THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee,
vs.
CITY OF ZAMBOANGA, SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL
REVENUE,defendants-appellants.
Facts:
Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the provincial
capital of the then Zamboanga Province. On October 12, 1936, Commonwealth Act 39 was approved
converting the Municipality of Zamboanga into Zamboanga City. Sec. 50 of the Act also provided that
Buildings and properties which the province shall abandon upon the transfer of the capital to another
place will be acquired and paid for by the City of Zamboanga at a price to be fixed by the Auditor
General.
Such properties include lots of capitol site, schools, hospitals, leprosarium, high school playgrounds,
burleighs, and hydro-electric sites.
On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga into two (2):
Zamboanga del Norte and Zamboanga del Sur. As to how the assets and obligations of the old province
were to be divided between the two new ones, Sec. 6 of that law provided Upon the approval of this
Act, the funds, assets and other properties and the obligations of the province of Zamboanga shall be
divided equitably between the Province of Zamboanga del Norte and the Province of Zamboanga del Sur
by the President of the Philippines, upon the recommendation of the Auditor General.
However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of Commonwealth Act
39 by providing that, All buildings, properties and assets belonging to the former province of
Zamboanga and located within the City of Zamboanga are hereby transferred, free of charge, in favor of
the said City of Zamboanga.
This constrained Zamboanga del Norte to file on March 5, 1962, a complaint against defendants-
appellants Zamboanga City; that, among others, Republic Act 3039 be declared unconstitutional for
depriving Zamboanga del Norte of property without due process and just compensation.
Lower court declared RA 3039 unconstitutional as it deprives Zamboanga del Norte of its private
properties.
Hence the appeal.
Issue:
Whether RA 3039 is unconstitutional on the grounds that it deprives Zamboanga del Norte of its private
properties.
Held:
No. RA 3039 is valid. The properties petitioned by Zamboanga del Norte is a public property.
The validity of the law ultimately depends on the nature of the 50 lots and buildings thereon in
question. For, the matter involved here is the extent of legislative control over the properties of a
municipal corporation, of which a province is one. The principle itself is simple: If the property is owned
by the municipality (meaning municipal corporation) in its public and governmental capacity, the
property is public and Congress has absolute control over it. But if the property is owned in its private or
proprietary capacity, then it is patrimonial and Congress has no absolute control. The municipality
cannot be deprived of it without due process and payment of just compensation.
The capacity in which the property is held is, however, dependent on the use to which it is intended and
devoted. Now, which of two norms, i.e., that of the Civil Code or that obtaining under the law of
Municipal Corporations, must be used in classifying the properties in question?
(The Civil provide: ART. 423. read)
G.R. No. L-29788 August 30, 1972
RAFAEL S. SALAS, in his capacity as Executive Secretary; CONRADO F. ESTRELLA, in his capacity as
Governor of the Land Authority; and LORENZO GELLA, in his capacity as Register of Deeds of Manila,
petitioners-appellants,
vs.
HON. HILARION U. JARENCIO, as Presiding Judge of Branch XXIII, Court of First Instance of Manila;
ANTONIO J. VILLEGAS, in his capacity as Mayor of the City of Manila; and the CITY OF MANILA,
respondents-appellees.
Facts:
City of Manila owner in fee simple of a parcel of land known as Lot 1, Block 557 of Cadastral Survey of
City of Manila, containing an area of 9689.80 sqm. On various dates in 1927, City of Manila sold portions
of the parcel of land. When the last sale was effected August 1924, Transfer Certificate of Title 22547
covering the residue of the land 7490.10 sam was issued in the name of City of Manila.
On September 1960, Municipal Board of Manila adopted a resolution requesting the President to
consider the feasibility of declaring the land under Transfer Certificate of Title 25545-25547 as
patrimonial property of Manila for the purpose of selling these lots to the actual occupants thereof. The
resolution was then transmitted to the Congress. The bill was then passed by Congress and approved by
President, and became Republic Act 4118, converting the land from communal property to disposable
and alienable land of State.
To implement RA 4118, Land Authority requested City of Manila to deliver the Citys TCT 22547 in order
to obtain title thereto in the name of Land Authority. The request was granted with the knowledge and
consent of City mayor, cancelling TCT 22547 and issuing TCT 80876 in the name of Land Authority.
City of Manila, for some reasons, brought an action to restrain, prohibit, and enjoin Land Authority and
Register of Deeds from implementing RA 4118, and praying for the declaration of RA 4118 as
unconstitutional.
Trial court declared RA 4118 to be unconstitutional and invalid on the ground that it deprived City of its
property without due process of law and payment of just compensation.
Land Authority and Register of Deeds argued that the land is a communal land, or a portion of public
domain owned by State; that the land has not been used by City of Manila for any public purpose; that
it was originally a communal land not because it was needed in connection with its organisation as a
municipality but rather for the common use of its inhabitants; that the City mayor merely enjoys the
usufruct over said land and its exercise of acts of ownership by selling parts thereof did not necessarily
convert the land into a patrimonial property of City of Manila nor divert the State of its paramount title.
Issue:
Whether the aforementioned land is a private or patrimonial property of the City of Manila.
Held:
The land is public property.
As a general rule, regardless of the source or classification of the land in the possession of municipality,
excepting those which it acquired in its own funds in its private or corporate capacity, such property is
held for the State for the benefit of its inhabitants, whether it be for governmental or proprietary
purposes. The legal situation is the same if the State itself holds the property and puts it to a different
use.
When it comes to property of municipality which it did not acquire in its private or corporate capacity
with its own funds (the land was originally given to City by Spain), the legislature can transfer its
administration and disposition to an agency of the National Government to be disposed of according to
its discretion. Here it did so in obedience to the constitutional mandate of promoting social justice to
insure the well-being and economic security of the people.
The property was not acquired by the City of Manila with its own funds in its private or proprietary
capacity. The land was part of the territory of City of Manila granted by sovereign in its creation.
Furthermore, City expressly recognised the paramount title of the State over its land when it requested
the President to consider the feasibility of declaring the lot as patrimonial property for selling.
There could be no more blatant recognition of the fact that said land belongs to the State and was
simply granted in usufruct to the City of Manila for municipal purposes. But since the City did not
actually use said land for any recognized public purpose and allowed it to remain idle and unoccupied
for a long time until it was overrun by squatters, no presumption of State grant of ownership in favor of
the City of Manila may be acquiesced in to justify the claim that it is its own private or patrimonial
property.
WHEREFORE, the appealed decision is hereby reversed, and petitioners shall proceed with the free and
untrammeled implementation of Republic Act No. 4118 without any obstacle from the respondents.
Without costs.
CEBU OXYGEN vs BERCILLES
In 1968, a terminal portion of a street in Cebu was excluded in the citys development plan hence the
council declared it as abandoned and was subsequently opened for public bidding. Cebu Oxygen &
Acetylene Co., Inc. was the highest bidder at P10,800.00. Cebu Oxygen applied for the lands
registration before CFI Cebu but the provincial fiscal opposed it, so did the court later through Judge
Pascual Bercilles, as it was ruled that the road is part of the public domain hence beyond the commerce
of man.
ISSUE: Whether or not Cebu Oxygen can validly own said land.
HELD: Yes. Under Cebus Charter (RA 3857), the city council may close any city road, street or alley,
boulevard, avenue, park or square. Property thus withdrawn from public servitude may be used or
conveyed for any purpose for which other real property belonging to the City may be lawfully used or
conveyed. Since that portion of the city street subject of Cebu Oxygens application for registration of
title was withdrawn from public use, it follows that such withdrawn portion becomes patrimonial
property which can be the object of an ordinary contract.
Article 422 of the Civil Code expressly provides that Property of public dominion, when no longer
intended for public use or for public service, shall form part of the patrimonial property of the State.
Chavez v. Pea and Amari
Fact:
In 1973, the Comissioner on Public Highways entered into a contract to reclaim areas of Manila Bay with
the Construction and Development Corportion of the Philippines (CDCP).
PEA (Public Estates Authority) was created by President Marcos under P.D. 1084, tasked with developing
and leasing reclaimed lands. These lands were transferred to the care of PEA under P.D. 1085 as part of
the Manila Cavite Road and Reclamation Project (MCRRP). CDCP and PEA entered into an agreement
that all future projects under the MCRRP would be funded and owned by PEA.
By 1988, President Aquino issued Special Patent No. 3517 transferring lands to PEA. It was followed by
the transfer of three Titles (7309, 7311 and 7312) by the Register of Deeds of Paranaque to PEA covering
the three reclaimed islands known as the FREEDOM ISLANDS.
Subsquently, PEA entered into a joint venture agreement (JVA) with AMARI, a Thai-Philippine
corporation to develop the Freedom Islands. Along with another 250 hectares, PEA and AMARI entered
the JVA which would later transfer said lands to AMARI. This caused a stir especially when Sen. Maceda
assailed the agreement, claiming that such lands were part of public domain (famously known as the
mother of all scams).
Peitioner Frank J. Chavez filed case as a taxpayer praying for mandamus, a writ of preliminary injunction
and a TRO against the sale of reclaimed lands by PEA to AMARI and from implementing the JVA.
Following these events, under President Estradas admin, PEA and AMARI entered into an Amended JVA
and Mr. Chaves claim that the contract is null and void.
Issue:
w/n: the transfer to AMARI lands reclaimed or to be reclaimed as part of the stipulations in the
(Amended) JVA between AMARI and PEA violate Sec. 3 Art. XII of the 1987 Constitution
w/n: the court is the proper forum for raising the issue of whether the amended joint venture
agreement is grossly disadvantageous to the government.
Held:
On the issue of Amended JVA as violating the constitution:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates
of title in the name of PEA, are alienable lands of the public domain. PEA may lease these lands to
private corporations but may not sell or transfer ownership of these lands to private corporations. PEA
may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987
Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the
public domain until classified as alienable or disposable lands open to disposition and declared no
longer needed for public service. The government can make such classification and declaration only
after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands
of the public domain, which are the only natural resources the government can alienate. In their present
state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34
hectares110 of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of
the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of
the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares111 of still
submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the
1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of
the public domain.
PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as
alienable or disposable, and further declare them no longer needed for public service. Still, the transfer
of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article
XII of the 1987Constitution which prohibits private corporations from acquiring any kind of alienable
land of the public domain.
HILARIO vs SALVADOR
Facts:
Hilario filed a complaint with the RTC against Salvador alleging that they were the co-owners of the
parcel of land where Salvador constructed his house without their knowledge and refused to vacate
despite their demands.
Salvodor filed a motion to dismiss the complaint on the ground of lack of jurisdiction. He contended
that the complaint did not state the assessed value of the property, which determines the jurisdiction of
the court.
Hilario maintained that the RTC had jurisdiction since their action was an accion reinvindicatoria, an
action incapable of pecuniary estimation; thus, regardless of the assessed value of the subject property,
exclusive jurisdiction fell within the said court. Also, in their opposition to Salvador's motion to dismiss,
they mentioned the increase in the assessed value of the land in the amount of P3.5 million. Moreover,
they maintained that their action was also one for damages exceeding P20,000.00, over which the RTC
had exclusive jurisdiction.
Issue:
Whether or not the action filed by Hilario was an accion reinvindicatoria.
Whether or not the RTC had jurisdiction over the complaint filed by Hilario.
Held:

The action filed by Hilario did not involve a claim of ownership over the property. They prayed that
Salvador vacate the property and restore possession to them. Hence, it was an accion publiciana, or
one for the recovery of possession of the real property. It was not an aaccion reinvindicatoria or a suit
for the recovery of possession over the real property as owner.
The nature of the action and which court has original and exclusive jurisdiction is determined by the
material allegations of the complaint, the type of relief prayed for by the plaintiff and the law in effect
when the action is filed, irrespective of whether the plaintiffs are entitled to some or all of the claims
asserted therein.
The complaint did not contain an allegation stating the assessed value of the property. Absent any
allegation in the complaint of the assessed value of the property, it could not thus be determined
whether the RTC or the MTC had original and exclusive jurisdiction over the action.
The law also explicitly excluded from the determination of the jurisdictional amount the demand for
interest, damages of whatever kind, attorneys fees, litigation expenses, and costs.
Since the RTC had no jurisdiction over the action, all the proceedings therein, including the decision of
the RTC, were null and void.
SAMPAYAN vs . COURT OF APPEALS
G.R. No. 156360. January 14, 2005
FACTS:
-On July 8, 1992, in the MCTC of Bayugan and Sibagat, Agusan del Sur, the siblings Crispulo Vasquez and
Florencia Vasquez-Gilsano filed complaint for forcible entry against Cesar Sampayan for allegedly having
entered and occupied a parcel of land, identified as Lot No. 1959, PLS-225, and built a house thereon
without their knowledge, consent or authority, the entry having been supposedly effected through
strategy and stealth. In their complaint, Crispulo and Florencia asserted that they were co-owners pro-
indiviso of the said lot, their mother Cristita Quita being the ownerand actual possessor thereof. Upon
the latters death and while they were absent from the said lot, Cesar Sampayan, through strategy and
stealth, allegedly built a house on the lot, to their exclusion. After repeated demands, Cesar Sampayan
allegedly refused to vacate the said lot. Thus, they filed an action for unlawful detainer.
-In his defense, Cesar Sampayan asserted that his occupation of the lot was by tolerance of the lots true
owners, Mr. and Mrs. Terrado, who were then residing in Cebu. The permission was given by the lots
overseer, Maria Ybanez. Sampayan further asserted that Crispulo and Valencias action had long
prescribed, inasmuch as the said lot had already been owned and possessed by the spouses Oriol since
1960, as evidenced by the latters payment of taxes. The Oriols, in turn, sold half the land to the
Terrados. Together, they maintained possession of their respective portions.
-Both the plaintiff siblings and defendant Sampayan submitted their respective evidence consisting of
affidavits and tax declarations. Meanwhile, the MCTC judge also conducted an ocular inspection of the
premises, where he found improvements. The findings in the ocular inspection have confirmed the
allegation of the defendant that his predecessors-in-interest have introduced improvements by planting
caimito trees, coconut trees, and others on the land in question. The MCTC dismissed the complaint. It
held that it is clear that defendants have been in possession for more than one year and that the
appropriate remedy would have been accion publiciana or lenaria de possession. Upon appeal to the
RTC, it reversed the decision, relying on the involvement of Cristita Quita, plaintiffs mother, in a
cadastral case involving the lot in 1957.
-Sampayan then appealed to the CA, which denied the same. Thus this petition for certiorari.
ISSUE:
1. Whether or not the complaint for forcible entry would prosper
2. Whether or not the petitioner had prior physical possession
HELD:
1. YES. In Sarmiento vs. CA, the Court held:
[t]o give the court jurisdiction to effect the ejectment of an occupant or deforciant on the land, it is
necessary that the complaint should embody such a statement of facts as brings the party clearly within
the class of cases for which the statutes provide a remedy, as these proceedings are summary in nature.
The complaint must show enough on its face to give the court jurisdiction without resort to parol
testimony. The jurisdictional facts must appear on the face of the complaint. . . .
It is clear it is from the above that for the MCTC to acquire jurisdiction over a forcible entry case, it is
enough that the complaint avers the jurisdictional facts, i.e. that the plaintiff had prior physical
possession and that he was deprived thereof by the defendant through force, intimidation, threats,
strategy and stealth. The complaint in this case makes such an averment. Hence, the irrelevant
circumstance that the evidence adduced during the hearing rendered improper an action for forcible
entry is of no moment and cannot deprive the MCTC of its jurisdiction over the case. The MCTC
continues to have that jurisdiction.
2.YES. To begin with, the Court is at once confronted by the uncontested findings of the MCTC judge
himself during his ocular inspection of the premises in dispute that what he saw thereat confirmed the
allegations of the defendant [now petitioner Sampayan] that his predecessors-in-interest have
introduced improvements by planting caimito trees, coconut trees, and others on the land in question,
adding that [N]othing can be seen on the land that plaintiff had once upon a time been in possession of
the land, and categorically stating that [T]he allegation that Cristita Quita, the predecessor-in-interest
of the plaintiffs had been in possession of the said property since 1957, openly, exclusively,
continuously, adversely and in the concept of an owner is a naked claim, unsupported by any evidence.
x x x
The Court noted that in the assailed decision herein, the Court of Appeals attached much significance to
the fact that private respondents mother, Cristita Quita, was an oppositor in Cadastral Case No. 149.
The Court ruled and held that the mothers being an oppositor in said cadastral case does not, by itself,
establish prior physical possession because not all oppositors in cadastral cases are actual possessors of
the lots or lands subject thereof.

SANTOS v s . AYON
G.R. No. 137013, Ma y 6, 2005, SANDOVAL -GUTIERREZ, J .
FACTS: In 1996, the petitioner, Santos, filed with the Municipal Trial Court in Cities
(MTCC) in Davao City a complaint for illegal detainer against the respondents,
spouses Ayon. In his complaint, he averred that a building used by the respondents
as a warehouse, encroached on a portion of his land. As early as 1985, he had
allegedly already informed respondents that the said building occupies a portion of
his land, but allowed them to continue using the building. In 1996, needing the
entire portion of his lot, he demanded that respondents remove the part of the
building encroaching
on his property, but respondents refused and continued to occupy the contested
portion.
The MTCC ruled in favor of petitioner and ordered the respondents to
vacate and surrender possession of the property. On appeal, the RTC affirmed in
toto the MTCC judgment, and upheld the finding that respondents occupation of
the contested portion was by mere tolerance. On petition for review however, the
CA held that petitioners proper remedy should have been an accion publiciana
before the RTC and not anaction for unlawful detainer, and thus dismissing the
complaint.
ISSUE: Whether the MTCC properly exercised jurisdiction over the complaint.
