.
It declared that jurisdiction over the subject matter is determined based on the allegations in the
complaint, and not on the defenses raised in the answer or motion to dismiss. Thus, it examined the
15

averments and concluded that the case involved a real action affecting title or possession of real
property with an assessed value exceeding P50,000.00, thereby falling within its jurisdiction.
Ruling of the CA
In a Decision dated March 7, 2016, the CA granted the Petition for Certiorari, and consequently
19

annulled and set aside the RTC's Orders dated April 14, 2014 and July 7, 2014.
The CA explained that the jurisdiction of a tribunal over the nature and the subject matter of a complaint
is determined by the material allegations contained therein and the character of the relief sought. On20

this score, it noted that the ultimate relief sought by the petitioner is to dispossess the respondents as
tenants, and to strip them of their tenurial rights over the subject property. It stressed that the
21 22

respondents' rights as tenants is attached to the subject property, notwithstanding the absence of an
actual tenancy relationship between them and the petitioner. As the new owner of the land, petitioner
merely assumed the rights and obligations of the previous owner. It further elucidated that the subject
23

property which consists of 5,865 square meters is part of the 1.9262 hectare-landholding declared in
the PARAD decision as tenanted by respondents. Thus, jurisdiction over the case properly pertains to
24

the DARAB.

Petitioner insists that the RTC has jurisdiction to rule on the complaint for quieting of title.

ISSUE:
- WHETHER OR NOT THE RTC HAS JURISDICTION OVER THE COMPLAINT FOR QUIETING OF
TITLE, ACCION REIVINDICATORIA AND DAMAGES.

HELD:
- YES. The RTC has jurisdiction over the action to quiet the title. The SC remanded the issue to the
RTC for a full resolution. There is no nexus or connection between the petitioner and the respondents,
therefore DARAB cannot have jurisdiction over the case.
RATIO:
Regular courts have jurisdiction over actions for quieting of title.
- The case cannot be bound by the jurisdiction of DARAB because there is no existence of a tenancy
relationship between the parties. The DARAB’s jurisdiction is limited to agrarian disputes. According to
Sec. 50 of RA 665768 (Comprehensive Agrarian Reform Law of 1988) vests the DAR with exclusive
and original jurisdiction over all matters involving the implementation of agrarian reform, save for
those falling under the exclusive jurisdiction of the DAR and DENR. The law specifically says, an
agrarian dispute is any controversy that relates to tenurial arrangements, be it a leasehold, tenancy
stewardship or otherwise, involving lands devoted to agriculture.

Heirs of Eñano vs. San Pedro Cineplex Properties, Inc. G.R. No. 236619 April 06, 2022
HEIRS OF MANUEL ENANO vs. SAN PEDRO CINEPLEX PROPERTIES
G.R. No. 236619. April 6,2022

FACTS:
Manuel Enano is the registered owner of the subject property evidenced by TCT No. T-35050, Manuel
had been in open and continuous possession of the subject property since 1966 until his demise in
1987 when his heirs had taken possession of the same. In June 2006, they received a complaint for
forcible entry filed by San Pedro Cineplex Properties Inc. claiming that it is the registered owner of the
subject property by virtue of TCT Nos. TCT 309608, TCT 309610 and TCT 309610.
Jennifer Enano Bote, daughter of Manuel H. Enano, was the Representative of the latter’s legal heirs.
In August 2006, she authorized her husband Virgilio Bote through an SPA to file a complaint for quieting
of title with damages.

To support the petitioner’s claim, Virgilio recounted in his Judicial Affidavit that Manuel and his
predecessors continuously occupied the subject property since 1965 and the taxes due thereon had
been paid until 2008 when the complaint for forcible entry was filed, Virgilio discovered that the
respondent’s TCT’s were fictitious because they originated from an unnotarized and undated Deed of
Sale between respondent and La Paz Housing Development Corporation. Moreover, La Paz Housing
TCT Nos. were reconstituted in a proceeding that did not transpire because no petition for reconstitution
was filed nor any record of reconstitution was found.

Petitioners then concluded that the sale between respondent and La Paz Housing was fraudulent. The
version of the Respondent on the other hand chronicled the chain of transaction which led to its
acquisition of the subject property.

First, Gliceria owned the subject property as her paraphernal property evidenced by OCT No. 0-217.
Second, Gliceria Sold the subject property to SPS. Antonio Sibulo and Rosario Islan in 1964, and
consequently TCT No. T-31852 was issued in their favor. When TCT no. T-31852 was cancelled. Two
separate certificates of the title in the name of the Sps. Sibulo were issued as follows: 1. TCT No. T-
42530 over the portion of the subject property covering 34,847 sq meters designated as Lot A and TCT
No T- 42531 over the portion of the subject property covering 20,000 square meters each for Lot 2-B
and 2-C. Third, the Sps. Sibulo sold lots 2-B and 2-C to Dona Crisanta Investment and Development
Corporation in 1966, Hence TCT no. T-27112 was issued in their favor, Then in 1967, the Sps. Sibulo
sold Lot 2-A to Dona Crisanta to whom TCTT-18811 was issued.

Fourth, Dona Crisanta sold the lots to La Paz Housing as evidenced by the Deed of Sale with Mortgage
in 1985, As a Result TCT nos. T-129577, T-129578, and T-129579 were issued in favor of La Paz
Housing. Fifth, La Paz Housing sold the subject property to respondents evidenced by a Deed of Sale
in 1994. Consequently, La Paz Housing Certificates of Title were cancelled and TCT Nos. T-309608,
T-309609 and T-309610 were issued in favor of the respondent.

Respondent also contended that Manuel’s TCT No. T-35050 was in fact covered in 219 sqm property
in Barrio Mayapa, Calamba Laguna. The RTC ruled in favor of the petitioners, aggrieved respondent
appealed the decision. The CA then reversed the RTC’s findings and dismissed the complaint for lack
of merit. Hence, this present petition.

ISSUE:
Whether or not the CA gravely erred when it reversed the decision of the RTC that Petitioners
have better right over the property subject of the instant case as against herein respondents.

RULING:

NO. Petitioners did not satisfy the requisites for quieting of title, thus, their complaint must be dismissed
for lack of merit. The crux of the controversy points us to Article 476 and 477 of the Civil Code of the
Philippines, the provisions that govern quieting of title which read:

ARTICLE 476: Whenever there is a cloud on title to real property or any interest therein, by reason of
any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is
in truth and in fact invalid, ineffective, voidable or unenforceable, and may be prejudicial to said title, an
action may be brought to remove such cloud or to quiet the title. An action may also be brought to
prevent a cloud from being cast upon title to real property or any interest therein.

ARTICLE 477. The plaintiff must have legal or equitable title to or interest in the real property which is
the subject-matter of the action. He need not be in possession of said property. As correctly observed
by the appellate court, we likewise find that petitioners failed to satisfactorily establish the two requisites.
Consequently, their complaint for quieting must fail.

To begin with, petitioners failed to prove that they hold a legal or equitable title over the subject property.
Petitioners are neither holders of a legal title nor equitable title over the subject property. To prove this
requisite, they presented, among others, TCT No. T-35050 which was issued in the name of manuel
and tax declaration among others which were not sufficient to establish their claim.

Similarly, Second requisite was not ascertained since the certificates of title in the name of the
respondent and the origin of the same were precisely demonstrated through the chain of transactions,
which led to respondent’s ownership of the subject property. Therefore, the alleged cloud created by
the respondent’s certificates of title did not exist. In fact, the genealogy of respondent’s certificates of
title were evidenced by the presentation of all certificates of title from the original title in the name of
gliceria, to sps. Sibulo, then Dona Crisanta investment to la paz housing and finally to respondent.
These documentary evidence serve as a competent proof that respondent’s certificates of title are
genuinely valid not just on their face but also on all legal aspects.

Further, it is settled that a tax declaration does not prove ownership, it is merely an indicium of chain of
ownership. Payment of taxes is not proof of ownership; it is at best, an indicium of possession in the
concept of ownership. Neither Tax receipts nor declaration of ownership for tax purposes is evidence
of ownership or of a right to possess realty when not supported by other effective proof.

Velarde vs. Heirs of Candari G.R. No. 190057 October 17, 2022
FACTS:
Adolfo B. Velarde (Adolfo), married to Antonina T. Velarde; Romulo B. Velarde (Romulo), married to
Jean T. Velarde; Bella B. Velarde; Benedicto B. Velarde (Benedicto); Isabelle V. Diaz; and Carmelita
B. Velarde (Carmelita) (collectively, petitioners) are the legal heirs of Isagani S. Velarde (Isagani).

In a notarized Deed of Sale with Right of Repurchase dated April 20, 1978, respondent Concepcion
Candari (Concepcion) sold seven parcels of land located in Aklan to Isagani with the right to repurchase
within five years.
Concepcion failed to redeem the lots. Thus, in a notarized Deed of Quitclaim and Waiver of Rights
dated February 11, 1986, Concepcion relinquished absolute ownership of the lots in favor of Isagani
and petitioners.
The other lot subject of this controversy was acquired by Isagani from Concepcion's sister, Rizalina C.
Villamon (Rizalina), through a notarized Deed of Absolute Sale dated July 1, 1982.
Petitioners averred that after Isagani's death on February 22, 1987, Concepcion began to represent
herself as the owner of the parcels of land by instituting tenants on portions of the vast lands, collecting
rentals, and appropriating the lands' produce. Their demand upon Concepcion to desist from usurping
their proprietary rights fell on deaf ears, prompting them to file a complaint for quieting of title and
damages.
Concepcion, on the other hand, denied having sold or relinquished ownership and possession of the
properties to Isagani or petitioners. She intimated that she inherited the disputed properties from her
father in 1977, and that she has never shared rentals/produce to Isagani or petitioners. She claimed
that Isagani was merely her lessee, to whom she entrusted the TDs of all her properties for safekeeping
and payment of realty taxes.
Hence, she was surprised when she learned about petitioners' claims. She accused Isagani and
petitioners of having obtained the deeds of conveyances, as well as the OCTs and TDs, by fraudulent
means.
Concepcion also claimed that her sister, Rizalina, never sold her property to Isagani. Thus, as
counterclaim, Concepcion asked for damages and the reconveyance of the properties to her.
In a Decision dated July 5, 2001, the Regional Trial Court (RTC) of Culasi, Antique, Branch 13, granted
the complaint for quieting of title. The RTC found that Concepcion's claims were unsubstantiated, while
petitioners sufficiently proved their title to the properties by their testimonial and documentary evidence
Petitioners moved for reconsideration, but was denied in the assailed CA Resolution

ISSUE:
WN the action for quieting of title should prosper. - NO

RULING:
Petitioners' complaint actually constitutes an accion reivindicatoria.
Petitioners' complaint may have been captioned as quieting of title, but an assiduous examination
of petitioners' averments indubitably show that the remedy sought constitutes an accion reivindicatoria.
An action to quiet title or remove clouds over the title is a special civil action specifically governed
by Rule 63 of the Rules on declaratory relief and similar remedies. Distinguished from ordinary civil
actions, the subject matter in special civil actions under Rule 63 is a deed, will, contract or other written
instrument, statute, executive order or regulation, or ordinance. The issue is the validity or construction
of documents; and the relief sought is the declaration of the parties' rights or duties vis-à-vis, the
questioned documents. Being declaratory in nature, this remedy presupposes that there has been no
breach or violation of the instruments involved, unlike in ordinary civil actions which necessitates the
existence of a violation of a right as an element of a cause of action. Thus, generally, judgments in
remedies of such nature do not entail any executional process as the only relief to be properly granted
is a declaration of the rights and duties of the parties under an instrument. Articles 476 and 477 of the
NCC state:
ART. 476. Whenever there is a cloud on title to real property or any interest therein,
by reasonof any instrument, record, claim, encumbrance or proceeding which is
 apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to remove
such cloud or to quiet the title.
ART. 477. The plaintiff must have legal or equitable title to, or interest in the real
property which is the subject-matter of the action. He need not be in possession of said
property.
Parsed from these provisions, two indispensable requisites must concur for an action for quieting
of title to prosper, namely: (1) the plaintiff has a legal or an equitable title to or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be
casting cloud on their title must be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.
Here, petitioners' cause of action is grounded upon their claims of ownership, which they argue to
have been clouded by Concepcion's exercise of proprietary rights — instituting tenants and collecting
rentals and products. What they perceive as clouds over their title were Concepcion's intrusive acts of
dominion over the properties. In Titong v. Court of Appeals, we emphatically ruled that physical
39

intrusion is not a ground for quieting of title. With an allegation of a violation (physical intrusion) of a
right (ownership), petitioners clearly do not seek a declaratory relief or mere removal of cloud over their
title. Ultimately, they seek to recover full possession of the properties as an element of their ownership,
which was disturbed by Concepcion's physical intrusion. Thus, petitioners' claims and arguments
clearly speak of an accion reivindicatoria — a suit to recover full possession of a parcel of land as an
element of ownership. 40

We have consistently held that the true nature of the action is not determined by the caption of the
pleading, but by the allegations it contain. The court should grant the relief warranted by the allegations,
substantiated by proof, even if no such relief or a different relief is prayed for. Verily, as the allegations
41

in this case constitute an accion reivindicatoria, the court should determine ownership of the properties
and award possession to the lawful owner, even if the complaint prayed for the quieting of title. This
42

was precisely the approach taken by the trial court.

