G.R. No.

3088
February 6, 1907
BANCO ESPANOL vs. PETERSON
On the 24th of October, 1905, the Spanish-Filipino Bank, a corporation, through its
attorneys, Del-Pan, Ortigas and Fisher, filed a complaint against the sheriff of the city of
Manila and the other defendant, Juan Garcia, praying that judgment be rendered against
the said sheriff, declaring that the execution levied upon the property referred to in the
complaint, to wit, wines, liquors, canned goods, and other similar merchandise, was illegal,
and directing the defendants to return the said goods to the plaintiff corporation, and in
case that he had disposed of the same, to pay the value thereof, amounting to P30,000,
Philippine currency, and further that it be declared that the said plaintiff corporation, under
the contract of pledge referred to in the complaint had the right to apply the proceeds of
the sale of the said goods to the payment of the debt of P40,000, Philippine currency, for
the security of which the said merchandise was pledged, with preference over the claim of
the other defendant, Juan Garcia and that both defendants be held jointly liable to the
plaintiff for the sum of P500, Philippine currency, as damages, and the said defendants to
pay the costs of the proceedings, and for such other and further relief as the plaintiff might
be entitled to under the law. Plaintiff alleges in its complaint that under the contract
entered into on the 4th of March, 1905, by and between the Spanish-Filipino Bank and
Francisco Reyes, the former, loaned to the latter the sum of P141,702, Philippine currency;
that on the same date Francisco Reyes was already indebted to the bank in the sum of
P84,415.38, Philippine currency, which, added to the amount of the loan, made a total of
P226,117.38, Philippine currency, received by the said Reyes as a loan from the plaintiff
bank, the entire sum at an annual interest of 8 per cent; that to secure the payment of
these two sums and the interest thereon, the debtor, Francisco Reyes, by a public
instrument executed before a notary on the aforesaid date mortgaged in favor of the
plaintiff bank several pieces of property belonging to him, and pledged to the said bank
part of his personal property, specifying the proportion on which the said real and personal
property thus mortgaged and pledged in favor of the plaintiff corporation would be
respectively liable for the payment of the debt; that the property pledged by the debtor to
the bank included a stock or merchandise, consisting of wines, liquors, canned goods, and
other similar articles valued at P90,591.75, Philippine currency, then stored in the
warehouses of the debtor, Reyes, No. 12 Plaza Moraga, in the city of Manila, which said
goods and merchandise were liable for the payment of the said sum of P90,591.75,
Philippine currency; that in the aforesaid deed of pledge it was agreed by and between the
bank and the debtor, Reyes, that the goods should be delivered to Ramon Garcia y Planas
for safe-keeping, the debtor having actually turned over to the said Garcia y Planas the
goods in question by delivering to him the keys of the warehouse in which they were kept;
that in a subsequent contract entered into by and between the debtor, Reyes, and the
plaintiff bank on the 29th of September, 1905, the said contract executed on the 4th of
March was modified so as to provide that the goods then (September 29) in possession the
depositary should only be liable for the sum of P40,000, Philippine currency, the said
contract of the 4th of March remaining in all other respects in full force and effect, Luis M.a
Sierra having been subsequently appointed by agreement between the bank and the
debtor as depositary of the goods thus pledged in substitution for the said Ramon Garcia y
Planas.

On the 19th of October, 1905, in an action brought in the Court of First Instance of the city
of Manila by Juan Garcia y Planas against Francisco Reyes and Ramon Agtarat, judgment
was rendered against the last-mentioned two for the sum of P15,000, Philippine currency,
to be paid by them severally or jointly, upon which judgment execution was issued against
the property of the defendants, Reyes and Agtarap. On the aforesaid 19th day of October,
for the purpose of levying upon the property of the defendants, the sheriff at the request of
Garcia, the plaintiff in that case, entered the warehouse where the goods pledged to the
plaintiff bank were stored under the custody of the depositary, Sierra, and levied upon
them as per list attached to the complaint marked "Exhibit A." The sheriff seized the goods
which had been pledged to the bank, depriving the latter of the possession of the same, to
which said contract executed on the 4th of March, 1905. Without the authority of the bank,
Reyes could not dispose of the said goods. The value of the goods seized by the sheriff was
P30,000, Philippine currency, the said sheriff, having refused, and still refusing, to return to
the same to the bank, notwithstanding repeated demands made upon him to this effect,
and it being alleged in the complaint that unless prohibited by the court the sheriff would
proceed to sell the said goods at public auction and apply the proceeds to the satisfaction
of the judgment rendered in favor of the Juan Garcia y Planas, while the other debtor Reyes
had not paid to the bank the P40,000, Philippine currency, to secure the payment of which
the goods mentioned in Exhibit A had been pledged to the bank, that is, to secure the
payment of a sum in excess of the actual value of the goods in the hands of the sheriff.
The defendant sheriff, James J. Peterson, and Juan Garcia, his codefendant, through their
attorneys, Hartigan, Marple, Rohde and Gutierrez, answering the complaint, stated that
they admitted the allegations contained in paragraphs 1, 2, 3, 4, 5, 12, and 17 of the
complaint, but denied the allegations contained in paragraphs 6, 7, 8, 9, 10, 11, 14, 16,
and 18. They further denied the allegations contained in paragraph 12, with the exception
that the defendant sheriff levied upon the goods mentioned in Exhibit A attached to the
complaint for the purpose of satisfying the judgment referred to therein; and also the
allegations contained in paragraph 13 of the complaint, with the exception that the sheriff
seized the property mentioned in Exhibit A under the execution referred to therein; and
finally defendants denied the allegation contained in paragraph 15 of the complaint, with
the exception of the allegation that the value of the property seized is P30,000. They
accordingly asked that the action be dismissed and that it be adjudged that the plaintiff
had no interest whatever in the property described in the complaint, and that the plaintiff
be taxed with the costs of these proceedings.
The testimony introduced by the parties having been received, and the exhibits having
been attached to the record, the court below entered judgment on the 4th of January,
1906, dismissing plaintiff's action and directing that the defendant recover from the
Spanish-Filipino Bank the costs of this action, for which execution was duly issued. To this
judgment counsel for plaintiff excepted and announced his intention of prosecuting a bill of
exceptions, and further made a motion for a new trial on the ground that the judgment of
the court below was contrary to law and that the findings of fact were plainly and
manifestly contrary to the weight of the evidence.
The decision of this case depends mainly upon the question as to whether the contract of
pledge entered into by and between the Spanish-Filipino Bank and Francisco Reyes to

secure a loan made by the former to the latter was valid, all the requisites prescribed by
the Civil Code having been complied with.
If so, the bank's claim had preference over the claim of a third person not secured, as was
the bank's, by a pledge, with reference to the property pledged to the extent of its value,
and therefore such property could not have been legally levied upon by the sheriff at the
request of the defendant, Juan Garcia. (Arts. 1921, 1922, Civil Code.)
The contract in question complies with all the requisites provided in article 1857 of the Civil
Code, such as that the property was pledged to secure a debt, the date of the execution,
the terms of the pledge, and the property pledged, all of which appears in a public
document, and the property pledged was placed in the hands of a third person by common
consent of the debtor and creditor, under the supervision of an agent of the bank. (Arts.
1863, 1865, 1866, 1869, 1871, Civil Code.) The defect alleged to exist in the said contract
is that the debtor, Reyes, continued in possession of the property pledged; that he never
parted with the said property, and that neither the creditor nor the depositary appointed
by common consent of the parties were ever in possession of the property pledged, and for
this reason, and upon the further ground that the contract was fraudulent, the court below
dismissed the complaint with the costs against the plaintiff.
In the motion for a new trial it was alleged by the plaintiff that the judgment of the court
below was contrary to law, and that the findings of fact contained therein were plainly and
manifestly against the weight of the evidence. If plaintiffs contention is correct, then the
judgment of the court below should be reversed.
From the evidence introduced at the trial, both oral and documentary, it appears that a
third person, appointed by the common consent of the debtor and creditor, was in
possession of the goods pledged in favor of the bank under the direct supervision of an
agent of the bank expressly appointed for this purpose, and it has not been shown that the
said Reyes continued in the possession of the goods after they had been pledged to the
plaintiff bank.
Exhibit C and the testimony of Francisco Reyes, Luis M.a Sierra, and Mariano Rodriguez
corroborate the existence and authenticity of the contract of pledge recorded in a public
instrument and conclusively and satisfactorily show that the debtor, after the pledge of the
property, parted with the possession of the same, and that it was delivered to a third
person designated by common consent of the parties. For the purpose of giving this
possession greater effect, the pledgee appointed a person to examine daily the property in
the warehouse where the same was kept.
The witness Matias Garcia also testified as to the status of these goods, and informed Juan
Garcia of such status before the same were levied upon.
The sheriff's testimony supports the allegation that the depositary, Sierra, was present at
the place where the goods were kept, as well as the representative of the bank, Rodriguez,
when he, the sheriff, went there for the purpose of levying upon the said property. He
further testified that Rodriguez, the representative of the bank, then protested and notified
him that the property in question was pledged to the Spanish-Filipino Bank.

The contract in question was, therefore, a perfect contract of pledge under articles 1857
and 1863 of the Civil Code, it having been conclusively shown that the pledgee took
charge and possession of the goods pledged through a depository and a special agent
appointed by it, each of whom had a duplicate key to the warehouse wherein the said
goods were stored, and that the pledgee, itself, received and collected the proceeds of the
goods as they were sold.
The fact that the said goods continued in the warehouse which was formerly rented by the
pledgor, Reyes, does not affect the validity and legality of the pledge, it having been
demonstrated that after the pledge had been agreed upon, and after the depository
appointed with the common consent of the parties had taken possession of the said
property, the owner, the pledgor, could no longer dispose of the same, the pledgee being
the only one authorized to do so through the depositary and special agent who
represented it, the symbolical transfer of the goods by means of the delivery of the keys to
the warehouse where the goods were stored being sufficient to show that the depositary
appointed by the common consent of the parties was legally placed in possession of the
goods. (Articles 438, 1463, Civil Code.)
The fact that the debtor, Reyes, procured purchasers and made arrangements for the sale
of the goods pledged and that the bills for the goods thus sold were signed by him does
not affect the validity of the contract, for the pledgor, Reyes, continued to be the owner of
the goods, (art. 1869, Civil Code), he being the one principally interested in the sale of the
property on the best possible terms.
As to the reservation stipulated in paragraph 13 of the contract executed on the 4th of
March, 1905, it could not affect the contract in question for the reason that reservation
referred to the rent from the property mortgaged, to the bank and the dividends from the
shares of stock also pledged to the bank, and not the merchandise so pledged, and such
reservation could not have rendered the contract of pledge null.
If the case is to be decided in accordance with the facts alleged and established, the
defendant not having introduced any evidence to show that the said contract of pledge
was fraudulent as to other creditors, there was no legal ground upon which the court below
could have held that the contract evidenced by the instrument in question was entered
into to defraud other creditors of the pledgor.
For the reason hereinbefore set out, and the judgment of the court below being contrary to
the evidence, the said judgment is hereby reversed, and it is hereby adjudged that the
plaintiff corporation, under and by virtue of the contract of pledge in question, had a
preferential right over that of the defendant, Juan Garcia, to the goods pledged or the
value thereof, the value to be applied to the payment of the debt of P40,000, Philippine
currency, for the security of which the said property was pledged, and the defendants are
accordingly hereby ordered to return to the plaintiff corporation the property improperly
levied upon, or to pay its value, amounting to P30,000, Philippine currency, without special
provision as to costs. After the expiration of twenty days let judgment be entered in
accordance herewith, and ten days thereafter the case be remanded to the court below for
execution. So ordered.

G.R. No. L-9989

March 13, 1918
CUAYCONG vs. BENEDICTO
The issues in this case relate to the right of plaintiffs to make use of two roads existing on
the Hacienda Toreno, a tract of land in the municipality of Victorias, Negros Occidental, the
property of the defendants, Blasa Benedicto and Ramona Benedicto. One of these roads is
referred to in the proceedings as the Nanca-Victorias road and the other as the Dacuman
Toreno road. The Court of First Instance held that those of the plaintiffs who claimed to be
entitled to make use of the Dacuman Toreno road had failed to establish the asserted
right, and dismissed the action as to them. From this decision they appealed to this court
but, their brief not having been filed within the time prescribed by the rules, their appeal
was dismissed, on motion of defendants, by resolution dated February 14, 1916.
Consequently, the issues presented on this appeal are limited to those which relate to the
rights of the parties with respect to the Nanca-Victorias road, and the determination of the
correctness of the decision of the court concerning that part of the controversy submitted
to its decision.
The allegations in the complaint with respect to the Nanca-Victorias road are that the
appellees, Eduardo Cuaycong, Lino Cuaycong, and Eulalio Dolor, are the owners of a group
of haciendas situated between the southern boundary of the Hacienda Toreno and the
barrio of Nanca, of the municipality of Seravia, and that the appellees Silverio Ginoo,
Gervasio Ascalon, and Juan Ledesma, are the lessees of part of said haciendas; that more
than twenty years the appellees and their predecessors in interest have made use of the
Nanca-Victorias road, which crosses the Hacienda Toreno, openly, publicly, and
continiously, with the knowledge of the owners of the said hacienda, for the purpose of
conveying the products of their haciendas to the town of Victorias and to the landing place
there situated, and for the purpose of transporting supplies from those points to their
haciendas, making use of the said road by means of carts, carabaos, and other usual
means of transportation; that there is no outlet to a public road from the hacienda
occupied by these plaintiffs, the only road and way by which the products of the plaintiffs'
property can be taken to the town of Victorias and to the landing place there being across
the Hacienda Toreno by the road marked on the plan attached to the complaint; that on the
fifteenth day of November, 1912, the defendants closed the road in question at the point
at which it crosses the Hacienda Toreno, and refused to permit plaintiffs to continue using
it; that plaintiffs were about to commence to grind their crop of sugar cane, and that, if
prevented from transporting their sugar across the Hacienda Toreno to their point of
embarkation, would suffer damages difficult to estimate. Upon these averments of fact the
plaintiffs prayed for a judgment that they are entitled to use the road in question as they
have been using it in the past, and that a perpetual injunction be issued against plaintiffs
restraining them from impending such use. Upon the filing of the complaint, plaintiffs
moved the court to issue a preliminary injunction restraining defendants from interfering
with the use of the road during the pendency of the suit, which motion was granted by the
court.
Defendants in their answer put in issue all the special averments of the complaint, as
above set forth, and by way of counterclaim and special defense, averred that the road
crossing the Hacienda Toreno, over which plaintiffs claim the right of passage, is the
private property of defendants; and, further, that they have not refused plaintiffs

permission to pass over this road but have required them to pay toll for the privilege of
doing so. Defendants also claimed damages for the use of the road by plaintiffs during the
pendency of the suit, alleging that the preliminary injunction had been improvidently
issued upon false statements contained in the verified complaint filed by plaintiffs.
The case was tried in July, 1913. The court on December 8, 1913, rendered judgment,
dismissing the complaint with respect to the plaintiffs Felix Suarez, Probo Jereza, Enrique
Azcona, and Melecio Pido, these being the plaintiffs who claimed the right to use the
Dacuman Toreno road. With respect to the Nanca-Victorias road, the court held that it
was a public highway over which the public had acquired a right of use by immemorial
prescription, and ordered the issuance of a perpetual injunction against plaintiffs,
restraining them from interfering in any manner with the use of the said road.
The conclusion of the court with respect to the facts affecting the Nanca-Victorias road are
as follows:
Turning to a consideration of the evidence relative to the Nanca-Victorias road we find
incontestable proof that it has been in existence for at least forty years. That the
hacenderos located in the southwestern section of Victorias and the public generally
passed over it freely and that it was used for all purposes of transportation of farm
produce, animals, etc. and by pedestrians as well as carromatas and other conveyances
without break or interruption until two or three years ago when the defendants announced
that the road was private and that those who wished to pass over it with sugar carts would
be obliged to pay a toll of ten centavos all other vehicles, it appears, were permitted to
pass free charge. This arrangement seems to have existed during the years of 1911 and
1912 and part of 1913, the money being collected apparently from some hacenderos and
not from others. There is some reason to believe from the evidence presented by
defendants themselves that the practice of making these payments to hacienda 'Toreno'
originated in an attempt to raise a fund for the repair of the road. There is no evidence that
any other hacenderos between Nanca and Victorias or any other person made any attempt
to close the road or to collect toll. On the contrary the road appears to have been repaired
by the hacenderos when it needed repairing and everyone used it on equal terms until the
defendants in 1910 or 1911 interposed the objection that the road in dispute was private.
This we think is a fair deduction from the evidence and although it is asserted that toll was
collected at an earlier date by the late Leon Montinola, brother of the defendant Ruperto
Montinola, there is no tangible evidence that this was so and that toll has been paid only
during the years of 1911, 1912, and part of 1913.
The question presented by the assignment of error are in effect:
(a) Is the Nanca-Victorias road at the point at which it traverses the Hacienda Toreno a
public highway or not?
(b) If it be held that the road in question is not a public highway, have plaintiffs proven
their acquisition of an easement of way over the Hacienda Toreno at the point traversed by
the road in question?
The trial judge, in holding that the road in question is public, bases in conclusion upon the
fact, which he deems to have been proven, that the road has been in existence "from time