HELD: YES. All actions for forcible entry or unlawful detainer shall be filed with the
proper Metropolitan Trial Courts, the Municipal Trial Courts and the Municipal
Circuit Trial Courts, which actions shall include not only the plea for restoration of
possession but also all claims for damages and costs arising therefrom. The said
courts are not divested of jurisdiction over such cases even if the defendants
therein raises the question of ownership over the litigated property in his pleadings
and the question of possession cannot be resolved without deciding the issue of
ownership.
The Court found no error in the MTCC assuming jurisdiction over
petitioners complaint. A complaint for unlawful detainer is sufficient if it alleges
that the withholding of the possession or the refusal to vacate is unlawful, without
necessarily employing the terminology of the law. Here, there is an allegation in
petitioners complaint that respondents occupancy on the portion of his property is
by virtue of his tolerance.
Petitioners cause of action for unlawful detainer springs from
respondents failure to vacate the questioned premises upon his demand sometime
in 1996.
It bears stressing that possession by tolerance is lawful, but such
possession becomes unlawful when the possessor by tolerance refuses to vacate
upon demand made by the owner. Our ruling in Roxas vs. Court of Appeals 391
SCRA 351 is applicable in this case: A person who occupies the land of another at
the latters tolerance or permission, without any contract between them, is
necessarily bound by an implied promise that he will vacate upon demand, failing
which, a summary action for ejectment is the proper remedy against him.
GANILA vs . COURT OF APPEALS
G.R. No. 150755, 06/28/2005 QUISUMBING, J .
FACTS: Private respondent, Violeta Herrera, filed 21 ejectment complaints in the
MCTC, which ordered the 21 defendants, now petitioners, to vacate the property in
question (Lot 1227). The RTC sustained the decision as to 19 defendants but
dismissed the case against 2. The 19 defendants who were ordered to vacate Lot
1227 filed a petition for review with the CA based on two arguments, namely: first,
that they possessed lot 1227 in good faith for more than 30 years in the concept of
owners, and second, that there was no withholding of possession since private
respondent was not in prior possession of the lot.
I S S U E S / H E L D:
Whether prior physical possession by the plaintiff is necessary for a complaint for
unlawful detainer to prosper
NO. While petitioners assert that this case involves only deprivation of
possession, they confuse the remedy of an action for forcible entry with that of
unlawful detainer. In unlawful detainer, prior physical possession by the plaintiff is
not necessary. It is enough that plaintiff has a better right of possession. Actual and
prior physical possession of a property by a party is indispensable only in forcible
entry cases. In unlawful detainer cases, the defendant is necessarily in prior lawful
possession of the property but his possession eventually becomes unlawful upon
termination or expiration of his right to possess. Thus, the fact that petitioners are
in possession of the lot does not automatically entitle them to remain in possession.
And the issue of prior lawful possession by the defendants does not arise at all in a
suit for unlawful detainer simply because prior lawful possession by virtue of
contract or other reasons is given or admitted. Unlike in a forcible entry where
defendants, by force, intimidation, threat, strategy or stealth, deprive the palintiff
or the prior physical possessor of possession, here there is no evidence to show that
petitioners entered the lot by any of these acts.
Whether private respondent properly filed complaints for unlawful detainer
YES. If only to stress the fundamental principles related to the present
controversy, jurisdiction over unlawful detainer suits is vested in Municipal Trial
Courts. And in ejectment cases, the jurisdiction of the court is determined by the
allegations of the complaint. In the case for ejectment, private respondents
allegations sufficiently present a case of unlawful detainer. She alleged that (1) she
owns Lot 1227, (2) she tolerated petitioners to construct their houses thereon; (3)
she withdrew her tolerance; and (4) petitioners refused to heed her demand to
vacate the lot. The Complaints were also filed within one year from the date of her
demand. The cause of action for unlawful detainer between the parties springs
from the failure of petitioners to vacate the lot upon lawful demand
of the private respondent. When they refused to vacate the lot after her demand,
petitioners continued possession became unlawful. Her complaint for ejectment
against respondent, to put it simply, is not without sufficient basis.
Whether private respondent should have filed an action to recover possession de
jure, as argued by petitioners on appeal
NO. Petitioners contention that private respondent should have filed an
action to recover possession de jure with the TC is not supported by law or
jurisprudence. The distinction between a summary action of ejectment and a
plenary action for recovery of possession and/or ownership of the land is settled in
our jurisprudence. Petitioners present contention was first raised only in their
appeal to the RTC. Raising it before the appellate tribunal is barred by estoppel.
They should have raised it in the proceedings before the MCTC. In our view, this
issue is a mere afterthought, when the MCTC decided against them. Basic rules of
fair play, justice and due process require that as a rule an issue cannot be raised by
the petitioners for the first time on appeal.
The Court noted with dismay petitioners insistence that it must order the
MCTC to conduct the requisite preliminary conference. The summary character of
ejectment suits will be disregarded if the Court would allow petitioners to further
delay this case by allowing a second preliminary conference. Ejectment by way of
forcible entry and unlawful detainer cases are summary proceedings, designed to
provide an expeditious means of protecting actual possession or the right to
possession over the property involved. It is a timely procedure designed to remedy
the delay in the resolution of such cases.
In sum, the Court found no reversible error much less any grave abuse of
discretion committed by the Court of Appeals. A person who occupies the land of
another at the latters tolerance or permission, without any contract between
them, is necessarily bound by an implied promise that he will vacate upon demand,
failing which a summary action for ejectment is the proper remedy against him. His
status is analogous to that of a lessee or tenant whose term of lease has expired but
whose occupancy continued by tolerance of the owner. In such a case, the date of
unlawful deprivation or withholding of possession is to be counted from the date of
the demand to vacate.
ROSS RICA SALES CENTER vs. SPS. ONG
G.R. No. 132197. 08/16/2005, TINGA , J .
FACTS: The spouses Ong are the original owners of 3 parcels of land which they
occupy. They sold it to Mandaue Prime Estate Realty, which then sold it to Ross Rica
Sales Center, Inc. The spouses Ong filed an action to annul the sale and transfer of
property to Mandaue Prime Estate Realty and at present, the case is still pending. In
the meantime, an ejectment case was filed against spouses Ong in the MTC, which
ruled against the latter. On appeal to the RTC, the judgment was affirmed by a
decision dated March 1, 1997. The spouses Ong received a copy of the decision on
April 28, 1997.
The spouses Ong first filed a Notice of Appeal with the RTC (May 8, 1997)
but on the very next day filed a Motion for Reconsideration, which was denied on
June 23, 1997. The spouses Ong received a copy of the order on July 9, 1997. On
July 24, 1997 respondents filed with the CA a motion for an additional 10 days to
file their Petition for Review, which they would eventually file on July 30, 1997.
The CA gave their petition for review due course and reversed the decision
of the RTC on the finding that the action filed was not one for unlawful detainer
based on two grounds: that the allegations fail to show that petitioners were
deprived of possession by force, intimidation, threat, strategy or stealth; and that
there is no contract, express or implied, between the parties that would qualify the
case as one of unlawful detainer.
ISSUES/HELD
Whether the complaint satisfies the jurisdictional requirements for a case of
unlawful detainer properly cognizable by the MTC
- YES. Well-settled is the rule that what determines the nature of an action
as well as which court has jurisdiction over it are the allegations of the complaint
and the character of the relief sought. In Javelosa vs. Court of the Appeals, it was
held that the allegation in the complaint that there was unlawful withholding of
possession is sufficient to make out a case for unlawful detainer. It is equally settled
that in an action for unlawful detainer, an allegation that the defendant is
unlawfully withholding possession from the plaintiff is deemed sufficient, without
necessarily employing the terminology of the law.
Hence, the phrase unlawful withholding has been held to imply possession on the
part of defendant, which was legal in the beginning, having no other source than a
contract, express or implied, and which later expired as a right and is being withheld
by defendant. In Rosanna B. Barba vs. Court of Appeals, the Supreme Court held
that a simple allegation that the defendant is unlawfully withholding possession
from plaintiff is sufficient. Based on this premise, the allegation in the Complaint
that:
. . . . despite demand to vacate, the defendants have refused and still
refuse to vacate said lots, thus, unlawfully withholding possession of said lots from
plaintiffs and depriving plaintiffs of the use of their lots; is already sufficient to
constitute an unlawful detainer case.
Likewise, the case of Co Tiamco vs. Diaz provides for a liberal approach in
considering the sufficiency of a complaint for unlawful detainer, thus:
. . . The principle underlying the brevity and simplicity of pleadings in forcible entry
and unlawful detainer cases rests upon considerations of public policy. Cases of
forcible entry and detainer are summary in nature, for they involve perturbation of
social order which must be restored as promptly as possible and, accordingly,
technicalities or details of procedure
should be carefully avoided.
Whether the case should be considered as one for accion reivindicatoria, and thus
the jurisdiction would lie with the RTC
- NO. The issue involved in accion reivindicatoria is the recovery of
ownership of real property. This differs from accion publiciana where the issue is
the better right of possession or possession de jure, and accion interdictal where
the issue is material possession or possession de facto. In an action for unlawful
detainer, the question of possession is primordial, while the issue of ownership is
generally unessential. Petitioners, in all their pleadings, only sought to recover
physical possession of the subject property. The mere fact that they claim
ownership over the parcels of land as well did not deprive the MTC of jurisdiction to
try the ejectment case. Even if respondents claim ownership as a defense to the
complaint for ejectment, the conclusion would be the same, for mere assertion of
ownership by the defendant in an ejectment case will not oust the municipal court
of its summary jurisdiction.
This Court in Ganadin vs. Ramos stated that if what is prayed for is ejectment or
recovery of possession, it does not matter if ownership is claimed by either party.
Therefore, the pending actions for Declaration of Nullity of Deed of Sale and
Transfer Certificates of Title and quieting of title in Civil Case No. MAN-2356 will not
abate the ejectment case.
In Drilon vs. Gaurana, this Court ruled that the filing of an action for reconveyance
of title over the same property or for annulment of the deed of sale over the land
does not divest the MTC of its jurisdiction to try the forcible entry or unlawful
detainer case before it, the rationale being that, while there may be identity of
parties and subject matter in the forcible entry case and the suit for annulment of
title and/or reconveyance, the rights asserted and the relief prayed for are not the
same.
The long settled rule is that the issue of ownership cannot be the subject of a
collateral attack. In Apostol vs. Court of Appeals, this Court had the occasion to
clarify this:
. . . Under Section 48 of Presidential Decree No. 1529, a certificate
of title shall not be subject to collateral attack. It cannot be altered,
modified or cancelled, except in a direct proceeding for that purpose in
accordance with law. The issue of the validity of the title of the respondents
can only be assailed in an action expressly instituted for that purpose.
Whether or not the petitioners have the right to claim ownership over
the property is beyond the power of the court a quo to determine in an
action for unlawful detainer.
PERALTA -LABRADOR v s . BUGARIN
G.R. No. 165177. August 25, 2005 YNARES-SANTIAGO, J .
FACTS: Petitioner Peralta-Labrador was the owner of a 400 sq. m. parcel of land,
purchased in 1976 from the spouses Pronto. In 1990, the DPWH constructed a road
which traversed her lot and separated 108 sq. m. from it. She was subsequently
issued Tax Declaration No. 02-2460R for the separated lot. Sometime in 1994,
respondent Silverio Bugarin forcibly took possession of the 108 sq. m. lot and
refused to vacate the same despite the pleas of petitioner. Hence, on January 18,
1996, she instituted a complaint for recovery of possession and ownership against
respondent before the MTC.
In his Answer with Counterclaims, respondent Bugarin contended that the area
claimed by petitioner is included in the 4,473 square-meter lot, covered by the
Original Certificate of Title (OCT) No. P-13011, and that he has been in continuous
possession and occupation thereof since 1955. In his Amended Answer with
Counterclaim, respondent failed to allege that the questioned lot is covered by the
OCT No. P-13011 and instead asserted that he planted fruit-bearing trees in the
property. Respondent further pleaded the defenses of lack of cause of action and
prescription.
The MTC decided in favor of respondent declaring him as the owner of the
controverted lot on the basis of the OCT No. P-13011. The complaint was dismissed
for failure of petitioner to prove prior physical possession and ownership thereof.
The decision was affirmed by the RTC. Petitioner further filed a petition for review
before the CA, but the same was denied for insufficiency of evidence and
petitioners failure to adduce evidence to prove either ownership or prior physical
possession.
ISSUE: Whether petitioner has a cause of action for forcible entry against
respondent
HELD: NO. In Lopez vs. David Jr., it was held that an action for forcible entry is a
quieting process and the one year time bar for filing a suit is in pursuance of the
summary nature of the action. Thus, the Court has nullified proceedings in theMTCs
when it improperly assumed jurisdiction of a case in which the unlawful deprivation
or withholding of possession had exceeded one year. After the lapse of the one year
period, the suit must be commenced in the RTC via an accion publiciana, a suit for
recovery of the right to possess. It is an ordinary civil proceeding to determine the
better right of possession of realty independently of title. It also refers to an
ejectment suit filed after the expiration of one year from the accrual of the cause of
action or from the unlawful withholding of possession of the realty
independently of title. Likewise, the case may be instituted before the same court
as an accion reivindicatoria, which is an action to recover ownership as well as
possession.
It is clear that petitioners averment make out a case for forcible entry because she
alleged prior physical possession of the subject lot way back in 1976, and the
forcible entry thereon by respondent. Considering her allegation that the unlawful
possession of respondent occurred two years prior to the filing of the complaint on
January 18, 1996, the cause of action for forcible entry has prescribed and the MTC
had no jurisdiction to entertain the case. Therefore petitioners complaint should
have been filed with the proper RTC.
On this point, the Court held in Bongato vs. Malvar that:
It is wise to be reminded that forcible entry is a quieting process, and that the
restrictive time-bar is prescribed to complement the summary nature of such
process. Indeed, the one-year period within which to bring an action for forcible
entry is generally counted from the date of actual entry to the land. However, when
entry is made through stealth, then the one-year period is counted from the time
the plaintiff learned about it.
After the lapse of the one-year period, the party dispossessed of a parcel
of land may file either an accion publiciana, which is a plenary action to recover the
right of possession; or an accion reivindicatoria, which is an action to recover
ownership as well as possession.
SERIA vs CABALLERO
G.R. No. 93213 August 9, 1991
LUCIO TAN ALIM, petitioner,
vs.
HON. COURT OF APPEALS and PACIFIC COAST TIMBER PRODUCTS, INC., respondents.
Celestino R. Calauit for petitioner.
Jose S. Santos, Jr. for private respondent
PARAS, J.:
This is a petition for review on certiorari of the February 27, 1990 decision * of the Court of Appeals in
CA-G.R. CV No. 10603 entitled "PACIFIC COAST TIMBER PRODUCTS, INC. vs. LUCIO TAN ALIM", affirming
the decision ** of the Regional Trial Court of Quezon City, Branch LXXXIX in Civil Case No. Q-24970
which dismissed private respondent's complaint, but allowed the petitioner to exercise his option to buy
the tractor in question, which decision was later amended in its Order, dated September 19, 1985,
partially granting petitioner's motion for reconsideration but denying his plea therein to grant damages
for unrealized income in his logging business due to the alleged irregular and illegal seizure of the said
equipment leased to him.
The case arose out of a Lease Contract with Option To Buy, dated January 5, 1977, which was entered
into by and between respondent PACIFIC COAST TIMBER PRODUCTS, INC., as lessor, and petitioner
LUCIO TAN ALIM, as lessee, for a term of fifteen months over a unit of tractor at a monthly rental of
P10,000.00 subject to the stipulation, among others, that after payment of five months, the lessee is
given an option to purchase the equipment at the price of P150,000.00, in which event the rental paid
shall be considered as part payment of the consideration and that the subject equipment has to remain
at the lessee's jobsite at PARCEL III-R between Dianawan Creek and Bazal, San Joaquin, Baler (Original
Record, p. 7; Exhibit "I" and Exhibit "A").
However, upon its delivery on January 15, 1977, the tractor was discovered to be defective.
Consequently, petitioner Alim informed the private respondent's manager at San Luis, Quezon of such
fact in his letter dated January 25, 1977, relaying likewise the need for the tractor's reconditioning or
replacement with another unit in good running condition and the immediate repair thereof as may be
arranged by him with the Manila Office (Ibid., p. 96, Exhibit "2"). The Logging Manager of the
respondent corporation, Luis O. Barredo, issued a certification on June 11, 1977 that a defective tractor
was delivered to the petitioner (Ibid., p. 98, Exhibit "5"). The amount of P5,000.00 for the repair of the
tractor was then paid by the private respondent to petitioner Alim on January 29, 1977 (Ibid., p. 97,
Exhibit "4"). Petitioner Alim expended the amount of P36,130.60 for its repair and reconditioning, as
specifically contained in his letter to respondent corporation of June 25, 1977 (Ibid., p. 99, Exhibit "3").
On July 1, 1977, the parties amended the lease contract with petitioner's obligation to execute a Deed
of Chattel Mortgage for his three motor vehicles in favor of the respondent to guarantee his undertaking
in the amended lease contract (Ibid., pp. 101-102; Rollo, pp. 12-13). Respondent corporation's counsel,
Lino M. Patajo, formally informed Alim in a letter dated March 16, 1978 that under the amended
contract wherein payment of rentals commenced in August, 1977, the latter failed to pay rentals for
seven months, from September, 1977 to February, 1978 in the amount of P70,000.00, for which reason
the contract of lease as well as the option to buy, are automatically terminated. The same counsel
likewise sent a notice of default in obligation secured by the Chattel Mortgage (Ibid., Exhibit "C"; p. 11,
Exhibit "D"; Original Records, p. 12). However, the petition for extrajudicial foreclosure thereon was
returned by the sheriff unsatisfied (Ibid., p. 12). Thereafter, a complaint for recovery of possession with
replevin of a unit of tractor (Ibid., pp. 13-15-A; Rollo, pp. 15-18), was filed by private respondent before
the then Court of First Instance of Quezon City due to petitioner's refusal to pay the arrears and to
deliver the subject equipment.