There are two sets of properties involved in this case. First, the lots subject of the Deed of Sale with
Right of Repurchase between Concepcion and Isagani. These properties were likewise the subject of
the Deed of Quitclaim and Waiver of Rights executed by Concepcion in favor of Isagani and petitioners,
wherein Concepcion acknowledged not only her failure to repurchase, but also Isagani and petitioners'
ownership and possession of the properties. Second, the lot subject of the Deed of Absolute Sale
between Isagani and Rizalina. These properties are now declared under Isagani and petitioners' names
for taxation purposes. As well, three of the parcels of land, which were the objects of the pacto de retro
sale, are now covered by the OCTs issued by the Register of Deeds of Antique under petitioners'
names, to wit: OCT No. P-17480 (Adolfo); OCT No. P-17483 (Romulo); and OCT No. P-17481
(Carmelita). Petitioners assert ownership over these properties as Isagani's heirs, as assignees in the
quitclaim and waiver of rights, and as registered owners.
To support their claim, petitioners presented the duly notarized deeds of conveyances. Concepcion,
however, denies knowledge of these deeds, and imputes fraud against Isagani and petitioners in
obtaining title to the properties. She claims that Isagani abused her trust when she left the TDs of all
her properties to him. As regards the property from Rizalina, Concepcion insists that no sale took place
as well between Isagani and Rizalina.
In ruling for Concepcion, the CA found the following circumstances as "hints of fraud and
irregularity" or "indices of [petitioners'] fraudulent maneuvers" to acquire the properties subject of the
43 44

pacto de retro sale: (1) there was no proper consolidation of ownership over the lots subject of the sale
with repurchase as required under Article 1607 of the NCC, i.e., through judicial order; (2) the Deed of
45

Quitclaim and Waiver of Rights was executed more than two years after the expiration of the redemption
period, and in favor of petitioners who are not the vendees a retro; and (3) petitioners' OCTs were
issued in 1982, i.e., before the expiration of the agreed redemption period in 1983 and even before
Concepcion's quitclaim and waiver of rights in 1986. 46

The CA was mistaken

The bare denials of [Concepcion] — that she never sold five (5) of the six (6) disputed
parcels of land, and that [Isagani] never purchased the sixth parcel of land from [Rizalina]
— cannot prevail over the affirmative testimonies of [petitioners Adolfo, Romulo], and
their witnesses, which are supported by documents x x x to the effect that [petitioners]
acquired ownership of the properties through public instruments.

ACCORDINGLY, the Petition for Review on Certiorari is GRANTED. The Decision dated
October 30, 2008 and the Resolution dated September 29, 2009 of the Court of Appeals-Cebu
City in CA-G.R. CV No. 72998 are REVERSED. The Decision dated July 5, 2001 of the Regional
Trial Court of Culasi, Antique, Branch 13, in Civil Case No. C-031 is REINSTATED. Petitioners
Spouses Adolfo B. Velarde and Antonina T. Velarde, Spouses Romulo B. Velarde and Jean T.
Velarde, Bella B. Velarde, Benedicto B. Velarde, Isabelle V. Diaz, and Carmelita B. Velarde are
declared as the true and rightful owners entitled to the possession of the disputed properties.

Heirs of Deloy vs. Basa-Joaquin G.R. No. 241841 November 28, 2022
FACTS:
• Siblings Dionisio Deloy (Dionisio) and Isabel Deloy (Isabel) were the registered owners of Lot
No. 4012, a six-hectare parcel of land located at the Sta. Cruz de Malabon Estate, City of Trece
Martires, Province of Cavite, and covered under Transfer Certificate of Title (TCT) No. T-13784.

• Dionisio died in 1985. In 1989, his surviving spouse, Praxedes, discovered the issuance of the
titles in the Province of Cavite's name when she looked for the certificates of title for Lot Nos.
4012-A and 4012-B. Praxedes and the other heirs of Dionisio filed a case for Annulment of
Torrens Title and Deed of Conveyance with Damages against the Province of Cavite and the
Register of Deeds

• On February 5, 1998, the RTC rendered its Decision in favor of Praxedes and the other heirs in
the Annulment Case. The Court renders judgment for the plaintiffs and against the defendants;
declaring any deed of conveyance presented by defendants Province of Cavite and the Register
of Deeds for the Province of Cavite as null and void; ordering the Register of Deeds for the
Province of Cavite to issue the corresponding torrens titles over the land subject matter hereof
in the name of the late Dionisio Deloy or his heirs to be disposed of in accordance with law after
payment of the corresponding fees.

• On appeal, the CA affirmed RTC decision in its Decision dated August 23, 2001.

• After the foregoing Decision became final and executory, the Registry of Deeds (RD) of Trece
Martires City cancelled TCT No. (T-13784) RT 1261219 and issued T-6669620 in lieu thereof. All
the certificates of title issued in the name of the Province of Cavite were cancelled.

• Verna Basa-Joaquin (Verna), the Heirs of Spouses Mariano and Macaria Del Rosario (Spouses Del
Rosario), and the Heirs of Maxima Guevarra (collectively, respondents; Heirs of Maxima), alleged
that the reconstitution affected the certificates of title issued in their respective names. To
respondents' surprise, the RD for Trece Martires City sent them a letter on June 20, 2007 asking
them to surrender the owner's duplicate copy of their respective titles for the purpose of annotating
the adverse claim of Heirs of Spouses Deloy. Respondents complied. Subsequently, the certificates
of title of respondents were canceled and new ones were issued all in the name of Dionisio.

• This prompted respondents to file their respective petitions for quieting of title or removal of the
cloud thereof and damages with prayer for temporary restraining order and/or preliminary injunction
before the RTC.

• Heirs of Spouses Deloy filed their Answers to the petitions before the RTC. They argued that the
cancellation of TCT No. (T-13784} RT 12612 should result in the cancellation of all the titles derived
from it, pursuant to the ruling in the Annulment Case. Thus, they argued that the titles of respondents
were spurious and should be cancelled.

• The RTC ruled in favor of respondents in its Decision dated April 24, 2012, that TCT No. (T-43159)
T-85 -TMC-08-1212 issued in the name of Verna R. Basa-Joaquin and entered on May 4, 1970 is
declared to be valid and subsisting; that the annotations in entry nos. 26141 and 26142 at the back
of TCT No. (T-43159) T- 554-TMC-08-1212 be cancelled and deleted; that the Register of Deeds
of Trece Martires City is directed to cancel TCT No. T-8259 -TMC-08-1385 in the names of the
'HEIRS OF SPOUSES DIONSIO DELOY AND PRAJIBDES MARTONITO;

• Heirs of Spouses Deloy filed a Motion for New Trial but denied by the RTC denied. They appealed
to the CA. The CA affirmed the RTC in its Decision.
ISSUE:
Whether the CA erred in affirming the RTC's ruling to grant respondents' petitions to quiet title.
HELD:
Yes. Respondents failed to prove that petition to quiet title is meritorious.
An action to quiet title is based on Article 476 of the Civil Code which provides:
ARTICLE 476. Whenever there is cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in
truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an
action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to real property or any
interest therein.
Based on the foregoing, an action to quiet title has the following requisites: "(l) the plaintiff or
complainant must have a legal or an equitable title to or interest in the real property subject of the
action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his [or her]
title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or
legal efficacy." Legal title refers to registered ownership while equitable title refers to beneficial
ownership.
Respondents were the registered owners of Lot Nos. 4012-J, 4012- K, and 4012-L under TCT Nos. T-
8554-TM -08-1212, T-22749, and T-69602, respectively. But, these certificates of title were cancelled
after Heirs of Spouses Deloy obtained a favorable ruling in the Annulment Case.
The question now is whether respondents were able to prove that they validly acquired ownership over
Lot 4012-J, 4012-K, and 4012-L.
Respondents offered copies of TCT Nos. (T-43159) T-8554, (T-25562) T-22749, and (T-29268) T-6960,
as evidence of their ownership. However, these certificates offered cannot be relied upon to prove the
validity of the transfer of ownership considering that they were derived from a void reconstituted title.
Verna did not present a copy of any instrument evidencing the sale of Lot No. 4012-J from Dionisio to
her parents, or the sale from her parents to herself. She admitted during her testimony that there is no
documentary proof of the sale between Dionisio and her parents Spouses Basa.
It is well-settled that tax declarations, by themselves, do not prove ownership. This is more so in the
case where Spouses Basa supposedly purchased the property in 1967 but real property taxes were
only paid in 2001. As such, the Court finds that the evidence presented by Verna is not enough to prove
that Dionisio sold Lot No. 4012-J to her parents Spouses Basa.
However, as stated above, tax declarations are not conclusive evidence of ownership. The dearth of
evidence regarding Lot Nos. 4012-K and 4012-L, which were supposedly transferred way back in 1967
and 1968, respectively, renders the existence of the sale doubtful. In sum, respondents were unable to
prove that their predecessors in-interest validly purchased Lot Nos. 4012-J, 4012-K, and 4012-L from
Dionisio. As such, their petitions for quieting of title cannot be granted for lack of basis.
WHEREFORE, the petition is GRANTED. The Decision dated March 12 2018 and the Resolution dated
August 24, 2018 of the Court of Appeals in CA-G.R. CV No. 102176 are REVERSED and SET ASIDE.
The petitions for quieting of title or removal of the cloud thereof and damages with prayer for temporary
restraining order and/or preliminary injunction filed by respondents Verna R. Basa-Joaquin, as
represented by her Attorney-in-Fact Maurino J. Salazar, the Heirs of Spouses Mariano Del Rosario and
Macaria Guevarra, and the Heirs of Maxima Guevarra, as represented by Angeli G. Del Rosario-Zoleta,
are hereby DISMISSED.

Article 484 – Article 501

Hernandez vs. Quitain G.R. No. L-48457 November 29, 1988
Facts:
Petitioner Perla Hernandez purchased a parcel of land from Sancho Manlapaz.
The land was originally part of a larger parcel owned by the spouses Crispulo Manlapaz and Antonia
Villanueva.
After their death, their children, including the respondent Ernesta Manlapaz- Valdemoro, extrajudicially
partitioned the land.
Each child received their respective portion, and Sancho sold the lot adjudicated to him to the petitioner.
The respondent filed a complaint seeking to redeem the lot bought by the petitioner, claiming that she
was not informed of the sale and deposited the redemption price with the trial court.
Issue:
Whether the respondent, as a co-owner, is entitled to exercise the right of legal redemption.
Ruling:
Basis of the legal right of redemption is the existence of a co-ownership.
CC 484 says that 'there is co-ownership whenever the ownership of an undivided thing or right belongs
to different persons.' The court also further emphasizes that there is no co-ownership when the owner
of a portion has been concretely determined and identified.
The lot has been concretely divided.
There has been extrajudicial partitioning of land, on 30 December 1974. By virtue of the partition, each
child received his respective portion. The inherited property had been subdivided and the heirs had
taken possession of their respective portions.
Purpose of legal redemption is to reduce the number of participants in the co- ownership of a thing or
right.
As cited in Caro v. CA: Inasmuch as the purpose of the law in establishing the right of legal redemption
between co-owners is to reduce the number of the participants until the community is done away with
(Viola v. Tecson, 49 Phil. 808), once the property is subdivided and distributed among the co-owners,
the community has terminated and there is no reason to sustain any right of legal redemption.
Legal redemption is no longer available once property has already been partitioned. In Umengan,
correctly cited by petitioner, the court said that the right of legal redemption under Article 1620, given
to a co-owner in case any one of the other co-heirs or co-owners sells his share to a third person,
cannot be invoked where the property had already been partitioned judicially or extrajudicially.
(No longer co-ownership issues)
Elements of Art 1622 (Right of redemption for adjoining owners) not proven.
Art. 1622 of the Civil Code, she can still redeem the property as an adjoining owner, having bought the
lot of her brother Jose, which abutted the lot adjudicated to Sancho-Article 1622 reads as follows:
Whenever a piece of urban land which is so small and so situated that a major portion thereof cannot
be used for any practical purpose within a reasonable time, having been bought merely for speculation,
is about to be resold, the owner of any adjoining land has a right of preemption at a reasonable price.
If the re-sale has been perfected, the owner whose intended use of the land in question appears best
justified shall be preferred.
In support of her theory, private respondent maintains that she alleged in her complaint the elements
necessary for the application of Article 1622 to wit: (1) that the piece of land is urban land, being situated
in the poblacion of Baleno, Masbate; (2) that since the lot is only 46.40 square meters, its area is so
small that a major portion thereof cannot be used for any practical purpose within a reasonable time;
and (3) that it was bought merely for speculation.
She failed to allege or prove a fourth element necessary to bring into operation Article 1622-that the
land is about to be resold, or that its resale has been perfected. She also failed to prove the concurrence
of the other elements.
ROC 46 Sec 3 merely directory. Substantial justice over mere technicality.
Respondent maintains that there was late filing as the SC only received the appeal after one year and
eight months after its approval. The undue delay should result in the dismissal of the appeal since
Section 3 of Rule 46 states that if the record on appeal is not received by the Court within thirty days
after the approval thereof, the appellee may upon notice to the appellant move the court to grant an
order directing the Clerk of Court forthwith to transmit the record on appeal or to declare the same
abandoned for failure to prosecute.
The court held here that the invocation of said rule is clearly an afterthought. Furthermore, in a fairly
recent decision, this Court emphasized its policy that technical rules should accede to the demands of
substantial justice
Paulmitan vs. Court of Appeals G.R. No. 61584 November 25, 1992