immemorial," and had been "continiously used as a public road . . . and open to public as
such for thirty or forty years . . . until . . . the defendants undertook to claim it as private
and to collect toll for the passage of carts." (Bill of Exceptions, p. 56.) There is no doubt
that for the past thirty or forty years a road has existed between the former site of the
town of Victorias and the barrio of Nanca, of the municipality of Seravia, and that this road
crosses defendants' hacienda. It is also true that during this period the plaintiffs and their
predecessors in the ownership of the hacienda now held by them have made use of this
road for the purpose of going and coming from their haciendas to the town of Victorias; but
the question is whether this use was limited to the plaintiffs, and their tenants and
employees, or whether it was, as held by the lower court, a use enjoyed by the public in
general. Plaintiffs produced only two witnesses, Segundo de Leon (stet. notes, pp. 21-22)
and Eduardo Cuaycong, (stet. notes, pp. 27-33) to testify as regards the use of the NancaVictorias road. Several other witnesses testified on behalf of plaintiffs, but their testimony
relates to the Dacuman Toreno road, which is not involved in this appeal. We have
carefully read the testimony of the witnesses Leon and Cuaycong, given upon their direct
and cross examination, but we have been unable to find that either of them has testified
that the road in question was ever used by the public in general. These witnesses testified
with regard to the use of the road by the present and former owners and occupants of the
estates of Bacayan, Esperanza, Alcaigan, Pusot, and Dolores for the transportation of the
products of these estates to the town of Victorias, and of supplies and agricultural
implements from Victorias to the haciendas, but neither of them testified expressly that
any other use had been made of said road. Nevertheless, it may be reasonably inferred
from the testimony of these witnesses that all persons having occasion to travel between
Victorias and the haciendas of Bacayan, Esperanza, Alacaigan, Pusot, and Dolores, whether
or not they were owners, tenants, or employees of said estates, made use of the road now
in dispute, crossing the Hacienda Toreno, and to this limited extent it may be said that the
public made use of the road, but there is nothing in the evidence to indicate that the so
called public use extended beyond this.
Apart from the fact that there is no direct evidence to support the finding of the court
concerning the general public use of the road in dispute, the record contains data strongly
tending to show that when the complaint was filed plaintiffs did not contend that the road
was a public highway, but merely contended that they had acquired by prescription an
easement of way across the Hacienda Toreno. For example, the action is entitled an "action
concerning a right of away." (Bill of Exceptions, pp. 64 and 65.) It is not averred in the
complaint that the road in question was used by the public. On the contrary, it is averred
that it was used by the plaintiffs and their predecessors. The averment in paragraph 8 of
the complaint that the plaintiffs have no other "outlet to a public road" than that which
they have been accustomed to used by going across the defendants' hacienda for the
purpose of going to the town of Victorias also shows that when they commenced this
action they had in mind the provisions of articles 564, et seq. of the Civil Code, which
relate to the method of establishing the compulsory easement of way. The owners of an
existing easement, as well as those whose properties are adjacent with a public road, have
no occasion to invoke these provisions of the Code, which relate to the creation of new
rights, and not the enforcement of rights already in existence.
It is true in the opening statement made to the court, counsel for plaintiffs, who was not
the same attorney by whom the complaint was signed, stated that plaintiffs contend that

the road in question is public, but as no evidence was introduced tending to establish this
contention concerning the Nanca Victorias road, counsel for defendants had no occasion
to object upon the ground that such testimony was not relevant to the averments of the
complaint. No evidence was taken to indicate that at any time since the road in question
has been in existence any part of the expense of its upkeep has been defrayed by the
general government, the province, or the municipality. The trial judge said upon this
subject:
It is true that whatever repairs were made on the road were made irregularly. The
municipality of Victorias had no funds to devote to the construction and repair of roads,
and the upkeep of the road depending entirely therefore on the initiative of the persons
who used it, was attended to only at such times as repairs were absolutely necessary. (Bill
of Exceptions, p. 49.)
The court also held that it appears from the government grant issued in 1885 to the
original owner of the hacienda adjacent to the Hacienda Toreno on its western boundary,
that the Nanca-Victorias road at that time separated that estate from the Jalbuena
Hacienda, and that these facts constitute "circumstantial evidence that the road was in
existence in 1885." We have examined the document to which the court refers, and we
agree that the road in question existed in 1885; but we do not believe that the document
in question proves that the road was public highway.
Another circumstance established by the evidence, and which is some importance in the
determination of this issue, is that although the defendants closed the Nanca-Victorias road
in the month of February, 1911, and since that time have collected toll from persons
passing over it with carts loaded with sugar, including those belonging to several of the
plaintiffs, nothing was done by them to prevent the continuation of this restriction until
December, 1912, when this action was commenced. It is natural to assume that if plaintiffs
had considered that the road in question was public, they would have protested
immediately against the action of the defendants, and would have either commenced a
civil action, as they subsequently did, or would have brought about a prosecution under
section 16 of Act No. 1511.
Upon the evidence taken and admissions contained in the pleadings and those made
during the course of the trial we consider that the following findings are warranted:
1. The town of Victorias has always been the shipping point of the products of the
Hacienda Toreno, and of the haciendas of appellees, as well as the place from which
supplies were brought to those properties.
2. For thirty or forty years before the commencement of the suit a wagon road, herein
called the Nanca-Victorias road, has been in existence, connecting the haciendas of
appellees with the town of Victorias, and this road traverses the property of defendants.
Since the removal of the town of Victorias to a new site the Nanca-Victorias road has been
used by appellees in travelling between their properties and the provincial road which
crosses the Hacienda Toreno from east to west.
3. No public funds have at any time been expended on the construction or upkeep of the
Nanca-Victorias road, but from time to time work has been done on it by the laborers

employed by the present and former owners of the Hacienda Toreno and the haciendas
owned by the appellees and their predecessors in title.
4. The Nanca-Victorias wagon road, including that part of it which crosses the Hacienda
Toreno, has for thirty-five or forty years been used by the appellees and their predecessors
in title for the transportation, by the usual means, of the products of their estates to their
shipping points in or near the town of Victorias, and the transportation to their estates of
all supplies required by them, and has been used by all persons having occasion to travel
to and from all or any of the estates now owned by the appellees.
5. The use of the Nanca-Victorias road in the manner and by the person above mentioned
was permitted without objection by the owners of the Hacienda Toreno until the year 1911,
when they closed it, and began charging a toll of 5 centavos for each cart which passed
over the road, including carts belonging to the appellants, until restrained from continuing
to do so by the preliminary injunction granted in this case.
6. The Nanca-Victorias road constitutes the only outlet from the estates of appellants to the
nearest public road which is the provincial road which crosses the Hacienda Toreno from
east to west.
Upon these facts the questions of law to be decided are:
(a) Is the Nanca-Victorias road a public highway?
(b) If the Nanca-Victoria road, or that part of it which crosses the Hacienda Toreno, is not a
public highway, is it subject to a private easement of way in favor of the appellees?
The defendants are the owners of the Hacienda Toreno under a Torrens title issued in
accordance with the Land Registration Act, conferring to them its absolute ownership,
subject only to the limitations of paragraph four of section 39 of said Act. It is admitted
that there is no annotation on the certificate of title regarding the road here in question,
either as a "public road" or as a "private way established by law," and, therefore, the
questions presented by this appeal are to be determined precisely as they would be had
the Hacienda Toreno not been brought under the operation of the Land Registration Act.
The plaintiffs being the owners of the property in question, the presumption of law is that it
is free from any lien or encumbrance whatever, and the burden therefore rests upon
plaintiffs to establish the contrary. As this court said in case of Fabie vs. Lichauco and the
children of Francisco L. Roxas (11 Phil. Rep., 14):
It is settled of law that a property is assumed to be free from all encumbrance unless the
contrary is proved.
There is admittedly no evidence to show that the land occupied by the road here in
question was any time conveyed to the general government or any of its political
subdivisions by the present or any of the former owners of the Hacienda Toreno. There is
no evidence, even remotely, tending to show that the road existed prior to the time when
the property now known as the Hacienda Toreno passed from the State into private
ownership. The record fails to disclose any evidence whatever tending to show that the
Government has at any time asserted any right or title in or to the land occupied by the
road, or that it has incurred any expense whatever in its upkeep or construction. The Civil

Code defines as public roads those which are constructed by the State (art. 339), and as
provincial and town roads those "the expense of which is borne by such towns or
provinces." (Civil Code, art. 344.) While it is not contended that this definition is exclusive,
it does show that during the Spanish regime, under normal conditions, roads which were
public were maintained at the public expense, and that the fact that at no time was any
expense incurred by the Government with respect to the road here in question tends
strongly to support the contention of the defendants that it is private way.
During the Spanish regime the law required each able to bodied citizen not within one of
the exempted classes to work a certain number of days in each year, his labor to be
devoted to "services of general utility" to the municipality of his residence. (Royal Decree
of July 11, 1883, art. 5.) Under this Decree and the Regulations for its enforcement (Berriz,
vol. 11, 258) the greater part of the work on the public road of the Islands was
accomplished. Had the road here in question been a public way, it is reasonable to assume
that the polistas of the town of Victorias would have been employed in maintaining it. It is
most significant that no mention is made in the testimony of the plaintiffs' witnesses of any
work of this character having been done on the road at any time, particularly in view of the
fact that their attention was drawn to this point. (Stet. note, pp. 8, 10, 11, 12, 13 and 14.)
The evidence shows that the repairs were made by the owners of the estates benefited by
the road, and by their laborers, as a pure voluntary act for their own convenience and
interest. There being no evidence of a direct grant to the government of the land occupied
by the road in question or that any Government funds or labor were expended upon it, the
question presents itself whether the use to which the road has been put was such as to
justify the conclusion of the lower court that it has become public property. There being no
evidence that the original use of the road by plaintiffs' predecessors was based upon any
grant of the fee to the road or of an easement of way, or that it began under the assertion
of a right on their part, the presumption must be that the origin of the use was the mere
tolerance or license of the owners of the estates affected.
This being so, has that merely permissive use been converted into a title vested in the
public at large, or in the plaintiffs by reason of their ownership of the land beneficially
affected by the use?
Had it been shown that the road had been maintained at the public expense, with the
acquiescence of the owners of the estates crossed by it, this would indicate such adverse
possession by the government as in course of time would ripen into title or warrant the
presumption of a grant or of a dedication. But in this case there is no such evidence, and
the claims of plaintiffs, whether regarded as members of the public asserting a right to use
the road as such, or as persons claiming a private easement of way over the land of
another must be regarded as resting upon the mere fact of user.
If the owner of a tract of land, to accommodate his neighbors or the public in general,
permits them to cross his property, it is reasonable to suppose that it is not his intention, in
so doing, to divest himself of the ownership of the land so used, or to establish an
easement upon it and that the persons to whom such permission, tacit or express, is
granted, do not regard their privilege of use as being based upon an essentially revocable
license. If the use continues for a long period of time, no change being made in the
relations of the parties by any express or implied agreement, does the owner of the

property affected lose his right of revocation? Or, putting the same question in another
form, does the mere permissive use ripen into title by prescription?
It is a fundamental principle of the law in this jurisdiction concerning the possession of real
property that such possession is not affected by acts of a possessory character which are
"merely tolerated" by the possessor, or which are due to his license (Civil Code, arts. 444
and 1942). This principle is applicable not only with respect to the prescription of the
dominium as a whole, but to the prescription of right in rem. In the case of Cortes vs.
Palanca Yu Tibo (2 Phil. Rep., 24, 38), the Court said:
The provision of article 1942 of the Civil Code to the effect that acts which are merely
tolerated produce no effect with respect to possession is applicable as much to the
prescription of real rights as to the prescription of the fee, it being a glaring and selfevident error to affirm the contrary, as does the appellant in his motion papers. Possession
is the fundamental basis of the prescription. Without it no kind of prescription is possible,
not even the extraordinary. Consequently, if acts of mere tolerance produce no effect with
respect to possession, as that article provides, in conformity with article 444 of the same
Code, it is evident that they can produce no effect with respect to prescription, whether
ordinary or extraordinary. This is true whether the prescriptive acquisition be of a fee or of
real rights, for the same reason holds in one and the other case; that is, that there has
been no true possession in the legal sense of the word. (See also Ayala de Roxas vs.
Maglonso, 8 Phil Rep., 745; Municipality of Nueva Caceres vs. Director of Lands and Roman
Catholic Bishop of Nueva Caceres, 24 Phil. Rep., 485.)
Possession, under the Civil Code, to constitute the foundation of a prescriptive right, must
be possession under claim of title (en concepto de dueno), or use the common law
equivalent of the term, it must be adverse. Acts of a possessory character performed by
one who holds by mere tolerance of the owner are clearly not en concepto de dueo, and
such possessory acts, no matter how long so continued, do not start the running of the
period of prescription.
A similar question was presented in the case of the Roman Catholic Archbishop of Manila
vs. Roxas (22 Phil. Rep., 450), in which case it appeared that Roxas, the owner of
the Hacienda de San Pedro Macati, claimed a right of way across the property of the
church to Calle Tejeron, a public street of the town of San Pedro Macati. The proof showed
that the road in question had been used by the tenants of the Hacienda de San Pedro
Macatifor the passage of carts in coming and leaving the hacienda "from time
immemorial," and further that the road had been used for time out of mind, not only by the
tenants of the hacienda but by many other people in going and coming from a church halfway between the boundary line of the hacienda and Calle Tejeron. The court held that the
facts did not give rise to a prescriptive right of easement in favor of the owner of the
hacienda, upon the ground that such use "is to be regarded as permissive and under an
implied license, and not adverse. Such a use is not inconsistent with the only use which the
proprietor thought fit to make of the land, and until the appellee thinks proper to inclose it,
such use is not adverse and will not preclude it from enclosing the land when other views
of its interest render it proper to do so. And though an adjacent proprietor may make such
use of the open land more frequently than another, yet the same rule will apply unless
there be some decisive act indicating a separate and exclusive use under a claim of right.
A different doctrine would have a tendency to destroy all neighborhood accommodations in

the way of travel; for if it were once understood that a man, by allowing his neighbor to
pass through his farm without objection over the pass-way which he used himself, would
thereby, after the lapse of time, confer a right on such neighbor to require the pass-way to
be kept open for his benefit and enjoyment, a prohibition against all such travel would
immediately ensue."
The decisions of the supreme court of Louisiana, a State whose jurisdiction is based, as is
our own, upon the Roman Law, and whose Civil Code is taken, as is our own,. very largely
from the Code of Napoleon, are particularly persuasive in matters of this character. In the
case of Torres vs. Fargoust (37 La. Ann., 497), cited by appellants in their brief, in which the
issues were very similar to those of the present case, the court held that
The mere fact that for thirty or forty years the public was permitted to pass over this
ground would not of itself constitute the place a locus publicus . . . dedication must be
shown by evidence so conclusive as to exclude all idea of private ownership; . . . such
dedication cannot be inferred from ere user alone; . . . no one is presumed to give away his
property. The burden is on him who avers a divestiture of ownership to prove it clearly.
We are, therefore, of the opinion, and so hold, that upon the facts established by the
evidence it does not appear that the road in question is a public road or way. We are also of
the opinion that plaintiffs have failed to show that they have acquired by prescription a
private right of passage over the lands of defendants. The supreme court of Spain has
decided that under the law in force before the enactment of the Civil Code, the easement
of way was discontinous, and that while such an easement might be acquired by
prescription, it must be used in good faith, in the belief of the existence of the right, and
such user must have been continuous from time immemorial. (Judgment of December 15,
1882.) In the appealed decision the court below says that the plaintiffs and their
predecessors made use of the road in question "from time immemorial," but there is no
evidence whatever in the record to sup[port this finding, although it is true that the
evidence shows the existence of the road and its use by the plaintiffs and their
predecessors for thirty-five or forty years. Speaking of the evidence required under the
present Code of Civil Procedure to show immemorial use of an easement, this court said in
the case of Ayal de Roxas vs. Case (8 Phil. Rep., 197, 198):
Third Partida in title 31, law 15 . . . says that discontinues servitudes . . . must be proved
by usage or a term so long that men can not remember its commencement. . . . In many
judgments the supreme court of Spain has refused to accept proof of any definite number
of years as a satisfaction of this requirement of the law. . . . We are of the opinion that in
order to establish a right of prescription [title of prescription based upon use from time
immemorial] something more required than memory of living witnesses. Whether this
something should be the declaration of persons long dead, repeated by those who testify,
as exacted by the Spanish law, or should be the common reputation of ownership
recognized by the Code of Procedure, it is unnecessary for us to decide. On either theory
the appellant has failed in his proof . . . .
The same thing may be said in this case. Witnesses have testified that they have known
the road for a certain period of years, beginning at a time prior to the enactment of the
Civil Code, but no evidence has been made to prove immemorial use by either of the
means of proof mentioned in this decision cited, nor is immemorial user averred in the

complaint as the basis of the right. It is evident, therefore, that no vested right by user
from time immemorial had been acquired by plaintiffs at the time the Civil Code took
effect. Under that Code (art 539) no discontinuous easement could be acquired by
prescription in any event. Assuming, without deciding, that this rule has been changed by
the provisions of the present Code of Civil Procedure relating to prescription, and that since
its enactment discontinuous easement may be required by prescription, it is clear that this
would not avail plaintiffs. The Code of Civil Procedure went into effect on October 1, 1901.
The term of prescription for the acquisition of rights in real estate is fixed by the Code (sec.
41) at ten years. The evidence shows that in February, 1911, before the expiration of the
term of ten years since the time the Code of Civil Procedure took effect, the defendants
interrupted the use of the road by the plaintiffs by constructing and maintaining a toll gate
on it and collecting toll from persons making use of it with carts and continued to do so
until they were enjoined by the granting of the preliminary injunction by the trial court in
December, 1912. Our conclusion is, therefore, that the plaintiffs have not acquired by
prescription a right to an easement of way over the defendant's property; that their use of
the Nanca-Victorias road across the Hacienda Toreno was due merely to the tacit license
and tolerance of the defendants and their predecessors in title; that license was essentially
revokable; and that, therefore, the defendants were within their rights when they closed
the road in 1911.
While in the allegations from the plaintiffs' complaint it might be inferred that it was their
purpose to seek to impose upon the defendants the easement to which arts. 564 et seq. of
the Civil Code relate, that purpose was evidently abandoned, and the case was tried upon
a wholly different theory. Proof was offered to show that the right of passage across
defendants' land is necessary to enable plaintiffs to get their products to market, but there
was no offer on their part to pay defendants the indemnity required by section 564.
For the reasons stated the judgment of the court below is reversed, the injunction issued
against defendants is allowed on this appeal. So ordered.
G.R. No. L-28066 September 22, 1976
ASTODILLO vs. PHHC

The lot in question is acqually in the possession of Peregrina Astudillo. She constructed
thereon a residential house (a shanty, according to Mitra). She admits that she has been
squatting on the said lot "uninterruptedly since 1957 up to the present" (p. 52, Record).
She filed with the administrative investigating committee of the PHHC a request dated
February 24, 1963, praying for the cancellation of the award of Lot 16 to Congressman
Mitra and asking the committee to recommend that it be re-awarded to her. No action was
taken on that request.
On May 3, 1965 Peregrina filed in the lower court her aforementioned petition against the
PHHC board of directors, the register of deeds of Quezon City and the spouses Ramon P.
Mitra and Salud O. Mitra. She questioned the legality of the award of Lot 16 to Mitra. She
asked that Lot 16 be sold to her.
After the respondents had filed their answers, the Mitra spouses filed a verified motion for
summary judgment. They assumed that there was no genuine issue as to any material
fact. Peregrina Astudillo opposed the motion. The parties submitted memoranda.
The lower court treated the motion for summary judgment as a motion to dismiss. It
dismissed Peregrina's petition on the grounds that she is a mala fide squatter and that the
sale of Lot 16 to Mitra cannot be assailed by means of certiorari and mandamus. Peregrina
appealed to this Court.
Her four assignments of error raise questions of law. She contends that the lower court
erred in holding that certiorari and mandamus do not lie in this case and that she has no
right to question the award to Mitra, and in not holding that the award of Lot 16 to him was
in contravention of the Anti-Graft and Corrupt Practice Law and of the constitutional
provision that a Senator or Representative should not directly or indirectly be financially
interested in any contract with the government of any subdivision or instrumentality
thereof during his term of office.
In the ultimate analysis the issue is whether Peregrina Astudillo has a cause of action to
annul the sale of Lot 16 to Mitra and to compel the PHHC board to award that lot to her.