Upon the filing of a bond by Pacific Coast Timber Products, Inc., furnished by Pioneer Insurance and
Surety Corporation in the sum of P300,000.00 (Ibid., p. 26), the trial court issued a writ of replevin for
the seizure and delivery of the property in question on April 13, 1978 (Ibid., p. 36; Rollo, p. 20). On April
16, 1978, Deputy Sheriff Reynaldo P. Lopez of the then Court of First Instance of Aurora Sub-province at
Baler, Quezon, seized the tractor from the petitioner and turned it over to the respondent corporation
on April 26, 1978 (Ibid p. 45, Sheriff's Return of Service).
In his answer (Ibid., pp. 38-43), the petitioner denied having defaulted in the payment of rentals and
claimed to have sustained damages for unrealized income in his logging business as a result of the
wrongful seizure of the tractor (Rollo, p. 21).
Both parties having failed to reach an agreement at the pretrial, the case was tried on the merits.
In the order of the trial court dated December 17, 1980, respondent corporation's motion to recall or lift
the Order of Seizure and to cancel the replevin bond the same having already served their purposes,
(Ibid., pp. 142-143), which was opposed by petitioner Alim (Ibid., pp. 144-146), was denied for lack of
merit since the case was still pending in court (Ibid., p. 149).
On the scheduled hearing of July 14, 1981, both parties failed to attend. Hence, the dismissal of the case
(Ibid., p. 158). However, the order of dismissal was reconsidered upon explanation of the parties (Ibid.,
p. 159). The case was finally resolved in favor of petitioner Alim on July 31, 1985 by the trial court (RTC,
Quezon City), the dispositive portion of which states:
ACCORDINGLY, judgment is hereby rendered dismissing the plaintiffs complaint, and allowing the
defendant within fifteen days from and after this judgment becomes final and executory, to exercise his
option under the Lease Contract with Option to Buy, as amended, to buy the tractor, in question, by
paying to the plaintiff the balance of P90,000.00 after deducting from the purchase price of
P150,000.00, in rentals, already paid by him, and ordering the plaintiff to pay to the defendant the
amount of P36,130.60 as reimbursement for the expenses for repairs made by the defendant on the
tractor which may be offsetted from the remaining purchase price of P90,000.00 if the defendant
exercises his option to buy, plus reasonable attorney's fees in the amount of P5,000.00, with costs
against the plaintiff.
SO ORDERED. (Rollo, pp. 32-33)
The said decision was, however, partially modified upon motion for reconsideration of the petitioner,
dated August 19, 1985 (Original Record, pp. 259-261), in its Order dated September 19, 1985, in this
wise:
ACCORDINGLY, judgment is hereby rendered dismissing the plaintiff's complaint, and allowing the
defendant, within fifteen (15) days from and after (sic) this judgment becomes final and executory, to
exercise his option under the Lease Contract with Option To Buy, as amended, to buy the tractor, in
question by paying to the plaintiff the balance of P80,000.00 after deducting from the purchase price of
P150,000.00, the amount of P70,000.00 in rentals, already paid by him, and ordering the plaintiff to pay
to the defendant the amount of P36,130.60 as reimbursement for the expenses for repairs made by the
defendant on the tractor, which may be off-setted (sic) from the remaining purchase price of
P80,000.00, if the defendant exercises his option to buy, plus reasonable attorney's fees in the amount
of P5,000.00, with costs against the plaintiff. (Rollo, pp. 37-A-38).
Not satisfied with the modified decision, petitioner Alim appealed, claiming damages because of the
wrongful seizure of the tractor, but the same was affirmed by the Court of Appeals which denied said
petitioner's claim for compensation and concurred with the following findings of the trial court:
However, since the fifteen (15) month lease period provided in the contract had already expired ... the
plaintiff may not be judicially compelled to deliver the tractor to defendant since after the expiration of
the lease period, it is legally entitled to its possession, as the owner thereof. (Rollo, P. 62)
Petitioner's motion for reconsideration was denied by the Court of Appeals in its resolution dated April
30, 1990 (Rollo, p. 65). Hence, this petition.
The issues raised in this case are: (1) whether or not the fifteen (15) month lease period had
commenced from August 1977 and expired in October 1978; (2) whether or not the petitioner is
entitled to collect/recover damages as prayed for in the complaint; and (3) whether or not petitioner is
entitled to recover the sum of P300,000.00 from the replevin bond, all of which may be synthesized in
one pivotal issue, the interpretation of the "Amendment to Contract of Lease" (Exhibit "6", Original
Records, p. 9) in relation to the "Original Lease Contract with Option to Buy (Exhibit "1". Original
Records, p. 7).
Both the trial court and the Court of Appeals are of the view that there is no amendment as to the
duration of the Contract of Lease; that the contract expired as originally stipulated on April 5, 1978 and
that when the tractor was seized by virtue of a writ of replevin on August 16, 1978, the contract of lease
had expired and the lessee Alim was consequently not entitled to damages.

A careful review of the records shows that in the original contract, it was expressly stipulated that the
lease shall be for a period of fifteen (15) months (Exhibit "1". par. 2) and that the lessee is given an
option to purchase the equipment for ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS, after Alim
has completed and religiously paid the 5-month rentals which shall be considered as part payment of
the consideration (Ibid., par. 4).
On the other hand, there is no provision in the amended contract as to the period of the lease. Instead,
it provides that "All provisions of the original lease contract not amended by the foregoing provisions
shall remain in full force and effect." (Exhibit "6", par. 5). The alteration is evidently focused on the
period for the right to exercise the option to buy. Originally, the period was five (5) months of regular
payment but under the amended contract, the period was changed to fifteen (15) months,
unquestionably including the period from the commencement of the original contract on January 7,
1977, as specifically provided in paragraph 4 thereof, which states:
4. The monthly rentals of the equipment which on the date of the execution of this amendment to
the original lease contract have not been paid shall be considered as paid obligation of LESSEE to
LESSOR, the payment of which will be the subject of negotiation between LESSOR and LESSEE.
The letter of Atty. Lino M. Patajo, counsel of respondent corporation, on which Alim heavily relied in his
arguments in his favor, unmistakably confirms the fact of non-extension of the lease agreement when
he spoke of the commencement of the payment of the rentals, not on the commencement of the new
period of lease (Exhibit "C", Original Records, p. 11). Inevitably, the courts cannot go beyond what
appears in the documents submitted by the parties.
Nothing is more settled than the rule that the terms of written contract are binding on the parties
thereto. In the interpretation of the provisions of a written contract, the courts should follow the literal
meaning of the stipulation. Otherwise, the evident intention of the parties must prevail (Art. 1370, Civil
Code) (Spouses Roberto E. Fermin and Maylinda Ferraren v. Hon. Court of Appeals, et al., G.R. 95146,
May 6, 1991).
There is therefore no merit in the petitioner's allegation that the seizure was wrongful for which he
must be compensated.1wphi1 The ownership or right of possession over the subject equipment
belonged to the Pacific Coast Timber Products, Inc. at the time it was seized. The seizure of the
equipment was ordered by the trial court for its restoration by means established in the laws of
procedure. Thus, the requisites for the issuance of the writ of replevin (Sec. 2, Rule 60) have been
satisfied.
The writ is a provisional remedy in replevin suits. It is in the "nature of a possessory action and the
applicant who seeks the immediate possession of the property need not be the holder of the legal title
to the property." It is sufficient that at the time he applied for a writ of replevin he is found to be
"entitled to a possession thereof as stated in Section 2, Rule 60 of the Rules of Court (Yang v. Valdez, 177
SCRA 141 [1989]).
The Appellate Court correctly observed that the trial court was right in holding that "the plaintiff may
not anymore be judicially compelled to deliver the tractor to the defendant since after the expiration of
the lease period, it is legally entitled to its possession, as the owner thereof (p 5, RTC decision; Rollo, p.
31)". It is very clear therefore, that Alim is not entitled to any award of damages based on the foregoing
facts and evidence presented. Neither can he claim moral and exemplary damages. The records show
that the petitioner was not able to adduce any evidence before the trial court to prove facts upon which
the award for such damages may be predicated. In fact, even in the petition and memorandum for the
petitioner, there was no discussion of the evidence upon which Alim relies for his claim.
Moral damages have to do with injury personal to the awardee such a physical sufferings and the like,
while exemplary damages are imposed by way of example or correction for the public good (Makabili v.
Court of Appeals, 157 SCRA 253 [1988]).
Indisputably, moral damages cannot generally be awarded in the absence of bad faith (De Aparico v.
Paraguya, 150 SCRA 279 [1987]). Otherwise stated, moral damages can be awarded if they are the
proximate results of a wrongful act or omission (Filinvest Credit Corporation v. Mendez, 152 SCRA 593
[1987]), while exemplary damages are not awarded if the defendant had not acted in a wanton,
oppressive or malevolent manner (Zenith Insurance Corporation v. Court of Appeals, 185 SCRA 398
[1990]), neither can claim for exemplary damages be granted in the absence of gross or reckless
negligence (De los Santos, et al. v. Court of Appeals, G.R. 51165, June 21, 1990), which misfeasance is
not true in the case at bar.
A replevin bond is simply intended to indemnify the defendant against any loss that he may suffer by
being compelled to surrender the possession of the disputed property pending the trial of the action.
He cannot recover on the bond as for a reconversion when he has failed to have the judgment entered
for the return of the property. Nor is the surety liable for payment of the judgment for damages
rendered against the plaintiff on a counterclaim or punitive damages for fraudulent or wrongful acts
committed by the plaintiffs and unconnected with the defendant's deprivation of possession by the
plaintiff. Even where the judgment was that the defendant was entitled to the property, but no order
was made requiring the plaintiff to return it or assessing damages in default of a return, it was declared
that until judgment was entered that the property should be restored, there could be no liability on the
part of the sureties Sapugay v. Court of Appeals, 183 SCRA 464 [1990]).
PREMISES CONSIDERED, the instant petition is DISMISSED and the assailed decision is AFFIRMED.
SO ORDERED.
PEREZ VS MENDOZA
G.R. No. L-22006. July 28, 1975.

Facts:
In 1922, Felisa Montalbo-Ortega exchanged the land she inherited from her father with the land of her
aunt, Andrea Montalbo, because the latter wanted to donate a
piece of land to the municipality of Taysan, Batangas, to be used as a school site and
the municipality preferred the land belonging to Felisa as it was adjacent to the
other properties of the municipality. After the exchange, Andrea donated almost
one-half of the land to the municipality and gave the other to her daughter
Margarita when the latter married Nicolas Mendoza in 1972. Since then, Margarita
and Nicolas possessed and occupied the land continuously, in the concept of owners.
When Nicolas sought the transfer of the property in their names he submitted the
deed of exchange of property executed by Felisa and Andrea in the presence of, and
witnessed by the Municipal Secretary, Rafael Manahan. When Basilio Perez came to
know of the alleged deed of exchange, he had it investigated and found that the
signature of the municipal secretary was forged. Accused of falsification of private
document, Mendoza was convicted; but the Court of Appeals acquitted him for
insufficiency of evidence.
On March 20, 1959, petitioner Basilio and his wife Petra brought an action against
respondent spouses Margarita and Nicolas for quieting of title, alleging that the land
in dispute was inherited by Petra and Felisa from Estanislao Montalbo who died in
1918; that the heirs partitioned said land in 1934 and the share of Felisa, the land
in question, was sold by her husband, Jose Ortega, and her children to petitioners;
that they leased the said parcel of land to respondents in 1946, but that when the
lease expired in 1951, the latter refused to return the land prompting the former to
file an unlawful detainer action which was still pending during the trial of this case.
The trial court dismissed the complaint and declared respondents with a better right
over the property in litigation. The Court of Appeals affirmed the decision of the trial
court in toto.
Issue:
Whether or not the trial court erred in its decision.
Held:
NO. Finding no reversible error, Supreme Court affirmed the judgment under review
with costs against petitioners. The claim of private respondents that they are the owners of the
land in dispute must be upheld on the ground that they were in actual and
continuous possession of the land, openly, adversely, and in the concept of owners
thereof since 1927 thereby acquiring ownership of the land through acquisitive
prescription. Possession is an indicium of ownership of the thing possessed and to the possessor goes
the presumption that he holds the thing under a claim of ownership. Article 433 of the
Civil Code provides that "(A)ctual possession under claim of ownership raises a
disputable presumption of ownership. The true owner must resort to judicial process
for the recovery of the property."
Article 538 of the Civil Code provides that possession as a fact cannot be recognized at the same time in
two different personalities except in the
cases of co-possession. Should a question arise regarding the fact of possession, the
present possessor shall be preferred; if there are two possessors, the one longer in
possession; if the dates of possession are the same, the one who presents a title;
and if all these conditions are equal, the thing shall be placed in judicial deposit
pending determination of its possession or ownership through proper proceedings
DIZON vs CA
GR 101929
(FULL TEXT)
The spouses Hilario Galang and Martina Laxamana owned two (2) lots located in San Agustin, Potrero,
Municipality of Bacolor, Province of Pampanga. They had six (6) children, namely, Dionisio, Marciana,
Potenciana, Flaviana, Leonora and Gertrudes.
The spouses (Hilario and Martina) mortgaged the aforesaid lots to Camilo Angeles. It is alleged by the
respondents that Dionisio Galang redeemed these lots in his own name, despite the fact that part of the
funds used for the redemption came from his sisters. 2 A cadastral survey involving the two (2) lots was
conducted, and on 19 May 1919, the Court of First Instance ordered the issuance in Cadastral Case No.
14, of OCT Nos. 9010 (for lot 3548) and 9102 (for lot 3562) in the name solely of Dionisio Galang
(hereafter Galang).
Respondents, who are heirs of Galangs sisters, claim that Galang and his five (5) sisters had partitioned
the subject lots on 27 June 1920, as embodied in an unnotarized affidavit executed by Galang (Exh. "C").
As a consequence thereof, Galangs sisters constructed their houses on Lot 3548. The structures passed
on from generation to generation, with each of Galangs sisters and their descendants enjoying the
benefits therefrom. No one questioned for disturbed them until the petitioners (heirs of Galang)
informed them that the lots in question were titled in Galangs name and had been partitioned, on the
basis of a Deed of Extrajudicial Partition (Exh. "D"), into three (3) equal parts corresponding to his
(Galangs) three (3) children; that petitioners had succeeded in subdividing the lots and in obtaining
titles thereto in their name (TCT Nos. 182670-R and 182671-R) despite their (respondents) earlier
demands for an extrajudicial settlement of their dispute.
Petitioners, on the other hand, contend that the cadastral case which culminated in the issuance of the
original certificates of title over the subject lots in the sole name of Galang, was a proceeding in rem,
thus binding on the whole world; that when original certificates of title (OCT Nos. 9010 and 9102) were
issued on 9 January 1922 to Galang, respondents did not raise any objection until March 1983 when
they filed the complaint in Civil Case No. 6752, or after a lapse of sixty-one (61) years.
The trial court 3 upheld Galangs titles over the lots which, as aforestated, had been issued as early as
1922 in his name. The trial court further held that respondents action had long prescribed, having been
filed only on 24 March 1983, or after a lapse of sixty-one (61) long years from the issuance of said titles.
The court also noted respondents failure to establish their relationship to Galangs five (5) sisters,
premising their claim solely on an unsubstantiated assertion that they are descendants of the deceased
Galang sisters. 4 The presence or construction of the houses on Lot No. 3548 was also not considered as
evidence in respondents favor, since no proof was submitted establishing respondents right to occupy
the place. The documentary evidence (Exh. "C" and "C-1") allegedly showing co-ownership among
Dionisio and his co-heirs, was likewise ignored by the trial court as this did not specifically refer to the
disputed Lots 3548 and 3562.chanrobles lawlibrary : rednad
On appeal by the respondents, respondent Court of Appeals reversed the trial court by upholding
respondents rights. It focused on two (2) issues. Thus
"Are the properties in question owned in common by the predecessors-in-interest of appellants and
appellees? And has appellants present action for partition prescribed?" 5
The appellate court declared that co-ownership existed between respondents predecessors-in-interest
and those of petitioners, on the basis of Galangs affidavit which, although unnotarized, was
nonetheless an ancient document, pursuant to Sec. 22, Rule 132 of the Rules of Court, since it was
executed on 27 June 1920. As such, proof of its due execution and authentication could be dispensed
with, according to the appellate court.
Hence, this recourse in turn by the petitioners.
We find the petition impressed with merit.
It is a fact that Dionisio Galangs ownership over the disputed lots (3548 and 3562) had been judicially
confirmed on 19 May 1919 in Cadastral Case No. 14, G.L.R.O. No. 51, which is a proceeding in rem and
hence binding "on the whole world." OCT No. 1056 (9010) and OCT No. 1057 (9102) were, as a
consequence, issued on 9 January 1922. None of Galangs co-heirs objected to or protested their
issuance. These titles became indefeasible and incontrovertible. Then it was only after sixty-one (61)
years or on 24 March 1983 that the descendants of Galangs co-heirs asserted co-ownership claims over
the subject lots.