When a co-owner sells the entire property without consent from the other co-owners, only his pro
indiviso share on the property is transferred to the buyer.
FACTS:
The dispute covers 2 lots, Lot 757 and Lot 1091, which were owned by Agatona Paulmitan. She had 2
children, Pascual and Donato. Pascual's (7) children (Alicio, Elena, Abelino, Adelina, Anita, Baking,
Anito) are the respondents and Donato and his daughter and son-in-law are petitioners.
Donato executed an Affidavit of Declaration of Heirship, adjudicating to himself Lot 757 claiming that
he is the sole surviving heir thus the OCT of Agatona was cancelled and a TCT was issued in his name.
He executed a deed of sale of Lot 1091 in favor of his daughter, Juliana. For non-payment of taxes, the
lot was forfeited and sole at a public to the Provincial Gov't of Negros Occidental, however, Juliana was
able to redeem the property. Upon learning these, the children of Pascual filed w/ the CFI a complaint
against petitioners to partition the land plus damages. Petitioners' defense was that the action has
already prescribed for it was filed more than 11 years after the issuance of the TCT and that Juliana
has acquired exclusive ownership thru the Deed of Sale and by redeeming the said property.
The CFI dismissed the complaint and became final and executory. With respect to Lot 1091, the court
decided in favor of respondents. They are entitled to 1⁄2 of Lot 1091, pro indiviso. The redemption did
not in anyway prejudice their rights. The land was ordered to be partitioned and the petitioners were
ordered to pay the respondents their share of the fruits and the respondents to pay their share in the
redemption of the land. The CA affirmed the decision thus the case at bar.
ISSUE:
(1) Whether or not Pascual's children and Donato and Juliana were co-owners of their mother's lot
(2) Whether or not Juliana acquired full ownership by redeeming the property
HELD:
(1) YES: When Agatona died, her estate was still unpartitioned. Art. 1078 states that "Where there are
2 or more heirs, the whole estate of the decedent
is, before its partition, owned in common by such heirs, subject to the payment of debts of the
deceased". Since Pascual and Donato were still alive when she died, they are co-owners of the estate.
When Pascual died, his children succeeded him in the co-ownership of the property.
When Donato sold to his daughter the lot, he was only a co-owner of the same thus he can only sell
his undivided portion of the property.
Art. 493 states that "each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it and even substitute another
person in its enjoyment, except when personal rights are involved. But the effect of the alienation or
mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in
the division upon the termination of the co-ownership."
Only the rights of the co-owner-seller are transferred making the buyer (Juliana) a co-owner.

(2) NO: When she redeemed the property, it did not end the co-ownership. The right of repurchase may
be exercised by a co-owner w/ respect to his/her share alone as stated in Art. 1612. But she may
compel them to reimburse her for half of the repurchase price for a co-owner has the right to compel
other co-owners to contribute to the expenses for the preservation of the thing and
to taxes.
Robles vs. Court of Appeals G.R. No. 123509 March 14, 2000

Doctrine: Contrary to the disquisition of the Court of Appeals, Hilario effected no clear and evident
repudiation of the co-ownership. It is a fundamental principle that a co-owner cannot acquire by
prescription the share of the other co-owners, absent any clear repudiation of the co-ownership. In
order that the title may prescribe in favor of a co-owner, the following requisites must concur: (1) the
co-owner has performed unequivocal acts of repudiation amounting to an ouster of the other co-
owners; (2) such positive acts of repudiation have been made known to the other co-owners; and (3)
the evidence thereof is clear and convincing.
Facts: Leon Robles primitively owned the land situated in Kay Taga, Lagundi. Morong, Rizal with an
area of 9,985 square meters. He occupied the same openly and adversely. He also declared the same
in his name for taxation purposes as early as 1916 covered by Tax Declaration No. 17865 and paid the
corresponding taxes thereon. When Leon Robles died, his son Silvino Robles inherited the land, who
took possession of the land, declared it in his name for taxation purposes and paid the taxes thereon.
Upon the death of Silvino Robles in 1942, his widow Maria de la Cruz and his children inherited the
property. They took adverse possession of said property and paid taxes thereon. The task of
cultivat[ing] the land was assigned to plaintiff Lucio Robles who planted trees and other crops. He also
built a nipa hut on the land. The plaintiffs entrusted the payment of the land taxes to their coheir and
half-brother, Hilario Robles.
In 1962, for unknown reasons, the tax declaration of the parcel of land in the name of Silvino Robles
was canceled and transferred to one Exequiel Ballena, father of Andrea Robles who is the wife of
defendant Hilario Robles. Thereafter, Exequiel Ballena secured a loan from the Antipolo Rural Bank,
using the tax declaration as security. Somehow, the tax declaration was transferred [to] the name of
Antipolo Rural Bank and later on, was transferred to the name of defendant Hilario Robles and his wife.
In 1996, Andrea Robles secured a loan from the Cardona Rural Bank, Inc., using the tax declaration
as security. Andrea Robles testified without contradiction that somebody else, not her husband Hilario
Robles, signed the loan papers because Hilario Robles was working in Marinduque at that time as a
carpenter. For failure to pay the mortgage debt, foreclosure proceedings were had and defendant Rural
Bank emerged as the highest bidder during the auction sale in October 1968.
The spouses Hilario Robles failed to redeem the property and so the tax declaration was transferred in
the name of defendant Rural Bank. On September 25, 1987, defendant Rural Bank sold the same to
the Spouses Vergel Santos and Ruth Santos.
In September 1987, plaintiff discovered the mortgage and attempted to redeem the property, but was
unsuccessful. On May 10, 1988, defendant spouses Santos took possession of the property in question
and was able to secure Free Patent No. IV-1-010021 in their names.
The trial court held that real estate mortgage executed allegedly by Hilario Robles in favor of the
defendant Cardona Rural Bank, Inc. was not valid, it stands to reason that the foreclosure proceedings
therein were likewise not valid. CA reserved the decision of the trial court and said that the court gravely
erred in invalidating the real estate mortgage constituted on the land solely on the basis of Andrea
Robles' testimony that her husband's signature thereon was forged. Hence, the current petition.

The petitioners contend that as coowners of the subject property, they did not agree to the real estate
mortgage constituted on it, petitioners insist that their shares therein should not have been prejudiced
by Hilario's actions.
Issue:
Whether or not the real estate mortgage entered into by Hilario Robles with Rural Bank of Cardona is
void.
Ruling:
Yes, the real estate mortgage entered into by Hilario Robles with Rural Bank of Cardona is void.
Considering that Hilario can be deemed to have mortgaged the disputed property not as absolute owner
but only as a co owner, he can be adjudged to have disposed to the Rural Bank of Cardona, Inc., only
his undivided share therein. The said bank, being the immediate predecessor of the Santos spouses,
was a mortgagee in bad faith. Thus, justice and equity mandate the entitlement of the Santos spouses,
who merely stepped into the shoes of the bank, only to what legally pertains to the latter-Hilario's share
in the disputed property.
In the present case, Hilario did not have possession of the subject property; neither did he exclude the
petitioners from the use and the enjoyment thereof, as they had indisputably shared in its fruits. 13

Likewise, his act of entering into a mortgage contract with the bank cannot be construed to be a
repudiation of the co-ownership. As absolute owner of his undivided interest in the land, he had the
right to alienate his share, as he in fact did. Neither should his payment of land taxes in his name, as
14

agreed upon by the co-owners, be construed as a repudiation of the co-ownership. The assertion that
the declaration of ownership was tantamount to repudiation was belied by the continued occupation
and possession of the disputed property by the petitioners as owners.

- Art. 493, Civil Code. "Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be
allotted to him in the division upon the termination of the co-ownership.
In sum, the real estate mortgage contract covering the disputed property-a contract executed between
Spouses Hilario and Andrea on the one hand and the Rural Bank of Cardona, Inc., on the other- is
hereby declared null and void insofar as it prejudiced the shares of Petitioners Lucio, Emerita, Aludia
and Emilio Robles; it is valid as to Hilario Robles' share therein. Consequently, the sale of the subject
property to the Santos spouses is valid insofar as it pertained to his share only. Likewise declared null
and void is Free Patent No. IV-1-010021 issued by the Bureau of Lands covering the subject property.
Petition is granted. Assailed decision is reversed and set aside.

Spouses Si vs. Court of Appeals G.R. No. 122047 October 12, 2000

FACTS:
The property in dispute originally belonged to Escolastica, wife of Severo Armada Sr.
During the lifetime of the spouses, the property was transferred to their children Crisostomo married to
Cresenciana, Jose married to Remedios and Dr. Severo, single. By virtue of a deed of sale. Crisostomo
through his attorney-in-fact conveyed the land to Anita Si for P75 000 thousand pesos
Jose Armada and his wife filed a complaint for the annulment of the deed of sale.

The complaint alleged that Conrado Isada (Cresenciana's brother-in-law) sold Crisostomo's share by
making it appear that Cresenciana, the attorney-in-fact of her husband, is a Filipino citizen, residing
with Isada
By this time, Crisostomo and Cresenciana had migrated and were already citizens of the United States
of America.
It also stated that when petitioners registered the deed of absolute sale they inserted the phrase "...
and that the co-owners are not interested in buying the same in spite of notice to them.", and that Jose
knew of the misrepresentations of Conrado.
Jose and Severo, Jr., had no written notice of the sale; and that all upon learning of the sale to the
spouses Si they filed a complaint for reconveyance claiming that they had a right of redemption
Si alleged that:
Escolastica, with the consent of her husband executed three separate deeds of sale conveying the
property to Severo, Crisostomo and Jose
Petitioners contend that since the property was already three distinct parcels of land, there was no
longer co-ownership among the brothers.
Jose and Severo, Jr. had no right of redemption when Crisostomo sold his share to the spouses Si.
Petitioners point out that it was only because the Armada brothers failed to submit the necessary
subdivision plan to the Office of the Register of Deeds in Pasay City that separate titles were not issued
RTC, ruled in favor of the Si's and dismissed the complaint
CA, reversed the trial court's decision
.
Stating that the portion sold in the deed of sale does not indicate the area sold
No evidence was presented to show that the Register of Deeds issued TCT on the basis of the said
deeds of Sale
Furthermore, the evidence on record shows that the Deed of Absolute Sale the portion sold was the
'undivided one hundred thirteen & 34/100 (113.34) square meters' of the parcel of land what was sold
to defendants are still undetermined and unidentifiable, as the area sold remains a portion of the whole
They were not notified of the said sale
The sale by a co-owner of his share in the undivided property is not invalid, but shall not be recorded
in the Registry Property, unless accompanied by an affidavit of the Vendor that he has given written
notice thereof to all possible redemptioners."
ISSUE: Whether private respondents are co-owners who are legally entitled to redeem the lot under
Article 1623 of the Civil Code
HELD:
NO
The lot in question had already been partitioned when their parents executed three (3) deed of sales
Every portion conveyed and transferred to the three sons was definitely described and segregated and
with the corresponding technical description.
It was extrajudicially partitioned
Every portion belonging to the three sons has been declared for taxation purposes with the Assessor's
Office of Pasay City
These are the unblinkable facts that the portion sold to defendant spouses Si by defendants Crisostomo
Armada and Cresenciana Armada was concretely determined and identifiable.
Hence, no right of redemption among co-owners exists

After the physical division of the lot among the brothers, the community ownership terminated, and the
right of preemption or redemption for each brother was no longer available. 22

Under Art. 484 of the Civil Code, there is co-ownership whenever the ownership of an undivided thing
23

or right belongs to different persons. There is no co-ownership when the different portions owned by
different people are already concretely determined and separately identifiable, even if not yet
technically described. This situation makes inapplicable the provision on the right of redemption of a
24

co-owner in the Civil Code, as follows:

"Art. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days
from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed
of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the
vendor that he has given written notice thereof to all possible redemptioners.
The right of redemption of co-owners excludes that of adjoining owners."
Moreover, we note that private respondent Jose Armada was well informed of the impending sale of
Crisostomo's share in the land. In a letter dated February 22, 1979, Jose told his brother Crisostomo:
"Well you are the king of yourselves, and you can sell your share of Leveriza." Co-owners with actual
25

notice of the sale are not entitled to written notice. A written notice is a formal requisite to make certain
that the co-owners have actual notice of the sale to enable them to exercise their right of redemption
within the limited period of thirty days. But where the co-owners had actual notice of the sale at the time
thereof and/or afterwards, a written notice of a fact already known to them, would be superfluous. The
statute does not demand what is unnecessary.