Peregrina Astudillo appealed from the "resolution" dated April 18, 1967 of the Court of First
Instance of Rizal, Quezon City Branch V, granting the motion for summary judgment filed
by Ramon P. Mitra and dismissing her petition for certiorari and mandamus (Civil Case No.
Q-8741).

We hold that she has no cause of action to impugn the award to Mitra and to require that
she be allowed to purchase the lot. As a squatter, she has no possessory rights over Lot
16. In the eyes of the law, the award to Mitra did not prejudice her since she was bereft of
any rights over the said lot which could have been impaired by that award (Baez vs. Court
of Appeals, L-30351, September 11, 1974, 59 SCRA 15, 22).

According to the pleadings of respondents Mitra and the People's Homesite and Housing
Corporation (PHHC) *, Mitra on December 28, 1957 applied, in behalf of his minor son,
Ramon Mitra Ocampo, for the purchase of Lot 16, Block E-155 of the East Avenue
Subdivision of the PHHC in Piahan, Quezon City.

The record does not show, and Peregrina does not claim, that she is a member of the
Piahan Homeowners Association some of whose members are "deserving squatters"
(Kempis vs. Gonzales, L-31701, October 31, 1974, 60 SCRA 439).

His application was approved on January 3, 1958. He made a downpayment of P840, an

amount equivalent to ten percent of the price of the lot. On September 9, 1961 the PHHC
and Mitra executed a contract of conditional sale. After Mitra had paid in full the price,
which totalled more than nine thousand pesos, a final deed of sale was executed in his
favor on February 18, 1965. Transfer Certificate of Title No. 89875 was issued to him on
March 1, 1965.

In the familiar language of procedure, she was not entitled to sue Mitra and the PHHC for
the enforcement or protection of a right, or the prevention of a wrong. Those respondents
did not commit any delict or wrong in violation of her rights because, in the first place, she
has no right to the lot. Not being principally or subsidiarily bound in the contract of sale
between Mitra and the PHHC, she is not entitled to ask for its annulment (Art. 1397, Civil
Code).

Peregrina invokes the PHHC charter (erroneously referred to as section 11 of

Commonwealth Act No. 648) which provides that the PHHC should acquire buildings so as
to provide "decent housing for those who may be unable otherwise to provide themselves
therewith" and that it should acquire large estates for their resale to bona fideoccupants.

that judgment be rendered commanding the defendant, immediately or at some other

specified time, to do the act required to be done to protect the rights of the petitioner, and
to pay the damages sustained by the petitioner by reason of the wrongful acts of the
defendant.

Those provisions do not sustain her action in this case. They do not justify her act of
squatting on a government-owned lot and then demanding that the lot be sold her
because she does not yet own a residential lot and house. She is not a bona fide occupant
of Lot 16.

Respondent PHHC board is not the board contemplated in section 1 of Rule 65. It does not
exercise judicial functions. The award being questioned was a routinary corporate act that
was within the board's competence. No jurisdictional issue was involved in that
award. certiorari lies only for the correction of jurisdictional errors (Gov't. of the P.I. vs.
Judge of 1st Instance of Iloilo 34 Phil 157, 159).

The State is committed to promote social justice and to maintain adequate social services
in the field of housing (Secs. 6 and 7, Art. II, New Constitution). But the State's solicitude
for the destitute and the have-nots does not mean that it should tolerate usurpations of
property, public or private.
"In carrying out its social readjustment policies, the government could not simply lay aside
moral standards, and aim to favor usurpers, squatters, and intruders, unmindful of the
lawful and unlawful origin and character of their occupancy. Such a Policy would
perpetuate conflicts instead of attaining their just solution" (Bernardo vs. Bernards, 96 Phil.
202, 206).
Indeed, the government has enunciated a militant policy against squatters. Thus, Letter of
Instruction No. 19 dated October 2, 1972 orders city and district engineers "to remove all
illegal constructions, including buildings ... and those built without permits on public or
private property" and provides for the relocation of squatters (68 O.G. 7962. See Letter of
Instruction No. 19-A). As noted by Justice Sanchez, "since the last global war, squatting on
another's property in this country has become a widespread vice" (City of Manila vs.
Garcia, L-26053, February 21, 1967, 19 SCRA 413, 418).
The lower court did not err in holding that Peregrina Astudillo cannot use the special civil
actions of certiorari and mandamus to secure a judicial review of the award of Lot 16 to
Mitra. Rule 65 of the Rules of Court provides: +.wph!1
SECTION 1. Petition for certiorari. When any tribunal, board, or officer exercising judicial
functions, has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion and there is no appeal, nor any plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a verified petition in the proper
court alleging the facts with certainty and praying that judgment be rendered annulling or
modifying the proceedings, as the law requires, of such tribunal, board or officer.
The petition shall be accompanied by a certified true copy of the judgment or order subject
thereof, together with copies of all pleadings and documents relevant and pertinent
thereto.
SEC. 3. Petition for mandamus. When any tribunal, corporation, board, or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary course of law, the person agrieved thereby
may file a verified petition in the proper court alleging the facts with certainty and praying

Nor is the relief sought by Peregrina Astudillo, which is to compel the PHHC board to cancel
the award of Lot 16 to Mitra and to resell it to her, a right that can be enforced
by mandamus. What she wants is to force the PHHC to execute a contract of sale in her
favor. That is not within the purview of the writ of mandamus.
Thus, it was held that "the writ of mandamus is not an appropriate or even admissible
remedy to enforce, the performance of a private contract which has not been fully
performed by either party" (Quiogue vs. Romualdez, 46 Phil. 337). In Jacinto vs. Director of
Lands, 49 Phil. 853, a petition for a writ of mandamus to compel the Director of Lands to
execute a deed of conveyance for certain lots in favor of the petitioner was denied.
Generally, title to property cannot be litigated in a mandamus proceeding (City of Manila
vs. Posadas, 48 Phil. 309, 337).
It is not a ministerial duty of the PHHC board to award Lot 16 to Peregrina. Anyway, it has
already been shown that as a squatter she is not clothed with any right to Lot 16 that may
be enforced in a court of justice.
The PHHC board completely ignored the alleged demands of Peregrina for the purchase of
Lot 16. It did not render any decision against her. Its inaction cannot be assailed by
certiorari or mandamus.
Peregrina's other assignment of error is that the award of Lot 16 to Congressman Mitra was
a violation of section 3(h) of the Anti-Graft and Corrupt Practices Law and of section 17,
Article VI of the 1935 Constitution, now section 11, Article VIII of the new Constitution.
On the other hand, Mitra contends that the PHHC performs proprietary functions. He
observed that the following high-ranking officials were awarded PHHC lots: Felixberto
Serrano, Dominador Antonio, Manuel Lim, Fernando Lopez, Pacita M. Gonzales, Genaro
Magsaysay, Daniel Romualdez, Felipe A. Abrigo, Bartolome Cabangbang, Juan Duran,
Manuel Enverga, Angel Fernandez, Jose Nuguid, Antonio de Pio, Lorenzo Teves, Faustino
Tobia, Pedro Trono, Marcelino Veloso and Valeriano Yancha.
We are of the opinion that that assignment of error need not be resolved in this case.
Having shown that Peregrina has no cause of action to assail the award of Lot 16 to Mitra,
it follows that in this particular case she cannot assail that award by invoking the
provisions of the Anti-Graft and Corrupt Practices Law and the Constitution. This is not the
proper forum for the ventilation of that question. (See Commonwealth Act No. 626;
Hernandez vs. Albano, 112 Phil. 506; Solidum and Concepcion, Jr. vs. Hernandez, 117 Phil.
335).

WHEREFORE, the lower court's order of dismissal is affirmed. No costs.

SO ORDERED.
G.R. No. L-57259 October 13, 1983
PERAN vs. CFI
The decision of the then Court of First Instance of Sorsogon, Branch II, Gubat, Sorsogon,
rendered in the exercise of its appellate jurisdiction, dismissing Civil Case No. 1277,
entitled "Angel P. Peran vs. Encarnacion Evasco, et al.", for Forcible Entry and Illegal
Detainer, is being assailed in this Petition for Review on certiorari on a question of law. Said
Decision reversed the judgment of the 2nd Municipal Circuit Court of Bulusan-Barcelona,
Sorsogon, for Forcible Entry & Illegal Detainer.
The antecedent facts follow:
The property in question, an unregistered residential land, with an area of 1,225 square
meters more or less, situated at Tagdon Barcelona, Sorsogon, was originally owned by Jose
Evasco. On December 29, 1950, Jose Evasco executed a "Reparticion Ex-trajudicial"
whereby he partitioned his properties among his five heirs. 1Subject property was one of
those alloted to his son, Alejandro Evasco, who had it surveyed in 1956 (Exhibits "I" and "I1") who had it declared in his name under Tax Declaration No. 1900. The other heirs
received their own shares, one of them, the deceased Anacleto Evasco, one of whose
children was listed as Encarnacion, possibly, the principal private respondent herein.
Alejandro Evasco sold his property to Jose E. Torella on December 31, 1972, 2 who declared
it for taxation purposes under Tax Declaration No. 5157. 3 On July 10, 1977, Jose E. Torella,
in turn, sold the land to Jose Enriquez Sabater, 4 and the latter also declared the property in
his name under Tax Declaration No. 7127. 5 Petitioner Angel P. Peran acquired the land by
purchase from Jose Enriquez Sabater on December 27, 1978, 6 and subsequently declared
it, too, in his name under Tax Declaration No. 7310. 7 The sale was duly recorded in the
Register of Deeds' Office of the province of Sorsogon on January 3, 1979 in accordance
with the provisions of Sec. 194 of the Revised Administrative Code as amended by Act No.
3344.
Sometime in January 1979, petitioner personally asked private respondents, Encarnacion
Evasco and her common-law husband Ramon Espera, whose house is erected on a 440
square meter portion (44 sq, ms. according to petitioner) of the lot in question, to remove
the same and vacate the premises. Respondents refused, and consequently, a
confrontation between the parties was had before the, Municipal Mayor of Barcelona and
later before the Municipal Judge of Bulusan-Barcelona to settle the dispute, but to no avail.
On February 8, 1979, petitioner filed a complaint for Forcible Entry and Illegal Detainer
against private respondents before the 2nd Municipal Circuit Court of Bulusan-Barcelona,
seeking the ejectment of the latter from the portion in question contending that
respondents are mere squatters thereon; that they had prevented plaintiff from entering
the property and deprived him of possession; and that they were tolerating persons in
getting soil and bringing about a gradual erosion of the land to his extreme prejudice.

Private respondents answered denying the material allegations of the Complaint, and
alleging that they are the lawful possessors for more than twenty (20) years of the said
portion, which formerly belonged to Jose Evasco, grandfather of Encarnacion Evasco and
that petitioner has no right to eject them therefrom.
On September 1, 1979, the 2nd Municipal Circuit Court of Bulusan-Barcelona rendered its
Decision ordering private respondents to vacate the lot in question, return its possession to
petitioner, reimburse him attorney's fees of P300.00 and litigation expenses, and to pay
the costs. Reconsideration of the said decision filed by private respondents was denied by
said Court on November 12, 1979. Private respondents appealed to respondent Court of
First Instance of Sorsogon, Branch II.
Respondent Court reversed the Municipal Circuit Court and dismissed the case on March
28, 1980, ruling that said Court had no jurisdiction over the case as the same was filed
only on February 4, (8), 1979, which was well beyond the one-year-period of limitation, the
cause of action having accrued from the sale of the property by Alejandro Evasco to Jose E.
Torella on December 31, 1972; and that since the only issue in an illegal detainer case is
physical possession, "whoever has prior possession, no matter in what character, is
protected by law."
Reconsideration of the said Decision sought by petitioner was denied by respondent Court.
Petitioner appealed said judgment directly to this Tribunal on a question of law, raising as
the lone issue:
... whether the respondent court was in error when for purposes of determining the
jurisdiction of the 2nd Municipal Circuit Court of Bulusan-Barcelona, to try Civil Case No.
1227, for Illegal Detainer:
(a) it reckoned the counting of one-year period within which to file the action from the sale
of the property in question by Alejandro Evasco to Jose Torella on December 31, 1972 and
not from the date of demand made by the petitioner upon the respondents; and
(b) by assuming that "prior possession in whatever character is protected by law.
We rule for petitioner.
Private respondents admit that the land in question was originally owned by Jose Evasco.
The tax declarations covering their house clearly state "house built on land owned by Jose
Evasco under Tax No. 1599". 8 Since the land had been partitioned to Alejandro Evasco by
his father, Jose Evasco, respondent Encarnacion can lay no claim to the property even as a
grand-daughter of Jose Evasco. Respondents may have been in possession of the portion
they occupy prior to petitioner but they have not proved their title thereto, nor their right
to possess the same. As the 2nd Municipal Circuit Court of Bulusan-Barcelona found, no
concrete evidence was introduced by respondents on this point. Moreover, it is noteworthy
that the validity of the "Reparticion Extrajudicial" whereby said lot was adjudicated to
Alejandro Evasco by his father Jose Evasco, predecessors-in-interest of petitioner, had
never been challenged.

If at all, private respondents' possession of their portion of the property was by mere
tolerance of petitioner's predecessors-in-interest, which, however, does not vest in them a
right which they can assert against petitioner. Possession by tolerance is lawful but this
becomes illegal when, upon demand to vacate by the owner, the possessor refuses to
comply with such demand. 9 A possessor by tolerance is necessarily bound by an implied
promise to vacate upon demand, failing which a summary action for ejectment is the
proper remedy against him. 10 It is not necessary that there be a formal agreement or
contract of lease before an unlawful detainer suit may be filed against a possessor by
tolerance. 11 Neither is prior physical possession of the property by petitioner an
indispensable requisite. 12The ruling of respondent Court, therefore, that "since the only
issue in forcible entry and illegal detainer action is the physical possession of real property
possession de facto and n t possession de jurewhoever has prior possession, no matter
in what character, is protected by law," is erroneous under the factual milieu herein,

WHEREFORE, judgment is hereby rendered:

A Forcible Entry and Unlawful Detainer action must be brought within one year from the
unlawful deprivation or withholding of possession. 13 The one-year-period of limitation
commences from the time of demand to vacate, and when several demands are made, the
same is counted from the last letter of demand. 14 Demand may either be personal or in
writing. 15 The demand to vacate having been made by petitioner in January 1979, and the
ejectment suit having been instituted on February 8, 1979, the 2nd Municipal Circuit Court
of Bulusan-Barcelona acted well within its jurisdiction in taking cognizance of the case.