It is true that Galang executed an affidavit, unnotarized at that, on 27 June 1920 which states in part as
follows (per English translation [Exh. "C-1]): 6
That on this date, I have received from all my sisters and nephews who are my co-heirs, namely
Potenciana Galang, Flaviana Galang, Gertrudes Galang, who are may sisters, and Silverio Garcia and
Hilarion Samia, in their own names and for their brothers and sisters who are also co-heirs, the sum of
ONE HUNDRED AND SIX PESOS (P106.00), Philippine Currency, as complete payment for the discharge of
the land we co-inherited, which is the one we partitioned this date also, which was mortgaged to the
Angeles family." 7
However, as can be gleaned from the foregoing, there is no reference to Lot Nos. 3548 and 3562. Said
affidavit is not therefore a sufficient basis or support for what is alleged by respondents as a partition
among Dionisio and his now deceased sisters. It does not, as correctly stated by the trial court, amount
to anything insofar as the two (2) lots involved in this case are concerned:chanrobles law library : red
"Even their presentation of the document purportedly executed by Dionisio Galang on June 27, 1920
(Exh. "C" and "C-1) where the latter acknowledges that he and his co-heirs named therein are co-owners
of a certain property which they had mortgaged to a certain family surnamed Angeles does not amount
to anything for nothing in this document shows that it pertains to the two lots involved herein. It merely
referred to a certain land which Dionisio Galang and his co-heirs co-inherited and partitioned without
any indication as to which property is being referred to." 8
We likewise agree with the trial court that in the absence of definite proof establishing respondents
link/relationship to their alleged predecessors-in-interest, i.e., the Galang sisters, they do not have any
cause of action, and the suit for partition must necessarily fall. The trial court aptly
observed:jgc:chanrobles.com.ph
". . . the plaintiffs thru their witnesses Bienvenido Tapnio, Marcos Dimabuyu, Pedro Atienza, and
Carmelita Galang, tried to prove that all the plaintiffs herein are heirs and direct descendants,
respectively, of Marciana Galang, Potenciana Galang, Flaviana Galang, Leoncia Galang and Gertrudes
Galang who, in their lifetime, together with their late brother Dionisio Galang, are the co-owners of
these two lots, namely, Lots Nos. 3548 and 3562. Lamentably, all that was proved in the process by the
plaintiffs thru these witnesses despite several proddings and suggestions made by the court toward this
end was that each of these plaintiffs are just related to one another in varying degrees of relationship.
They failed to establish their connection or relationship with any of these five sisters save for their
unfounded averment that they are indeed descendants and heirs of these deceased individuals." 9
WHEREFORE, the petition is GRANTED. The appealed decision of the Court of Appeals is hereby SET
ASIDE and the decision of the trial court dated 3 October 1986 in Civil Case No. 6752 is hereby
REINSTATED. No costs.
SO ORDERED.

G.R. No. 93213 August 9, 1991
LUCIO TAN ALIM, petitioner,
vs.
HON. COURT OF APPEALS and PACIFIC COAST TIMBER PRODUCTS, INC., respondents.
Celestino R. Calauit for petitioner.
Jose S. Santos, Jr. for private respondent
PARAS, J.:
This is a petition for review on certiorari of the February 27, 1990 decision * of the Court of Appeals in
CA-G.R. CV No. 10603 entitled "PACIFIC COAST TIMBER PRODUCTS, INC. vs. LUCIO TAN ALIM", affirming
the decision ** of the Regional Trial Court of Quezon City, Branch LXXXIX in Civil Case No. Q-24970
which dismissed private respondent's complaint, but allowed the petitioner to exercise his option to buy
the tractor in question, which decision was later amended in its Order, dated September 19, 1985,
partially granting petitioner's motion for reconsideration but denying his plea therein to grant damages
for unrealized income in his logging business due to the alleged irregular and illegal seizure of the said
equipment leased to him.
The case arose out of a Lease Contract with Option To Buy, dated January 5, 1977, which was entered
into by and between respondent PACIFIC COAST TIMBER PRODUCTS, INC., as lessor, and petitioner
LUCIO TAN ALIM, as lessee, for a term of fifteen months over a unit of tractor at a monthly rental of
P10,000.00 subject to the stipulation, among others, that after payment of five months, the lessee is
given an option to purchase the equipment at the price of P150,000.00, in which event the rental paid
shall be considered as part payment of the consideration and that the subject equipment has to remain
at the lessee's jobsite at PARCEL III-R between Dianawan Creek and Bazal, San Joaquin, Baler (Original
Record, p. 7; Exhibit "I" and Exhibit "A").
However, upon its delivery on January 15, 1977, the tractor was discovered to be defective.
Consequently, petitioner Alim informed the private respondent's manager at San Luis, Quezon of such
fact in his letter dated January 25, 1977, relaying likewise the need for the tractor's reconditioning or
replacement with another unit in good running condition and the immediate repair thereof as may be
arranged by him with the Manila Office (Ibid., p. 96, Exhibit "2"). The Logging Manager of the
respondent corporation, Luis O. Barredo, issued a certification on June 11, 1977 that a defective tractor
was delivered to the petitioner (Ibid., p. 98, Exhibit "5"). The amount of P5,000.00 for the repair of the
tractor was then paid by the private respondent to petitioner Alim on January 29, 1977 (Ibid., p. 97,
Exhibit "4"). Petitioner Alim expended the amount of P36,130.60 for its repair and reconditioning, as
specifically contained in his letter to respondent corporation of June 25, 1977 (Ibid., p. 99, Exhibit "3").
On July 1, 1977, the parties amended the lease contract with petitioner's obligation to execute a Deed
of Chattel Mortgage for his three motor vehicles in favor of the respondent to guarantee his undertaking
in the amended lease contract (Ibid., pp. 101-102; Rollo, pp. 12-13). Respondent corporation's counsel,
Lino M. Patajo, formally informed Alim in a letter dated March 16, 1978 that under the amended
contract wherein payment of rentals commenced in August, 1977, the latter failed to pay rentals for
seven months, from September, 1977 to February, 1978 in the amount of P70,000.00, for which reason
the contract of lease as well as the option to buy, are automatically terminated. The same counsel
likewise sent a notice of default in obligation secured by the Chattel Mortgage (Ibid., Exhibit "C"; p. 11,
Exhibit "D"; Original Records, p. 12). However, the petition for extrajudicial foreclosure thereon was
returned by the sheriff unsatisfied (Ibid., p. 12). Thereafter, a complaint for recovery of possession with
replevin of a unit of tractor (Ibid., pp. 13-15-A; Rollo, pp. 15-18), was filed by private respondent before
the then Court of First Instance of Quezon City due to petitioner's refusal to pay the arrears and to
deliver the subject equipment.
Upon the filing of a bond by Pacific Coast Timber Products, Inc., furnished by Pioneer Insurance and
Surety Corporation in the sum of P300,000.00 (Ibid., p. 26), the trial court issued a writ of replevin for
the seizure and delivery of the property in question on April 13, 1978 (Ibid., p. 36; Rollo, p. 20). On April
16, 1978, Deputy Sheriff Reynaldo P. Lopez of the then Court of First Instance of Aurora Sub-province at
Baler, Quezon, seized the tractor from the petitioner and turned it over to the respondent corporation
on April 26, 1978 (Ibid p. 45, Sheriff's Return of Service).
In his answer (Ibid., pp. 38-43), the petitioner denied having defaulted in the payment of rentals and
claimed to have sustained damages for unrealized income in his logging business as a result of the
wrongful seizure of the tractor (Rollo, p. 21).
Both parties having failed to reach an agreement at the pretrial, the case was tried on the merits.
In the order of the trial court dated December 17, 1980, respondent corporation's motion to recall or lift
the Order of Seizure and to cancel the replevin bond the same having already served their purposes,
(Ibid., pp. 142-143), which was opposed by petitioner Alim (Ibid., pp. 144-146), was denied for lack of
merit since the case was still pending in court (Ibid., p. 149).
On the scheduled hearing of July 14, 1981, both parties failed to attend. Hence, the dismissal of the case
(Ibid., p. 158). However, the order of dismissal was reconsidered upon explanation of the parties (Ibid.,
p. 159). The case was finally resolved in favor of petitioner Alim on July 31, 1985 by the trial court (RTC,
Quezon City), the dispositive portion of which states:
ACCORDINGLY, judgment is hereby rendered dismissing the plaintiffs complaint, and allowing the
defendant within fifteen days from and after this judgment becomes final and executory, to exercise his
option under the Lease Contract with Option to Buy, as amended, to buy the tractor, in question, by
paying to the plaintiff the balance of P90,000.00 after deducting from the purchase price of
P150,000.00, in rentals, already paid by him, and ordering the plaintiff to pay to the defendant the
amount of P36,130.60 as reimbursement for the expenses for repairs made by the defendant on the
tractor which may be offsetted from the remaining purchase price of P90,000.00 if the defendant
exercises his option to buy, plus reasonable attorney's fees in the amount of P5,000.00, with costs
against the plaintiff.
SO ORDERED. (Rollo, pp. 32-33)
The said decision was, however, partially modified upon motion for reconsideration of the petitioner,
dated August 19, 1985 (Original Record, pp. 259-261), in its Order dated September 19, 1985, in this
wise:
ACCORDINGLY, judgment is hereby rendered dismissing the plaintiff's complaint, and allowing the
defendant, within fifteen (15) days from and after (sic) this judgment becomes final and executory, to
exercise his option under the Lease Contract with Option To Buy, as amended, to buy the tractor, in
question by paying to the plaintiff the balance of P80,000.00 after deducting from the purchase price of
P150,000.00, the amount of P70,000.00 in rentals, already paid by him, and ordering the plaintiff to pay
to the defendant the amount of P36,130.60 as reimbursement for the expenses for repairs made by the
defendant on the tractor, which may be off-setted (sic) from the remaining purchase price of
P80,000.00, if the defendant exercises his option to buy, plus reasonable attorney's fees in the amount
of P5,000.00, with costs against the plaintiff. (Rollo, pp. 37-A-38).
Not satisfied with the modified decision, petitioner Alim appealed, claiming damages because of the
wrongful seizure of the tractor, but the same was affirmed by the Court of Appeals which denied said
petitioner's claim for compensation and concurred with the following findings of the trial court:
However, since the fifteen (15) month lease period provided in the contract had already expired ... the
plaintiff may not be judicially compelled to deliver the tractor to defendant since after the expiration of
the lease period, it is legally entitled to its possession, as the owner thereof. (Rollo, P. 62)
Petitioner's motion for reconsideration was denied by the Court of Appeals in its resolution dated April
30, 1990 (Rollo, p. 65). Hence, this petition.
The issues raised in this case are: (1) whether or not the fifteen (15) month lease period had
commenced from August 1977 and expired in October 1978; (2) whether or not the petitioner is
entitled to collect/recover damages as prayed for in the complaint; and (3) whether or not petitioner is
entitled to recover the sum of P300,000.00 from the replevin bond, all of which may be synthesized in
one pivotal issue, the interpretation of the "Amendment to Contract of Lease" (Exhibit "6", Original
Records, p. 9) in relation to the "Original Lease Contract with Option to Buy (Exhibit "1". Original
Records, p. 7).
Both the trial court and the Court of Appeals are of the view that there is no amendment as to the
duration of the Contract of Lease; that the contract expired as originally stipulated on April 5, 1978 and
that when the tractor was seized by virtue of a writ of replevin on August 16, 1978, the contract of lease
had expired and the lessee Alim was consequently not entitled to damages.
A careful review of the records shows that in the original contract, it was expressly stipulated that the
lease shall be for a period of fifteen (15) months (Exhibit "1". par. 2) and that the lessee is given an
option to purchase the equipment for ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS, after Alim
has completed and religiously paid the 5-month rentals which shall be considered as part payment of
the consideration (Ibid., par. 4).
On the other hand, there is no provision in the amended contract as to the period of the lease. Instead,
it provides that "All provisions of the original lease contract not amended by the foregoing provisions
shall remain in full force and effect." (Exhibit "6", par. 5). The alteration is evidently focused on the
period for the right to exercise the option to buy. Originally, the period was five (5) months of regular
payment but under the amended contract, the period was changed to fifteen (15) months,
unquestionably including the period from the commencement of the original contract on January 7,
1977, as specifically provided in paragraph 4 thereof, which states:
4. The monthly rentals of the equipment which on the date of the execution of this amendment to
the original lease contract have not been paid shall be considered as paid obligation of LESSEE to
LESSOR, the payment of which will be the subject of negotiation between LESSOR and LESSEE.
The letter of Atty. Lino M. Patajo, counsel of respondent corporation, on which Alim heavily relied in his
arguments in his favor, unmistakably confirms the fact of non-extension of the lease agreement when
he spoke of the commencement of the payment of the rentals, not on the commencement of the new
period of lease (Exhibit "C", Original Records, p. 11). Inevitably, the courts cannot go beyond what
appears in the documents submitted by the parties.
Nothing is more settled than the rule that the terms of written contract are binding on the parties
thereto. In the interpretation of the provisions of a written contract, the courts should follow the literal
meaning of the stipulation. Otherwise, the evident intention of the parties must prevail (Art. 1370, Civil
Code) (Spouses Roberto E. Fermin and Maylinda Ferraren v. Hon. Court of Appeals, et al., G.R. 95146,
May 6, 1991).
There is therefore no merit in the petitioner's allegation that the seizure was wrongful for which he
must be compensated.1wphi1 The ownership or right of possession over the subject equipment
belonged to the Pacific Coast Timber Products, Inc. at the time it was seized. The seizure of the
equipment was ordered by the trial court for its restoration by means established in the laws of
procedure. Thus, the requisites for the issuance of the writ of replevin (Sec. 2, Rule 60) have been
satisfied.
The writ is a provisional remedy in replevin suits. It is in the "nature of a possessory action and the
applicant who seeks the immediate possession of the property need not be the holder of the legal title
to the property." It is sufficient that at the time he applied for a writ of replevin he is found to be
"entitled to a possession thereof as stated in Section 2, Rule 60 of the Rules of Court (Yang v. Valdez, 177
SCRA 141 [1989]).

The Appellate Court correctly observed that the trial court was right in holding that "the plaintiff may
not anymore be judicially compelled to deliver the tractor to the defendant since after the expiration of
the lease period, it is legally entitled to its possession, as the owner thereof (p 5, RTC decision; Rollo, p.
31)". It is very clear therefore, that Alim is not entitled to any award of damages based on the foregoing
facts and evidence presented. Neither can he claim moral and exemplary damages. The records show
that the petitioner was not able to adduce any evidence before the trial court to prove facts upon which
the award for such damages may be predicated. In fact, even in the petition and memorandum for the
petitioner, there was no discussion of the evidence upon which Alim relies for his claim.

Moral damages have to do with injury personal to the awardee such a physical sufferings and the like,
while exemplary damages are imposed by way of example or correction for the public good (Makabili v.
Court of Appeals, 157 SCRA 253 [1988]).

Indisputably, moral damages cannot generally be awarded in the absence of bad faith (De Aparico v.
Paraguya, 150 SCRA 279 [1987]). Otherwise stated, moral damages can be awarded if they are the
proximate results of a wrongful act or omission (Filinvest Credit Corporation v. Mendez, 152 SCRA 593
[1987]), while exemplary damages are not awarded if the defendant had not acted in a wanton,
oppressive or malevolent manner (Zenith Insurance Corporation v. Court of Appeals, 185 SCRA 398
[1990]), neither can claim for exemplary damages be granted in the absence of gross or reckless
negligence (De los Santos, et al. v. Court of Appeals, G.R. 51165, June 21, 1990), which misfeasance is
not true in the case at bar.
A replevin bond is simply intended to indemnify the defendant against any loss that he may suffer by
being compelled to surrender the possession of the disputed property pending the trial of the action.
He cannot recover on the bond as for a reconversion when he has failed to have the judgment entered
for the return of the property. Nor is the surety liable for payment of the judgment for damages
rendered against the plaintiff on a counterclaim or punitive damages for fraudulent or wrongful acts
committed by the plaintiffs and unconnected with the defendant's deprivation of possession by the
plaintiff. Even where the judgment was that the defendant was entitled to the property, but no order
was made requiring the plaintiff to return it or assessing damages in default of a return, it was declared
that until judgment was entered that the property should be restored, there could be no liability on the
part of the sureties Sapugay v. Court of Appeals, 183 SCRA 464 [1990]).
PREMISES CONSIDERED, the instant petition is DISMISSED and the assailed decision is AFFIRMED.
SO ORDERED.
Churchill & Tait v. Rafferty
32 Phil. 580 (1915)
In re: Police power of the State, Lawful Subject of police power
This is an appeal from a judgment of the Court of First Instance of Manila. The case involves a dual
question one involving the power of the court to restrain by injunction the collection of the tax in
question and the other relating to the power of the Collector of Internal Revenue to remove any sign,
signboard, or billboard upon the ground that the same is offensive to the sight or is otherwise a
nuisance.
The focus of this digest is to highlight the cases latter aspect as correlated to the police power of the
State.
Facts
Appellees, Francis A. Churchill and Stewart Tait are involved in the advertising business, particularly in
billboard advertising. Their billboards located upon private lands in the Province of Rizal were removed
upon complaints and by the orders of the defendant Collector of Internal Revenue by virtue of the
provisions of subsection (b) of section 100 of Act No. 2339.
Appellees, in their supplementary complaint challenge the power of the of the Collector of Internal
Revenue to remove any sign, signboard, or billboard upon the ground that the same is offensive to the
sight or is otherwise a nuisance and maintain that the billboards in question in no sense constitute a
nuisance and are not deleterious to the health, morals, or general welfare of the community, or of any
persons. Defendant Collector of Internal Revenue avers that after due investigation made upon the
complaints of the British and German Consuls, the defendant decided that the billboard complained of
was and still offensive to the sight and is otherwise a nuisance.
Issue
1. Was the enactment assailed by the plaintiffs was a legitimate exercise of the
police power of the Government?
Held
The High Court is of the opinion that unsightly advertisements or signs, signboards, or billboards which
are offensive to the sight, are not disassociated from the general welfare of the public. This is not
establishing a new principle, but carrying a well- recognized principle to further application. Moreover, if
the police power may be exercised to encourage a healthy social and economic condition in the country,
and if the comfort and convenience of the people are included within those subjects, everything which
encroaches upon such territory is amenable to the police power. Judgment reversed.
Taxicab Operators vs. Board of Transportation
G.R. No. L-59234. September 30, 1982.