Sanchez vs. Court of Appeals G.R. No. 152766 June 20, 2003
Facts:
Lilia Sanchez, petitioner, constructed a house on a 76-square meter lot owned by her parents-in-law.
The lot was registered under TCT No. 263624 with the following co-owners: Eliseo Sanchez married to
Celia Sanchez, Marilyn Sanchez married to Nicanor Montalban, Lilian Sanchez, widow, Nenita
Sanchez, single, Susana Sanchez married to Fernando Ramos, and Felipe Sanchez.
On 20 February 1995, the lot was registered under TCT No. 289216 in the name of private respondent
Virginia Teria by virtue of a Deed of Absolute Sale supposed to have been executed on 23 June 1995
by all six (6) co-owners in her favor.
Petitioner claimed that she did not affix her signature on the document and subsequently refused to
vacate the lot, thus prompting private respondent Virginia Teria to file an action for recovery of
possession of the aforesaid lot with the Metropolitan Trial Court (MeTC) of Caloocan City sometime in
September 1995
MeTC-Br. 49 of Caloocan City ruled in favor of private respondent declaring that the sale was valid only
to the extent of 5/6 of the lot and the other 1/6 remaining as the property of petitioner, on account of
her signature in the Deed of Absolute Sale having been established as a forgery.

Petitioner then elevated her appeal to the Regional Trial Court of Caloocan City, subsequently assigned
to Br. 120, which ordered the parties to file their respective memoranda of appeal. Counsel for petitioner
did not comply with this order, nor even inform her of the developments in her case. Petitioner not
having filed any pleading with the RTC of Caloocan City, the trial court affirmed the 27 July 1998
decision of the MeTC.
On 4 November 1998, the MeTC issued an order for the issuance of a writ of execution in favor of
private respondent Virginia Teria, buyer of the property. On 4 November 1999 or a year later, a Notice
to Vacate was served by the sheriff upon petitioner who however refused to heed the Notice.
On 28 April 1999 private respondent started demolishing petitioner’s house without any special permit
of demolition from the court.
Due to the demolition of her house which continued until 24 May 1999 petitioner was forced to inhabit
the portion of the premises that used to serve as the house’s toilet and laundry area.
RTC denied the Petition and the subsequent Motion for Reconsideration.
On 14 June 2000 petitioner filed her Petition for Certiorari with the Court of Appeals alleging grave
abuse of discretion on the part of the court a quo.
On 23 May 2001 the appellate court dismissed the petition for lack of merit.1âwphi1 On 18 June 2001
petitioner filed a Motion for Reconsideration but the Court of Appeals denied the motion in its Resolution
of 8 January 2002.

Issue: WON the Court of Appeals committed grave abuse of discretion in dismissing the challenged
case before it. - yes
The Deed of Absolute Sale by the other co-owners to Virginia Teria shall be RESPECTED insofar as
the other undivided 5/6 portion of the property is concerned.
Let the records of this case be REMANDED to MeTC-Br. 49, Caloocan City to effect the aforementioned
survey and partition, as well as segregate the 1/6 portion appertaining to petitioner Lilia Sanchez.
Held:
This case overlooks a basic yet significant principle of civil law: co-ownership. Throughout the
proceedings from the MeTC to the Court of Appeals, the notion of co-ownership was not sufficiently
dealt with. We attempt to address this controversy in the interest of substantial justice. Certiorari should
therefore be granted to cure this grave abuse of discretion.
Sanchez Roman defines co-ownership as "the right of common dominion which two or more persons
have in a spiritual part of a thing, not materially or physically divided. Manresa defines it as the
"manifestation of the private right of ownership, which instead of being exercised by the owner in an
exclusive manner over the things subject to it, is exercised by two or more owners and the undivided
thing or right to which it refers is one and the same."
The characteristics of co-ownership are: (a) plurality of subjects, who are the co-owners, (b) unity of or
material indivision, which means that there is a single object which is not materially divided, and which
is the element which binds the subjects, and, (c) the recognition of ideal shares, which determines the
rights and obligations of the co-owners.
In co-ownership, the relationship of such co-owner to the other co-owners is fiduciary in character and
attribute. Whether established by law or by agreement of the co-owners, the property or thing held pro-
indiviso is impressed with a fiducial nature so that each co-owner becomes a trustee for the benefit of
his co-owners and he may not do any act prejudicial to the interest of his co-owners.
Thus, the legal effect of an agreement to preserve the properties in co-ownership is to create an express
trust among the heirs as co-owners of the properties. Co-ownership is a form of trust and every co-
owner is a trustee for the others.
Before the partition of a land or thing held in common, no individual or co-owner can claim title to any
definite portion thereof. All that the co-owner has is an ideal or abstract quota or proportionate share in
the entire land or thing.
Article 493 of the Civil Code gives the owner of an undivided interest in the property the right to freely
sell and dispose of it, i.e., his undivided interest. He may validly lease his undivided interest to a third
party independently of the other co-owners. But he has no right to sell or alienate a concrete, specific
or determinate part of the thing owned in common because his right over the thing is represented by a
quota or ideal portion without any physical adjudication.
Although assigned an aliquot but abstract part of the property, the metes and bounds of petitioner's lot
has not been designated. As she was not a party to the Deed of Absolute Sale voluntarily entered into
by the other co-owners, her right to 1/6 of the property must be respected. Partition needs to be effected
to protect her right to her definite share and determine the boundaries of her property. Such partition
must be done without prejudice to the rights of private respondent Virginia Teria as buyer of the 5/6
portion of the lot under dispute.
De Guia vs. Court of Appeals G.R. No. 120864 October 08, 2003

On 12 May 1986, ABEJO instituted an action for recovery of possession with damages against DE
GUIA.
1. The subject of the dispute are two undivided parcels of land used as a fishpond situated in Barrio
Ubihan, Meycauayan, Bulacan, originally co-owned by Primitiva Lejano and Lorenza Araniego married
to Juan Abejo.
2. The FISHPOND is registered under the names of Primitiva Lejano and Lorenza Araniego under TCT
No. 6358 of the Bulacan Register of Deeds as follows:
PRIMITIVA LEJANO, Filipina, of legal age, single - ½ share; and LORENZA ARANIEGO, Filipina, of
legal age, married to Juan Abejo, ½ share, ---
3. The FISHPOND has a total land area of approximately 79,220 square meters. ABEJO is seeking to
recover possession of the ½ undivided portion of the FISHPOND containing 39,611 square meters.
4. DE GUIA (along with a certain Aniano Victa) acquired possession of the entire FISHPOND by virtue
of a document captioned Salin ng Pamumusisyong ng Palaisdaan ("Lease Contract") executed
between him and the heirs of Primitiva Lejano. The Lease Contract was effective from 30 July 1974 up
to 30 November 1979 for a consideration of ₱100,000.
5. The Lease Contract was executed with the knowledge and consent of Teofilo Abejo, sole heir of
Lorenza Araniego Abejo. Teofilo Abejo acquired Lorenza Araniego Abejo’s ½ undivided share in the
FISHPOND by intestate succession.
6. Teofilo Abejo (now deceased) sold his ½ undivided share in the FISHPOND to his son, ABEJO, on
22 November 1983.
7. DE GUIA continues to possess the entire FISHPOND and to derive income from the property despite
the expiration of the Lease Contract and several demands to vacate made by Teofilo Abejo and by his
successor-in-interest, ABEJO. The last demand letter was dated 27 November 1983.
8. ABEJO filed his complaint for recovery of possession with damages against DE GUIA on 12 May
1986.
9. DE GUIA’s claim of ownership over the other ½ undivided portion of the FISHPOND has not been
finally adjudicated for or against him.

Subsequently, defendant became the absolute owner of one half of the undivided area of the fishpond
and he questioned plaintiffs ownership of the other half as void and fraudulent. As to the area pertaining
to plaintiff, defendant claimed that he introduced improvements worth ₱500,000 and being in good faith,
he asked that he should be reimbursed by plaintiff.
RTC ruled in favor of Abejo
CA affirmed RTC
ISSUE:
THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURT’S ORDER DIRECTING
PETITIONER TO TURN OVER THE ONE-HALF UNDIVIDED PORTION OF THE FISHPOND WHICH
IS STILL UNDER A STATE OF CO-OWNERSHIP;

RULING:
The petition is partly meritorious.
First and Second Issues: Cause of Action and Turn-Over of Possession
DE GUIA contends that a co-owner cannot claim a definite portion from the property owned in common
until there is a partition. DE GUIA argues that ABEJO should have filed an action for partition instead
of recovery of possession since the court cannot implement any decision in the latter case without first
a partition. DE GUIA contends that an action for recovery of possession cannot prosper when the
property subject of the action is part of an undivided, co-owned property. The procedural mode adopted
by ABEJO, which is recovery of possession, makes enforcement difficult if not impossible since there
is still no partition of the subject property.
Under Article 484 of the Civil Code, "there is co-ownership whenever the ownership of an undivided
thing or right belongs to different persons." A co-owner of an undivided parcel of land is an "owner of
the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner
of a portion which is truly abstract." On the other hand, there is no co-ownership when the different
15

portions owned by different people are already concretely determined and separately identifiable, even
if not yet technically described.
16

Article 487 of the Civil Code provides, "[a]ny one of the co-owners may bring an action in ejectment."
This article covers all kinds of actions for the recovery of possession. Article 487 includes forcible entry
and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of
ownership (accion de reivindicacion).

The summary actions of forcible entry and unlawful detainer seek the recovery of physical possession
only. These actions are brought before municipal trial courts within one year from dispossession.
However, accion publiciana, which is a plenary action for recovery of the right to possess, falls under
the jurisdiction of the proper regional trial court when the dispossession has lasted for more than one
year. Accion de reivindicacion, which seeks the recovery of ownership, also falls under the jurisdiction
of the proper regional trial court.
Any co-owner may file an action under Article 487 not only against a third person, but also against
another co-owner who takes exclusive possession and asserts exclusive ownership of the property.
In the latter case, however, the only purpose of the action is to obtain recognition of the co-ownership.
The plaintiff cannot seek exclusion of the defendant from the property because as co-owner he has a
right of possession. The plaintiff cannot recover any material or determinate part of the property. 19

In Hermogena G. Engreso with Spouse Jose Engreso v. Nestoria De La Cruz and Herminio De La
Cruz, we reiterated the rule that a co-owner cannot recover a material or determinate part of a common
20

property prior to partition as follows:

It is a basic principle in civil law that before a property owned in common is actually partitioned, all that
the co-owner has is an ideal or abstract quota or proportionate share in the entire property. A co-owner
has no right to demand a concrete, specific or determinate part of the thing owned in common because
until division is effected his right over the thing is represented only by an ideal portion.
As such, the only effect of an action brought by a co-owner against a co-owner will be to obtain
recognition of the co-ownership; the defendant cannot be excluded from a specific portion of the
property because as a co-owner he has a right to possess and the plaintiff cannot recover any material
or determinate part of the property. Thus, the courts a quo erred when they ordered the delivery of one-
half (½) of the building in favor of private respondent.
Indisputably, DE GUIA has been in exclusive possession of the entire FISHPOND since July 1974.
Initially, DE GUIA disputed ABEJO’s claim of ownership over the ½ undivided portion of the FISHPOND.
Subsequently, he implicitly recognized ABEJO’s ½ undivided share by offering to settle the case for
₱300,000 and to vacate the property. During the trial proper, neither DE GUIA nor ABEJO asserted or
manifested a claim of absolute and exclusive ownership over the entire FISHPOND.1a\^/phi1.net
Before this Court, DE GUIA limits the issues to the propriety of bringing an action for recovery of
possession and the recovery of compensatory damages.
Following the inherent and peculiar features of co-ownership, while ABEJO and DE GUIA have equal
shares in the FISHPOND quantitatively speaking, they have the same right in a qualitative sense as
co-owners. Simply stated, ABEJO and DE GUIA are owners of the whole and over the whole, they
exercise the right of dominion. However, they are at the same time individual owners of a ½ portion,
which is truly abstract because until there is partition, such portion remains indeterminate or
unidentified. As co-owners, ABEJO and DE GUIA may jointly exercise the right of dominion over the
21

entire FISHPOND until they partition the FISHPOND by identifying or segregating their respective
portions.
Since a co-ownership subsists between ABEJO and DE GUIA, judicial or extra-judicial partition is the
proper recourse. An action to demand partition is imprescriptible and not subject to laches. Each co-
22

owner may demand at any time the partition of the common property unless a co-owner has repudiated
the co-ownership under certain conditions. Neither ABEJO nor DE GUIA has repudiated the co-
23

ownership under the conditions set by law.