4. Sentencing the plaintiffs jointly and severally to pay the defendants P3,000.00 as
attorney's fees, with costs.

WHEREFORE, the assailed Decision of respondent Court of First Instance of Sorsogon,

Branch II, in Civil Case No.1227, is SET ASIDE, and the Decision of the 2nd Municipal Circuit
Court of Bulusan-Barcelona is hereby reinstated,
Costs against private respondents. SO ORDERED.
--- xxx END OF ACQUISITION OF POSSESSION xx --G.R. No. L-35933 June 29, 1984
LAINGO vs. CAMILO
The issue raised in this petition is whether or not the execution ordered by the respondent
court conforms to the final judgment embodied in the decision of the Court of Appeals in
CA-G.R. No. 43920-R.
The petitioners filed a complaint as plaintiffs in Civil Case No. 5438 of the Court of First
Instance of Davao to recover a seven hectare portion of a twenty-two hectare parcel of
land in Malita, Davao.
The disputed property is part of a homestead applied for by Gaudencio Dacuyan married to
Susana de la Cerna and awarded in 1934 to the "heirs of Gaudencio Dacuyan" because the
applicant had died in the meantime. The title was registered in October, 1934. In 1942, the
widow Susana de la Cerna describing herself as "half owner of the conjugal property" sold
seven (7) hectares of the land to Damian Camilo, respondent in this case. Camilo, in turn,
sold the land in 1966 to the other respondent, Juan Magallanes.
The dispositive portion of the decision in the reivindicacion case states:

1. Dismissing the complaint;

2. Divesting the plaintiffs of ownership over seven hectares of the southern side of the land
covered by Original Certificate of Title No. 1175 of the Register of Deeds of Davao, more
particularly, the portion described in the deed of sale executed by Susana Cerna de Laingo
on November 20, 1972, in the presence of Jorge Agonias and Juan Magailanes and
acknowledged before Atty. Ramon M. Kimpo, and the accompanying sketch marked as
Exhibits 1 and 1-A, respectively and vesting the same in Juan A. Magallanes, Filipino,
married to Fedilina Neri, Filipino, and residing at Malita, Davao;
3. Directing the plaintiffs to allow Juan Magallanes to have the aforesaid land surveyed;
and,

Upon appeal by the petitioners, however, the Court of Appeals modified the lower court's
decision. The dispositive portion of the appellate decision reads:
IN VIEW WHEREOF, this Court is constrained to modify as it now modifies the judgment
appealed from: the sale to appellees is held to be valid only as to an undivided seven (7)
hectares not of the specific portion now litigated; appellants are entitled to co-possession
thereof with appellees until the undivided seven (7) hectares to which appellees are
entitled are definitely segregated thru partition; the adjudication of attorney's fee is set
aside; no more pronouncement as to cost.
After the judgment of the Court of Appeals had become final and executory, the petitonerrs
filed the necessary motion with the Court of First Instance of Davao to issue a writ of
execution placing them in co-possession with the private respondents of the seven (7)
hectares being litigated.
The private respondents filed a counter motion for the issuance of a writ of excution
praying that the petitioners be ordered to execute a project of partition among the heirs
and while doing so, segregate the seven (7) hectares purchased and possessed by them
from the date of the document of sale. The petitioners, however, opposed the counter
motion emphasizing that the execution of judgment referred to an action for recovery of
possession of a specific seven (7) hectares of land and not to an action for partition of
property.
The respondent countered with a rejoinder which admitted that the judgment, while
ambiguous, confirmed their rights over seven (7) hectares of land sold to them. Since they
have been in possession of a specific seven (7) hectares of land on which they planted
coconuts already bearing fruits, the most equitable execution according to them was for
those seven (7) hectares to be the seven hectares adjudged in the decision.
The Court of First Instance decided the matter by issuing a writ of execution allowing the
respondents to enjoy possession over the entire twenty-two (22) hectares with the

petitioners. The questioned order, the second paragraph of which is assailed in this petition
reads:
On motion of the plaintiffs, through Aty. Ampig, and without objection of Atty. Latorilla,
counsel for the defendant, let a writ of possession issue with respect to the seven (7)
hectares, subject matter of the suit, by allowing the plaintiffs to enjoy with the defendants
possession of the same.

therein; and as a corollary neither can his successor-in-interest Juan Magallanes but since
Susana was entitled to at least 11 hectares; therefore her sale ov seven (7) hectares is
undivided would have been valid, but a sale by her of this specific portion litigated could
not bvind her co-plaintiffs; and this being the final result the adjudication of attorney's fees
must have to be discarded;
xxx xxx xxx

On oral motion of Atty. Latorilla, let a writ of possession issue with respect to the remainder
of the twenty-two (22) hectares by allowing the defendants to enjoy with the plaintiffs
possession of the rest of the twnety-two (22) hectares.

The judgment of the Court of Appeals, with the foregoing reasons for seemingly ambigtous
judgment calling for a future segregation of seven (7) hectares out of the twenty-two (22)
hectares, has long become final and executory.

SO ORDERED.

We agree with the petitioners that the execution ordered by the court of first instance did
not conform to the final judgment being executed.

The motions for reconsideration having been denied, the petitioners raised the case to us
directly on a pure legal issue which they state as follows:
THE COURT A QUO OR THE RESPONDENTN JUDGE ERRED IN ORDERING THE ISSUANCE OF
A WRIT OF POSSESSION WITH RESPECT TO THE REMAINDER OF THE TWENTY TWO (22)
HECTARES BY ALLOWING THE DEFENDANTS TO ENJOY WITH THE PLAINTIFFS POSSESSION
OF THE REST OF THE TWENTY TWO (22) HECTARES AND IN DENYING THE TWO (2)
MOTIONS FOR RECONSIDERATION OF THE SAID ORDER.
The reason given by the Court of Appeals for not granting undisputed ownership of the
seven (7) hectares already possessed by the respondents are:
xxx xxx xxx
3. CONSIDERING: Now, as to this that while it is true that the Land Tax Declaration in the
name of the heirs of Gaudencio Dacuyan Exh. 3 was afterwards cancelled and reduced
from its area of 22 hectares to 15 hectares under Exh. 3-A the remaining seven (7)
hectares coming to be declared in the name of the buyer Camilo Damian under Exh. 5-A, 5B, 5-C and 5-D, yet a scrutiny of these documents would not show any participation of the
other children of Gaundencio and Susana namely Teodoro, Elena and Samson the coplaintiffs in this case not even any proof that they were informed of the sale; neither is
there any evidenc34 present in the rcord positive in character that they had ever
consented to a physical segregation of the seven (7) hectare portion sold by Susana unto
Camilo so that the point of laches is without any basis; it is true that Camilo and afterwards
in 1966 his successor-in-interest Juan Magallanes had beein in possession apparently
exclusive since the sale to Camilo in 1942 under Exh. 1 but the trouble is that exclusive
possession by a co-owner cannot give riose to prescription; the law has always been to the
effect that between co-owners prescription cannot run, Cortez v. Oliva, 33 Phil. 480 and in
order for prescription to run between themselves the repudiation of co-ownership must be
clearly manifested which is not at all the case here bearing in mind the undisputed fact
that Camilo Damian did not even attempt to register Exh. 1 nor notify said other children of
Gaudencio Dacuyan and tell them he was claiming the seven (7) hectare portion as solely
his own; and neither should it be overlooked that the title being a Torrens title it cannot be
the subject matter of prescription; this will mean that notwithstanding the possession
apparently exclusive of Camilo Damian for more than twenty (20) years over the seven (7)
hectare portion, he cannot under the law be permitted to claim absolute ownership

We stated in Phil-American Accident Insurance Co., Inc. (97 SCRA 811)

The questioned Order cannot be sustained. The judgment which was sought to be
executed ordered the payment of simple "legal interest" only. It said nothing about the
payment of compound interes. Accordingly, when the respondent judge ordered the
payment of compound interest he went beyond the confines of his own judgment which
had been affirmed by the Court of Appeals and which had become final. Fundamental is
the rule that execution must conform to that ordained or decreed in the dispositive part of
the decision. Likewise, a court cannot, except for clerical errors or omissions, amend a
judgment that has become final. (Jaob, et al. v. Alo, et al., 91 Phil. 750 [1952]; Robles v.
Timario, et al., 107 Phil. 809 [1960]; Collector of Internal Revenue v. Gutierrez, et al., 108
Phil. 215 [1960]; Ablaza v. Sycip, et al., 110 Phil. 4 [1960].) (emphasis supplied)
At the same time, the mode of execution desireed by the petitioners would be unfair to the
respondents and not in keeping with the disposition really ordained by the Court of
Appeals. As stated in Macabuhay v. Manuel (101 SCRA 835) where we cited Padua v.
Robles (66 SCRA 485):
... that the meaning, operation and consequences of a judgment must be ascertained like
any other written instrument and that a judgment rests on the intention of the Court oas
gathered from every part thereof including the situation to which it applies and the
attendant circumstances.
A reading of the decision and its background facts shows that the controversy litigated and
passed upon by the Court of Appeals was confined to the ownership of seven (7) hectares
of land which forms part of the twenty two (22) hectares parcel of land covered by a
torrens title in the name of the petitioners.
The Court of Appeals ruled that the respondents are entitled to seven (7) hectares of the
property but not necessarily the seven (7) hectares possessed by them. They are entitled
to co-possession with appellees untill the undivided seven (7) hectares are definitely
segregated through partition.
For us to now rule that the respondents will enjoy co-possession with the petitioners over
seven (7) hectares which belongs to the former would be inequitous even as actual co-

possession over twenty two (22) hectares would not conform to the final judgment. There
is the other consideration that segregation of the definite seven (7) hectares must await
the partition among the heirs, a procedure outside the control of the respondents.

In April 1984, defendants requested for an extension of time within which to vacate, which
was granted by the spouses Tan. However, from that time on, defendants also stopped
paying monthly rentals due on the land they leased.

We, therefore, rule that the co-possession mentioned in the Court of Appeals judgment
refers to the right of the respondents, already certain and vested but not yet specific, over
any seven (7) hectares not spelled out, the respondents shall continue to possess the
seven (7) hectares thy have held since the litigated sale and enjoy all its furits. Theuy will
have no share of the fruits of the other fifteen (15) hectares nor its enjoyment but neither
shall the petitioners have any share in the fruits or enjoyment of the seven 97) hectares
held by the respondents. It would be in the interests of all concerned if the partition of the
property among the heirs is effected immediately and the respondents are finally given
their definite seven (7) hectares as provided in the appellate judgment.

In view of this, in July 1984, defendants were told to leave the premises and to pay rentals
in arrears. As defendants refused to comply with both demands, the matter was brought to
the Barangay Council for settlement. As no agreement was reached, a certification to file
action was issued to the spouses Tan. Hence, the Tans filed an action for unlawful detainer
with damages against Gabrito, et al.

WHEREFORE, the petition is hereby GRANTED. The second paragraph of the questioned
order is DELETED. The respondents shall continue to exclusively possess and enjoy the
seven (7) hectares actually held by them in accordance with the terms of this decision until
a partition is effected and their share is definitely segregated.
SO ORDERED.
G.R. No. 77976 November 24, 1988
GABRITO vs. CA
This is a petition for review on certiorari with preliminary injunction and restraining order of
the decision of the Court of Appeals * dated March 4, 1987 in CA-G.R. No. SP No. 08710,
"Maximo Gabrito et al. vs. Hon. Nicias O. Mendoza and Roberto Tan et al.," affirming the
April 2, 1986 decision of the Regional Trial Court of Olongapo City ** which also affirmed
the decision of MTCC, Branch V, Olongapo City, and the Resolution of respondent court
dated March 30, 1987 denying herein petitioners' motion for reconsideration.
The appeal originated as an unlawful detainer complaint filed by herein private
respondents with the Municipal Trial Court, Branch V, Olongapo City.
The antecedent facts as summarized by the Court of Appeals are as follows:
The spouses Roberto Tan and Benita Ching-Tan filed a complaint in the Municipal Trial Court
against defendants Maximo Gabrito, et al., alleging that they are the possessors and legal
owners of the property situated at No. 107 Gordon Ave., New Kalalake, Olongapo City as
evidenced by Tax Declaration No. 4-2046. The defendants are leasing portions of this
parcel of land, each paying the corresponding monthly rentals due thereon.
On the leased portion, the defendants constructed buildings and have allowed other
persons to sublease the same for commercial purposes.
As the spouses Tan have no other property where they could construct their residential
house, the spouses Tan notified the defendants (in January 1984) that they intend to
personally use the land to build their house thereon and gave defendants three (3) months
to vacate the premises and remove the structures and improvements which defendants
had constructed thereon.

In answer to the complaint, defendants Gabrito, et al. denied the material allegations of
the complaint and alleged that: they are builders in good faith over the land as provided in
Article 448 of the Civil Code; the land where the houses of defendants were built is a public
land, not yet awarded nor titled to anybody; plaintiffs's alleged predecessor-in-interest not
being the owner thereof could not have passed nor transferred ownership thereof to them
(plaintiffs) considering that Gloria Carillo's Miscellaneous Sales Application No. (X-4-4320)
has not yet been acted upon by the Bureau of Lands; plaintiffs and their predessors-ininterest are absentee applicants over the land, hence, are disqualified to own the same;
plaintiffs have never been in possession of the land while the defendants are in actual
physical possession thereof; the sale of plaintiffs' alleged predecessor-in-interest in favor of
plaintiffs is null and void for being in violation of P.D. No. 1517 as defendants being lessees
of the land have the right of first refusal thereof.
Defendants brought a counterclaim for damages against the plaintiffs. (Rollo, Annex "C",
pp. 39-40).
Respondent Municipal Trial Judge applied the rule on summary procedure in this case,
rendered its decision dated November 22, 1985, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered for all the defendants to vacate the parcel
of land described in par. 3 of the complaint, removing therefrom the buildings and any
other improvements respectively owned by them; and to pay plaintiffs the following as
reasonable compensation for the use of the premises:
Maximo Gabritoat P250.00 per month from April 1984 until he vacates the premises;
Roger Libutat P150.00 per month from May 1984 until he vacates the premises;
Liza de Veraat: P150.00 per month from April 1984, until she vacates the premises;
Carmelita Uyat Pl 70.00 per month from April 1984, until she vacates the premises.
for all defendants to pay, in equal shares, damages by way of attorney's fees in the
amount of ONE THOUSAND PESOS ( P1,000.00 ) as well as costs. SO ORDERED. (Rollo,
p. 35).
On appeal to the Regional Trial Court (Civil Case No. 450-08-5), the decision of the
Municipal Trial Court was affirmed in its decision dated April 2, 1986, the dispositive portion
of which reads:
WHEREFORE, premised on all the foregoing consideration and finding no prejudicial
and reversible error was ever committed by the lower Court, the Court affirms in

toto the decision being appealed, with costs against the defendants-appellants. SO
ORDERED. (Rollo, Annex 'B' p. 38).
On review, herein respondent Court of Appeals sustained the decision rendered by the
Regional Trial Court Branch LXXIV, and ruled;
WHEREFORE, the Petition for Review herein is DISMISSED for lack of merit. (Rollo, Annex
"C", p. 44).
On March 16, 1987, the petitioner filed their "Motion for Reconsideration and Opposition to
the Motion for Immediate Execution Pending Further Proceedings" which was denied by the
Ninth Division of respondent Court of Appeals in its Resolution dated March 30, 1987 and
granted the Motion for Immediate Issuance of a Writ of Execution filed by private
respondents (Annex "F", Rollo, pp. 57-58).
Hence, this petition for review on certiorari filed on April 13, 1987.
On April 21, 1987, Acting Chief Justice Andres Narvasa, authorized the grant of Temporary
Restraining Order in this case which was confirmed by the Second Division of this Court in
its Resolution dated April 27, 1987 (Rollo, pp. 86, 87, 88).
In a Resolution dated June 8, 1987, petitioners were required to comment on the motion
dated April 26, 1987 (Rollo, p. 94) of counsel for respondents, praying to set aside the
temporary restraining order issued on April 21, 1987 and to issue a writ of execution
pending appeal or to allow the Court of Appeals to proceed with the execution of the
decision pending appeal (Rollo, p. 115), which was complied with by petitioners on July 22,
1987 (Rollo, p. 143).
In the resolution of October 5, 1987 (Rollo, p. 187) the petition was given due course and
the parties were required to submit their respective memoranda within twenty (20) days
from notice. Petitioners' memorandum was submitted on December 3, 1987 (Rollo, p. 196).
Respondents submitted their memorandum on April 12, 1988 (Rollo, p. 235). Petitioners
raised the following issues:
1. That a Municipal Trial Court has no jurisdiction to take cognizance of a case for Unlawful
Detainer under Sec. 1 of Rule 70 of the Rules of Court, where the plaintiffs are merely the
legal possessors and recent transferees of a public land, and the defendants are the
absolute owners of the building existing on the same land, for a number of years already.
2. That the respondent Regional Trial Court, Branch LXXIV, Olongapo City, ought to have
dismissed the action for Unlawful Detainer and as the same was also heard on appeal by
the said Court on this jurisdictional challenge.
3. The market value of the residential houses or buildings of the defendants on the said
land is approximately P170,000.00, and it was with plaintiffs' predecessor-in-interest, one
Gloria Carillo-Potente that defendants caused said structures to be erected on said land
plaintiffs having only acquired from said predecessor, by means of a Deed of Sale of such
rights sometime on January 5, 1984.
4. Upon this frame of facts which are admitted in the Decision of both Courts, only a Court
of General Jurisdiction, a Regional Trial Court, can have the competence to try and decide

the same: the Court of Special Limited Jurisdiction, cannot take cognizance of such facts as
an action for Unlawful Detainer.
5. Arguendo, that the Court of Origin has jurisdiction to take cognizance of the cause of
action for Unlawful Detainer, it should have not heard the case in accordance with the
Rules of Summary Proceedings, and based its Decision on an Affidavit hearing, as the
question of ownership was being contested between plaintiffs and defendants, with respect
to whom was the preferred grantee to the same land, and which falls under the complete
administration and control of the Bureau of Lands.
6. In fact, the Court of Origin, Branch V, Municipal Trial Court in Cities, Olongapo, should
have suspended the proceedings, as there was an Administrative Protest being heard by
the District Land Office of Olongapo City.
7. On the question of suspension of proceedings denied by the Court of Origin, Municipal
Trial Court in Cities, Branch V, Olongapo City, an action for certiorari was filed before
Branch LXXIII of Regional Trial Court, Olongapo City, Civil Case No. 399-0-85, and although
a Restraining Order against Municipal Trial Court in Cities, Branch V, City of Olongapo, was
issued, the same was already academic as by that time said Municipal Trial Court, Branch
V, Olongapo City, has already rendered its Decision in favor of private respondent hereat,
plaintiff therein.
8. Branch LXXIV, Regional Trial Court, Olongapo, in its Decision rendered on appeal, did not
pass upon such matters, specified supra, so as to reverse the Decision of the Court of
Origin: the subject Decisions, have not considered the due process rights of petitioners
toward their residences and structures, the same are facing the risk of condemnation and
destruction without fair hearing, and such improvements have an aggregate value of
Pl70,000.00, more or less.
9. Respondent Honorable Judge Mendoza of Branch LXXIV, Regional Trial Court, Olongapo,
may have been misled by the citation of authority, case of Vda. de Bocaling vs. Laguna, et
al., 54 SCRA, 243, relied upon by appellees, said case being totally inapplicable to the facts
of this case.
10. Respondent Deputy Sheriff Rogelio Lumanlan, without regard to the fif'teen (15) days
period finality of the Order and/or Writ of Demolition, harrassed herein petitioners,
notwithstanding the pendency of matters involved to their extreme discomfort and anxiety.
11. The Decision of the Honorable Court of Appeals, Annex "C", sustained the Decision of
the Regional Trial Court and ignored the vital issues posed for resolution: A Motion For
Reconsideration, copy is hereto attached as Annex "D", was presented, precisely to stress
the same but, a pointed or precise ruling upon such issues was avoided in the Resolution
dated 30th of March, 1987, true copy attached herein as Annex "E".
12. On the other (sic) upon Motion of private respondents, the Tans, despite Opposition
thereto, Writ of Execution pending appeal was issued and respondent Deputy Sheriff
Lumanlan enforced the same, copy of which is hereto attached as Annex "F": true copy of
Notice to Vacate served by said respondent Deputy Sheriff to petitioners is attached as
Annex "G" herein.