Facts:
Petitioners who are taxicab operators assail the constitutionality of Memorandum Circular No. 77-42
issued by the Board of Transportation (BOT) providing for the phasing out and replacement of old and
dilapidated taxicabs; as well as Implementing Circular No. 52 issued pursuant thereto by the Bureau of
Land Transportation (BLT) instructing personnel of the BLT within the National Capital Region to
implement the said BOT Circular, and formulating a schedule of phase-out of vehicles to be allowed and
accepted for registration as public conveyances.
Petitioners allege that the questioned Circulars did not afford them procedural and substantive due
process, equal protection of the law, and protection against arbitrary and unreasonable classification
and standard. Among others, they question the issuance of the Circulars without first calling them to a
conference or requiring them to submit position papers or other documents enforceability thereof only
in Metro Manila; and their being applicable only to taxicabs and not to other transportation services.
Issues:
Whether or not the constitutional guarantee of due process was denied to the taxicab operators and/or
other persons affected by the assailed Circular No. 52.
Held:
The Supreme Court held that there was no denial of due process since calling the taxicab operators or
persons who may be affected by the questioned Circulars to a conference or requiring them to submit
position papers or other documents is only one of the options open to the BOT which is given wide
discretionary authority under P.D. No. 101; and fixing a six- year ceiling for a car to be operated as
taxicab is a reasonable standard adopted to apply to all vehicles affected uniformly, fairly, and justly.
The Court also ruled that neither has the equal protection clause been violated by initially enforcing the
Circulars only in Metro Manila since it is of common knowledge that taxicabs in this city, compared to
those of other places, are subjected to heavier traffic pressure and more constant use, thus making for a
substantial distinction; nor by non-application of the Circulars to other transportation services because
the said Circulars satisfy the criteria required under the equal protection clause, which is the uniform
operation by legal means so that all persons under identical or similar circumstances would be accorded
the same treatment both in privilege conferred and the liabilities imposed.
It is clear from the provision of Section 2 of P.D. 101 aforequoted, that the leeway accorded the Board
gives it a wide range of choice in gathering necessary information or data in the formulation of any
policy, plan or program. It is not mandatory that it should first call a conference or require the
submission of position papers or other documents from operators or persons who maybe affected, this
being only one of the options open to the Board, which is given wide discretionary authority. Petitioners
cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can they
state with certainty that public respondents had not availed of other sources of inquiry prior to issuing
the challenged Circulars. Operators of public conveyances are not the only primary sources of the data
and information that may be desired by the BOT.
REPUBLIC vs CASTELLVI
GR # L-20620 August 15, 1974 (Constitutional Law Eminent Domain, Elements of Taking)
FACTS: After the owner of a parcel of land that has been rented and occupied by the government in
1947 refused to extend the lease, the latter commenced expropriation proceedings in 1959. During the
assessment of just compensation, the government argued that it had taken the property when the
contract of lease commenced and not when the proceedings begun. The owner maintains that the
disputed land was not taken when the government commenced to occupy the said land as lessee
because the essential elements of the taking of property under the power of eminent domain, namely
(1) entrance and occupation by condemnor upon the private property for more than a momentary
period, and (2) devoting it to a public use in such a way as to oust the owner and deprive him of all
beneficial enjoyment of the property, are not present.
ISSUE: Whether or not the taking of property has taken place when the condemnor has entered and
occupied the property as lesse.
HELD: No, the property was deemed taken only when the expropriation proceedings commenced in
1959.

The essential elements of the taking are: (1) Expropriator must enter a private property, (2) for more
than a momentary period, (3) and under warrant of legal authority, (4) devoting it to public use, or
otherwise informally appropriating or injuriously affecting it in such a way as (5) substantially to oust the
owner and deprive him of all beneficial enjoyment thereof.
In the case at bar, these elements were not present when the government entered and occupied the
property under a contract of lease.
City Government of Quezon vs. Judge Ericta GR No. L-34915 June 24, 1983
Facts:
An ordinance was promulgated in Quezon city which approved the the regulation ofestablishment of
private cemeteries in the said city. According to the ordinance, 6% of the total area of the private
memorial park shall be set aside for charity burial of deceased persons who are paupers and have been
residents of QC. Himlayang Pilipino, a private memorial park, contends that the taking or confiscation of
property restricts the use of property such that it cannot be used for any reasonable purpose and
deprives the owner of all beneficial use of his property. It also contends that the taking is not a valid
exercise of police power, since the properties taken in the exercise of police power are destroyed and
not for the benefit of the public.
Issue:
Whether or not the ordinance made by Quezon City is a valid taking of private property
Ruling:
No, the ordinance made by Quezon City is not a valid way of taking private property. The ordinace is
actually a taking without compensation of a certain area from a private cemetery to benefit paupers
who are charges of the municipal corporation. Instead of building or maintaing a public cemeteries.
State's exercise of the power of expropriation requires payment of just compensation. Passing the
ordinance without benefiting the owner of the property with just compensation or due process, would
amount to unjust taking of a real property. Since the property that is needed to be taken will be used for
the public's benefit, then the power of the state to expropriate will come forward and not the police
power of the state.
REPUBLIC VS PLDT
26 SCRA 620 (1969) (Constitutional Law Eminent Domain, Expropriation, Just Compensation)
FACTS: Public petitioner commenced a suit against private respondent praying for the right of the
Bureau of Telecommunications to demand interconnection between the Government Telephone System
and that of PLDT, so that the Government Telephone System could make use of the lines and facilities of
the PLDT. Private respondent contends that it cannot be compelled to enter into a contract where no
agreement is had between them.
ISSUE: Whether or not interconnection between PLDT and the Government Telephone System can be a
valid object for expropriation.
HELD: Yes, in the exercise of the sovereign power of eminent domain, the Republic may require the
telephone company to permit interconnection as the needs of the government service may require,
subject to the payment of just compensation. The use of lines and services to allow inter-service
connection between the both telephone systems, through expropriation can be a subject to an
easement of right of way.
US GOVERNMENT VS. CAUSBY, digested
Posted by Pius Morados on November 8, 2011
328 US 256, May 27, 1946 (Constitutional Law Just Compensation, Taking, Superjacent Space)
FACTS: Government planes fly over a private property at such low altitude as to practically touch the
tops of the trees. Herein respondent, owner of the said property filed a complaint against public
respondent on grounds that there was an intrusion into the superjacent rights of the former entitling
the same to payment of just compensation because the owner was deprive of the use of the said
property. Petitioner contends that there has been no taking because flights are made within the
navigable airspace and, there was no divestiture of title.
ISSUE: Whether or not there was a taking of superjacent space which entitles for just compensation.
HELD: Yes. Superjacent space is not part of private property because being a public domain, ownership
of the same is vested in the State. However, if flying or occupying over it so low and frequent as to
create a direct and immediate interference with the enjoyment and use of the land underneath it, then
a taking is considered, entitling the owner for a just compensation.
Lunod et al vs. Meneses | Torres, J.
G.R. No. 4223 | August 19, 1908
FACTS
Plaintiifs (Appellees) Nicolas Lunod and 7 others are owners of farmlands
on the upper estates near a lake (Calalaran).
 Defendant-Appellant Higno Meneses is the owner of a fishpond and a strip
of land in Paraanan adjoining said lake on one side and a river on the other. Paraan
is the only outlet of water to the river from the lands of Lunod et al during rainy
season.
In 1901 Meneses converted the land in Paraan to a fishpond and by means
of a dam and a bamboo net prevented the free passage of water through Paraan
causing flood and damage of plantations in the upper estates.
Lunod et al filed a complaint alleging that there exists in favor of their rice
fields a statutory easement for more than 20 years before 1901 and praying that
Meneses be ordered to remove the obstructions that impede the passage of water
through Paraanan.
TC ruled in favor of the plaintiffs.
ISSUE
WON Meneses can be permitted to obstruct the flow of waters through his lands.
HELD
NO. But Lunod et al cannot prevent the defendant from building works to prevent
his lands against influx of waters.
RATIO Bachrach v. Seifert [G.R. No. L-2659. October 12, 1950.]
Where a statutory easement exists between adjoining estates, the owner
of the lower lands must not construct any work that may impair or obstruct an Facts:
easement which consists in receiving the waters which naturally, and without the
intervention of man, descend from more elevated lands; neither shall the owner of The deceased E. M. Bachrach, who left no forced heir except his widow Mary McDonald Bachrach, in his
the latter construct any work that may increase the easement. last will and testament made various legacies in cash and willed the remainder of his estate. The estate
The Civil Code allows that every owner may enclose his property by means of E. M. Bachrach, as owner of 108,000 shares of stock of the Atok-Big Wedge Mining Co., Inc., received
of walls, dikes, fences, or any other device, but his right is limited by the easement from the latter 54,000 shares representing 50 per cent stock dividend on the said 108,000 shares. On
with which his estate is charged. June 10, 1948, Mary McDonald Bachrach, as usufructuary or life tenant of the estate, petitioned the
Since the plaintiffs can not prevent the defendant from protecting his lands lower court to authorize the Peoples Bank and Trust Company, as administrator of the estate of E. M.
against the influx of salt water; but the defendant could never be permitted to Bachrach, to transfer to her the said 54,000 shares of stock dividend by indorsing and delivering to her
obstruct the flow of the waters through his lands to the river during the heavy rains, the corresponding certificate of stock, claiming that said dividend, although paid out in the form of
when the high lands in Calalaran and the lake in said place are flooded, thereby stock, is fruit or income and therefore belonged to her as usufructuary or life tenant. Sophie Siefert and
impairing the right of the owners of the dominant estates; the court advised that it Elisa Elianoff, legal heirs of the deceased, opposed said petition on the ground that the stock dividend in
is perhaps useful and advantageous to all parties that Meneses be made to build a question was not income but formed part of the capital and therefore belonged not to the usufructuary
another dike in addition to the old dike between the lake of said place and the low but to the remainderman. While appellants admit that a cash dividend is an income, they contend that a
lands in Paraanan, for the purpose of preventing the salt waters of the river stock dividend is not, but merely represents an addition to the invested capital.
flooding (at high tide) not only the lowlands in Paraanan but also the higher ones of
Calalaran and its lake. Issue:

Whether or not a dividend is an income and whether it should go to the usufructuary.

Held:
The usufructuary shall be entitled to receive all the natural, industrial, and civil fruits of the property in
usufruct. The 108,000 shares of stock are part of the property in usufruct. The 54,000 shares of stock
dividend are civil fruits of the original investment. They represent profits, and the delivery of the
certificate of stock covering said dividend is equivalent to the payment of said profits. Said shares may
be sold independently of the original shares, just as the offspring of a domestic animal may be sold
independently of its mother. If the dividend be in fact a profit, although declared in stock, it should be
held to be income. A dividend, whether in the form of cash or stock, is income and, consequently,
should go to the usufructuary, taking into consideration that a stock dividend as well as a cash dividend
can be declared only out of profits of the corporation, for if it were declared out of the capital it would
be a serious violation of the law.
Under the Massachusetts rule, a stock dividend is considered part of the capital and belongs to the
remainderman; while under the Pennsylvania rule, all earnings of a corporation, when declared as
dividends in whatever form, made during the lifetime of the usufructuary, belong to the latter. The
Pennsylvania rule is more in accord with our statutory laws than the Massachusetts rule.
Bachrach Motors v. Talisay-Silay Milling [G.R. No. 35223. September 17, 1931.]
Facts: On 22 December 1923, the Talisay-Silay Milling Co., Inc., was indebted to the PNB. To secure the
payment of its debt, it succeeded in inducing its planters, among whom was Mariano Lacson Ledesma,
to mortgage their land to the bank. And in order to compensate those planters for the risk they were
running with their property under that mortgage, the aforesaid central, by a resolution passed on the
same date, and amended on 23 March 1928, undertook to credit the owners of the plantation thus
mortgaged every year with a sum equal to 2% of the debt secured according to the yearly balance, the
payment of the bonus being made at once, or in part from time to time, as soon as the central became
free of its obligations to the bank, and of those contracted by virtue of the contract of supervision, and
had funds which might be so used, or as soon as it obtained from said bank authority to make such
payment.
<It seems Mariano Lacson Ledesma is indebted from Bachrach Motor; the circumstance of which is not
found in the case facts.>
Bachrach Motor Co., Inc. filed a complaint against the Talisay-Silay Milling Co., Inc., for the delivery of
the amount of P13,850 or promissory notes or other instruments of credit for that sum payable on 30
June 1930, as bonus in favor of Mariano Lacson Ledesma. The complaint further prays that the sugar
central be ordered to render an accounting of the amounts it owes Mariano Lacson Ledesma by way of
bonus, dividends, or otherwise, and to pay Bachrach Motors a sum sufficient to satisfy the judgment
mentioned in the complaint, and that the sale made by said Mariano Lacson Ledesma be declared null
and void. The PNB filed a third
party claim alleging a preferential right to receive any amount which Mariano Lacson Ledesma might be
entitled from Talisay-Silay Milling as bonus. Talisay-Silay answered the complaint that Mariano Lacson
Ledesmas credit (P7,500) belonged to Cesar Ledesma because he had purchase it. Cesar Ledesma
claimed to be an owner by purchase in good faith. At the trial all the parties agreed to recognize and
respect the sale made in favor of Cesar Ledesma of the P7,500 part of the credit in question, for which
reason the trial court dismissed the complaint and cross-complaint against Cesar Ledesma authorizing
the central to deliver to him the sum of P7,500. And upon conclusion of the hearing, the court held that
the Bachrach Motor Co., Inc., had a preferred right to receive the amount of P11,076.02 which was
Mariano Lacson Ledesmas bonus, and it ordered the central to deliver said sum to Bachrach Motors.
PNB appealed.
The Supreme Court affirmed the judgment appealed from, as it found no merit in the appeal;, without
express finding as to costs.
1. Civil Fruits under Article 355 of the Civil Code
Article 355 of the Civil Code considers three things as civil fruits: First, the rents of buildings;
second, the proceeds from leases of lands; and, third, the income from perpetual or life annuities, or
other similar sources of revenue. According to the context of the law, the phrase u otras analogas
refers only to rents or income, for the adjectives otras and analogas agree with the noun rentas, as
do also the other adjectives perpetuas and vitalicias. The civil fruits the Civil Code understands
one of three and only three things, to wit: the rent of a building, the rent of land, and certain kinds of
income.
2. Bonus not a civil fruit; not an income of the land
The amount of the bonus, according to the resolution of the central granting it, is not based upon the
value, importance or any other circumstance of the mortgaged property, but upon the total value of the
debt thereby secured, according to the annual balance, which is something quite distinct from and
independent of the property referred to. As the bonus is not obtained from the land, it is not civil fruits
of that land. It is neither rent of buildings, proceeds from lease of lands, or income under Article 355 of
the Civil Code.
EQUATORIAL V. MAYFAIR- Sale of Land
FACTS:
Carmelo & Bauermann, Inc. owned a land, together with two 2-storey buildings at Claro M. Recto
Avenue, Manila, and covered by TCT No. 18529.
On June 1, 1967, Carmelo entered into a Contract of Lease with Mayfair Theater Inc. fpr 20 years. The
lease covered a portion of the second floor and mezzanine of a two-storey building with about 1,610
square meters of floor area, which respondent used as Maxim Theater.
Two years later, on March 31, 1969, Mayfair entered into a second Lease with Carmelo for another
portion of the latters property this time, a part of the second floor of the two-storey building, and two
store spaces on the ground floor. In that space, Mayfair put up another movie house known as Miramar
Theater. The Contract of Lease was likewise for a period of 20 years.
Both leases contained a clause giving Mayfair a right of first refusal to purchase the subject properties.
Sadly, on July 30, 1978 - within the 20-year-lease term -- the subject properties were sold by Carmelo to
Equatorial Realty Development, Inc. for eleven million smackers, without their first being offered to
Mayfair.
As a result of the sale of the subject properties to Equatorial, Mayfair filed a Complaint before the
Regional Trial Court of Manila for the recission of the Deed of Absolute Sale between Carmelo and
Equatorial, specific performance, and damages. RTC decided for Carmelo and Equatorial. Tsk tsk.
CA reversed and ruled for Mayfair. The SC denied a petition questioning the CA decision. What
happened is that the contract did get rescinded, Equatorial got its money back and asserted that
Mayfair have the right to purchase the lots for 11 million bucks.
Decision became final and executory, so Mayfair deposited with the clerk the 11M (less 847grand
withholding) payment for the properties (Carmelo somehow disappeared).
Meanwhile, on Sept 18, 1997, barely five months after Mayfair submitted its Motion for Execution,
Equatorial demanded from Mayfair backrentals and reasonable compensation for the Mayfairs
continued use of the subject premises after its lease contracts expired. Remember that Mayfair was still
occupying the premises during all this hullabaloo.
ISSUE:
Whether or not Equatorial was the owner of the subject property and could thus enjoy the fruits and
rentals.
HELD:NO.
Nor right of ownership was transferred from Carmelo to Equatorial since there was failure to deliver the
property to the buyer. Compound this with the fact that the sale was even rescinded.
The court went on to assert that rent is a civil fruit that belonged to the owner of the property
producing it by right of accession. Hence, the rentals that fell due from the time of the perfection of the
sale to petitioner until its rescission by final judgment should belong to the owner of the property
during that period. We remember from SALES that in a contract of sale, one of the contracting parties
obligates himself to transfer ownership of and to deliver a determinate thing and the other to pay
therefor a price certain in money or its equivalent. Ownership of the thing sold is a real right, which the
buyer acquires only upon delivery of the thing to him in any of the ways specified in articles 1497 to
1501, or in any other manner signifying an agreement that the possession is transferred from the
vendor to the vendee. This right is transferred, not by contract alone, but by tradition or delivery. There
is delivery if and when the thing sold is placed in the control and possession of the vendee.
While execution of a public instrument of sale is recognized by law as equivalent to the delivery of the
thing sold, such constructive or symbolic delivery is merely presumptive. It is nullified by the failure of
the vendee to take actual possession of the land sold.