Wheelers Club International, Inc. vs. Bonifacio, Jr. G.R. No. 139540 June 29, 2005

FACTS: Rosario, Romeo, Virgilio, Generoso, Andres, Jovito, Jose, Zenaida B. Lafiguera, Corazon B.
Calub, and Ma. Cristina B. De Guzman are the registered co-owners of a parcel of land with
improvement.
The co-owners comprised the Board of Directors of J & R Bonifacio Development Corporation (JRBDC).
Bonifacio Development Associates, Inc. (BDAI) entered into a Contract of Lease with Wheelers for a
term of five years.
Under the Contract of Lease, Wheelers undertook to pay BDAI a monthly rental of P108,750 for the
lease of the Property. JRBDC entered into a Lease Development Agreement with BDAI.
Under the Lease Development Agreement, BDAI was authorized to renovate, manage, develop, and
sublease the Property.
The term of the agreement was also for five years. The monthly rental was based on the actual income
derived from the lease, management and development of the Property to be shared by the co-owners
and BDAI.
On 16 June 1996, the co-owners demanded that BDAI submit accounting records of all income from
the Property. BDAI, in turn, demanded that the co- owners furnish it with receipts and records of cash
and check advances.
On 18 August 1996, the co- owners approved a Resolution terminating the authority of Jaime C.
Bonifacio to manage and administer the Property for BDAIs failure to submit an accounting of the
income. Rosario, as President and Chairman of the Board of JRBDC, wrote Jaime, as President and
Chairman of BDAI, a letter terminating the agreement with JRBDC for non-payment of whatever was
due to JRBDC under the agreement.

The co-owners approved a Resolution appointing Jovito as the new administrator of the Property. BDAI
insisted that there was no valid reason for the termination of BDAI or Jaime's management of the
Property.
BDAI claimed that Rosarios failure to furnish receipts hindered its submission of complete accounting
records. Jovito wrote to Wheelers claiming that the co-owners did not authorize the Contract of Lease
between BDAI and Wheelers. Jovito gave Wheelers ten days to vacate the Property. Meanwhile,
Wheelers continued to pay BDAI the monthly rentals from February to September 1997. Jovito, as a
co- owner of the Property, filed with the MTC a complaint for unlawful detainer against Wheelers.
ISSUE: WHETHER THE CO-OWNERS HAVE A CAUSE OF ACTION FOR UNLAWFUL DETAINER
AGAINST WHEELERS FOR NON-PAYMENT OF RENTALS AND EXPIRATION OF THE TERM OF
THE LEASE AGREEMENT.
RULING:
In sum, the Lease Development Agreement between the co-owners and BDAI, and the Contract of
Lease between BDAI and Wheelers, remain valid, in the absence of any judicial declaration of their
nullity. Jovito and the other co-owners cannot merely assume and allege that these agreements are
void.
The Court rejects Jovito's argument that the Lease Development Agreement between the co-owners
and BDAI is void. Jovito maintains that a lease of the Property involves an act of alteration requiring
the unanimous consent of the co-owners pursuant to Article 491 of the Civil Code, which consent is
allegedly absent in this case. - Article 491 of the Civil Code provides:
ART. 491. None of the co-owners shall, without the consent of the others, make alterations in the thing
owned in common, even though benefits for all would result therefrom. However, if the withholding of
the consent by one or more of the co-owners is clearly prejudicial to the common interest, the courts
may afford adequate relief. (Emphasis supplied)
A lease over the common property without the consent of all the co-owners is not void. Just as a sale
of the whole common property without the consent of the other co-owners affects only the share or
interest of the selling co-owner,40 a lease of the entire property does not affect the interests of the non-
consenting co-owners. Therefore, a lease over the entire Property is valid insofar as the interests of the
consenting co-owners are concerned.4

The Contract of Lease between BDAI and Wheelers had a term running from 1 June 1994 to 31 May
1999. This term is within the five-year period of BDAIS Lease Development Agreement with the co-
owners. Jovito filed the unlawful detainer case against Wheelers on 21 October 1997. Clearly, the
Contract of Lease between BDAI and Wheelers was still valid and subsisting when Jovito filed the
unlawful detainer case. Thus, at the time of filing of the unlawful detainer complaint, Jovito and the
other co-owners did not have a cause of action to eject Wheelers from the Property. As things stand,
BDAI is the sub-lessor of the Property. BDAIs sub-lease agreement with Wheelers is within the five-
year term of BDAIs principal lease with the co-owners. Until the expiration of the five-year term of BDAIS
principal lease, the sub-lease agreement between BDAI and Wheeler remains valid, unless the sub-
lease agreement is judicially annulled in the proper case, or unless there is a judgment cancelling
BDAIS principal lease with the co-owners or ousting BDAI from the Property. Moreover, no lease
agreement exists between the co-owners and Wheelers.
Therefore, Jovitos claim that the term of the alleged lease agreement between the co-owners and
Wheelers has expired has no legal basis.

Adlawan vs. Adlawan G.R. No. 161916 January 20, 2006

Sometime in 1961, spouses Ramon and Oligia needed money to finance the renovation of their house.
Since they were not qualified to obtain a loan, they transferred ownership of Lot 7226 in the name of
their son Dominador who was the only one in the family who had a college education. By virtue of a
January 31, 1962 simulated deed of sale, a title was issued to Dominador which enabled him to secure
14

a loan with Lot 7226 as collateral. Notwithstanding the execution of the simulated deed, Dominador,
then single, never disputed his parents’ ownership of the lot. He and his wife, Graciana, did not disturb
respondents’ possession of the property until they died on May 28, 1987 and May 6, 1997, respectively.
Meanwhile, the RTC granted petitioner’s motion for execution pending appeal which was opposed by
19

the alleged nephew and nieces of Graciana in their motion for leave to intervene and to file an answer
in intervention. They contended that as heirs of Graciana, they have a share in Lot 7226 and that
20

intervention is necessary to protect their right over the property. In addition, they declared that as co-
owners of the property, they are allowing respondents to stay in Lot 7226 until a formal partition of the
property is made.
Petitioner contends that even granting that he has co-owners over Lot 7226, he can on his own file the
instant case pursuant to Article 487 of the Civil Code which provides:
ART. 487. Any one of the co-owners may bring an action in ejectment.
This article covers all kinds of actions for the recovery of possession. Article 487 includes forcible entry
and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of
ownership (accion de reivindicacion). A co-owner may bring such an action without the necessity of
26

joining all the other co-owners as co-plaintiffs because the suit is presumed to have been filed to benefit
his co-owners. It should be stressed, however, that where the suit is for the benefit of the plaintiff alone
who claims to be the sole owner and entitled to the possession of the litigated property, the action
should be dismissed. 27

The renowned civilist, Professor Arturo M. Tolentino, explained –

A co-owner may bring such an action, without the necessity of joining all the other co-owners as co-
plaintiffs, because the suit is deemed to be instituted for the benefit of all. If the action is for the benefit
of the plaintiff alone, such that he claims possession for himself and not for the co-ownership, the action
will not prosper.

Sps. Mendoza vs. Coronel G.R. No. 156402 February 13, 2006

On appeal are the Court of Appeals' (CA's) May 30, 2002 Decision in CA-G.R. SP No. 67157 and
November 12, 2002 Resolution, reversing the September 17, 2001 Decision of the Regional Trial Court
(RTC) of Malolos, Bulacan in Civil Case No. 458-M-2001. The RTC of Malolos ruled that the Municipal
Trial Court (MTC) of Hagonoy, Bulacan, before which respondent filed the ejectment case against
petitioners, had no jurisdiction to decide the case for failure of respondent to implead her co-owners of
the disputed property, the latter being indispensable parties to the ejectment suit.
The facts are as follows:
Respondent Maria Coronel is one of the co-owners of Lots 3250 and 3251 located at Sagrada Familia,
Hagonoy, Bulacan. Petitioners, spouses Alfredo and Rosario Mendoza, occupied said
lots upon tolerance of respondent and her co-owners without paying any rent. When respondent
demanded that petitioners vacate the premises, the latter refused. Thus, on December 27, 2000,
respondent filed a case before the MTC of Hagonoy, Bulacan for unlawful detainer against petitioners.
The MTC ruled in favor of respondent, ordering petitioners to vacate the disputed lots. The dispositive
portion of its May 29, 2001 Decision reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering the defendants and all
those claiming rights under them:
(1) to vacate the subject premises (lots 3250 and 3251) and to surrender possession of the same to
plaintiff[:]
(2) to pay plaintiff attorney's fees and litigation expenses in the amount of P10,000.00 and to pay a
monthly rental of P500 from receipt of this decision until they shall have vacated the subject premises;
and
(3) to pay costs of suit
Petitioners appealed to the RTC of Malolos, Bulacan which ruled in their favor. It annulled and set aside
the appealed decision for want of jurisdiction of the MTC. It held that the co-owners of the subject lot
should have been impleaded as indispensable parties.
On appeal to the CA, respondent was successful as the appellate court reversed and set aside the
ruling of the RTC and revived the decision of the MTC dated May 29, 2001. Petitioners' Motion for
Reconsideration was denied.
Hence, this appeal
Petitioners assign the following errors:
I. The lower court erred in ruling that a co-owner can bring an action in ejectment without impleading
his co-owners, relying on an "Errata for pages 38-39 of Volume 280 SCRA," which appears to alter the
original tenor of the ruling in Arcelona vs. CA that co-owners are indispensable parties.
II. The lower court erred in not taking into account that the complaint was filed by an attorney-in-fact
authorized by only one of the co-owners to file the ejectment suit.
III. The lower court erred in allowing the petition for review despite the fact that the certification against
forum-shopping was executed by an attorney-in-fact, in violation of the requirement that parties must
personally sign the same.

ISSUE:
whether any of the co-owners may bring an action in ejectment. - no
RULING:
The CA is correct in overruling the RTC. The latter court held that in Arcelona v. Court of Appeals, we
held that a co-owner cannot maintain an action in ejectment without joining all the other co-owners, the
latter being indispensable parties.
In reversing the ruling of the RTC, the CA pointed out that the RTC relied on the uncorrected Arcelona
decision. The RTC overlooked the fact that the decision has been corrected by an "ERRATA for pages
38-39" appearing on the second leaf of volume 280 of the SCRA. Thus, the CA held:
Formerly, Article 487 of the old Civil Code provided that "any one of the co-owners may bring an action
in ejectment." It was subsequently held that a co-owner could not maintain an action in ejectment
without joining all the other co-owners.
The foregoing statement was deleted and replaced with the following:
In the past, a co-owner could not even maintain an action in ejectment without joining all the other co-
owners...
While Article 487 of the Civil Code now provides that "any one of the co-owners may bring an action in
ejectment," former Chief Justice Moran also stressed that all of them are necessary and proper
parties...
We reiterate the Arcelona ruling that the controlling law is Article 487 of the Civil Code which
categorically states:
Any one of the co-owners may bring an action in ejectment. (n)
Article 487 is a departure from the rule laid down in the case of Palarca v. Baguisi- which held that an
action for ejectment must be brought by all the co-owners. As explained by Tolentino, the law now
allows a co-owner to bring an action for ejectment, which covers all kinds of actions for the recovery of
possession, including forcible entry and unlawful detainer, without the necessity of joining all the other
co-owners as co-plaintiffs, because the suit is deemed to be instituted for the benefit of all.
Cruz vs. Catapang G.R. No. 164110 February 12, 2008

Republic Act No. 4726 as amended by Republic Act No. 7899

Sunset View Condominium Corporation vs. Campos, Jr. G.R. No. 52361 April 27, 1981

These two cases which involve similar facts and raise Identical questions of law were ordered
consolidated by resolution of this Court dated March 17, 1980.
Facts:
G.R. No. L-52361 - Aguilar-Bemares Realty, a sole proprietorship with business name registered,
owned and operated by the spouses Emmanuel G. Aguilar and Zenaida B. Aguilar, is the assignee of
a unit, "Solana", in the Sunset View Condominium Project with La Perla Commercial, Incorporated, as
assignor.
The La Perla Commercial, Incorporated bought the "Solana" unit on installment from the Tower
Builders, Inc. Sunset View Condominium Corporation, filed for the collection of assessments levied on
the unit against Aguilar-Bernares Realty.
Private respondent filed a Motion to Dismiss the complaint, petititioner filed its opposition and the motion
to dismiss was granted by the respondent Judge who opined that the private respondent is, pursuant
to Section 2 of RA No. 4726, a "holder of a separate interest" and consequently, a shareholder of the
plaintiff condominium corporation; and that "the case should be properly filed with the Securities &
Exchange Commission which has exclusive original jurisdiction on controversies arising between
shareholders of the corporation.
" the motion for reconsideration thereof having been denied, the petitioner, alleging grave abuse of
discretion on the part of respondent Judge, filed the instant petition for certiorari praying that the said
orders be set aside.
G.R. NO. 52524 - Petitioner filed its amended complaint for the collection of overdue accounts on
assessments and insurance premiums and the interest thereon amounting to P6,168 06 against Lim
Siu Leng to whom was assigned on a unit called "Alegria" of the Sunset. View Condominium Project
by Alfonso Uy who had entered into a "Contract to Buy and Sell" with Tower Builders, Inc. over the said
unit on installment basis.
Private respondent filed a motion to dismiss on the ground of lack of jurisdiction, alleging that the
amount sought to be collected is an assessment.
The correctness and validity of which is certain to involve a dispute between her and the petitioner
corporation; that she has automatically become, as a purchaser of the condominium unit, a stockholder
of the petitioner pursuant to Section 2 of the Condominium Act; that the dispute is intra-corporate and
is consequently under the exclusive jurisdiction of the Securities & Exchange Commission.
Petitioner filed its opposition, alleging that the private respondent who had not fully paid for the unit was
not the owner thereof, consequently was not the holder of a separate interest which would make her a
stockholder, and that hence the case was not an intra- corporate dispute.
After the private respondent filed her answer to the opposition to the motion to dismiss of the petitioner,
the trial court issued an order denying the motion to dismiss.
The private respondent's motion for reconsideration was denied by the trial court.
Private respondent then appealed, petitioner filed its "Motion to Dismiss Appeal" on the ground that the
order of the trial court appealed from is interlocutory.
The motion to dismiss the appeal was denied and the parties were ordered to submit their respective
memorandum on the issue raised before the trial court and on the disputed order of the trial judge.
After the parties submitted their respective memoranda on the matter, the Judge issued an order in
which he directed that "the appeal is hereby dismissed and the judgment of the lower court is reversed.
CA:
The case is dismissed and the parties are directed to ventilate their controversy with the Securities &
Exchange Commission.
Hence this petition for certiorari, alleging grave abuse of discretion on the part of the respondent Judge.