13. Per Annex "D" Motion For Reconsideration a constitutional point, was reared forth, on
first impression, per proviso of Sec. 10, Art. XIII-new, 1986 Constitution, relevant to
demolition and resettlement, and, Resolution, dated 30th March, 1987, Annex "E", of the
Honorable Appellate Authority, avoided said constitutional question, without passing upon
the same.
14. Of Jurisdictional matters: Decision dated March 4, 1987, of the Honorable Court of
Appeals was, received on March 6, 1987, Motion For Reconsideration was filed on March
16, 1987, and Resolution dated 30th of March, 1987, denying Motion for Reconsideration
was received on April 1, 1987: thus, this Petition is filed within the 15 day period. (Rollo,
pp. 4-8).
All of which boil down to the main issue of whether or not an action for unlawful detainer is
the proper action to oust petitioners from their occupation of the land in dispute.
There is no question as to the ownership of the land in litigation as both petitioners and
private respondents admit that the same is a public land and owned by the government.
The bone of contention is, who has a better right to possess the land which definitely falls
under the jurisdiction of the Municipal Trial Court and the rule of summary procedure may
properly be applied.
In a preliminary conference held pursuant to Section 6 of the Rule on Summary Procedure,
defendants admitted that they entered the premises as lessees and had been paying
rentals for the use of the land to Gloria Carillo, private respondents' predecessor-in-interest
(Order dated May 15, 1985 in Civil Case No. 2511, MTC, Olongapo City, Branch V; Rollo, pp.
72-73).<re||an1w> When requested to vacate the premises, petitioners asked for an
extension of time which request was granted. However, petitioners failed to vacate the
premises and also stopped paying rentals. In view of said admissions, petitioners had
unquestionably recognized private respondents' prior right of possession over the
questioned property.
Petitioners' allegation in their answer that they are builders in good faith over the land as
provided for in Article 448 of the Civil Code is untenable. As ruled by this Court, Article 448
of the Civil Code, applies only where one builds on land in the belief that he is the owner of
the land, but does not apply where one's interest in the land is that of a lessee under a
rental contract (Balucanag v. Francisco, 122 SCRA 498 [1983]). More than that, it has been
settled that the mere fact that, in his answer, defendant claims to be the exclusive owner
of the property from which plaintiff seeks to eject him is not sufficient to divest the
Municipal Trial Court of jurisdiction (Vivar v. Vivar, 8 SCRA 847, 849 [1963]; De Santa vs.
Court of Appeals, 140 SCRA 52 [1985]).
In addition, this Court held in Bocaling v. Laguna, et al (54 SCRA 243, 250 [1973]) that:
The rule is well-settled that lessees, like petitioner, are not possessors in good faith
because he knew that their occupancy of the premises continues only during the life of the
lease, and they cannot as a matter of right, recover the value of their improvements from
the lessor, much less retain the premises until they are reimbursed. Their rights are
governed by Article 1678 of the Civil Code which allows reimbursement of lessees up to
one-half of the value of their improvements if the lessor so elects.

Petitioners contend that the above cited case is "completely inapplicable to the case at
bar, because the genesis case of Ejectment therein was subjected to a compromise
Agreement" (Rollo, p. 18). Such contention is, however, untenable. One of the issues raised
in the above-cited case was whether or not lessees are builders and/or possessors in good
faith entitled to reimbursement for the value of their improvements. The Court
categorically resolved the issue in the negative without qualification nor even a reference
to the compromise agreement alluded to by the petitioner.
In a later development, petitioners filed a supplemental memorandum submitting the
decision of the Bureau of Lands dated June 7, 1987, the dispositive portion of which reads:
IN VIEW OF ALL THE FOREGOING, the Miscellaneous Sales Application No. 4320 of Benita
Ching Tan should be, as hereby as it is rejected forfeiting to the government whatever
amount had been paid on account thereof. The miscellaneous sales application of
Maximo Gabrito, Carmelita Uy, Roger Libut and Liza de Vera shall continue to be given
due course after a subdivision survey of the portion occupied by them shall have been
made at their pro-rata expense. SO ORDERED.
In view thereof, petitioners maintain that they are the lawful owners of the buildings and
the legal possessors of subject land and that the records of the court proceedings show the
pendency of the administrative protest before the Bureau of Lands between the same
litigating parties (Rollo, pp. 166-167).
Respondents countered that the decision of the Bureau of Lands granting preferential right
to the petitioners to apply for the subject parcel of land is still on appeal before the
Department of Natural Resources. 1 Hence, said decision which is not yet final, cannot
affect the outcome of this case because the authority given to the land department over
the disposition of public land does not exclude the courts from their jurisdiction over
possessory actions, the character of the land notwithstanding (Rollo, pp. 246-247).
The contention of private respondents is well taken.
This issue has long been laid to rest by this Court. As early as the case of Pitarque v.
Sorilla (92 Phil. 55 [1952]), this Court ruled that:
The vesting of the Lands Department with authority to administer, dispose of, and alienate
public lands must not be understood as depriving the other branches of the Government of
the exercise of their respective functions of powers thereon, such as the authority to stop
disorders and quell breaches of peace by the police and the authority on the part of the
courts to take jurisdiction over possessory actions arising therefrom not involving, directly
or indirectly, alienation and disposition.
Said ruling was reiterated in Bahayang v. Maceren, 96 Phil 390 (1955); in Molina v. De
Bacud, 19 SCRA 56 (1967) and in Rallon v. Ruiz, Jr., 28 SCRA 331 (1969). In the latter case,
the Court specifically ruled on the jurisdictional question, as follows:
Courts have jurisdiction over possessory actions involving public lands to determine the
issue of physical possession (in forcible entry cases before the inferior court) on the better
right of possession (in accion publiciana cases before court of first instance). And this is
because the issue of physical possession raised before the courts is independent of the

question of disposition and alienation of public lands which should be threshed out in the
Bureau of Lands.

G.R. No. 86774 August 21, 1991

PRESLEY vs. BEL AIR VILLAGE ASSOCIATION

The above ruling was further reiterated in Francisco v. Secretary of Agriculture and Natural
Resources (121 SCRA 380 [1983]) and in a recent case of National Development Co., et al.
v. Hervilla, G.R. No. 65718, June 30, 1987 (151 SCRA 520), where it was held that:

This is a petition for review of the decision of the Court of Appeals promulgated on
November 28, 1988 affirming the decision of the Regional Trial Court in toto. The
dispositive portion of the decision reads:

It is now well settled that the administration and disposition of public lands are committed
by law to the Director of Lands primarily, and ultimately to the Secretary of Agriculture and
Natural Resources. The jurisdiction of the Bureau of Lands is confined to the determination
of the respective rights of rival claimants of public lands or to cases which involve
disposition and alienation of public lands. The jurisdiction of courts is limited to the
determination of who has the actual, physical possession or occupation of the land in
question (in forcible entry cases, before municipal courts) or, the better right of possession
(in accion publiciana, in cases before the Court of First Instance, now Regional Trial Court).

WHEREFORE, the defendants are enjoined permanently from using the property in question
as a pan de sal store or from using it for any other commercial purposes; the defendants
are ordered to pay, jointly and severally, the plaintiff the sum of P3,803.55 with legal
interest from February 9, 1981 until the said sum is fully paid and the defendants are
further ordered to pay, jointly and severally, the sum of P4,500.00 as and for attorney's
fees. (Rollo, p. 30)

And even more recently in the case of Guerrero v. Amores, et al., G.R. No.
L-34492 promulgated on March 28, 1988, the Court clearly stated that "pending final
adjudication of ownership by the Bureau of Lands, the Court has jurisdiction to determine
in the meantime the right of possession over the land." Corollary thereto, the power to
order the sheriff to remove improvements and turn over the possession of the land to the
party adjudged entitled thereto, belongs only to the courts of justice and not to the Bureau
of Lands.

A complaint for specific performance and damages with preliminary injunction was filed by
plaintiff-appellee, Bel-Air Village Association, Inc. (BAVA for short) against Teofilo Almendras
and Rollo Almendras (now both deceased and substituted by defendant-appellant Enedina
Presley) for violation of the Deed Restrictions of Bel-Air Subdivision that the subject house
and lot shall be used only for residential and not for commercial purposes and for nonpayment of association dues to plaintiff BAVA amounting to P3,803.55.

In the same case, the application of the principle of exhaustion of administrative remedies
with reference to public lands, was further clarified by this Court as follows:
On the other hand, the application of the principle of exhaustion of administrative
remedies as a condition precedent to the filing of a juridical action is confined to
controversies arising out of the disposition of public lands (Geukoko vs. Araneta, 102 Phil.
706 (1957); Marukot vs. Jacinto, 98 Phil. 128 (1957), alienation of public lands (Rallos vs.
Ruiz, Jr., supra) or to the determination of the respective rights of rival claimants to public
lands (Pitarque vs. Sorilla, supra) and not to possessory actions involving public lands
which are limited to the determination of who has the actual, physical possession or
occupation of the land in question (Rallos vs. Ruiz, Jr., supra).<re||an1w>
In fact, the Bureau of Lands in its decision of June 7, 1987, admitted the jurisdiction of the
courts to decide the case on the question of physical possession, although not on the
question of ownership (Rollo, p. 179).
Under the circumstances, a careful study of the records failed to show any cogent reason
to disturb the findings of the Municipal Trial Court in Cities and of the Regional Trial Court,
both of Olongapo City, and finally of the Court of Appeals.
WHEREFORE, the decision of respondent Court of Appeals is AFFIRMED and the temporary
restraining order is lifted. Costs against petitioners. SO ORDERED.
--- xxx END OF EFFECTS OF ACQUISITION xx ---

The facts as stated by the Court of Appeals are as follows:

The Almendrases were at the time of the filing of the action the registered owners of a
house and lot located at 102 Jupiter Street, Bel-Air Village, Makati, Metro Manila. As such
registered owners, they were members of plaintiff BAVA pursuant to the Deed Restrictions
annotated in their title (TCT No. 73616) over the property in question and defendant
Presley, as lessee of the property, is the owner and operator of 'Hot Pan de Sal Store'
located in the same address.
At the time the Almendrases bought their property in question from Makati Development
Corporation, the Deed Restrictions (Exh. "C") was already annotated in their title (Exh. "B")
providing (among others) 'that the lot must be used only for residential purpose' (Exh. "B1" and "B-2").
When BAVA came to know of the existence of the 'Pan de sal' store, it sent a letter to the
defendants asking them to desist from operating the store (Exh. "D").
Under the existing Deed Restrictions aforesaid, the entire Bel-Air Subdivision is classified as
a purely residential area, particularly Jupiter Road which is owned by and registered in the
name of BAVA.
It has likewise been established that the Almendrases had not paid the BAVA membership
dues and assessments which amounted to P3,802.55 as of November 3, 1980. Teofilo
Almendras contended that there was no written contract between him and appellee BAVA.
Only a consensual contract existed between the parties whereby Almendras regularly pays
his dues and assessments to BAVA for such services as security, garbage collection and
maintenance and repair of Jupiter Street. However, when the services were withdrawn by
appellee BAVA, there was no more reason for the latter to demand payment of such dues
and assessments. (Rollo, pp. 30-31)

After due hearing on the merits, the trial court rendered the decision in favor of BAVA
which was affirmed by the respondent Court of Appeals.
On January 20, 1989, the Court of Appeals denied the Motion for Reconsideration.
Consequently, the petitioner filed the instant petition with this Court raising the following
issues, to wit:
A. THE RULING OF RESPONDENT COURT OF APPEALS IS NOT IN ACCORDANCE WITH THE
RECENT CONSOLIDATED DECISION EN BANC OF THIS HONORABLE SUPREME COURT
PROMULGATED DECEMBER 22,1988 IN RE SANGALANG, BEL-AIR VILLAGE ASSOCIATION
INC. v. INTERMEDIATE APPELLATE COURT AND AYALA CORPORATION G.R. NO. 71169; BELAIR VILLAGE ASSOCIATION INC. v. TENORIO, ET AL.-G.R. NO. 74376; BEL-AIR AIR VILLAGE
ASSOCIATION, INC. v. COURT OF APPEALS AND ROMUALDEZ, ET AL G.R. NO. 76394; BELAIR VILLAGE ASSOCIATION INC. v. COURT OF APPEALS AND FILLEY, ET AL.-G.R. NO. 78182;
BEL-AIR VILLAGE ASSOCIATION, INC. v. COURT OF APPEALS AND MONCAL, ET AL.-G.R. NO.
82281, WHICH CONSOLIDATED DECISION APPLIES ON ALL FOURS IN THE CASE AT BAR IN
FAVOR OF PETITIONER.
B. THE RULING OF RESPONDENT COURT OF APPEALS ADJUDGING PETITIONER SOLIDARILY
LIABLE TOGETHER WITH THE ALMENDRASES TO PAY THE ALLEGED UNPAID ASSOCIATION
DUES IS PATENTLY CONTRARY TO THE EVIDENCE AND FACTS.
C. THE RULING OF RESPONDENT COURT OF APPEALS ADJUDGING PETITIONER SOLIDARILY
LIABLE TO PAY ATTORNEY'S FEES IS WITHOUT ANY LEGAL OR FACTUAL BASIS. (Rollo, p. 1112)
During the pendency of the case with this Court, petitioner Enedina Fox Presley died on
January 4, 1991. She was substituted by her two daughters as heirs, namely Olivia V.
Pizzaro and Consuelo V. Lacson.
The issues raised in the instant petition have already been dealt with in the consolidated
cases decided by this Court promulgated on December 22, 1988 entitled Sangalang, et
al. vs. Intermediate Appellate Court and Ayala Corporation, G.R. No. 71169; Bel-Air Village
Association, Inc. v. Intermediate Appellate Court and Rosario de Jesus Tenorio and Cecilia
Gonzalvez, G.R. No. 74376; Bel-Air v. Court of Appeals and Eduardo and Buena Romualdez,
G.R. No. 76394; BAVA v. Court of Appeals, Dolors Filley and J. Romero Associates, G.R. No.
78182; and BAVA v. Court of Appeals, Violeta Moncal and Majal Development Corp., G.R.
No. 82281. (168 SCRA 634 [1988])
Apparently, when the respondent court promulgated the questioned decision on November
28, 1988 the Sangalang case had not yet been decided by this Court. It was however,
aware of the pending case as it made mention of the several cases brought to court by
BAVA against the aforesaid commercial establishments.
The petitioner in the instant case is similarly situated as the private respondents in G.R.
Nos. 74376; 76394; 78182 and 82281 who converted their residential homes to
commercial establishments; hence, BAVA filed suits against them to enforce the Deeds of
Restrictions annotated in their titles which provide among others, "that the lot must be
used only for residential purposes."