For property to be delivered, we need two things. Delivery of property or title, and transfer of control or
custody to the buyer. Possession was never acquired by the petitioner. It therefore had no rights to rent.
BERNARDO v BATACLAN (1938; Laurel)
FACTS: Plaintiff Vicente Bernardo acquired a parcel of land from Pastor Samonte thru a contract of sale.
Thereafter, Bernardo instituted a case against said vendor to secure possession of the land. Bernardo
was able to obtain a favorable decision from the court. The plaintiff found the defendant herein,
Catalino Bataclan, in the said premises. It appears that he has been authorized by former owners, as far
back as 1922, to clear the land and make improvements thereon. Thus, plaintiff instituted a case against
Bataclan in the Court of First Instance of Cavite. In this case, plaintiff was declared the owner of the land
but the defendant was held to be a possessor in good faith, entitled to reimbursement in the total sum
of P1,642, for work done and improvements made. Both parties appealed the decision.
The court thereafter made some modifications by allowing the defendant to recover compensation
amounting to P2,212 and by reducing the price at which the plaintiff could require the defendant to
purchase the land in question from P300 down to P200 per hectare. Plaintiff was likewise given 30 days
from the date when the decision became final to exercise his option, either to sell the land to the
defendant or to buy the improvements from him. On January 9, 1934, the plaintiff conveyed to the
court his desire "to require the defendant to pay him the value of the land at the rate of P200 per
hectare or a total price of P18,000 for the whole tract of land." The defendant indicated that he was
unable to pay the land and, on January 24, 1934, an order was issued giving the plaintiff 30 days within
which to pay the defendant the sum of P2,212.
Subsequently, on April 24, 1934, the court below, at the instance of the plaintiff and without objection
on the part of the defendant, ordered the sale of the land in question at public auction. The land was
sold on April 5, 1935 to Toribio Teodoro for P8,000.
ISSUE: WON DEFENDANT BATACLAN IS STILL ENTITLED TO RECOVER THE COURT MANDATED
COMPENSATION ARISING FROM THE SALE OF THE PROPERTY TO TORIBIO

HELD: NO. Manresa, basing on Art 448 of the NCC, where the planter, builder or sower has acted in
good faith, a conflict of rights arises between the owners and it becomes necessary to protect the
owner of the improvements without causing injustice to the owner of the land. The law provided a just
and equitable solution by giving the owner of the land the option to acquire the improvements after
payment of the proper indemnity or to oblige the builder or planter to pay for the land and the sower to
pay the proper rent. In this case, the plaintiff, as owner of the land, chose to require the defendant, as
owner of the improvements to pay for the land.
The defendant avers that he is a possessor in good faith and that the amount of P2,212 to which he is
entitled has not yet been paid to him. Defendant further claims that he has a right to retain the land in
accordance with the provisions of article 453 of the Civil Code. While the said argument is legally
tenable, the same must perforce be denied because defendant Bataclan has lost his right of retention as
he failed to pay for the land. The law, as we have already said, requires no more than that the owner of
the land should choose between indemnifying the owner of the improvements or requiring the latter to
pay for the land.
IGNACIO v HILARIO (1946; Moran)
Facts: Elias Hilario and his wife Dionisia Dres filed a complaint against Damian, Francisco and Luis Ignacio
concerning the ownership of a parcel of land, partly rice-land and partly residential. After the trial of the
case, the lower court under Judge Alfonso Felix, rendered judgment holding Hilario and Dres as the legal
owners of the whole property but conceding to the Ignacios the ownership of the houses and granaries
built by them on the residential portion with the rights of a possessor in good faith, in accordance with
article 361 of the Civil Code.
Subsequently, in a motion filed in the same CFI (now handled by respondent Judge Hon. Felipe
Natividad), Hilario and Dres prayed for an order of execution alleging that since they chose neither to
pay the Ignacios for the buildings nor to sell to them the residential lot, the Ignacios should be ordered
to remove the structure at their own expense and to restore Hilario and Dres in the possession of said
lot. After hearing, the motion was granted by Judge Natividad. Hence, the petition for certiorari was
filed by the Ignacios praying for (a) a restraint and annulment of the order of execution issued by Judge
Natividad; (b) an order to compel Hilario and Dres to pay them the sum of P2,000 for the buildings, or
sell to them the residential lot for P45; or (c) a rehearing of the case for a determination of the rights of
the parties upon failure of extra-judicial settlement.
The Supreme Court set aside the writ of execution issued by Judge Natividad and ordered the lower
court to hold a hearing in the principal case wherein it must determine the prices of the buildings and of
the residential lot where they are erected, as well as the period of time within which Hilario and Dres
may exercise their option either to pay for the buildings or to sell their land, and, in the last instance,
the period of time within which the Ignacios may pay for the land, all these periods to be counted from
the date the judgment becomes executory or unappealable. After such hearing, the court shall render a
final judgment according to the evidence presented by the parties; with costs against Hilarion and Dres.
1. Right of retention of builder in good faith
The owner of the building erected in good faith on a land owned by another, is entitled to retain the
possession of the land until he is paid the value of his building, under article 453. Article 453 provides
that Necessary expenses shall be refunded to every possessor; but only the possessor in good faith
may retain the thing until such expenses are made good to him. Useful expenses shall be refunded to
the possessor in good faith with the same right of retention, the person who has defeated him in the
possession having the option of refunding the amount of the expenses or paying the increase in value
which the thing may have acquired in consequence thereof."
2. Option of the landowner to pay for the building or sell his land to the owner of the building; Right of
remotion only available if he chose the latter and the owner of the building cannot pay
The owner of the land, upon the other hand, has the option, under article 361, either to pay for the
building or to sell his land to the owner of the building. Article 361 provides that The owner of land on
which anything has been built, sown or planted in good faith, shall have the right to appropriate as his
own the work, sowing or planting, after the payment of the indemnity stated in articles 453 and 454, or
to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper
rent. He cannot however refuse both to pay for the building and to sell the land and compel the owner
of the building to remove it from the land where it is erected. He is entitled to such remotion only
when, after having chosen to sell his land, the other party fails to pay for the same.
3. Order amends judgment substantially and thus null and void
The order of Judge Natividad compelling the Ignacios to remove their buildings from the land belonging
to Hilario and Dres only because the latter chose neither to pay for such buildings nor to sell the land, is
null and void, for it amends substantially the judgment sought to be executed and is, furthermore,
offensive to articles 361 and 453 of the Civil Code.
4. Original decision did not become final as it failed to determine the value of the buildings and of the
lot; and the time to which the option may be exercised
In the decision of Judge Felix, the rights of both parties were well defined under articles 361 and 453 of
the Civil Code, but it failed to determine the value of the buildings and of the lot where they are erected
as well as the periods of time within which the option may be exercised and payment should be made,
these particulars having been left for determination apparently after the judgment has become final.
The procedure is erroneous, for after the judgment has become final, no additions can be made thereto
and nothing can be done therewith except its execution. And execution cannot be had, the sheriff being
ignorant as to how, for how much, and within what time may the option be exercised, and certainty no
authority is vested in him to settle these matters which involve exercise of judicial discretion. Thus, the
judgment rendered by Judge Felix has never become final, it having left matters to be settled for its
completion in a subsequent proceeding, matters which remained unsettled up to the time the petition is
filed in the present case.
SARMIENTO V. AGANA
129 SCRA 122
FACTS:
While Ernesto Valentino was still courting his wife, latters mother offered a lot for the construction
of house by the spouses. It was assumed that the wifes mother was the owner of the land, which
would eventually transfer to the spouses. It turned out that Sarmiento was the owner of the
land. Sarmiento filed an ejectment suit to which the trial court found out that the spouses are
possessors in good faith and ordered Sarmiento to exercise option based on Art 448. Sarmiento did not
exercise any of the options. The spouses then consigned the amount in court.
ISSUE: Whether or not Sarmiento can refuse to exercise the given options
HELD: Negative. The landowner cannot refuse both to appropriate or sell the land, and to compel
the builder to remove it from the land on which it is located. He is entitled to such demolition only
when after having chosen to sell the land, the other party fails to pay for the same.
Francisco Depra vs. Agustin Dumlao GR L-57348 16 May 1985
Facts: Depra is the owner of a parcel of land to which Dumlao, living in an adjoining lot, had built a
kitchen that encroached an area of 34 square meters. The encroachment was discovered in a relocation
survey of Depras property. Upon discovery, Depras mother wrote a demand letter asking Dumlao to
move back from his encroachment. She then filed a case of Unlawful Detainer against Dumlao.
In the trial court it was proven that Dumlao was a builder in good faith; thus the Municipal Court
rendered it judgment that reads:
Ordering that a forced lease is created between the parties with the plaintiffs, as lessors, and the
defendants as lessees, over the disputed portion with an area of thirty four (34) square meters, the rent
to be paid is five (P5.00) pesos a month, payable by the lessee to the lessors within the first five (5) days
of the month the rent is due; and the lease shall commence on the day that this decision shall have
become final.
Neither party appealed. However, Depra did not accept the payment of rentals so that Dumlao
deposited such rentals with the Municipal Court.
Depra then filed a Complaint for Quieting of Title against Dumlao, the latter admitted the encroachment
but alleged, that the present suit us barred by res judicate by virtue of the decision of the Municipal
Court.
DEPRA claims that the Decision of the Municipal Court was null and void ab initio because its jurisdiction
is limited to the sole issue of possession, whereas decisions affecting lease, which is an encumbrance on
real property, may only be rendered by Courts of First Instance.
Issue:
I. Whether or not the Municipal Courts decision was null and void ab initio because it has no
jurisdiction over the case?
II. Whether or not the factual situations of DUMLAO and DEPRA conform to the juridical positions
respectively defined by law, for a "builder in good faith" under Article 448, a "possessor in good faith"
under Article 526 and a "landowner in good faith' under Article 448?
Held:
I. Addressing out selves to the issue of validity of the Decision of the
Municipal Court, we hold the same to be null and void. The judgment in a detainer case is effective in
respect of possession only (Sec. 7, Rule 70, Rules of Court). The Municipal Court over-stepped its
bounds when it imposed upon the parties a situation of "forced lease", which like "forced co-
ownership" is not favored in law. Furthermore, a lease is an interest in real property, jurisdiction over
which belongs to Courts of First Instance (now Regional Trial Courts) (Sec. 44(b), Judiciary Act of 1948;
Sec. 19 (2) Batas Pambansa Blg. 129). Since the Municipal Court, acted without jurisdiction, its Decision
was null and void and cannot operate as res judicata to the subject complaint for Queting of Title.
Besides, even if the Decision were valid, the rule on res judicata would not apply due to difference in
cause of action. In the Municipal Court, the cause of action was the deprivation of possession, while in
the action to quiet title, the cause of action was based on ownership. Furthermore, Sec. 7, Rule 70 of
the Rules of Court explicitly provides that judgment in a detainer case "shall not bar an action between
the same parties respecting title to the land. "
II. ART. 448. The owner of the land on which anything has been built sown or planted in good faith,
shall have the right
to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in
articles 546 and 548, or
to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper
rent.
However, the builder or planter cannot be obliged to buy the land if its value is considerably more than
that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the court shall fix the terms thereof (Paragraphing
supplied)
Pursuant to the foregoing provision, DEPRA has the option either to pay for the encroaching part of
DUMLAO's kitchen, or to sell the encroached 34 square meters of his lot to DUMLAO. He cannot refuse
to pay for the encroaching part of the building, and to sell the encroached part of his land, 5 as he had
manifested before the Municipal Court. But that manifestation is not binding because it was made in a
void proceeding.
However, the good faith of DUMLAO is part of the Stipulation of Facts in the Court of First Instance. It
was thus error for the Trial Court to have ruled that DEPRA is "entitled to possession," without more, of
the disputed portion implying thereby that he is entitled to have the kitchen removed. He is entitled to
such removal only when, after having chosen to sell his encroached land, DUMLAO fails to pay for the
same. 6 In this case, DUMLAO had expressed his willingness to pay for the land, but DEPRA refused to
sell.
TECHNOGAS PHILIPPINES vs. CA
G.R. No. 108894 February 10, 1997
PANGANIBAN, J.:
FACTS:
The parties in this case are owners of adjoining lots in Paraaque, Metro Manila. It was discovered in a
survey, that a portion of a building of Technogas, which was presumably constructed by its predecessor-
in-interest, encroached on a portion of the lot owned by private respondent Edward Uy.
Upon learning of the encroachment or occupation by its buildings and wall of a portion of private
respondents land, the petitioner offered to buy from defendant that particular portion of Uys land
occupied by portions of its buildings and wall with an area of 770 square meters, more or less, but the
latter, however, refused the offer
The parties entered into a private agreement before a certain Col. Rosales in Malacaang, wherein
petitioner agreed to demolish the wall at the back portion of its land thus giving to the private
respondent possession of a portion of his land previously enclosed by petitioner's wall.
Uy later filed a complaint before the office of Municipal Engineer of Paraaque, Metro Manila as well
as before the Office of the Provincial Fiscal of Rizal against Technogas in connection with the
encroachment or occupation by plaintiff's buildings and walls of a portion of its land but said complaint
did not prosper; so Uy dug or caused to be dug a canal along Technogas wall, a portion of which
collapsed in June, 1980, and led to the filing by the petitioner of the supplemental complaint in the
above-entitled case and a separate criminal complaint for malicious mischief against Uy and his wife
which ultimately resulted into the conviction in court Uy's wife for the crime of malicious mischief;
ISSUE: WON the petitioner is builder in good faith.
HELD: YES.
We disagree with Respondent Courts reliance on the cases of J.M. Tuason & Co., Inc. vs. Vda. de
Lumanlan and J.M. Tuason & Co., Inc. vs. Macalindong, in ruling that the petitioner "cannot be
considered in good faith" because as a land owner, it is "presumed to know the metes and bounds of his
own property, specially if the same are reflected in a properly issued certificate of title. One who
erroneously builds on the adjoining lot should be considered a builder in (b)ad (f)aith, there being
presumptive knowledge of the Torrens title, the area, and the extent of the boundaries." There is
nothing in those cases which would suggest that bad faith is imputable to a registered owner of land
when a part of his building encroaches upon a neighbor's land, simply because he is supposedly
presumed to know the boundaries of his land as described in his certificate of title,
Article 527 of the Civil Code presumes good faith, and since no proof exists to show that the
encroachment over a narrow, needle-shaped portion of private respondent's land was done in bad faith
by the builder of the encroaching structures, the latter should be presumed to have built them in good
faith. It is presumed that possession continues to be enjoyed in the same character in which it was
acquired, until the contrary is proved.
Good faith consists in the belief of the builder that the land he is building on is his, and his ignorance of
any defect or flaw in his title. Hence, such good faith, by law, passed on to Pariz's successor, petitioner in
this case. The good faith ceases from the moment defects in the title are made known to the possessor,
by extraneous evidence or by suit for recovery of the property by the true owner.
Consequently, the builder, if sued by the aggrieved landowner for recovery of possession, could have
invoked the provisions of Art. 448 of the Civil Code, which reads:
The owner of the land on which anything has been built, sown or planted in good faith, shall have the
right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided
for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and
the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land
if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.
The obvious benefit to the builder under this article is that, instead of being outrightly ejected from the
land, he can compel the landowner to make a choice between the two options: (1) to appropriate the
building by paying the indemnity required by law, or (2) sell the land to the builder. The landowner
cannot refuse to exercise either option and compel instead the owner of the building to remove it from
the land
In view of the good faith of both petitioner and private respondent, their rights and obligations are to
be governed by Art. 448. Hence, his options are limited to: (1) appropriating the encroaching portion of
petitioner's building after payment of proper indemnity, or (2) obliging the latter to buy the lot occupied
by the structure. He cannot exercise a remedy of his own liking
Ortiz vs. Kayanan
Facts: Plaintiff used to be the legal guardian of Martin Dolorico II. When his ward died, plaintiff
continued to cultivate and possess the latters property, which was formerly a subject of homestead
application. In the said application, the wards uncle was named as his heir and successor in interest.
Thus, the uncle executed an affidavit relinquishing his rights over the property in favor of Comintan and
Zamora, his grandson and son-in-law and requested the Director of Lands to cancel the homestead
application. The homestead application was cancelled to the protest of Ortiz saying that he should be
given preference to purchase the lot inasmuch as he is the actual occupant and has been in continuous
possession of the same. Still, the lot in question was sold at a public auction wherein defendant
Comintan was the only bidder.
The plaintiffs protest was investigated upon but his claim was not given due course. On appeal,
respondent court rules that half of the portion of land should be given to the defendant, being the
successful bidder. The other half should be awarded to Zamora without prejudice to the right of Ortiz to
participate in the public bidding of the lot. If Ortiz is to be not declared the successful bidder,
defendants should reimburse jointly said plaintiff for the improvements introduced on the land, with
him, having the right to retain the property until after he has been paid for.
Plaintiff appealed the judgment. It was later found out that Ortiz collected tolls on a portion of the
property wherein he has not introduced any improvement.
The judgment became final and executory. Private respondents filed a motion for its execution
requesting that they file a bond in lieu of the amount that should be paid to Ortiz, on the condition that
after the accounting of the tolls collected by plaintiff, there is still and amount due and payable to the
said plaintiff, the bond shall be held answerable.
Petitioner thus filed the instant petition, contending that in having issued the Order and Writ of
Execution, respondent Court "acted without or in excess of jurisdiction, and/or with grave abuse of
discretion, because the said order and writ in effect vary the terms of the judgment they purportedly
seek to enforce." He argued that since said judgment declared the petitioner a possessor in good faith,
he is entitled to the payment of the value of the improvements introduced by him on the whole
property, with right to retain the land until he has been fully paid such value. He likewise averred that
no payment for improvements has been made and, instead, a bond therefor had been filed by
defendants (private respondents), which, according to petitioner, is not the payment envisaged in the
decision which would entitle private respondents to the possession of the property. Furthermore, with
respect to portion "B", petitioner alleges that, under the decision, he has the right to retain the same
until after he has participated and lost in the public bidding of the land to be conducted by the Bureau
of Lands. It is claimed that it is only in the event that he loses in the bidding that he can be legally
dispossessed thereof.