Issue: 1. Is a purchaser of a condominium unit in the condominium project managed by the petitioner,
who has not yet fully paid the purchase price thereof, automatically a stockholder of the petitioner
Condominium Corporation? - NO
2. Is it the regular court or the Securities & Exchange Commission that has jurisdiction over cases for
collection of assessments assessed by the Condominium Corporation on condominium units the full
purchase price of which has not been paid?
Ruling: Questioned orders of the respondent Judge are set aside and said Judge is ordered to try the
case on the merits.
Ration: 1) Section 5 of the Condominium Act expressly provides that the shareholding in the
Condominium Corporation will be conveyed only in a proper case.
It provides: Any transfer or conveyance of a unit or an apartment, office or other space therein, shall
include the transfer or conveyance of the undivided interests in the common areas or, in a proper case,
the membership or shareholding in the condominium corporation
It is clear that not every purchaser of a condominium unit is a shareholder of the condominium
corporation. The Condominium Act. leaves to the Master Deed the determination of when the
shareholding will be transferred to the purchaser of a unit.
Thus, Section 4 of said Act provides: The provisions of this Act shall apply to property divided or to be
divided into condominium only if there shall be recorded in the Register of Deeds of the province or city
in which the property lies and duly annotated in the corresponding certificate of title of the land an
enabling or master deed which shall contain, among others, the following:
(d) Astatement of the exact nature of the interest acquired or to be acquired by the purchaser in the
separate units and in the common areas of the condominium project...
The Amended Master Deeds in these cases, which were duly registered in the Register of Deeds, and
contain, by mandate of Section 4, a statement of the exact nature of the interest acquired by a purchaser
of a unit, provide in Section 6 of Part 1: (d) Each Unit owner shall, as an essential condition to such
ownership, acquire stockholding in the Condominium Corporation herein below provided.
The Amended Master Deeds provide in Section 7: b) All unit owners shall of necessity become
stockholders of the Condominium Corporation. TOWER shall acquire all the shares of stock of SUNSET
VIEW and shall allocate the said shares to the units in proportion to the appurtenant interest in the
COMMON AREAS and LIMITED COMMON AREAS as provided in Section 6 (b) above. Said shares
allocated are mere appurtenances of each unit, and therefore, the same cannot be transferred,
conveyed, encumbered or otherwise disposed of separately from the Unit.
It is clear from the of the Master Deeds that the shareholding in the Condominium Corporation is
inseparable from the unit to which it is. only an appurtenant and that only the owner of a unit is a
shareholder in the Condominium Corporation
(a) of Part 1, Section 6, of the Master Deeds determines when and under what conditions ownership of
a unit is acquired by a purchaser thus: (a) The purchaser of a unit shall acquire title or ownership of
such Unit, subject to the terms and conditions of the instrument conveying the unit to such purchaser
and to the terms and conditions of any subsequent conveyance under which the purchaser takes title
to the Unit, and subject further to this MASTER DEED.
In both deeds of conveyance, it is provided: 4. Upon full payment by the BUYER of the total purchase
price and full compliance by the BUYER of an its obligations herein, the SELLER will convey unto the
BUYER, as soon as practicable after completion of the construction, full and absolute title in and to the
subject unit, to the shares of stock pertaining thereto and to an rights and interests in connection
therewith.
The share of stock appurtenant to the unit be transferred accordingly to the purchaser of the unit only
upon full payment of the purchase price at which time he will also become the owner of the unit. Even
under the contract, it is only the owner of a unit who is a shareholder of the Condominium Corporation.
Inasmuch as owners is conveyed only upon full payment of the purchase price, it necessarily follows
that a purchaser of a unit who has not paid the full purchase price thereof is not The owner of the unit
and consequently is not a shareholder of the Condominium Corporation.

Pursuant to the above statutory provision, ownership of a unit is a condition sine qua non to being a
shareholder in the condominium corporation. It follows that a purchaser of a unit who is not yet the
owner thereof for not having fully paid the fill purchase price, is not a- shareholder By necessary
implication, the "separate interest" in a condominium, which entitles the holder to become automatically
a share holder in the condominium corporation, as provided in Section 2 of the Condominium Act, can
be no other than ownership of a unit. This is so because nobody can be a shareholder unless he is the
owner of a unit and when he ceases to be the owner, he also ceases automatically to be a shareholder.
The private respondents, therefore, who have not fully paid the purchase price of their units and are
consequently not owners of their units are not members or shareholders of the petitioner condominium
corporation.
2) Case for collection cannot be a "controversy arising out of intracorporate or partnership relations
between and among stockholders, members or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members or associates,
respectively" which controversies are under the original and exclusive jurisdiction of the Securities &
Exchange Commission, pursuant to Section 5 (b) of P.D. No. 902- A. The subject matters of the instant
cases according to the allegations of the complaints are under the jurisdiction of the regular courts.
Twin Towers Condominium Corporation vs. Court of Appeals G.R. No. 123552 February 27, 2003

Facts: Twin Towers Condominium Corp. is a non-stock corporation organized for the sole purpose of
holding title to and managing the common areas of Twin Towers Condominium.
ALS Management & Development Corp. is a registered owner of Unit 4-A wherein its pres. Litonjua
occupies therein.
Twin Towers Condominium Corp collects from all its members quarterly assessments and dues as
authorized by its Master Deed and its By-Laws.
ALS failed to pay assessments and dues starting 1986 up to the 1st quarter of 1988. Twin Towers
Condominium Corp claimed against both ALS and Litonjua P118,923.20 as unpaid assessments and
dues.
ALS claims that it is the corp. & not Litonuja who is liable and claims damages against Twin Towers
Condominium Corp's act of preventing usage of facilities.
The SEC Hearing Officer ordered Twin Towers Condominium Corp to pay Litonjua moral and
exemplary damages for maliciously including Litonjua's name in the list of delinquent unit owners and
for impleading him as ALS but ordered the latter to pay the assessments and dues to Twin Towers
Condominium Corp.
The SEC en banc nullified the award of damages and attorney's fees to Litonjua on the ground that the
SEC had no jurisdiction over Litonjua.
The SEC en banc held that there is no intracorporate relationship between Twin Towers Condominium
Corp and Litonjua who is not the registered owner of the Unit & not a member of Twin Towers
Condominium Corp and Twin Towers Condominium Corp can't raise the corporate veil doctrine.
Specifically, Rule 26.3 of Twin Towers Condominium Corp's house rules expressly authorize denial of
the use of condominium facilities to delinquent members.
Twin Towers Condominium Corp justifies such by invoking Section 36, paragraph 11 of the Corporation
Code which grants every corporation the power "to exercise such powers as may be essential or
necessary to carry out its purpose or purposes as stated in its Articles of Incorporation." Twin Towers
Condominium Corp claims that there is here implied the power to enact such measures as may be
necessary to carry out the provisions of the Articles of Incorporation, By-Laws and Master Deed to deal
with delinquent members.
ALS assail the validity of House Rule 26.3 alleging that it is ultra vires so it claims it can validly deduct
the value of the services withheld from the assessments and dues since it was barred from using the
Condominium facilities for which the assessments and dues were being collected.
Issue:
Whether Twin Towers Condominium Corp House Rule 26.3 is Ultra Vires.
Ruling:
No.
The Condominium Act, petitioner’s By-Laws and the Master Deed expressly empower petitioner to
promulgate House Rule 26.3. Section 9 of the Condominium Act provides:
"Section 9. The owner of a project shall, prior to the conveyance of any condominium therein, register
a declaration of restrictions relating to such project, which restrictions xxx shall inure to and bind all
condominium owners in the project. xxx The Register of Deeds shall enter and annotate the declaration
of restrictions upon the certificate of title covering the land included within the project, if the land is
patented or registered under the Land Registration or Cadastral acts.
Pursuant to Section 9 (a) (1) and (3) of the Condominium Act, the Master Deed expressly authorizes
petitioner to exercise all the powers granted to the management body by the Condominium Act,
petitioner’s Articles of Incorporation and By-Laws, the Master Deed, and the Corporation Code. Section
3, Part II of the Master Deed reads:
"Section 3. MANAGEMENT BODY. - The Condominium Corporation to be formed and organized
pursuant to Section 7 of Part I, above, shall constitute the management body of the project. As such
management body, the powers of the Condominium Corporation shall be such as are provided by the
Condominium Act, by the Articles of Incorporation and the By-Laws of the Corporation, by this
instrument and by the applicable provisions of the Corporation Code as are not inconsistent with the
Condominium Act. Among such powers but not by way of limitation, it shall have the power to enforce
the provisions thereof in accordance with the By-Laws of the corporation."
Thus, the Master Deed clearly empowers petitioner to enforce the provisions of the Master Deed in
accordance with petitioner’s By-Laws.
Petitioner’s By-Laws expressly authorize petitioner’s Board of Directors to promulgate rules and
regulations on the use and enjoyment of the common areas. Thus, paragraph 2, Section 2 of petitioner’s
By-Laws states:
"Without limiting the general nature of the foregoing powers, the Board of Directors shall have the power
to enforce the limitations, restrictions, and conditions contained in the Master Deed and Declaration of
Restrictions of the project; promulgate rules and regulations concerning the use, enjoyment and
occupancy of the units, common areas and other properties in the condominium project, to make and
collect assessments against members as unit owners to defray the costs and expenses of the
condominium project and the corporation and to secure by legal means the observance of the
provisions of the Condominium Act, the Master Deed, the Articles of Incorporation, these By-Laws, and
the rules and regulations promulgated by it in accordance herewith. The members of the corporation
bind themselves to comply faithfully with all these provisions.
Evidently, the Condominium Act, the Master Deed and petitioner’s By-Laws grant petitioner the express
power to promulgate rules and regulations concerning the use, enjoyment and occupancy of the
common areas.
Moreover, House Rule 26.3, which prohibits delinquent members from using the common areas, is
necessary to ensure maintenance of the common areas. Petitioner’s purpose in enacting House Rule
26.3 is to enforce effectively the provisions of the Master Deed. House Rule 26.3 is well within the
powers of petitioner to adopt as the same is reasonably necessary to attain the purpose for which both
petitioner and the Condominium project were created. Thus, Section 7 of the Master Deed declares:
"Section 7. CONDOMINIUM CORPORATION. - A corporation to be known as THE TWIN TOWERS
CONDOMINIUM (hereinafter referred to as the "Condominium Corporation"), shall be formed and
organized pursuant to the Condominium Act and the Corporation Code to hold title to all the aforestated
common areas of the condominium project including the land, to manage THE TWIN TOWERS
CONDOMINIUM and to do such other things as may be necessary, incidental and convenient to the
accomplishment of said purposes xx

WHEREFORE, the petition is GRANTED and the assailed Decision of the Court of Appeals is SET
ASIDE. ALS Management & Development Corporation is ordered to pay Twin Towers Condominium
Corporation all overdue assessments and dues, including interest and penalties from date of default,
as shall be determined by the proper Regional Trial Court in accordance with this Decision.

Twin tower's By-Laws expressly authorize its Board of Directors to promulgate rules and regulations
on the use and enjoyment of the common areas.
Twin tower would be unable to carry out its main purpose of maintaining the Condominium common
areas and facilities if members refuse to pay their dues and yet continue to use these areas and
facilities.
To impose a temporary ban on the use of the common areas and facilities until the assessments and
dues in arrears are paid is a reasonable measure that Twin Towers may undertake to compel the
prompt payment of assessments and dues.