The Court in the Sangalang case, however, held:

xxx xxx xxx
... In the Sangalang case, we absolve the Ayala Corporation primarily owing to our finding
that is not liable for the opening of Jupiter Street to the general public. Insofar as these
petitions are concerned, we likewise exculpate the private respondents, not only because
of the fact that Jupiter Street is not covered by the restrictive easements based on the
'deed restrictions' but chiefly because the National Government itself, through the Metro
Manila Commission (MMC), had reclassified Jupiter Street into a 'high density commercial
(C-3) zone,' (See rollo, G.R. No. 71169, Id., 117) pursuant to its Ordinance No. 81-01 Hence,
the petitioners have no cause of action on the strength alone of the said deed restrictions.
(p. 667; Emphasis supplied)
In the instant petition, BAVA assails the Court's decision in the Sangalang case, more
specifically the Court's interpretation of Ordinance No. 81-01 passed by the Metro Manila
Commission (MMC) on March 14, 1981. It avers that due to the multitude of issues raised
and the numerous pleadings filed by the different contending parties, the Court was misled
and unfortunately erred in concluding that Jupiter Street was reclassified as a "high density
commercial (C-3) zone" when in fact, it is still considered as a "(R-1) residential zone."
If indeed private respondent's observations were accurate, the Court will certainly not
hesitate to correct the situation and the case at bar would be the proper occasion to do so.
We have carefully examined the pleadings but have found no reason to reconsider
the Sangalang doctrine. In assailing the Court's decision, the private respondent has come
out with mere assertions and allegations. It failed to present any proofs or convincing
arguments to substantiate its claim that Jupiter Street is still classified as a residential
zone. (See Filinvest v. Court of Appeals, 182 SCRA 664 [1990]) No new zoning reclassification, ordinance, certification to the effect or jurisprudence for that matter was
brought to the attention of this Court which would necessarily compel us to take a second
look at the Sangalang Case. The Court can not reverse a precedent and rule favorably for
the private respondent on the strength of mere inferences.
The respondent court in the case at bar was not at all entirely wrong in upholding the Deed
of Restrictions annotated in the title of the petitioners. It held that the provisions of the
Deed of Restrictions are in the nature of contractual obligations freely entered into by the
parties. Undoubtedly, they are valid and can be enforced against the petitioner. However,
these contractual stipulations on the use of the land even if said conditions are annotated
on the torrens title can be impaired if necessary to reconcile with the legitimate exercise of
police power. (Ortigas & Co. Limited Partnership v. Feati Bank and Trust Co., 94 SCRA 533
[1979]).
We reiterate the Court's pronouncements in the Sangalang case which are quite clear:
It is not that we are saying that restrictive easements, especially the easements herein in
question, are invalid or ineffective. As far as the Bel-Air subdivision itself is concerned,
certainly, they are valid and enforceable. But they are, like all contracts, subject to the
overriding demands, needs, and interests of the greater number as the State may
determine in the legitimate exercise of police power. Our jurisdiction guarantees sanctity of

contract and is said to be the 'law between the contracting parties,' (Civil Code, supra, art.
1159) but while it is so, it cannot contravene 'law, morals, good customs, public order, or
public policy.' (supra, art. 1306). Above all, it cannot be raised as a deterrent to police
power, designed precisely to promote health, safety, peace, and enhance the common
good, at the expense of contractual rights, whenever necessary. . . (p. 667)
Jupiter Street has been highly commercialized since the passage of Ordinance No. 81-01.
The records indicate that commercial buildings, offices, restaurants, and stores have
already sprouted in this area. We, therefore, see no reason why the petitioner should be
singled out and prohibited from putting up her hot pan de sal store. Thus, in accordance
with the ruling in the Sangalang case, the respondent court's decision has to be reversed.
With respect to the demand for payment of association dues in the sum of P3,803.55, the
records reveal that this issue is now moot and academic after petitioner Presley purchased
the property subject of lease from the Almendrases and settled all association dues.
Likewise, the demand for payment of attorney's fees is now without legal or factual basis.
WHEREFORE, the petition is hereby GRANTED. The decision of the respondent court dated
November 28, 1988 is REVERSED and SET ASIDE. The complaint of the private respondent
is DISMISSED.
SO ORDERED.
G.R. No. 90596
April 8, 1991
SOLID MANILA CORP vs. BIO HONG TRADING
This is an appeal filed by way of a petition for review on certiorari under Rule 45 of the
Rules of Court.
The petitioner raises two questions: (1) whether or not the Court of Appeals 1 erred in
reversing the trial court which had rendered summary judgment; and (2) whether or not it
erred in holding that an easement had been extinguished by merger.
We rule for the petitioner on both counts.
It appears that the petitioner is the owner of a parcel of land located in Ermita, Manila,
covered by Transfer Certificate of Title No. 157750 of the Register of Deeds of Manila. The
same lies in the vicinity of another parcel, registered in the name of the private respondent
corporation under Transfer Certificate of Title No. 128784.
The private respondent's title came from a prior owner, and in their deed of sale, the
parties thereto reserved as an easement of way:
. . .a portion thereof measuring NINE HUNDRED FOURTEEN SQUARE METERS, more or less,
had been converted into a private alley for the benefit of neighboring estates, this being
duly annotated at the back of the covering transfer Certificate of title per regulations of the
Office of the City Engineer of Manila and that the three meterwide portion of said parcel
along the Pasig River, with an area of ONE HUNDRED SEVENTY NINE (179) SQUARE
METERS, more or less, had actually been expropriated by the City Government, and

developed pursuant to the beautification drive of the Metro Manila Governor. (p. 3,
Record).2
As a consequence, an annotation was entered in the private respondent's title, as follows:
Entry No. 7712/T-5000 CONSTRUCTION OF PRIVATE ALLEY It is hereby made of record
that a construction of private alley has been undertaken on the lot covered by this title
from Concepcion Street to the interior of the aforesaid property with the plan and
specification duly approved by the City Engineer subject to the following conditions to wit:
(1) That the private alley shall be at least three (3) meters in width; (2) That the alley shall
not be closed so long as there's a building exists thereon (sic); (3) That the alley shall be
open to the sky; (4) That the owner of the lot on which this private alley has been
constituted shall construct the said alley and provide same with concrete canals as per
specification of the City Engineer; (5) That the maintenance and upkeep of the alley shall
be at the expense of the registered owner; (6) That the alley shall remain open at all times,
and no obstructions whatsoever shall be placed thereon; (7) That the owner of the lot on
which the alley has been constructed shall allow the public to use the same, and allow the
City to lay pipes for sewer and drainage purposes, and shall not act (sic) for any indemnity
for the use thereof; and (8) That he shall impose upon the vendee or new owner of the
property the conditions abovementioned; other conditions set forth in Doc. No. 4236, Page
No. 11, Book No. 84 of Nicasio P. Misa, Not. Pub. of Manila. 3
The petitioner claims that ever since, it had (as well as other residents of neighboring
estates) made use of the above private alley and maintained and contributed to its
upkeep, until sometime in 1983, when, and over its protests, the private respondent
constructed steel gates that precluded unhampered use.
On December 6, 1984, the petitioner commenced suit for injunction against the private
respondent, to have the gates removed and to allow full access to the easement.
The court a quo shortly issued ex parte an order directing the private respondent to open
the gates. Subsequently, the latter moved to have the order lifted, on the grounds that: (1)
the easement referred to has been extinguished by merger in the same person of the
dominant and servient estates upon the purchase of the property from its former owner;
(2) the petitioner has another adequate outlet; (3) the petitioner has not paid any
indemnity therefor; and (4) the petitioner has not shown that the right-of-way lies at the
point least prejudicial to the servient estate.
The private respondent's opposition notwithstanding, the trial court issued a "temporary
writ of preliminary injunction to continue up to the final termination of the case upon its
merits upon the posting of a P5,000.00 bond by the plaintiff. 4 (the petitioner herein).
Thereafter, the respondent corporation answered and reiterated its above defenses.
On April 15, 1986, the petitioner moved for summary judgment and the court a quo ruled
on the same as follows:
In view of the foregoing, this Court finds it unnecessary to try this case on the merit (sic)
and hereby resolve (sic) to grant the plaintiffs motion for summary judgment. (pp. 15-107,
Record).5

On January 19, 1987, the trial court rendered judgment against the private respondent, the
dispositive portion of which states:
WHEREFORE, judgment is hereby rendered making permanent the temporary mandatory
injunction, that had been issued against the defendant, and for the defendant to pay the
plaintiff the costs of this suit.
The defendant's counterclaim against the plaintiff is hereby dismissed, for lack of merit.
(Summary Judgment, p. 6).6
The private respondent appealed to the respondent Court of Appeals.
Meanwhile, the private respondent itself went to the Regional Trial Court on a petition for
the cancellation of the annotation in question. The court granted cancellation, for which
the petitioner instituted CA-G.R. SP No. 13421 of the respondent Court of Appeals which
ordered the restoration of the annotation "without prejudice [to] the final outcome of 7 the
private respondent's own appeal (subject of this petition).
In reversing the trial court which had, as earlier mentioned, rendered summary judgment,
the respondent Court of Appeals held that the summary judgment was improper and that
the lower court erroneously ignored the defense set up by the private respondent that the
easement in question had been extinguished. According to the Appellate Court, an
easement is a mere limitation on ownership and that it does not impair the private
respondent's title, and that since the private respondent had acquired title to the property,
"merger" brought about an extinguishment of the easement.
The petitioner submits that the respondent Court of Appeals erred, because the very deed
of sale executed between the private respondent and the previous owner of the property
"excluded" the alley in question, and that in any event, the intent of the parties was to
retain the "alley" as an easement notwithstanding the sale.
As already stated at the outset, the Court finds merit in the petition.
There is no question that an easement, as described in the deed of sale executed between
the private respondent and the seller, had been constituted on the private respondent's
property, and has been in fact annotated at the back of Transfer Certificate of Title No.
128784. Specifically, the same charged the private respondent as follows: "(6) That the
alley shall remain open at all times, and no obstructions whatsoever shall be placed
thereon; (7) That the owner of the lot on which the alley has been constructed shall allow
the public to use the same, and allow the City to lay pipes for sewer and drainage
purposes, and shall not [ask] for any indemnity for the use thereof. . ." 8 Its act, therefore, of
erecting steel gates across the alley was in defiance of these conditions and a violation of
the deed of sale, and, of course, the servitude of way.

property as its own, but rather, it is seeking to have the private respondent respect the
easement already existing thereon. The petitioner is moreover agreed that the private
respondent has ownership, but that nonetheless, it has failed to observe the limitation or
encumbrance imposed on the same
There is therefore no question as to ownership. The question is whether or not an
easement exists on the property, and as we indicated, we are convinced that an easement
exists.
It is true that the sale did include the alley. On this score, the Court rejects the petitioner's
contention that the deed of sale "excluded" it, because as a mere right-of-way, it can not
be separated from the tenement and maintain an independent existence. Thus:
Art. 617. Easements are inseparable from the estate to which they actively or passively
belong.9
Servitudes are merely accessories to the tenements of which they form part. 10 Although
they are possessed of a separate juridical existence, as mere accessories, they can not,
however, be alienated11 from the tenement, or mortgaged separately.12
The fact, however, that the alley in question, as an easement, is inseparable from the main
lot is no argument to defeat the petitioner's claims, because as an easement precisely, it
operates as a limitation on the title of the owner of the servient estate, specifically, his
right to use (jus utendi).
As the petitioner indeed hastens to point out, the deed itself stipulated that "a portion
thereof [of the tenement] measuring NINE HUNDRED FOURTEEN SQUARE METERS, more or
less, had been converted into a private alley for the benefit of the neighboring
estates. . ."13 and precisely, the former owner, in conveying the property, gave the private
owner a discount on account of the easement, thus:
WHEREAS, to compensate for the foregoing, the parties hereto agreed to adjust the
purchase price from THREE MILLION SEVEN HUNDRED NINETY THOUSAND FOUR HUNDRED
FORTY PESOS (P3,790,440.) to THREE MILLION FIVE HUNDRED THREE THOUSAND TWO
HUNDRED FORTY PESOS (P3,503,240.00)14
Hence, and so we reiterate, albeit the private respondent did acquire ownership over the
property including the disputed alley as a result of the conveyance, it did not acquire
the right to close that alley or otherwise put up obstructions thereon and thus prevent the
public from using it, because as a servitude, the alley is supposed to be open to the public.

The Court then is of the opinion that injunction was and is proper and in denying injunctive
relief on appeal, the respondent Appellate Court committed an error of judgment and law.

The Court is furthermore of the opinion, contrary to that of the Court of Appeals, that no
genuine merger took place as a consequence of the sale in favor of the private respondent
corporation. According to the Civil Code, a merger exists when ownership of the dominant
and servient estates is consolidated in the same person. 15 Merger then, as can be seen,
requires full ownership of both estates.

It is hardly the point, as the Court of Appeals held, that the private respondent is the owner
of the portion on which the right-of-way had been established and that an easement can
not impair ownership. The petitioner is not claiming the easement or any part of the

One thing ought to be noted here, however. The servitude in question is a personal
servitude, that is to say, one constituted not in favor of a particular tenement (a real
servitude) but rather, for the benefit of the general public.

Personal servitudes are referred to in the following article of the Civil Code:
Art. 614. Servitudes may also be established for the benefit of a community, or of one or
more persons to whom the encumbered estate does not belong. 16
In a personal servitude, there is therefore no "owner of a dominant tenement" to speak of,
and the easement pertains to persons without a dominant estate, 17 in this case, the public
at large.
Merger, as we said, presupposes the existence of a prior servient-dominant owner
relationship, and the termination of that relation leaves the easement of no use. Unless the
owner conveys the property in favor of the public if that is possible no genuine
merger can take place that would terminate a personal easement.
For this reason, the trial court was not in error in rendering summary judgment, and insofar
as the respondent Court of Appeals held that it (the trial court) was in error, the Court of
Appeals is in error.
Summary judgments under Rule 34 of the Rules of Court are proper where there is no
genuine issue as to the existence of a material fact, and the facts appear undisputed
based on the pleadings, depositions, admissions, and affidavits of record. 18 In one case,
this Court upheld a decision of the trial court rendered by summary judgment on a claim
for money to which the defendant interposed the defense of payment but which failed to
produce receipts.19 We held that under the circumstances, the defense was not genuine
but rather, sham, and which justified a summary judgment. In another case, we rejected
the claim of acquisitive prescription over registered property and found it likewise to be
sham, and sustained consequently, a summary judgment rendered because the title
challenged was covered by a Torrens Certificate and under the law, Torrens titles are
imprescriptible.20
We also denied reconveyance in one case and approved a summary judgment rendered
thereon, on the ground that from the records, the plaintiffs were clearly guilty of laches
having failed to act until after twenty-seven years. 21We likewise allowed summary
judgment and rejected contentions of economic hardship as an excuse for avoiding
payment under a contract for the reason that the contract imposed liability under any and
all conditions.22
In the case at bar, the defense of merger is, clearly, not a valid defense, indeed, a sham
one, because as we said, merger is not possible, and secondly, the sale unequivocally
preserved the existing easement. In other words, the answer does not, in reality, tender
any genuine issue on a material fact and can not militate against the petitioner's clear
cause of action.
As this Court has held, summary judgments are meant to rid a proceeding of the ritual of a
trial where, from existing records,23 the facts have been established, and trial would be
futile.
What indeed, argues against the posturing of the private respondent and consequently,
the challenged holding of the respondent Court of Appeals as well is the fact that the
Court of Appeals itself had rendered judgment, in its CA-G.R. No. 13421, entitled Solid

Manila Corporation v. Ysrael, in which it nullified the cancellation of the easement

annotated at the back of the private respondent's certificate of title ordered by Judge
Ysrael in LRC Case No. 273. As the petitioner now in fact insists, the Court of Appeals'
judgment, which was affirmed by this Court in its Resolution dated December 14, 1988, in
G.R. No. 83540, is at least, the law of the case between the parties, as "law of the case" is
known in law, e.g.:
xxx

xxx

xxx

Law of the case has been defined as the opinion delivered on a former appeal. More
specifically, it means that whatever is once irrevocably established as the controlling legal
rule of decision between the same parties in the same case continues to be the law of the
case, whether correct on general principles or not, so long as the facts on which such
decision was predicated continue to be the facts of the case before the court. (21 C.J.S.
330) (Emphasis supplied).
It may be stated as a rule of general application that, where the evidence on a second or
succeeding appeal is substantially the same as that on the first or preceding appeal, all
matters, questions, points, or issues adjudicated on the prior appeal are the law of the
case on all subsequent appeals and will not be considered or readjudicated therein. (5
C.J.S. 1267) (Emphasis supplied.)
In accordance with the general rule stated in Section 1821, where, after a definite
determination, the court has remanded the cause for further action below, it will refuse to
examine question other than those arising subsequently to such determination and
remand, or other than the propriety of the compliance with its mandate; and if the court
below has proceeded in substantial conformity to the directions of the appellate court, its
action will not be questioned on a second appeal.
As a general rule a decision on a prior appeal of the same case is held to be the law of the
case whether that decision is right or wrong, the remedy of the party deeming himself
aggrieved being to seek a rehearing. (5 C.J.S. 1276-77). (Emphasis supplied.)
Questions necessarily involved in the decision on a former appeal will be regarded as the
law of the case on a subsequent appeal, although the questions are not expressly treated
in the opinion of the court, as the presumption is that all the facts in the case bearing on
the point decided have received due consideration whether all or none of them are
mentioned in the opinion. (5 C.J.S. 1286-87). (Emphasis supplied.) 24
CA-G.R. No. 13421 is the law of the case because clearly, it was brought to determine the
rights of the parties regarding the easement, subject of the controversy in this case,
although as a petition for "cancellation of annotation" it may have, at a glance, suggested
a different cause of action.
And for reasons of fair play, the private respondent can not validly reject CA-G.R. No.
13421 as the law of the case, after all, it was the one that initiated the cancellation
proceedings with the Regional Trial Court in LRC No. 273 that precipitated that appeal. In
the second place, the proceedings for cancellation of annotation was in fact meant to
preempt the injunction decreed by the lower court in this case. Plainly and simply, the
private respondent is guilty of forum-shopping, as we have described the term:

xxx

xxx

xxx

There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party

seeks a favorable opinion (other than by appeal or certiorari) in another. The principle
applies not only with respect to suits filed in the courts but also in connection with
litigations commenced in the courts while an administrative proceeding is pending, as in
this case, in order to defeat administrative processes and in anticipation of an unfavorable
administrative ruling and a favorable court ruling. This is specially so, as in this case,
where the court in which the second suit was brought, has no jurisdiction. 25
to which contempt is a penalty.26
As it happened, in its effort to shop for a friendly forum, the private respondent found an
unfriendly court and it can not be made to profit from its act of malpractice by permitting it
to downgrade its finality and deny its applicability as the law of the case.
As a personal servitude, the right-of-way in question was established by the will of the
owner.
In the interesting case of North Negros Sugar Co., Inc. v. Hidalgo,27 this Court, speaking
through Justice Claro Recto, declared that a personal servitude (also a right of way in that
case) is established by the mere "act"28 of the landowner, and is not "contractual in the
nature,"29 and a third party (as the petitioner herein is a third party) has the personality to
claim its benefits. In his separate opinion, however, Justice Jose Laurel maintained that a
personal or voluntary servitude does require a contract and that "[t]he act of the plaintiff in
opening the private way here involved did not constitute an offer . . . " 30 and "[t]here being
no offer, there could be no acceptance; hence no contract." 31
The Court sees no need to relive the animated exchanges between two legal titans (they
would contend even more spiritedly in the "larger" world of politics) to whom present
scholars perhaps owe their erudition and who, because of the paths they have taken, have
shaped history itself; after all, and coming back to the case at bar, it is not disputed that
an easement has been constituted, whereas it was disputed in North Negros' case. Rather,
the question is whether it is still existing or whether it has been extinguished. As we held,
our findings is that it is in existence and as a consequence, the private respondent can not
bar the public, by erecting an obstruction on the alley, from its use.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals is SET ASIDE
and the decision of the Regional Trial Court is hereby REINSTATED. The petitioner and its
counsel are hereby required to SHOW CAUSE why they should not be punished for
contempt of court, and also administratively dealt with in the case of counsel, for forum
shopping. IT IS SO ORDERED.
--- xxx END OF VOLUNTARY EASEMENT xxx --G.R. No. 77425
June 19, 1991
ROMAN CATHOLIC ARCHOBISHOP OF MANILA vs. CA
These two petitions for review on certiorari1 seek to overturn the decision of the Court of
Appeals in CA-G.R. CV No. 054562 which reversed and set aside the order of the Regional