It is the position of petitioner that all the fruits of the property, including the tolls collected by him from
the passing vehicles, which according to the trial court amounts to P25,000.00, belongs to petitioner
and not to defendant/private respondent Quirino Comintan, in accordance with the decision itself,
which decreed that the fruits of the property shall be in lieu of interest on the amount to be paid to
petitioner as reimbursement for improvements. Any contrary opinion, in his view, would be tantamount
to an amendment of a decision which has long become final and executory and, therefore, cannot be
lawfully done.
The issue decisive of the controvery isafter the rendition by the trial court of its judgment in Civil Case
No. C-90 on March 22, 1966 confirming the award of one-half of the property to Quirino Comintan
whether or not petitioner is still entitled to retain for his own exclusive benefit all the fruits of the
property, such as the tolls collected by him from March 1967 to December 1968, and September 1969
to March 31, 1970, amounting to about P25,000.00.
RULING: Negative
1.No contention that the possessor in good faith is entitled to the fruits received before the possession
is legally interrupted. Possession in good faith ceases or is legally interrupted from the moment defects
in the title are made known to the possessor, by extraneous evidence or by the filing of an action in
court by the true owner for the recovery of the property. Hence, all the fruits that the possessor may
receive from the time he is summoned in court, or when he answers the complaint, must be delivered
and paid by him to the owner or lawful possessor.
2.However, even after his good faith ceases, the possessor can still retain the property (Art 546) until he
has been fully reimbursed for all the necessary and useful expenses made by him on the property. he
principal characteristic of the right of retention is its accessory character. It is accessory to a principal
obligation. Considering that the right of the possessor to receive the fruits terminates when his good
faith ceases, it is necessary, in order that this right to retain may be useful, to concede to the creditor
the right to secure reimbursement from the fruits of the property by utilizing its proceeds for the
payment of the interest as well as the principal of the debt while he remains in possession.
3.Petitioner cannot appropriate for his own exclusive benefit the tolls which he collected from the
property retained by him. It was his duty under the law, after deducting the necessary expenses for his
administration, to apply such amount collected to the payment of the interest, and the balance to the
payment of the obligation.
We hold, therefore, that the disputed tolls, after deducting petitioner's expenses for administration,
belong to Quirino Comintan, owner of the land through which the toll road passed, further considering
that the same was on portions of the property on which petitioner had not introduced any
improvement. The trial court itself clarified this matter when it placed the toll road under receivership.
The omission of any mention of the tolls in the decision itself may be attributed to the fact that the tolls
appear to have been collected after the rendition of the judgment of the trial court.
4.As to the other lot, it appears that no public sale has yet been conducted by the Bureau of Lands and,
therefore, petitioner is entitled to remain in possession thereof. This is not disputed by respondent
Eleuterio Zamora. After public sale is had and in the event that Ortiz is not declared the successful
bidder, then he should be reimbursed by respondent Zamora in the corresponding amount for the
improvements on Lot 5785-B.
G.R. NO. 120303. JULY 24, 1996
GEMINIANO, ET. AL. VS. COURT OF APPEALS
FACTS:
It appears that subject lot was originally owned by the petitioners' mother, Paulina Amado vda. de
Geminiano. On a 12-square-meter portion of that lot stood the petitioners' unfinished bungalow, which
the petitioners sold to the private respondents, with an alleged promise to sell to the latter that portion
of the lot occupied by the house. Subsequently, the petitioners' mother executed a contract of lease
over a 126 square-meter portion of the lot, including that portion on which the house stood, in favor of
the private respondents for P40.00 per month for a period of 7 years.
The private respondents then introduced additional improvements and registered the house in their
names. After the expiration of the lease contract, however, the petitioners' mother refused to accept
the monthly rentals.
It turned out that the lot in question was the subject of a suit, which resulted in its acquisition by one
Maria Lee in 1972. Lee sold the lot to Lily Salcedo, who in turn sold it to the spouses Dionisio. Spouses
Dionisio executed a Deed of Quitclaim over the said property in favor of the petitioners.
The petitioners sent a letter addressed to private respondent Mary Nicolas demanding that she vacate
the premises and pay the rentals in arrears within twenty days from notice.
Upon failure of the private respondents to heed the demand, the petitioners filed a complaint for
unlawful detainer and damages.
ISSUE: WON Art. 448 is applicable to this case.
HELD: NO.
The private respondents claim they are builders in good faith, hence, Article 448 of the Civil Code should
apply. They rely on the lack of title of the petitioners' mother at the time of the execution of the
contract of lease, as well as the alleged assurance made by the petitioners that the lot on which the
house stood would be sold to them.
But being mere lessees, the private respondents knew that their occupation of the premises would
continue only for the life of the lease. Plainly, they cannot be considered as possessors nor builders in
good faith.
Article 448 of the Civil Code, in relation to Article 546 of the same Code, which allows full
reimbursement of useful improvements and retention of the premises until reimbursement is made,
applies only to a possessor in good faith, i.e., one who builds on land with the belief that he is the
owner thereof. It does not apply where one's only interest is that of a lessee under a rental contract;
otherwise, it would always be in the power of the tenant to "improve" his landlord out of his property.
And even if the petitioners indeed promised to sell, it would not make the private respondents
possessors or builders in good faith so as to be covered by the provisions of Article 448 of the Civil Code.
The latter cannot raise the mere expectancy of ownership of the aforementioned lot because the
alleged promise to sell was not fulfilled nor its existence even proven.
PLEASANTVILLE DEVELOPMENT CORPORATION VS. COURT OF APPEALS
G.R. NO. 79688 253 SCRA 10 FEBRUARY 1, 1996
PONENTE: PANGANIBAN, J.
Doctrine: Good faith consists in the belief of the builder that he land he is building on is his and his
ignorance of any defect or flaw in his title. The burden of proving bad faith belongs to the one asserting
it.
Facts: Edith Robillo purchased from Pleasantville Development Corporation, herein petitioner a parcel of
land at Pleasantville Subdivision, Bacolod City. The property was designated as Lot 9, Phase II. In 1975,
herein respondent Eldred Jardinico bought the said subject lot from the former purchaser. Eldred later
discovered that the property he purchased had improvements introduced therein by respondent Wilson
Kee.
Kee on the other hand bought on installments Lot 8 of the same subdivision from C.T. Torres
Enterprises, Inc. (CTTEI) which is the exclusive real estate agent of the petitioner. Under the contract Kee
was allowed to take possession of the property even before full payment of the price. CTTEI through an
employee, Zenaida Octaviano accompanied Kees wife Donabelle to inspect Lot No. 8. Octaviano
however mistakenly pointed towards Lot 9. Hence spouses Kee had their residence, an auto repair shop,
a store and other improvements constructed on the wrong lot.
Upon discovery of the blunder both Kee and Jardinico tried to reach an amicable settlement but they
failed. Jardinico demanded that the improvements be removed but as Kee refused, Jardinico filed a
complaint for ejectment with damages against Kee at the Municipal Trial Court in Cities (MTCC) of
Bacolod City. Kee filed a third-party complaint against herein petitioner and CTTEI.
The MTCC found that the error was attributable to CTTEI also since at present the contract with Kee has
rescinded for Kees failure to pay installments. Kee no longer had any right over the subject property and
must pay rentals for its use. The Regional Trial Court (RTC) of Bacolod City ruled that petitioner and
CTTEI were not at fault or were not negligent. It argued that Kee was a builder in bad faith. Even if
assuming that he was in good faith, he was no longer so and must pay rentals from the time that he was
given notice to vacate the lot. The Court of Appeals ruled that Kee was a builder in good faith as he was
unaware of the mix-up when he constructed the improvements. It was in fact due to the negligence and
wrongful delivery of CTTEI which included its principal the herein petitioner. It further ruled that the
award of rental was without basis.
Pending the resolution of the case at the Court of Appeals Jardinico and Kee entered into a deed of sale,
wherein Lot 9 was sold to Kee. In the said deed a provision stating that regardless of the outcome of the
decision, such shall not be pursued by the parties and shall be considered dismissed and without effect.
The appellate court was not informed of this deal.
Issue: Whether or not a lot buyer who constructs improvements on the wrong property erroneously
delivered by the owners agent, a builder in good faith?
Held: Yes. Article 527 of the Civil Code provides the presumption that petitioner has the burden of
proving that Kee was a builder in bad faith. Kee may be made liable for the violation of the contract with
CTTEI but this may not be used as a basis of bad faith and as a sufficient ground to negate the
presumption of good faith. Jardinico is presently only allowed to file a complaint for unlawful detainer.
Good faith is based on the belief of the builder that the land he is building on is his and his ignorance of
any flaw or defect in is title. Since at the time when Kee constructed his improvements on Lot 8, he was
not aware that it was actually Lot 9 that was delivered to him. Petitioner further contends that Kee was
negligent as a provision in the Contract of Sale on Installment stated that the vendee must have
personally examined the property and shall bear on his own the consequential expenses in the changes
that may happen thereon. The court held that such provision cannot be interpreted as a waiver of the
vendees right to recover damages resulting from petitioners negligence. Such interpretation of the
waiver is contrary to law and public policy and cannot be allowed. Petitioner cannot claim and excuse
itself from liability by claiming that it was not directly involved in the delivery of the property. The
principal must be responsible for the acts of the agent done within the scope of his authority. CTTEI was
the sole real estate representative of the petitioner when the delivery was made. Wilson Kee is
therefore declared a builder in good faith. Petitioner and respondent CTTEI are declared solidarily liable
for damages due to negligence. The award of rentals to Jardinico is dispensed with.
FELICES VS IRIOLA
Originally brought to the Court of Appeals, this appeal was certified to us by that Court on the ground
that it does not raise any genuine issue of fact.
It appears that plaintiff and appellee Silverio Felices was the grantee of a homestead of over eight
hectares located in barrio Curry, Municipality of Pili, Province of Camarines Sur, under Homestead
Patent No. V-2117 dated January 26, 1949, and by virtue of which he was issued Original Certificate of
Title No. 104 over said property. The month following the issuance of his patent, on February 24, 1949,
appellee conveyed in conditional sale to defendant and appellant Mamerto Iriola a portion of his
homestead of more than four hectares, for the consideration of P1,700. The conveyance (Exh. 1)
expressly stipulates that the sale was subject to the provisions of Sec. 119 of Act 141, as amended, and
to the prohibitions spread on the vendor's patent; and that after the lapse of five years or as soon as
may be allowed by law, the vendor or his successors would execute in vendee's favor a deed of absolute
sale over the land in question.
Two years after the sale, on April 19, 1951, appellee tried to recover the land in question from appellant,
but the latter refused to allow it unless he was paid the amount of P2,000 as the alleged value of
improvements he had introduced on the property. In view of appellant's persistent refusal, plaintiff
deposited the received price in court and filed this action on October 4, 1951.
In the court below, appellant, while recognizing appellee's right to "redeem", insisted that he must first
be reimbursed the value of his improvements. Whereupon, the court appointed a commissioner to
ascertain the nature and value of the alleged improvements, and thereafter found that said
improvements were made by defendant either after plaintiff had informed him of his intention to
recover the land, or after the complaint had been filed; some of the improvements were even
introduced after a commissioner had already been appointed to appraise their value. Wherefore, the
lower court held defendant in bad faith and not entitled to reimbursement for his improvements.
Defendant was, likewise, ordered to accept the amount of P1,700 deposited by plaintiff in court, to
execute in favor of the latter.the corresponding deed of reconveyance, and to restore him in possession
of the land in question.
At the outset, it must be made clear that as the sale in question was executed by the parties within the
five-year prohibitive period under section 118 of the Public Land Law, the same is absolutely null and
void and ineffective from its inception. Consequently, appellee never lost his title or ownership over the
land in question, and there was no need either for him to repurchase the same from appellant, or for
the latter to execute a deed of reconveyance in his favor. The case is actually for mutual restitution,
incident to the nullity ab initio of the conveyance.
The question now is: May appellant recover or be reimbursed the value of his improvements on the
land in question, on the theory that as both he and appellee knew that their sale was illegal and void,
they were both in bad faith and consequently, Art. 453 of the Civil Code applies in that "the rights of one
and the other shall be the same as though both had acted in good faith"?
The rule of Art. 453 of the Civil Code invoked by appellant[1] can not be applied to the instant case for
the reason that the lower court found, and appellant admits, that the improvements in question were
made on the premises only after appellee had tried to recover the land in question from appellant, and
even during the pendency of this action in the court below. After appellant had refused to restore the
land to the appellee, to the extent that the latter even had to resort to the present action to recover his
property, appellee could no longer be regarded as having impliedly assented or conformed to the
improvements thereafter made by appellant on the premises. Upon the other hand, appellant,
recognizing as he does appellee's right to get back his property, continued to act in bad faith when he
made improvements on the land in question after he had already been asked extra-judicially and
judicially, to surrender and return its possession to appellee; and as a penalty for such bad faith, he
must forfeit his improvements without any right to reimbursement therefor. "He who builds, plants or
sows in bad faith on the land of another, loses what is built, planted, or sown without right to
indemnity" (Art. 449, New Civil Code).
Wherefore, the judgment appealed from is affirmed, with the sole njodiftcation that appellant need not
execute a deed of reconveyance in appellee's favor, the original conveyance being hereby declared void
ab initio. Costs against appellant Mamerto Iriola. So ordered.
Paras, C. J., Bengzon, Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion, Endencia, and
Felix, JJ., concur.
[1]ART. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on
the land of another, but also on the part of the owner of such land, the rights of one and the other shall
be the same as though both had acted in good faith. * * *
G.R. NO. 151815. FEBRUARY 23, 2005
SPOUSES JUAN NUGUID AND ERLINDA T. NUGUID VS. HON. COURT OF APPEALS AND PEDRO P.
PECSON
FACTS:
Pedro P. Pecson owned a commercial lot on which he built a four-door two-storey apartment building.
For failure to pay realty taxes, the lot was sold at public auction by the City Treasurer to Mamerto
Nepomuceno, who in turn sold it for P103,000 to the spouses Juan and Erlinda Nuguid.
Pecson challenged the validity of the auction sale before the RTC of Quezon City, the RTC upheld the
spouses title but declared that the four-door two-storey apartment building was not included in the
auction sale. This was affirmed by the CA and by the SC.
The Nuguids became the uncontested owners of commercial lot. The Nuguid spouses moved for
delivery of possession of the lot and the apartment building.
ISSUE:
WON the Nuguids should reimburse Pecson for the benefits derived from the apartment building.
HELD: YES.
Since petitioners opted to appropriate the improvement for themselves as early as June 1993, when
they applied for a writ of execution despite knowledge that the auction sale did not include the
apartment building, they could not benefit from the lots improvement, until they reimbursed the
improver in full, based on the current market value of the property.
Under Article 448, the landowner is given the option, either to appropriate the improvement as his own
upon payment of the proper amount of indemnity or to sell the land to the possessor in good faith.
Relatedly, Article 546 provides that a builder in good faith is entitled to full reimbursement for all the
necessary and useful expenses incurred; it also gives him right of retention until full reimbursement is
made.
The right of retention is considered as one of the measures devised by the law for the protection of
builders in good faith. Its object is to guarantee full and prompt reimbursement as it permits the actual
possessor to remain in possession while he has not been reimbursed (by the person who defeated him
in the case for possession of the property) for those necessary expenses and useful improvements made
by him on the thing possessed.
Given the circumstances of the instant case where the builder in good faith has been clearly denied his
right of retention for almost half a decade, we find that the increased award of rentals by the RTC was
reasonable and equitable. The petitioners had reaped all the benefits from the improvement
introduced by the respondent during said period, without paying any amount to the latter as
reimbursement for his construction costs and expenses. They should account and pay for such benefits.
REPUBLIC VS. COURT OF APPEALS AND TANCINCO
GR No. L-61647 October 12, 1984 132 SCRA 514
Facts:
Respondents, Benjamin Tancinco, Azucena Tancinco Reyes, Maria Tancinco Imperial and Mario C.
Tancinco are registered owners of a parcel of land covered by TCT # T-89709 situated in Barrio Ubinan,
Meycauayan, Bulacan bordering on the Meycauayan and Bocaue rivers.
On June 24, 1974, the private respondents filed an application for the registration of the three
lots adjacent to their fishpond property.
On April 5, 1974, Assistant Provincial Fiscal Armando C. Vicente, in representation of the Bureau
of Lands filed a written opposition to the application for registration.
The Lower Court rendered a decision granting the application on the finding that the lands in
question are accretions to the private respondents fishponds.
CA affirmed Lower Courts decision.
Republic contended that there is no accretion to speak of under Article 457 of the new Civil Code
because what actually happened is that the private respondents simply transferred their dikes further
down the river bed of Meycauayan river, and thus, if there is any accretion to speak of, it is the man-
made and artificial and not the result of the gradual and imperceptible sedimentation by the waters of
the river.
Issue:
Whether or not the accretion can be a valid subject of registration.
Held:

That the testimony of the private respondents lone witness to the effect that as early as 1939 there
already existed such alleged alluvial deposits, deserves no merit. It should be noted that the lots in
question were not included in the survey of their adjacent property conducted on May 10, 1940 and in
the Cadastral Survey of the entire Municipality of Meycauayan conducted between the years 1958 to
1960. The alleged accretion was declared for taxation purposes only in 1972 or 33 years after it had
supposedly permanently formed. The only valid conclusion therefore is that the said areas could not
have been there in 1939. They existed only after the private respondents transferred their dikes towards
the bed of the Meycauayan River in 1951. What private respondents claim as accretion is really an
encroachment of a portion of the Meycauayan River by reclamation.