Hulst vs. PR Builders, Inc. G.R. No. 156364 September 25, 2008

FACTS: On September 3, 2007, the SC rendered a Decision. (SC's earlier ruling: Petitioner and his
wife, being Dutch nationals,are proscribed under the Constitution from acquiring and owning real
property, it is unequivocal that the Contract to Sell entered into by petitioner together with his wife and
respondent is void.)
Section 7 of Article XII of the 1987 Constitution provides:
Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except
to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.
Petitioner filed the present Motion for Partial Reconsideration Petitioner contends that the Contract to
Sell between petitioner and respondent involved a condominium unit and did not violate the
Constitutional proscription against ownership of land by aliens.
He argues that the contract to sell will not transfer to the buyer ownership of the land on which the unit
is situated; thus, the buyer will not get a transfer certificate of title but merely a Condominium Certificate
of Title as evidence of ownership; a perusal of the contract will show that what the buyer acquires is
the seller's title and rights to and interests in the unit and the common areas.
Respondent failed to file a comment on the subject motion.
ISSUE: WON foreign nationals can own Philippine real estate through the purchase of condominium
units or townhouses?
HELD:
Yes. Under Republic Act (R.A.) No. 4726, otherwise known as the Condominium Act, foreign nationals
can own Philippine real estate through the purchase of condominium units or townhouses constituted
under the Condominium principle with Condominium Certificates of Title.
Section 5 of R.A. No. 4726 states: SECTION 5. Any transfer or conveyance of a unit or an apartment,
office or store or other space therein, shall include the transfer or conveyance of the undivided interest
in the common areas or, in a proper case, the membership or shareholdings in the condominium
corporation; Provided, however, That where the common areas in the condominium project are held by
the owners of separate units as co-owners thereof, no condominium unit therein shall be conveyed or
transferred to persons other than Filipino citizens or corporations at least 60% of the capital stock of
which belong to Filipino citizens, except in cases of hereditary succession. Where the common areas
in a condominium project are held by a corporation, no transfer or conveyance of a unit shall be valid if
the concomitant transfer of the appurtenant membership or stockholding in the corporation will cause
the alien interest in such corporation to exceed the limits imposed by existing laws. (Emphasis supplied)
The law provides that no condominium unit can be sold without at the same time selling the
corresponding amount of rights, shares or other interests in the condominium management body, the
Condominium Corporation; and no one can buy shares in a Condominium Corporation without at the
same time buying a condominium unit. It expressly allows foreigners to acquire condominium units and
shares in condominium corporations up to not more than 40% of the total and outstanding capital stock
of a Filipino-owned or controlled corporation. Under this set up, the ownership of the land is legally
separated from the unit itself. The land is owned by a Condominium Corporation and the unit owner is
simply a member in this Condominium Corporation. As long as 60% of the members of this
Condominium Corporation are Filipino, the remaining members can be foreigners.
Considering that the rights and liabilities of the parties under the Contract to Sell is covered by the
Condominium Act wherein petitioner as unit owner was simply a member of the Condominium
Corporation and the land remained owned by respondent, then the constitutional proscription against
aliens owning real property does not apply to the present case. There being no circumvention of the
constitutional prohibition, the Court's pronouncements on the invalidity of the Contract of Sale should
be set aside.
Revelina Limson vs. Wack Wack Condominium Corporation G.R. No. 188802 February 14, 2011

FACTS:
Petitioner purchased from Conchita Benitez an apartment unit (Unit 703) at Wack Wack Apartments.
Upon moving in, Revelina noticed defects in the electrical main panel located inside the unit. Racquel
Gonzalez, who sits as Member of respondent's Board of Directors, replied by letter under the Rules, it
is the duty of the unit owner to maintain the electrical and plumbing systems at his/her expense.
Respondent wrote Revelina to demand that repairs in line with the above-stated recommendation of
the City Building Office be undertaken within ten (10) days.
Before the deadline, respondent's Board of Directors resolved to impose a daily fine of P1,000.00 on
Revelina should the latter fail to comply.
Revelina and her husband refused to undertake the repairs and to pay the fine. They claimed that the
electrical main panel forms part of the common areas, citing Section 6 of Republic Act No. 4726.
The RTC dismissed respondent's complaint. CA reversed the decision of the trial court, holding in the
main that for the electrical main panel to be considered as part of the common areas, it should have
been intended for communal use and benefit. The subject electrical main panel being located inside
the unit and its principal function being to control the flow of electricity into the unit, the appellate court
concluded that charges for its repair cannot be for respondent's
account.
ISSUE: WN electrical panel forms part of the common areas in acc with the RA 4726 - yes
HELD:

CIVIL LAW: Condominium

Respondent cannot disclaim responsibility for the maintenance of the Apartments' electrical supply
system solely because a component thereof is placed inside a unit.
Section 3 (e) of R.A. 4726 defines "common areas" as "the entire project except all units separately
granted or held or reserved." Section 6 (a) of the same law provides:

a.) x x x The following are not part of the unit: bearing walls, columns, floors, roofs,
foundations, and other common structural elements of the buildings; lobbies, stairways,
hallways and other areas of common use, elevator equipment and shafts, central heating,
central refrigeration and central air conditioning equipment, reservoir, tanks, pumps and
other central services and facilities, pipes, ducts, flues, chutes, conduits wires and other
utility installations, wherever located, except the outlets thereof when located within the
unit. (emphasis and underscoring supplied)

The electrical panel's location inside the unit notwithstanding, it is not automatically considered as part
of it. The above-quoted pertinent provisions of the law and the master deed contemplate that "common
areas," e.g. utility installations, may be situated within the unit.

Where a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied
without attempt to interpret. Verba legis non est recedendum, index animi sermo est. There should be
[7]

no departure from the words of the statute, for speech is the index of intention.
Both the law and the Master Deed refer to utility installations as forming part of the common areas,
which reference is justified by practical considerations. Repairs to correct any defects in the electrical
wiring should be under the control and supervision of respondent to ensure safety and compliance with
the Philippine Electrical Code, not to mention security and peace of mind of the unit owners.

Lim vs. Moldex Land, Inc. G.R. No. 206038 January 25, 2017
Facts: Condocor (Condominium Corporation) a non-stock, non-profit corporation, which is the
registered condominium corporation for the Golden Empire Tower held its annual general membership
meeting. Moldex became a member of Condocor on the basis of its ownership of the 220 unsold units
in the Golden Empire Tower.
During the meeting, an existence of a quorum was declared even though only 29 of the 108 unit buyers
were present. The declaration was based on the presence of the majority of the voting rights, including
those pertaining to the 220 unsold units held by Moldex through its representatives. Lim (a registered
unit owner), through her attorney-in-fact, objected to the validity of the meeting. The objection was
denied. Thus, Lim and all the other unit owners present, except for one, walked out and left the meeting.
Despite the walkout, the individual respondents and the other unit owner proceeded with the meeting
and elected the new members of the Board of Directors for 2012-2013. All 4 individual respondents
(JAMINOLA, MACALINTAL, MILANES, and ROMAN) were voted as members of the board, together
with other 3 members. Consequently, Lim filed an election protest before the RTC. Lim claimed that
herein respondents are not entitled to be members of the Board of Directors because they are non-unit
buyers. However, said court ruled in favor for the respondents. Not in conformity, Lim filed the present
petition.
Issue: Whether only the unit buyers are entitled to become members of Condocor.
Ruling: No. Moldex can be deemed a member of Condocor.
Lim asserted that only unit buyers are entitled to become members of Condocor. Respondents, for their
part, countered that a registered owner of a unit in a condominium project or the holders of duly issued
condominium certificate of title (CCT), automatically becomes a member of the condominium
corporation, relying on Sections 2 and 10 of the Condominium Act, the Master Deed and Declaration
of Restrictions, as well as the By-Laws of Condocor. For said reason, respondents averred that as
Moldex is the owner of 220 unsold units and the parking slots and storage areas attached thereto, it
automatically became a member of Condocor upon the latter's creation.
On this point, respondents are correct. Section 2 of the Condominium Act states:
Sec. 2. A condominium is an interest in real property consisting of separate interest in a unit in a
residential, industrial or commercial building and an undivided interest in common, directly or indirectly,
in the land on which it is located and in other common areas of the building. A condominium may
include, in addition, a separate interest in other portions of such real property. Title to the common
areas, including the land, or the appurtenant interests in such areas, may be held by a corporation
specially formed for the purpose (hereinafter known as the "condominium corporation") in which the
holders of separate interest shall automatically be members or shareholders, to the exclusion of others,
in proportion to the appurtenant interest of their respective units in the common areas.
The Condominium Act does not provide a specific mode of acquiring ownership of a unit. It is erroneous
to argue that the ownership must result from a sale transaction between the owner-developer and the
purchaser. Such interpretation would mean that persons who inherited a unit, or have been donated
one, and properly transferred title in their names cannot become members of a condominium
corporation.

Leviste Management System, Inc. vs. Legaspi Towers 200, Inc. G.R. No. 199353 April 04, 2018

The land belongs to a condominium corporation wherein the builder, as a unit owner, is considered a
stockholder or member under Sec. 10 of the Condominium Act. The builder is already in co- ownership
with other unit owners as members or stockholders of the condominium corporation. The purchaser of
a condominium unit binds himself to a contract with other unit owners.
A builder must gain the consent of other registered owners and follow the by-rules of the condominium
before amending the Master Deed.
FACTS:
Legaspi Towers is a 7-floor condominium building with a deck roof and 2 levels above the deck roof,
as stated in the Master Deed, at Paseo De Roxas, Makati City with a unit on the roof deck and 2 levels
above said unit called Concession 2 and Concession 3. Concession 3 was bought by Leviste
Management System (Petitioner).
LEMANS sought to build another unit called Concession 4 on top of Concession 3 and was able to
secure a buiding permit for its construction.
However, Legaspi Towers 200 Inc. (Respondent) sent a notice to Petitioner that its construction was
illegal but the latter did not heed such. Petitioner filed a writ of mandatory injunction against
Respondent.
The RTC affirmed Respondent wherein it found application of Art. 448 of the Civil Code and Depra v.
Dumlao1. The "air space" above the unit actually belongs to Respondent.
Respondent sought to demolish Concession 4 at the expense of Petitioner. Respondent argued that
Petitioner should first get the consent of the registered owners of the condominium project before
amendment of the Master Deed under Sec. 4 of the Condominium Act.
Petitioner argued that there must be a determination of the required values under Depra case before
Respondent can take action.

In Depra, the court should determine:

1.The present fair price of the encroached area of the land;
2.The amount of expenses spent in building;
3. The increase in value the area may have acquired by reason of the building;
4.Whether the value of the build land is considerably more than that of the land build thereon.
After determination of the above, the court shall grant the owner a period of 15 days to exercise his
option whether:
a. To appropriate the land by paying the amount of expenses spent for building the same or the increase
of such area's value by reason of the building or;
b.To oblige the builder in good faith to pay the price of the said area.

RTC: Affirmed Respondent.

CA: Affirmed RTC Decision.
5): Whether Respondent can build Concession 4 on top of Petitioner's condominium building.

HELD: No. Petitioner contravened the Master Deed by adding a 3rd level above the roof deck and by
violating the Condominium Act and Respondent's by-laws.
RATIO:
Instead of procuring the required consent of the registered owners under Sec. 4 of the Condominium
Act or having Concession 4 approved by the members in a regular or special meeting called for the
purpose under Respondent's by-laws, Petitioner merely had an internal agreement with the former
president of Respondent. This cannot bind corporations since they can act only through their Board of
Directors.
In the case at bar, however, the land belongs to a condominium corporation, wherein the builder, as a
unit owner, is considered a stockholder or member in accordance with Section 10 of the Condominium
Act, which provides:

SECTION 10. Whenever the common areas in a condominium project are held by a condominium
corporation, such corporation shall constitute the management body of the project. The corporate
purposes of such a corporation shall be limited to the holding of the common areas, either in ownership
or any other interest in real property recognized by law, to the management of the project, and to such
other purposes as may be necessary, incidental or convenient to the accomplishment of said purposes.
The articles of incorporation or by-laws of the corporation shall not contain any provision contrary to or
inconsistent with the provisions of this Act, the enabling or master deed, or the declaration of restrictions
of the project. Membership in a condominium corporation, regardless of whether it is a stock or non-
stock corporation, shall not be transferable separately from the condominium unit of which it is an
appurtenance. When a member or stockholder ceases to own a unit in the project in which the
condominium corporation owns or holds the common areas, he shall automatically cease to be a
member or stockholder of the condominium corporation.