Trial Court of Imus, Cavite dismissing Civil Case No. 095-84, as well as the order of said
respondent court denying petitioner's motions for the reconsideration of its aforesaid
decision.
On November 29, 1984, private respondents as plaintiffs, filed a complaint for nullification
of deed of donation, rescission of contract and reconveyance of real property with
damages against petitioners Florencio and Soledad C. Ignao and the Roman Catholic
Bishop of Imus, Cavite, together with the Roman Catholic Archbishop of Manila, before the
Regional Trial Court, Branch XX, Imus, Cavite and which was docketed as Civil Case No.
095-84 therein.3
In their complaint, private respondents alleged that on August 23, 1930, the spouses
Eusebio de Castro and Martina Rieta, now both deceased, executed a deed of donation in
favor of therein defendant Roman Catholic Archbishop of Manila covering a parcel of land
(Lot No. 626, Cadastral Survey of Kawit), located at Kawit, Cavite, containing an area of
964 square meters, more or less. The deed of donation allegedly provides that the donee
shall not dispose or sell the property within a period of one hundred (100) years from the
execution of the deed of donation, otherwise a violation of such condition would
render ipso facto null and void the deed of donation and the property would revert to the
estate of the donors.
It is further alleged that on or about June 30, 1980, and while still within the prohibitive
period to dispose of the property, petitioner Roman Catholic Bishop of Imus, in whose
administration all properties within the province of Cavite owned by the Archdiocese of
Manila was allegedly transferred on April 26, 1962, executed a deed of absolute sale of the
property subject of the donation in favor of petitioners Florencio and Soledad C. Ignao in
consideration of the sum of P114,000. 00. As a consequence of the sale, Transfer
Certificate of Title No. 115990 was issued by the Register of Deeds of Cavite on November
15, 1980 in the name of said petitioner spouses.
What transpired thereafter is narrated by respondent court in its assailed decision. 4
On December 17, 1984, petitioners Florencio Ignao and Soledad C. Ignao filed a motion to
dismiss based on the grounds that (1) herein private respondents, as plaintiffs therein,
have no legal capacity to sue; and (2) the complaint states no cause of action.
On December 19, 1984, petitioner Roman Catholic Bishop of Imus also filed a motion to
dismiss on three (3) grounds, the first two (2) grounds of which were identical to that of the
motion to dismiss filed by the Ignao spouses, and the third ground being that the cause of
action has prescribed.
On January 9, 1985, the Roman Catholic Archbishop of Manila likewise filed a motion to
dismiss on the ground that he is not a real party in interest and, therefore, the complaint
does not state a cause of action against him.
After private respondents had filed their oppositions to the said motions to dismiss and the
petitioners had countered with their respective replies, with rejoinders thereto by private
respondents, the trial court issued an order dated January 31, 1985, dismissing the
complaint on the ground that the cause of action has prescribed. 5

Private respondents thereafter appealed to the Court of Appeals raising the issues on (a)
whether or not the action for rescission of contracts (deed of donation and deed of sale)
has prescribed; and (b) whether or not the dismissal of the action for rescission of
contracts (deed of donation and deed of sale) on the ground of prescription carries with it
the dismissal of the main action for reconveyance of real property. 6
On December 23, 1986, respondent Court of Appeals, holding that the action has not yet
prescibed, rendered a decision in favor of private respondents, with the following
dispositive portion:
WHEREFORE, the Order of January 31, 1985 dismissing appellants' complaint is SET ASIDE
and Civil Case No. 095-84 is hereby ordered REINSTATED and REMANDED to the lower
court for further proceedings. No Costs.7
Petitioners Ignao and the Roman Catholic Bishop of Imus then filed their separate motions
for reconsideration which were denied by respondent Court of Appeals in its resolution
dated February 6, 1987,8 hence, the filing of these appeals by certiorari.
It is the contention of petitioners that the cause of action of herein private respondents has
already prescribed, invoking Article 764 of the Civil Code which provides that "(t)he
donation shall be revoked at the instance of the donor, when the donee fails to comply
with any of the conditions which the former imposed upon the latter," and that "(t)his
action shall prescribe after four years from the non-compliance with the condition, may be
transmitted to the heirs of the donor, and may be exercised against the donee's heirs.
We do not agree.
Although it is true that under Article 764 of the Civil Code an action for the revocation of a
donation must be brought within four (4) years from the non-compliance of the conditions
of the donation, the same is not applicable in the case at bar. The deed of donation
involved herein expressly provides for automatic reversion of the property donated in case
of violation of the condition therein, hence a judicial declaration revoking the same is not
necessary, As aptly stated by the Court of Appeals:
By the very express provision in the deed of donation itself that the violation of the
condition thereof would render ipso facto null and void the deed of donation, WE are of the
opinion that there would be no legal necessity anymore to have the donation judicially
declared null and void for the reason that the very deed of donation itself declares it so.
For where (sic) it otherwise and that the donors and the donee contemplated a court action
during the execution of the deed of donation to have the donation judicially rescinded or
declared null and void should the condition be violated, then the phrase reading "would
render ipso facto null and void" would not appear in the deed of donation.9
In support of its aforesaid position, respondent court relied on the rule that a judicial action
for rescission of a contract is not necessary where the contract provides that it may be
revoked and cancelled for violation of any of its terms and conditions. 10 It called attention
to the holding that there is nothing in the law that prohibits the parties from entering into
an agreement that a violation of the terms of the contract would cause its cancellation
even without court intervention, and that it is not always necessary for the injured party to
resort to court for rescission of the contract. 11 It reiterated the doctrine that a judicial

action is proper only when there is absence of a special provision granting the power of
cancellation.12
It is true that the aforesaid rules were applied to the contracts involved therein, but we see
no reason why the same should not apply to the donation in the present case. Article 732
of the Civil Code provides that donationsinter vivos shall be governed by the general
provisions on contracts and obligations in all that is not determined in Title III, Book III on
donations. Now, said Title III does not have an explicit provision on the matter of a
donation with a resolutory condition and which is subject to an express provision that the
same shall be considered ipso factorevoked upon the breach of said resolutory condition
imposed in the deed therefor, as is the case of the deed presently in question. The
suppletory application of the foregoing doctrinal rulings to the present controversy is
consequently justified.
The validity of such a stipulation in the deed of donation providing for the automatic
reversion of the donated property to the donor upon non-compliance of the condition was
upheld in the recent case of De Luna, et al. vs. Abrigo, et al.13 It was held therein that said
stipulation is in the nature of an agreement granting a party the right to rescind a contract
unilaterally in case of breach, without need of going to court, and that, upon the happening
of the resolutory condition or non-compliance with the conditions of the contract, the
donation is automatically revoked without need of a judicial declaration to that effect.
While what was the subject of that case was an onerous donation which, under Article 733
of the Civil Code is governed by the rules on contracts, since the donation in the case at
bar is also subject to the same rules because of its provision on automatic revocation upon
the violation of a resolutory condition, from parity of reasons said pronouncements in De
Luna pertinently apply.
The rationale for the foregoing is that in contracts providing for automatic revocation,
judicial intervention is necessary not for purposes of obtaining a judicial declaration
rescinding a contract already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to determine whether or not the
rescission was proper.14
When a deed of donation, as in this case, expressly provides for automatic revocation and
reversion of the property donated, the rules on contract and the general rules on
prescription should apply, and not Article 764 of the Civil Code. Since Article 1306 of said
Code authorizes the parties to a contract to establish such stipulations, clauses, terms and
conditions not contrary to law, morals, good customs, public order or public policy, we are
of the opinion that, at the very least, that stipulation of the parties providing for automatic
revocation of the deed of donation, without prior judicial action for that purpose, is valid
subject to the determination of the propriety of the rescission sought. Where such
propriety is sustained, the decision of the court will be merely declaratory of the
revocation, but it is not in itself the revocatory act.
On the foregoing ratiocinations, the Court of Appeals committed no error in holding that
the cause of action of herein private respondents has not yet prescribed since an action to
enforce a written contract prescribes in ten (10) years.15 It is our view that Article 764 was
intended to provide a judicial remedy in case of non-fulfillment or contravention of
conditions specified in the deed of donation if and when the parties have not agreed on the

automatic revocation of such donation upon the occurrence of the contingency

contemplated therein. That is not the situation in the case at bar.
Nonetheless, we find that although the action filed by private respondents may not be
dismissed by reason of prescription, the same should be dismissed on the ground that
private respondents have no cause of action against petitioners.
The cause of action of private respondents is based on the alleged breach by petitioners of
the resolutory condition in the deed of donation that the property donated should not be
sold within a period of one hundred (100) years from the date of execution of the deed of
donation. Said condition, in our opinion, constitutes an undue restriction on the rights
arising from ownership of petitioners and is, therefore, contrary to public policy.
Donation, as a mode of acquiring ownership, results in an effective transfer of title over the
property from the donor to the donee. Once a donation is accepted, the donee becomes
the absolute owner of the property donated. Although the donor may impose certain
conditions in the deed of donation, the same must not be contrary to law, morals, good
customs, public order and public policy. The condition imposed in the deed of donation in
the case before us constitutes a patently unreasonable and undue restriction on the right
of the donee to dispose of the property donated, which right is an indispensable attribute
of ownership. Such a prohibition against alienation, in order to be valid, must not be
perpetual or for an unreasonable period of time.
Certain provisions of the Civil Code illustrative of the aforesaid policy may be considered
applicable by analogy.1wphi1Under the third paragraph of Article 494, a donor or testator
may prohibit partition for a period which shall not exceed twenty (20) years. Article 870, on
its part, declares that the dispositions of the testator declaring all or part of the estate
inalienable for more than twenty (20) years are void.
It is significant that the provisions therein regarding a testator also necessarily involve, in
the main, the devolution of property by gratuitous title hence, as is generally the case of
donations, being an act of liberality, the imposition of an unreasonable period of
prohibition to alienate the property should be deemed anathema to the basic and actual
intent of either the donor or testator. For that reason, the regulatory arm of the law is or
must be interposed to prevent an unreasonable departure from the normative policy
expressed in the aforesaid Articles 494 and 870 of the Code.
In the case at bar, we hold that the prohibition in the deed of donation against the
alienation of the property for an entire century, being an unreasonable emasculation and
denial of an integral attribute of ownership, should be declared as an illegal or impossible
condition within the contemplation of Article 727 of the Civil Code. Consequently, as
specifically stated in said statutory provision, such condition shall be considered as not
imposed. No reliance may accordingly be placed on said prohibitory paragraph in the deed
of donation. The net result is that, absent said proscription, the deed of sale supposedly
constitutive of the cause of action for the nullification of the deed of donation is not in truth
violative of the latter hence, for lack of cause of action, the case for private respondents
must fail.

It may be argued that the validity of such prohibitory provision in the deed of donation was
not specifically put in issue in the pleadings of the parties. That may be true, but such
oversight or inaction does not prevent this Court from passing upon and resolving the
same.
It will readily be noted that the provision in the deed of donation against alienation of the
land for one hundred (100) years was the very basis for the action to nullify the deed of d
donation. At the same time, it was likewise the controverted fundament of the motion to
dismiss the case a quo, which motion was sustained by the trial court and set aside by
respondent court, both on the issue of prescription. That ruling of respondent court
interpreting said provision was assigned as an error in the present petition. While the issue
of the validity of the same provision was not squarely raised, it is ineluctably related to
petitioner's aforesaid assignment of error since both issues are grounded on and refer to
the very same provision.
This Court is clothed with ample authority to review matters, even if they are not assigned
as errors on appeal, if it finds that their consideration is necessary in arriving at a just
decision of the case:16 Thus, we have held that an unassigned error closely related to an
error properly assigned,17 or upon which the determination of the question properly
assigned is dependent, will be considered by the appellate court notwithstanding the
failure to assign it as error.18
Additionally, we have laid down the rule that the remand of the case to the lower court for
further reception of evidence is not necessary where the Court is in a position to resolve
the dispute based on the records before it. On many occasions, the Court, in the public
interest and for the expeditious administration of justice, has resolved actions on the
merits instead of remanding them to the trial court for further proceedings, such as where
the ends of justice, would not be subserved by the remand of the case. 19 The aforestated
considerations obtain in and apply to the present case with respect to the matter of the
validity of the resolutory condition in question.
WHEREFORE, the judgment of respondent court is SET ASIDE and another judgment is
hereby rendered DISMISSING Civil Case No. 095-84 of the Regional Trial Court, Branch XX,
Imus, Cavite.
SO ORDERED.
G.R. No. L-69970 November 28, 1988
DANGUILAN vs. IAC
The subject of this dispute is the two lots owned by Domingo Melad which is claimed by
both the petitioner and the respondent. The trial court believed the petitioner but the
respondent court, on appeal, upheld the respondent. The case is now before us for a
resolution of the issues once and for all.
On January 29, 1962, the respondent filed a complaint against the petitioner in the then
Court of First Instance of Cagayan for recovery of a farm lot and a residential lot which she
claimed she had purchased from Domingo Melad in 1943 and were now being unlawfully
withheld by the defendant. 1 In his answer, the petitioner denied the allegation and averred
that he was the owner of the said lots of which he had been in open, continuous and

adverse possession, having acquired them from Domingo Melad in 1941 and 1943.
case was dismissed for failure to prosecute but was refiled in 1967. 3

The

At the trial, the plaintiff presented a deed of sale dated December 4, 1943, purportedly
signed by Domingo Melad and duly notarized, which conveyed the said properties to her
for the sum of P80.00. 4 She said the amount was earned by her mother as a worker at the
Tabacalera factory. She claimed to be the illegitimate daughter of Domingo Melad, with
whom she and her mother were living when he died in 1945. She moved out of the farm
only when in 1946 Felix Danguilan approached her and asked permission to cultivate the
land and to stay therein. She had agreed on condition that he would deliver part of the
harvest from the farm to her, which he did from that year to 1958. The deliveries having
stopped, she then consulted the municipal judge who advised her to file the complaint
against Danguilan. The plaintiff 's mother, her only other witness, corroborated this
testimony. 5
For his part, the defendant testified that he was the husband of Isidra Melad, Domingo's
niece, whom he and his wife Juana Malupang had taken into their home as their ward as
they had no children of their own. He and his wife lived with the couple in their house on
the residential lot and helped Domingo with the cultivation of the farm. Domingo Melad
signed in 1941 a private instrument in which he gave the defendant the farm and in 1943
another private instrument in which he also gave him the residential lot, on the
understanding that the latter would take care of the grantor and would bury him upon his
death. 6 Danguilan presented three other witnesses 7 to corroborate his statements and to
prove that he had been living in the land since his marriage to Isidra and had remained in
possession thereof after Domingo Melad's death in 1945. Two of said witnesses declared
that neither the plaintiff nor her mother lived in the land with Domingo Melad. 8
The decision of the trial court was based mainly on the issue of possession. Weighing the
evidence presented by the parties, the judge 9 held that the defendant was more
believable and that the plaintiff's evidence was "unpersuasive and unconvincing." It was
held that the plaintiff's own declaration that she moved out of the property in 1946 and left
it in the possession of the defendant was contradictory to her claim of ownership. She was
also inconsistent when she testified first that the defendant was her tenant and later in
rebuttal that he was her administrator. The decision concluded that where there was doubt
as to the ownership of the property, the presumption was in favor of the one actually
occupying the same, which in this case was the defendant. 10
The review by the respondent court 11 of this decision was manifestly less than thorough.
For the most part it merely affirmed the factual findings of the trial court except for an
irrelevant modification, and it was only toward the end that it went to and resolved what it
considered the lone decisive issue.
The respondent court held that Exhibits 2-b and 3-a, by virtue of which Domingo Melad had
conveyed the two parcels of land to the petitioner, were null and void. The reason was that
they were donations of real property and as such should have been effected through a
public instrument. It then set aside the appealed decision and declared the respondents
the true and lawful owners of the disputed property.
The said exhibits read as follows:

EXHIBIT 2-b is quoted as follows:

12

I, DOMINGO MELAD, of legal age, married, do hereby declare in this receipt the truth of
my giving to Felix Danguilan, my agricultural land located at Barrio Fugu-Macusi,
Penablanca, Province of Cagayan, Philippine Islands; that this land is registered under
my name; that I hereby declare and bind myself that there is no one to whom I will
deliver this land except to him as he will be the one responsible for me in the event
that I will die and also for all other things needed and necessary for me, he will be
responsible because of this land I am giving to him; that it is true that I have nieces
and nephews but they are not living with us and there is no one to whom I will give my
land except to Felix Danguilan for he lives with me and this is the length175 m. and
the width is 150 m.
IN WITNESS WHEREOF, I hereby sign my name below and also those present in the
execution of this receipt this 14th day of September 1941.
Penablanca Cagayan, September 14, 1941.
(SGD.) DOMINGO MELAD
WITNESSES:
1. (T.M.) ISIDRO MELAD
2. (SGD.) FELIX DANGUILAN
3. (T.M.) ILLEGIBLE
EXHIBIT 3-a is quoted as follows:

13

I, DOMINGO MELAD, a resident of Centro, Penablanca, Province of Cagayan, do hereby

swear and declare the truth that I have delivered my residential lot at Centro,
Penablanca, Cagayan, to Felix Danguilan, my son-in-law because I have no child; that I
have thought of giving him my land because he will be the one to take care of
SHELTERING me or bury me when I die and this is why I have thought of executing this
document; that the boundaries of this lot ison the east, Cresencio Danguilan; on the
north, Arellano Street; on the south by Pastor Lagundi and on the west, Pablo Pelagio
and the area of this lot is 35 meters going south; width and length beginning west to
east is 40 meters.
IN WITNESS HEREOF, I hereby sign this receipt this 18th day of December 1943.
(SGD.) DOMINGO MELAD
WITNESSES:
(SGD.) ILLEGIBLE
(SGD.) DANIEL ARAO
It is our view, considering the language of the two instruments, that Domingo Melad did
intend to donate the properties to the petitioner, as the private respondent contends. We
do not think, however, that the donee was moved by pure liberality. While truly donations,
the conveyances were onerous donations as the properties were given to the petitioner in
exchange for his obligation to take care of the donee for the rest of his life and provide for

his burial. Hence, it was not covered by the rule in Article 749 of the Civil Code requiring
donations of real properties to be effected through a public instrument. The case at bar
comes squarely under the doctrine laid down in Manalo v. De Mesa, 14 where the Court
held:
There can be no doubt that the donation in question was made for a valuable
consideration, since the donors made it conditional upon the donees' bearing the expenses
that might be occasioned by the death and burial of the donor Placida Manalo, a condition
and obligation which the donee Gregorio de Mesa carried out in his own behalf and for his
wife Leoncia Manalo; therefore, in order to determine whether or not said donation is valid
and effective it should be sufficient to demonstrate that, as a contract, it embraces the
conditions the law requires and is valid and effective, although not recorded in a public
instrument.
The private respondent argues that as there was no equivalence between the value of the
lands donated and the services for which they were being exchanged, the two transactions
should be considered pure or gratuitous donations of real rights, hence, they should have
been effected through a public instrument and not mere private writings. However, no
evidence has been adduced to support her contention that the values exchanged were
disproportionate or unequal.
On the other hand, both the trial court and the respondent court have affirmed the factual
allegation that the petitioner did take care of Domingo Melad and later arranged for his
burial in accordance with the condition imposed by the donor. It is alleged and not denied
that he died when he was almost one hundred years old, 15which would mean that the
petitioner farmed the land practically by himself and so provided for the donee (and his
wife) during the latter part of Domingo Melad's life. We may assume that there was a fair
exchange between the donor and the donee that made the transaction an onerous
donation.
Regarding the private respondent's claim that she had purchased the properties by virtue
of a deed of sale, the respondent court had only the following to say: "Exhibit 'E' taken
together with the documentary and oral evidence shows that the preponderance of
evidence is in favor of the appellants." This was, we think, a rather superficial way of
resolving such a basic and important issue.
The deed of sale was allegedly executed when the respondent was only three years old
and the consideration was supposedly paid by her mother, Maria Yedan from her earnings
as a wage worker in a factory. 16 This was itself a suspicious circumstance, one may well
wonder why the transfer was not made to the mother herself, who was after all the one
paying for the lands. The sale was made out in favor of Apolonia Melad although she had
been using the surname Yedan her mother's surname, before that instrument was signed
and in fact even after she got married. 17 The averment was also made that the contract
was simulated and prepared after Domingo Melad's death in 1945. 18 It was also alleged
that even after the supposed execution of the said contract, the respondent considered
Domingo Melad the owner of the properties and that she had never occupied the same. 19
Considering these serious challenges, the appellate court could have devoted a little more
time to examining Exhibit "E" and the circumstances surrounding its execution before

pronouncing its validity in the manner described above. While it is true that the due
execution of a public instrument is presumed, the presumption is disputable and will yield
to contradictory evidence, which in this case was not refuted.
At any rate, even assuming the validity of the deed of sale, the record shows that the
private respondent did not take possession of the disputed properties and indeed waited
until 1962 to file this action for recovery of the lands from the petitioner. If she did have
possession, she transferred the same to the petitioner in 1946, by her own sworn
admission, and moved out to another lot belonging to her step-brother. 20 Her claim that
the petitioner was her tenant (later changed to administrator) was disbelieved by the trial
court, and properly so, for its inconsistency. In short, she failed to show that she
consummated the contract of sale by actual delivery of the properties to her and her
actual possession thereof in concept of purchaser-owner.
As was held in Garchitorena v. Almeda:

21

Since in this jurisdiction it is a fundamental and elementary principle that ownership does
not pass by mere stipulation but only by delivery (Civil Code, Art. 1095; Fidelity and Surety
Co. v. Wilson, 8 Phil. 51), and the execution of a public document does not constitute
sufficient delivery where the property involved is in the actual and adverse possession of
third persons (Addison vs. Felix, 38 Phil. 404; Masallo vs. Cesar, 39 Phil. 134), it becomes
incontestable that even if included in the contract, the ownership of the property in dispute
did not pass thereby to Mariano Garchitorena. Not having become the owner for lack of
delivery, Mariano Garchitorena cannot presume to recover the property from its present
possessors. His action, therefore, is not one of revindicacion, but one against his vendor for
specific performance of the sale to him.
In the aforecited case of Fidelity and Deposit Co. v. Wilson,
Court:

22

Justice Mapa declared for the

Therefore, in our Civil Code it is a fundamental principle in all matters of contracts and a
well- known doctrine of law that "non mudis pactis sed traditione dominia rerum
transferuntur". In conformity with said doctrine as established in paragraph 2 of article 609
of said code, that "the ownership and other property rights are acquired and transmitted
by law, by gift, by testate or intestate succession, and, in consequence of certain
contracts, by tradition". And as the logical application of this disposition article 1095
prescribes the following: "A creditor has the rights to the fruits of a thing from the time the
obligation to deliver it arises. However, he shall not acquire a real right" (and the
ownership is surely such) "until the property has been delivered to him."
In accordance with such disposition and provisions the delivery of a thing constitutes a
necessary and indispensable requisite for the purpose of acquiring the ownership of the
same by virtue of a contract. As Manresa states in his Commentaries on the Civil Code,
volume 10, pages 339 and 340: "Our law does not admit the doctrine of the transfer of
property by mere consent but limits the effect of the agreement to the due execution of
the contract. ... The ownership, the property right, is only derived from the delivery of a
thing ... "

As for the argument that symbolic delivery was effected through the deed of sale, which
was a public instrument, the Court has held:

2. The said college shall not sell, transfer or convey to any third party nor in any way
encumber said land;

The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is
considered to be delivered when it is placed "in the hands and possession of the vendee."
(Civil Code, art. 1462). It is true that the same article declares that the execution of a
public instrument is equivalent to the delivery of the thing which is the object of the
contract, but, in order that this symbolic delivery may produce the effect of tradition, it is
necessary that the vendor shall have had such control over the thing sold that, at the
moment of the sale, its material delivery could have been made. It is not enough to confer
upon the purchaser the ownership and the right of possession. The thing sold must be
placed in his control. When there is no impediment whatever to prevent the thing sold
passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery
through the execution of a public instrument is sufficient. But if, notwithstanding the
execution of the instrument, the purchaser cannot have the enjoyment and material
tenancy of the thing and make use of it himself or through another in his name, because
such tenancy and enjoyment are opposed by the interposition of another will, then fiction
yields to realitythe delivery has not been effected. 23

3. The said land shall be called "RAMON LOPEZ CAMPUS", and the said college shall be
under obligation to erect a cornerstone bearing that name. Any net income from the land
or any of its parks shall be put in a fund to be known as the "RAMON LOPEZ CAMPUS
FUND" to be used for improvements of said campus and erection of a building thereon. 1

There is no dispute that it is the petitioner and not the private respondent who is in actual
possession of the litigated properties. Even if the respective claims of the parties were both
to be discarded as being inherently weak, the decision should still incline in favor of the
petitioner pursuant to the doctrine announced in Santos & Espinosa v. Estejada 24 where
the Court announced:
If the claim of both the plaintiff and the defendant are weak, judgment must be for the
defendant, for the latter being in possession is presumed to be the owner, and cannot be
obliged to show or prove a better right.
WHEREFORE, the decision of the respondent court is SET ASIDE and that of the trial court
REINSTATED, with costs against the private respondent. It is so ordered.
G.R. No. 112127 July 17, 1995
CENTRAL PHILIPPINE UNIVERSITY vs. CA
CENTRAL PHILIPPINE UNIVERSITY filed this petition for review on certiorari of the decision
of the Court of Appeals which reversed that of the Regional Trial Court of Iloilo City
directing petitioner to reconvey to private respondents the property donated to it by their
predecessor-in-interest.
Sometime in 1939, the late Don Ramon Lopez, Sr., who was then a member of the Board of
Trustees of the Central Philippine College (now Central Philippine University [CPU]),
executed a deed of donation in favor of the latter of a parcel of land identified as Lot No.
3174-B-1 of the subdivision plan Psd-1144, then a portion of Lot No. 3174-B, for which
Transfer Certificate of Title No. T-3910-A was issued in the name of the donee CPU with the
following annotations copied from the deed of donation
1. The land described shall be utilized by the CPU exclusively for the establishment and
use of a medical college with all its buildings as part of the curriculum;

On 31 May 1989, private respondents, who are the heirs of Don Ramon Lopez, Sr., filed an
action for annulment of donation, reconveyance and damages against CPU alleging that
since 1939 up to the time the action was filed the latter had not complied with the
conditions of the donation. Private respondents also argued that petitioner had in fact
negotiated with the National Housing Authority (NHA) to exchange the donated property
with another land owned by the latter.
In its answer petitioner alleged that the right of private respondents to file the action had
prescribed; that it did not violate any of the conditions in the deed of donation because it
never used the donated property for any other purpose than that for which it was
intended; and, that it did not sell, transfer or convey it to any third party.
On 31 May 1991, the trial court held that petitioner failed to comply with the conditions of
the donation and declared it null and void. The court a quo further directed petitioner to
execute a deed of the reconveyance of the property in favor of the heirs of the donor,
namely, private respondents herein.
Petitioner appealed to the Court of Appeals which on 18 June 1993 ruled that the
annotations at the back of petitioner's certificate of title were resolutory conditions breach
of which should terminate the rights of the donee thus making the donation revocable.
The appellate court also found that while the first condition mandated petitioner to utilize
the donated property for the establishment of a medical school, the donor did not fix a
period within which the condition must be fulfilled, hence, until a period was fixed for the
fulfillment of the condition, petitioner could not be considered as having failed to comply
with its part of the bargain. Thus, the appellate court rendered its decision reversing the
appealed decision and remanding the case to the court of origin for the determination of
the time within which petitioner should comply with the first condition annotated in the
certificate of title.
Petitioner now alleges that the Court of Appeals erred: (a) in holding that the quoted
annotations in the certificate of title of petitioner are onerous obligations and resolutory
conditions of the donation which must be fulfilled non-compliance of which would render
the donation revocable; (b) in holding that the issue of prescription does not deserve
"disquisition;" and, (c) in remanding the case to the trial court for the fixing of the period
within which petitioner would establish a medical college. 2
We find it difficult to sustain the petition. A clear perusal of the conditions set forth in the
deed of donation executed by Don Ramon Lopez, Sr., gives us no alternative but to
conclude that his donation was onerous, one executed for a valuable consideration which
is considered the equivalent of the donation itself, e.g., when a donation imposes a burden
equivalent to the value of the donation. A gift of land to the City of Manila requiring the

latter to erect schools, construct a children's playground and open streets on the land was
considered an onerous donation. 3 Similarly, where Don Ramon Lopez donated the subject
parcel of land to petitioner but imposed an obligation upon the latter to establish a medical
college thereon, the donation must be for an onerous consideration.

because of the presence of several factors and circumstances involved in the erection of
an educational institution, such as government laws and regulations pertaining to
education, building requirements and property restrictions which are beyond the control of
the donee.

Under Art. 1181 of the Civil Code, on conditional obligations, the acquisition of rights, as
well as the extinguishment or loss of those already acquired, shall depend upon the
happening of the event which constitutes the condition. Thus, when a person donates land
to another on the condition that the latter would build upon the land a school, the
condition imposed was not a condition precedent or a suspensive condition but a
resolutory one. 4 It is not correct to say that the schoolhouse had to be constructed before
the donation became effective, that is, before the donee could become the owner of the
land, otherwise, it would be invading the property rights of the donor. The donation had to
be valid before the fulfillment of the condition. 5 If there was no fulfillment or compliance
with the condition, such as what obtains in the instant case, the donation may now be
revoked and all rights which the donee may have acquired under it shall be deemed lost
and extinguished.

Thus, when the obligation does not fix a period but from its nature and circumstances it
can be inferred that a period was intended, the general rule provided in Art. 1197 of the
Civil Code applies, which provides that the courts may fix the duration thereof because the
fulfillment of the obligation itself cannot be demanded until after the court has fixed the
period for compliance therewith and such period has arrived. 8

The claim of petitioner that prescription bars the instant action of private respondents is
unavailing.
The condition imposed by the donor, i.e., the building of a medical school upon the land
donated, depended upon the exclusive will of the donee as to when this condition shall be
fulfilled. When petitioner accepted the donation, it bound itself to comply with the
condition thereof. Since the time within which the condition should be fulfilled depended
upon the exclusive will of the petitioner, it has been held that its absolute acceptance and
the acknowledgment of its obligation provided in the deed of donation were sufficient to
prevent the statute of limitations from barring the action of private respondents upon the
original contract which was the deed of donation. 6
Moreover, the time from which the cause of action accrued for the revocation of the
donation and recovery of the property donated cannot be specifically determined in the
instant case. A cause of action arises when that which should have been done is not done,
or that which should not have been done is done. 7 In cases where there is no special
provision for such computation, recourse must be had to the rule that the period must be
counted from the day on which the corresponding action could have been instituted. It is
the legal possibility of bringing the action which determines the starting point for the
computation of the period. In this case, the starting point begins with the expiration of a
reasonable period and opportunity for petitioner to fulfill what has been charged upon it by
the donor.
The period of time for the establishment of a medical college and the necessary buildings
and improvements on the property cannot be quantified in a specific number of years

This general rule however cannot be applied considering the different set of circumstances
existing in the instant case. More than a reasonable period of fifty (50) years has already
been allowed petitioner to avail of the opportunity to comply with the condition even if it
be burdensome, to make the donation in its favor forever valid. But, unfortunately, it failed
to do so. Hence, there is no more need to fix the duration of a term of the obligation when
such procedure would be a mere technicality and formality and would serve no purpose
than to delay or lead to an unnecessary and expensive multiplication of suits. 9 Moreover,
under Art. 1191 of the Civil Code, when one of the obligors cannot comply with what is
incumbent upon him, the obligee may seek rescission and the court shall decree the same
unless there is just cause authorizing the fixing of a period. In the absence of any just
cause for the court to determine the period of the compliance, there is no more obstacle
for the court to decree the rescission claimed.
Finally, since the questioned deed of donation herein is basically a gratuitous one, doubts
referring to incidental circumstances of a gratuitous contract should be resolved in favor of
the least transmission of rights and interests.10 Records are clear and facts are undisputed
that since the execution of the deed of donation up to the time of filing of the instant
action, petitioner has failed to comply with its obligation as donee. Petitioner has slept on
its obligation for an unreasonable length of time. Hence, it is only just and equitable now to
declare the subject donation already ineffective and, for all purposes, revoked so that
petitioner as donee should now return the donated property to the heirs of the donor,
private respondents herein, by means of reconveyance.
WHEREFORE, the decision of the Regional Trial Court of Iloilo, Br. 34, of 31 May 1991 is
REINSTATED and AFFIRMED, and the decision of the Court of Appeals of 18 June 1993 is
accordingly MODIFIED. Consequently, petitioner is directed to reconvey to private
respondents Lot No. 3174-B-1 of the subdivision plan Psd-1144 covered by Transfer
Certificate of Title No. T-3910-A within thirty (30) days from the finality of this judgment.
Costs against petitioner. SO ORDERED.
--- xxx END OF REVOCATION & REDUCTION OF DONATIONS XXX ---