The lower court cannot validly order the registration of lots 1 and 2 in the names of the private
respondents. These lots were portions of the bed of the Meycauayan River and are therefore classified
as property of the public domain. They are not open to registration under the Land registration Act. The
adjudication of the lands in question as property in the names of the private respondents is null and
void.
GRANDE v. CA
FACTS:
The Grandes are owners of a parcel of land in Isabela, by inheritance from their deceased mother,
Patricia Angui, who likewise, inherited it from her parents. In the early 1930s, the Grandes decided to
have their land surveyed for registration purposes. The land was described to have Cagayan River as the
northeastern boundary, as stated in the title.
By 1958, a gradual accretion took place due to the action of the current of the river, and an alluvial
deposit of almost 20,000 sq.m. was added to the registered area. The Grandes filed an action for
quieting of title against the Calalungs, stating that they were in peaceful and continuous possession of
the land created by the alluvial deposit until 1948, when the Calalungs allegedly trespassed into their
property. The Calalungs, however, stated that they were the rightful owners since prior to 1933.
The CFI found for the Grandes and ordered the Calalungs to vacate the premises and pay for damages.
Upon appeal to the CA, however, the decision was reversed.
ISSUE:
Whether or not the alluvium deposited land automatically belongs to the riparian owners?
HELD:
Art. 457 dictates that alluvium deposits on land belong to the owners of the adjacent land. However,
this does not ipso jure become theirs merely believing that said land have become imprescriptible. The
land of the Grandes only specifies a specific portion, of which the alluvial deposits are not included, and
are thus, subject to acquisition by prescription. Since the Calalungs proved that they have been in
possession of the land since 1934 via two credible witnesses, as opposed to the Grandes single witness
who claims that the Calalungs only entered the land in 1948, the Calalungs have been held to have
acquired the land created by the alluvial deposits by prescription. This is because the possession took
place in 1934, when the law to be followed was Act 190, and not the New Civil Code, which only took
effect in 1950.
REPUBLIC VS MENESES
HEIRS OF NAVARRO V. IAC
Accretion along an area adjacent to the sea is public domain, even if the accretion results from rivers
emptying into the sea. It cannot be registered.
FACTS:
Sinforoso Pascual sits in the midst of a land registration case. The story begins on 1946 upon his desire
to register land on the northern section of his existing property. His current registered property is
bounded on the east by Talisay River, on the West by Bulacan River and on the North by the Manila bay.
Both rivers flow towards the Manila Bay. Because of constantly flowing water, extra land of about
17hectares (thats about the size of Disney Park!) formed in the northern most section of the property.
It is this property he sought to register.
The RTC denied the registration claiming this to be foreshore land and part of public domain (remember,
accretion formedby the sea is public dominion). His Motion for Reconsideration likewise burned. In
1960, he attempted registry again, claiming that the Talisay and Bulacan rivers deposited more silt
resulting on accretion. He claimed this land as riprarian owner. The Director of Lands, Director of
Forestry and the Fiscal opposed.
Then a new party surfaced. Mr Emiliano Navarro jumped into the fray opposing the same application,
stating the he leased part of the property sought to be registered. He sought to protect his fishpond that
rested on the same property. Sinforoso was not amused and filed ejectment against Mr. Navarro,
claiming that Navarro used stealth force and strategy to occupy a portion of his land. Pascual lost the
case against Navarro so he appealed. During the appeal, his original land registration case was
consolidated and tried jointly. (alas Pascual died) The heirs of Pascual took over the case.
On 1975, the court decided that the property was foreshore land and therefore part of public domain.
The RTC dismissed the complaint of Pascual for ejectment against Navarro and also denied his land
registration request. Pascuals heirs appealed and the RTC was reversed by the IAC. The Apellate court
granted petition for registration! The reason? The accretion was caused by the two rivers, not manila
bay. Hence it wasnt foreshore land. (BUT the confusion lies in the fact that the accretion formed
adjacent to Manila Bay which is sea!) Aggrieved, the Director of Forestry moved for reconsideration
(Government insists it is foreshore and hence, public domain). The Apellate court denied all motions of
the Director and the Government.
The matter went to the SC.
ISSUE:
Whether or not the accretion taking place on property adjacent to the sea can be registered under the
Torrens system.
HELD:
It cannot be registered. This is land of Public domain. Pascual claimed ownership under Article 457 of
the Civil Code saying that the disputed 14-hectare land is an accretion caused by the joint action of the
Talisay and Bulacan Rivers Art 457: Accretion as a mode of acquiring property and requires the
concurrence of the following requisites: (1) that the accumulation of soil or sediment be gradual and
imperceptible; (2) that it be the result of the action of the waters of the river; and (3) that the land
where the accretion takes place is adjacent to the bank of the river.
Unfortunately, Pasucal and Heirs claim of ownership based on Art 457 is misplaced. If theres any land to
be claimed, it should be land ADJACENT to the rivers Talisay and Bulacan. The law is clear on this.
Accretion of land along the river bank may be registered. This is not the case of accretion of land on the
property adjacent to Manila Bay.
Furthermore, Manila Bay is a sea. Accretion on a sea bank is foreshore land and the applicable law is not
Art 457 but Art 4 of the Spanish Law of Waters of 1866. This law, while old, holds that accretion along
sea shore cannot be registered as it remains public domain unless abandoned by government for public
use and declared as private property capable of alienation.
Article 4 of the Spanish Law of Waters of August 3, 1866 provides as follows:
Lands added to the shores by accretions and alluvial deposits caused by the action of the sea, form part
of the public domain. When they are no longer washed by the waters of the sea and are not necessary
for purposes of public utility, or for the establishment of special industries, or for the coast-guard
service, the Government shall declare them to be the property of the owners of the estates adjacent
thereto and as increment thereof.
The IAC decision granting registration was reversed and set aside. Registration cannot be allowed.
BAES V. COURT OF APPEALS
The rules on alluvion do not apply to man-made or artificial accretions nor to accretions to lands that
adjoin canals or esteros or artificial drainage systems. If the riparian owner is entitled to compensation
for the damage to or loss of his property due to natural causes, there is all the more reason to
compensate him when the change in the course of the river is effected through artificial means.
FACTS:
In 1962, the Government dug up a canal on a private estate in order to streamline the Tripa de Gallina
creek (in other words, there was a mand-made change of river course). Said private estate was acquired
by petitioner Baes, and was subdivided in to three lots. It was lot 2958-C which was totally occupied by
the canal so the Government in exchange granted him a lot near but not contiguous to C. The old river
bed was filled up by soil from Lot C. Petitioner now claims ownership over the old river bed on the basis
of Article 461 which says that abandoned river beds belong to the riparian owners whose land is
occupied by the new course of water.
ISSUE
WON Baes owned Lot 1-B.
HELD
Art. 461, NCC
River beds abandoned through NATURAL CHANGE ipso facto belong to owner whose lands are
occupied by the new course in proportion to the are lost. Owners of the land adjoining the river bed
have the right to acquire by paying its value (must not exceed value of new beds area)
If change is due to concessioners authorized by the Government, the concession may be granted to
concessioners. No grant = land belongs to owners of land covered by the waters. Must not prejudice tge
superior rights of third persons with sufficient title.
If a riparian owner is entitled to compensation for damage/loss due to natural reasons, there is no reson
not to compensate when the change was effected through artificial means.
The loss was caused by a deliberate act of Government. The Government is obliged to compensate Baes
for the loss.
However, Baes has already been compensated through the fair exchange of lots between him and the
Government.
BINALAY VS. MANALO
A sudden and forceful action like that of flooding is not the alluvial process contemplated in Art. 457.
The accumulation of the soil deposits must be slow and hardly imperceptible in order for the riparian
owner to acquire ownership thereof. Also, the land where the accretion takes place is adjacent to the
banks of the rivers (or the sea coast).
FACTS
Manalo acquired 2 lots which were originally owned by Judge Taccad from 2 different people (the
latters daughter and from an earlier purchaser). These lots were later consolidated into Lot 307, a total
of 10.45 hectares. The lot was beside the Cagayan River, which, due to flooding, would place a portion
of the land underwater during the rainy season (September to December). On sunny days, however, the
land would be dried up for the entire dry season (January to August). When a survey of the land was
conducted on a rainy month, a portion of the land that Manalo bought was then underwater and was
thus left unsurveyed and excluded from Lot 307.
The big picture is this: Cagayan River running from south to north, forks at a certain point to form two
braches (western and eastern) and then unites at the other end, further north, to form a narrower strip
of land. The eastern branch of the river cuts through Lot 307, and is flooded during the rainy season.
The unsurveyed portion, on the other hand, is the bed of the eastern branch. Note that the fork exists
only during the rainy season while the island/elongated strip of land formed in the middle of the forks
becomes dry and perfect for cultivation when the Cagayan river is at its ordinary depth. The strip of land
in the middle of the fork totaled 22.7 hectares and was labeled Lot 821-822. Lot 821 is directly opposite
Lot 307 and is separated by the eastern branch of the rivers fork.
Manalo claims that Lot 821 belongs to him by way of accretion to the submerged portion of the land to
which it is adjacent. Petitioners (Binalay, et al) who possess the Lot 821, on the other hand, insist that
they own it. They occupy the other edges of the lot along the river bank (i.e. the fertile portions on
which they plant tobacco and other agricultural products) and also cultivate the western strip during the
summer.
Manalo filed 2 cases for forcible entry which were both dismissed. Later on, he filed a complaint for
quieting of title, possession, and damages against petitioner. The trial court and the CA ruled in favor of
Manalo, saying that Lot 821 and Lot 307 cannot be considered separate and distinct from each other.
They reasoned that when the land dries up for the most part of the year, the two are connected. [Note:
The CA applied the ruling in Govt of the Phil Islands vs. Colegio de San Jose, which was actually
inappropriate because the subject matter in this case was a lake so that the definition of a bed was
different.]
ISSUE:
Whether or not Manalo owns Lot 821 by way of accretion
RULING: No.
The disputed property is not an accretion. It is the action of the heavy rains that cause the highest
ordinary level of waters of the Cagayan River during the rainy season. The depressed portion is a river
bed and is thus considered property of public domain.
The SC observed the following:
a) The pictures identified by Manalo during his direct examination depict the depressed portion as a
river bed. The dried up portion had dike-like slopes (around 8m) on both sides connecting it to Lot 307
and Lot 821 that are vertical and very prominent.
b) The eastern bed already existed even before Manalo bought the land. It was called Rio Muerte de
Cagayan.
c) Manalo could not have acquire ownership of the land because article 420 of the civil code states that
rivers are property of public dominion. The word river includes the running waters, the bed, and the
banks. [The seller never actually owned that part of the land since it was public property]
d) The submerged area (22.72 ha) is twice the area of the land he actually bought. It is difficult to
suppose that such a sizable area could have been brought about by accretion.
More importantly, the requisites of accretion in article 457 were not satisfied. These are: 1) that the
deposition of the soil or sediment be gradual and imperceptible; 2) that it be the result of the action of
the waters of the river (or sea); and 3) the land where the accretion takes place is adjacent to the banks
of the rivers (or the sea coast). The accretion shouldve been attached to Lot 307 for Manalo to acquire
its ownership. BUT, the claimed accretion lies on the bank of the river; not adjacent to Lot 307 but
directly opposite it across the river. Aside from that, the dike-like slopes which were very steep may
only be formed by a sudden and forceful action like flooding. The steep slopes could not have been
formed by the river in a slow and gradual manner.
Plaintiff-appellee Siari Valley Estates Inc. vs. defendant-appellant Filemon Lucasan
GR No. L-7046, 31 August 1955, 97 Phil 987
Facts: In 1921, plaintiff-appellee and duly-organized agricultural corporation Siari Valley Estate Inc.
started raising livestock on its 950-hectare ranch with 7 native cattle. It acquired in 1923 thirty (30)
native cattle and two Indian bulls. Through a native black bull, native stock was introduced into its herd
and the male offspring of that bull were castrated. Prior to Japanese occupation, the fence enclosing
Siari Valley's pasture was well kept. But in 1943, a portion of that fence was destroyed, causing some of
the cattle straying into defendant-appellant Filemon Lucasan's adjoining unfenced range in Sindangan,
Zamboanga. Several men employed under him took advantage of the situation and willfully,
deliberately rounding up and driving many animals from Siari pasture towards his grazing land. In
December 1948, Siari Valley Estate Inc. filed an action to recover about 200 head of cattle that were
driven or wandered from its pasture lands into defendant's adjoining ranch. It asked for return of its
animals with their offspring or for payment of those disposed of by defendant, plus damages. Lucasan
denied in his answer that he appropriated or retained any cattle belonging to Siari Valley and alleged on
the contrary that the plaintiff took away from his pasture 105 heads of cattle through force and
intimidation. He also demanded suitable compensation.
Farmer Jesus Pandi testified that during the war he saw Lucasan's men Angel Galimon, Francisco Ramos
and Bilingan Subane driving 30 heads of cattle from Siari Valley Estate to defendant's ranch, and his
testimony remained uncontradicted. Galimon, Ramos and Bilingan were available during the trial, but
Lucasan did not place them on the witness stand to contradict Pandi's testimony.
After submission of several motion and petitions by both parties, a trial was held, and the Court of First
Instance (CFI) Zamboanga on 30 June 1952 (via Hon. Judge Patricio Ceniza) decided in favor of Siari
Valley Estate, affirming its right to recover the (alleged) strayed animals and its offspring. The said trial
court also ordered Filemon Lucasan to deliver all the cattle in his ranch, especially the 323 animals and
its offspring demanded by Siari Valley. He was also found guilty of contempt proceedings and he is
hereby sentenced to pay a fine of P500.00 pursuant to Section 6, Rule 64 of the Rules of Court or suffer
subsidiary imprisonment in case of insolvency at the rate of one day, for every PhP2.50 that he fails to
pay.
Issues: Defendant Filemon Lucasan appealed CFI Zamboanga's decision raising the issue whether Siari
Valley Estate's cattle were commingled with his cattle, and was such mix-up (commixtion) was made in
bad faith?
Legal Provisions: Articles 472-473 of RA 386 (The New Civil Code) states:
Art. 472 - If by the will of their owners two things of the same or different kinds are mixed, or if the
mixture occurs by chance, and in the latter case the things are not separable without injury, each owner
shall acquire a right proportional to the part belonging to him, bearing in mind the value of the things
mixed or confused. (381)
Art. 473 - If by the will of only one owner, but in good faith, two things of the same or different kinds are
mixed or confused, the rights of the owners shall be determined by the provisions of the preceding
article. If the one who caused the mixture or confusion acted in bad faith, he shall lose the thing
belonging to him thus mixed or confused, besides being obliged to pay indemnity for the damages
caused to the owner of the other thing with which his own was mixed. (382)
Held by the Supreme Court: The Supreme Court denied Lucasan's appeal and affirmed CFI Zamboanga's
decision that held him guilty of appropriating or retaining Siari Valley's Cattle and its offspring. The
Supreme Court also applied Article 473 of the New Civil Code in the present case and it held that
Lucasan acted in bad faith:
Lucasan's cowboys and even his sons Rafael and Vicente rounded up and drove Siari Valley's cattle into
his pasture. He knew that he had the plaintiff's cattle, but refused to return them despite plaintiff's
demands. He even threatened Siari Valley's men when it tried to retrieve the animals. He harassed them
with false prosecutions for their attempts to get the said animals back. He would not allow plaintiff' s
cowboys to get into his pasture to identify its flock. Lastly, he rebranded several Siari Valley cattle with
his own brand and sold those cattle without registering the sales. Also, after some cattle impounded
were entrusted to his custody as trustee, he disposed of not less than 5 head of cattle among those he
received as such trustee. He disposed of much more cattle than he had a right to.
Montelibano vs Bacolod-Murcia Milling (1962)
Facts: Plaintiffs-appellants, Alfredo Montelibano, Alejandro Montelibano, and the Limited co-
partnership Gonzaga and Company, had been and are sugar planters adhered to the defendant-
appellees sugar central mill under identical milling contracts. Originally executed in 1919, said contracts
were stipulated to be in force for 30 years starting with the 1920-21 crop, and provided that the
resulting product should be divided in the ratio of 45% for the mill and 55% for the planters. Sometime
in 1936, it was proposed to execute amended milling contracts, increasing the planters share to 60% of
the manufactured sugar and resulting molasses, besides other concessions, but extending the operation
of the milling contract from the original 30 years to 45 years. The Board of Directors of the appellee
Bacolod-Murcia Milling Co., Inc., adopted a resolution granting further concessions to the planters over
and above those contained in the printed Amended Milling Contract. The appellants initiated the
present action, contending that three Negros sugar centrals with a total annual production exceeding
one-third of the production of all the sugar central mills in the province, had already granted increased
participation (of 62.5%) to their planters, and that under the resolution the appellee had become
obligated to grant similar concessions to the plaintiffs. The appellee Bacolod-Murcia Milling Co., inc.,
resisted the claim, and defended by urging that the stipulations contained in the resolution were made
without consideration; that the resolution in question was, therefore, null and void ab initio, being in
effect a donation that was ultra vires and beyond the powers of the corporate directors to adopt.
Issue: WON the board resolution is an ultra vires act and in effect a donation from the board of
directors?
Held: No. There can be no doubt that the directors of the appellee company had authority to modify the
proposed terms of the Amended Milling Contract for the purpose of making its terms more acceptable
to the other contracting parties. As the resolution in question was passed in good faith by the board of
directors, it is valid and binding, and whether or not it will cause losses or decrease the profits of the
central, the court has no authority to review them. Whether the business of a corporation should be
operated at a loss during depression, or close down at a smaller loss, is a purely business and economic
problem to be determined by the directors of the corporation and not by the court. The appellee
Bacolod-Murcia Milling Company is, under the terms of its Resolution of August 20, 1936, duty bound to
grant similar increases to plaintiffs-appellants herein.