The builder is therefore already in a co-ownership with other unit owners as members or stockholders
of the condominium corporation, whose legal relationship is governed by a special law, the
Condominium Act. It is a basic tenet in statutory construction that between a general law and a special
law, the special law prevails. Generalia specialibus non derogant. The provisions of the Civil Code, a
[30]

general law, should therefore give way to the Condominium Act, a special law, with regard to properties
recorded in accordance with Section 4 of said Act. Special laws cover distinct situations, such as the
[31]

necessary co-ownership between unit owners in condominiums and the need to preserve the structural
integrity of condominium buildings; and these special situations deserve, for practicality, a separate set
of rules.
In accordance therefore with the Master Deed, the By-Laws of Legaspi Towers, and the Condominium
Act, the relevant provisions of which were already set forth above, Legaspi Towers is correct that it has
the right to demolish Concession 4 at the expense of LEMANS. Indeed, the application of Article 448
to the present situation is highly iniquitous, in that an owner, also found to be in good faith, will be forced
to either appropriate the illegal structure (and impliedly be burdened with the cost of its demolition) or
to allow the continuance of such an illegal structure that violates the law and the Master Deed, and
threatens the structural integrity of the condominium building upon the payment of rent. The Court
cannot countenance such an unjust result from an erroneous application of the law and jurisprudence.
WHEREFORE, the Petition in G.R. No. 199353 is hereby DENIED for lack of merit. The Petition in G.R.
No. 199389 is GRANTED

Welbilt Construction Corp. vs. Heirs of De Castro G.R. No. 210286 July 23, 2018

Facts:
Petitioners Welbit Construction Corporation and Wack Wack Condominium Corporation are the
developer and management body of Wack Wack Apartments Building (condominium), respectively,[4]
while Spouses Eugenio Juan and Matilde Gonzalez are the owners thereof.[5]
The late Cresenciano C. De Castro (De Castro) is the registered owner of Unit 802 of of the
condominium, covered by Condominium Certificate of Title (CCT) No. 2826[6] (subject property). For
failure to pay assessment dues amounting to P79,905.41 as of July 31, 1986 despite demand, Welbit
Construction Corp., Wack Wack Condominium Corp., and Spouses Eugenio Juan Gonzalez and
Matilde Gonzalez (petitioners) caused the annotation of a lien for unpaid assessments and other dues
at the back of De Castro's title on August 14, 1986 pursuant to Section 4 of the Master Deed with
Declaration of Restrictions of Wack Wack Condominium (Master Deed).[7]
As the said dues remained unsettled, petitioners filed a petition for the extra-judicial foreclosure of the
subject property with the Office of the Ex--Officio Sheriff of Pasig City on October 27, 1986. The
requirements of publication and posting of the notice were then complied with and the public auction
was set on February 10, 1987. A copy of such notice was received by De Castro on January 29, 1987.[8]
Petitioners emerged as the highest bidder for P88,809.94. Accordingly, a certificate of sale was issued
in their favor on February 10, 1987. On April 2, 1987, the sale was registered with the Register of Deeds
of Pasig City and annotated at the back of De Castro's title. De Castro failed to redeem the property.[9]
When requested to surrender his owner's duplicate copy of CCT No. 2826, De Castro filed a petition
for annulment of foreclosure proceedings before the Securities and Exchange Commission (SEC)
which then had the jurisdiction over intra-corporate disputes. In the said petition, De Castro argued that
petitioners have no legal personality to invoke the Condominium Act and should have availed of other
remedies in law; the annotation of assessment dues and certificate of sale, and the extra-judicial
proceedings were highly irregular and devoid of factual and legal basis; that the assessments imposed
were excessive, oppressive, unconscionable, and arbitrary; and that the petitioners have no special
power of attorney or authority was granted to them nor was there any agreement between the parties
to that effect.[10]
For their part, petitioners countered that the foreclosure was lawful pursuant to the Master Deed to
which De Castro was bound as a unit owner. Petitioners further averred that the assessment was fair
and reasonable as the rate in computing the same was the same applied to all condominium unit
owners. As for the foreclosure proceedings, De Castro was notified thereof but never made any
opposition nor did he attend the foreclosure sale.[11]
Sometime in February 1992, during the pendency of the case, De Castro passed away[12] and
substituted by Heirs of Cresenciano C. De Castro (respondents).
Issue
Whether or not the CA erred in declaring the extra-judicial foreclosure proceeding null and void.
Held:
We find merit in the instant petition.
As can be gleaned from the CA's assailed Decision, its conclusion that the extra-judicial foreclosure
proceeding instituted by the petitioners is null and void for the latter's lack of proof of authority is heavily
anchored upon the case of First Marbella[22] above-cited. A careful perusal of the said case, however,
would show that the same is not applicable in the case at bar.
Section 20 of the Condominium Act merely provides that the assessments, upon any condominium
made in accordance with a duly registered declaration of restrictions, shall be a lien upon the said
condominium, and also prescribes the procedure by which such liens may be enforced, viz.:
Sec. 20. The assessment upon any condominium made in accordance with a duly registered
declaration of restrictions shall be an obligation of the owner thereof at the time the assessment is
made. The amount of any such assessment plus any other charges thereon, such as interest, costs
(including attorney's fees) and penalties, as such may be provided for in the declaration of restrictions,
shall be and become a lien upon the condominium to be registered with the Register of Deeds of the
city or province where such condominium project is located. The notice shall state the amount of such
assessment and such other charges thereon as may be authorized by the declaration of restrictions, a
description of condominium unit against which same has been assessed, and the name of the
registered owner thereof. Such notice shall be signed by an authorized representative of the
management body or as otherwise provided in the declaration of restrictions. Upon payment of said
assessment and charges or other satisfaction thereof, the management body shall cause to be
registered a release of the lien.

Such lien shall be superior to all other liens registered subsequent to the registration of said notice of
assessment except real property tax liens and except that the declaration of restrictions may provide
for the subordination thereof to any other liens and encumbrances, such liens may be enforced in the
same manner provided for by law for the judicial or extra-judicial foreclosure of mortgage or real
property. Unless otherwise provided for in the declaration of the restrictions, the management body
shall have power to bid at foreclosure sale. The condominium owner shall have the right of redemption
as in cases of judicial or extra-judicial foreclosure of mortgages. [23] (Emphasis in the original)
Indeed, it does not grant the petitioners the authority to foreclose. The aforecited provision clearly
provides that the rules on extra-judicial foreclosure of mortgage or real property should be followed.
Accordingly, Section 1[24] of Act No. 3135,[25] which prescribes for the procedure for the extra-judicial
foreclosure of real properties subject to real estate mortgage, in relation to Circular No. 7-2002 and SC
A.M. No. 99-10-05-0 requires that the petition for extra-judicial foreclosure be supported by evidence
that petitioners hold a special power or authority to foreclose, thus:
Sec. 1. All applications for extra-judicial foreclosure of mortgage, whether under the direction of the
Sheriff or a notary public pursuant to Art. No. 3135, as amended, and Act 1508, as amended, shall be
filed with the Executive Judge, through the Clerk of Court, who is also the Ex--Officio Sheriff (A.M. No.
99-10-05-0, as amended, March 1, 2001).
Sec. 2. Upon receipt of the application, the Clerk of Court shall:
a. Examine the same to ensure that the special power of attorney authorizing the extra-judicial
foreclosure of the real property is either inserted into or attached to the deed of real estate mortgage
(Act No. 3135, Sec. 1, as amended) x x x.[26]
In First Marbella, the Court held that "[w]ithout proof of petitioner's special authority to foreclose, the
Clerk of Court as Ex-Officio Sheriff is precluded from acting on the application for extra-judicial
foreclosure."[27]
Unlike in First Marbella, however, the CA erred in ruling that herein petitioners have no such special
authority to foreclose. In the said case, the Court found that the only basis of therein petitioners for
causing the extra- judicial foreclosure of therein respondent's condominium unit was a mere notice of
assessment annotated on the latter's CCT. Thus, the Court ruled that neither annotation nor law vests
therein petitioner with sufficient authority to foreclose on the property.[28]
In the case at bar, the foreclosure was not merely based on the the notice of assessment annotated on
CCT No. 2826 nor solely upon the Condominium Act but also on the Master Deed [29] and the
condominium corporation's By-Laws. [30] As correctly found by the RTC:
Thus, Section 1 of the Article V of the By-laws of the Condominium Corporation authorizes the board
to assess the unit owner penalties and expenses for maintenance and repairs necessary to protect the
common areas or any portion of the building or safeguard the value and attractiveness of the
condominium. Under Section 5 of Article [V] of the By-Laws, in the event a member defaults in the
payment of any assessment duly levied in accordance with the Master Deed and the By-Laws, the
Board of Directors may enforce collection thereof by any of the remedies provided by the Condominium
Act and other pertinent laws, such as foreclosure. XXX.
XXXX

The Master Deed with Declaration of Restrictions of the Condominium Project is annotated on the
Condominium Certificate of title 2826. The Master Deed and By-Laws constitute as the contract
between the unit owner and the condominium corporation. As a unit owner, [De Castro] is bound by
the rules and restrictions embodied in the said Master Deed and by-Laws pursuant to the provisions of
the Condominium Act. Under the Condominium Act (Section 20 of RA 4726) and the by-laws (Section
5 of Article [V]) of the Wack Wack, the assessments upon a condominium constitute a lien on such
condominium and may be enforced by judicial or extra-judicial foreclosure. [31] (Emphasis ours)
Clearly, petitioners were authorized to institute the foreclosure proceeding to enforce the lien upon the
condominium unit. Moreover, this conclusion finds support in the 1984 condominium corporation's
Board Resolution No. 84-007,[32] also signed by De Castro as a member of the Board of Directors at
that time, stating that:
RESOLVED to, as we do hereby authorize our President, Arch. Eugenio Juan Gonzalez and/or the law
offices of Siguion Reyna, Montecillo and Ongsiako and/or whomsoever Arch. Gonzalez may appoint or
designate, to effect foreclosure of Condominium Apartment Units at Wack Wack Apartment Building
Condominium Project, Mandaluyong, Metro Manila with unpaid or delinquent accounts to satisfy the
unit's obligation to Wack Wack Condominium Corporation;
RESOLVED FURTHER TO, as we do hereby designate and appoint Arch. Eugenio Juan Gonzalez as
the Wack Wack Condominium Corporation's attorney-in-fact for the purpose of foreclosure;
RESOLVED FINALLY TO, as we do hereby authorize the above-named Architect Eugenio Juan
Gonzalez to execute, sign, and deliver documents and whatever papers necessary, and in general, to
do and perform all such acts and things that are or may be necessary to give effect to the foregoing
authority. Furthermore, in the similar case of Wack Wack Condominium Corp. v. Court of Appeals,[33]
involving petitioners and another unit owner, wherein the petitioners likewise extra-judicially foreclosed
a condominium unit to enforce assessments albeit the issue therein was the jurisdiction of the SEC,
this Court had already ruled that the Condominium Act and the By-Laws of the condominium
corporation recognize and authorize assessments upon a condominium unit to constitute a lien on such
unit which may be enforced by judicial or extra-judicial foreclosure. Clearly, petitioners' authority to
foreclose a condominium unit to enforce
assessments, pursuant to the Condominium Act and the condominium corporation's Master Deed and
By- -Laws, had long been established.
WHEREFORE, premises considered, the Petition is GRANTED. Accordingly, the Decision dated
September 30, 2013 and Resolution dated December 4, 2013 of the Court of Appeals in CA-G.R. CV
No. 93366 are hereby REVERSED and SET ASIDE. The Decision dated March 31, 2009 of the
Regional Trial Court of Mandaluyong City, Branch 211 in SEC Case No. MC-02-002 is REINSTATED.
BNL Management Corporation vs. Uy G.R. No. 210297 April 03, 2019

Nature of Action: This is an action for Damages and Specific Performance with preliminary mandatory/
prohibitory injunction against respondents Reynaldo Uy, et al., instituted by BNL Management
Corporation due to the failure of the former to restore the electricity and water of the subject
condominium unit owned by the latter.
Facts: BNL Management owned six (6) condominium units at the Imperial Bayfront Tower
Condominium, A. Mabini Street, Malate, Manila (Imperial Bayfront). These units were leased to its
clients under separate contracts of lease. BNL Management also held exclusive rights to three (3)
parking spaces of Imperial Bayfront. BNL Management, through David, wrote a letter to the building
administrator of Imperial Bayfront, acknowledging receipt of the November billing statement. In the
letter, it brought up concerns, among others, over the general cleanliness and maintenance of common
areas.
Further, this is to put on notice that if the above list of problems remain
unresolved, we will be constrained to withhold all future payments of association dues until the issues
are resolved satisfactorily.
BNL Management received Notice of Billing. Still, BNL Management did not pay the arrears. Thus, in
the meeting, the Association's Board of Directors composed of Reynaldo Uy et al. resolved to
disconnect the lighting facilities in the six (6) units owned by BNL Management.
Since the Association refused to restore its electricity and water, BNL Management and David filed
before the Regional Trial Court a Complaint" against Uy, et al. for damages and specific performance
with preliminary mandatory/prohibitory injunction.
The RTC dismissed the complaint. It found out that the homeowners' association depended on the
dues paid by its members to deliver services such as building maintenance.
On appeal, the Court of Appeal denied the petition affirming the decision of the RTC. The CA held that
the act of cutting off BNL Management's electricity and water supply was legal.
Thus this Petition for Review on Certiorari
Issue: Whether or not the act in disconnecting the lighting facilities was ultra vires and therefore the
same is liable for damages to BNL Management.
Held: Negative. The Court held that BNL cannot justify their nonpayment of dues with mere allegations
that the House Rules and Regulations are invalid and that the Association's Board of Directors was not
duly elected. Petitioners' action for damages is not the proper forum to determine the legitimacy of the
Association's
Board of Directors and whether its acts are ultra vires. Finally, petitioners are not entitled to the
damages they prayed for.
Moral damages are awarded in circumstances enumerated under Article 2217 of the Civil Code:
ARTICLE 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though
incapable of pecuniary computation, moral damages may be recovered if they are the proximate result
of the defendant's wrongful act or omission. For moral damages to be awarded, the following requisites
must be present: Such damages, to be recoverable, must be the proximate result of a wrongful act or
omission the factual basis for which is satisfactorily established by the aggrieved party. There is no
showing here that an exception should apply pro hac vice in favor of petitioner BNL Management.