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ATENEO DE DAVAO UNIVERSITY

Davao City

BAR OPERATIONS 09

PROPERTY

ATTY. ED C. BATACAN*

Is the prospective buyer obliged to go beyond the certificate to

determine the condition of the property? NO. Every person dealing with

registered land may safely rely on the correctness of the certificate of title

issued therefor and the law will in no way oblige him to go beyond the

certificate to determine the condition of the property. Erasusta, Jr. vs.

Court of Appeals 495 SCRA 319

What is the nature of a conveyance of a property prior to its

registration? No deed, mortgage, lease, or other voluntary instrument,

except a will purporting to convey or affect registered land shall take

effect as a conveyance or bind the land, but shall operate only as a

contract between the parties and as evidence of authority to the Register

of Deeds to make registration. Adverse claim is done by making a

statement in writing setting forth a party’s alleged right or interest, and

how or under whom acquired, a reference to the number of the

certificate of title of the registered owner, the name of the registered

owner, and a description of the land in which the right or interest is

claimed. Rodriguez vs. Court of Appeals 495 SCRA 490

What is the nature of an adverse claim? The annotation of an

adverse claim is a measure designed to protect the interest of a person

over a piece of real property where the registration of such interest or right

is not otherwise provided for by the Land Registration Act, and serves as a

notice and warning to third parties dealing with said property that

someone is claiming an interest on the same or a better right than the

registered owner thereof. The deed of sale with assumption of mortgage is

a registrable instrument. It must be registered with the Office of the

Register of Deeds in order to bind third parties. Rodriguez vs. Court of

Appeals 495 SCRA 490

Public use; Property of public dominion. The Airport lands and

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buildings of the MIAA are property of public dominion and therefore

owned by the State or the Republic of the Philippines. The term “ports” in

Article 420 (1) of the Civil Code includes seaports and airports – the MIAA

Airport Lands and Buildings constitute a “port” constructed by the State.

They are devoted to public use because they are used by the public for

international and domestic travel and transportation; The charging of fees

to the public does not determine the character of the property whether it

is of public dominion or not. Manila International Airport Authority vs. Court

of Appeals 495 SCRA 591

Issue in forcible entry and unlawful detainer action. In unlawful

detainer and forcible entry cases, the only issue to be determined is who

between the contending parties has better possession of the contested

property; An accion publiciana, also known as accion plenaria de

posesion, is a plenary action for recovery of possession in an ordinary civil

proceeding in order to determine the better and legal right to possess,

independently of title. Bejar vs. Caluag, 516 SCRA 84. A party who can

prove prior possession can recover such possession even against the

owner himself. Lumbres vs. Tablada, Jr., 516 SCRA 575

Significance of tax declarations. It has been ruled that while tax

declarations and realty tax payment of property are not conclusive

evidence of ownership, nevertheless, they are good indicia of the

possession in the concept of owner for no one in his right mind would be

paying taxes for a property that is not in his actual or at least constructive

possession. They constitute at least proof that the holder has a claim of

title over the property. Republic vs. Enriquez, 501 SCRA 436. While tax

declarations and receipts are not conclusive evidence of ownership and

do not prove title to the land, nevertheless, when coupled with actual

possession, they constitute evidence of great weight and can be the basis

of a claim of ownership through prescription. Aguirre vs. Heirs of Lucas

Villanueva 505 SCRA 855.

Nature of possession by tolerance. A person who occupies the land

of another at the latter’s tolerance or permission, without any contract

between them, is necessarily bound by an implied promise to vacate

upon demand, failing which, a summary action for ejectment is the

proper remedy. Quevada vs. Court of Appeals, 502 SCRA 233

Action for reconveyance is imprescriptible. An action for

reconveyance prescribes in ten years, the point of reference being the

date of registration of the deed or the date of issuance of the certificate

of title over the property- an action for reconveyance is imprescriptible

only when the plaintiff is in actual possession of the property. Heirs of Emilio

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Santioque vs. Heirs of Emilio Calma, 505 SCRA 665. The prescriptive period

for the reinvidicatory action has not yet commenced to run where the

plaintiff was in actual or physical possession of the property when he filed

his complaint, Iglesia ni Cristo vs Ponferrada, 505 SCRA 828.

Possession in good faith. Possession is in “good faith” when there

is a reasonable belief that the person from whom the thing is received has

been the owner thereof and could thereby transmit his ownership; There is

“just title” when the adverse claimant comes into possession of the

property through any of the modes recognized by law for the acquisition

of ownership or other real rights, but the grantor is neither the owner nor in

a position to transmit the right. Aguirre vs. Heirs of Lucas Villanueva, 505

SCRA 855.

Quieting of title. An action for quieting of title is a remedy which

may be availed of only when by reason of any instrument, record, claim,

encumbrance or proceeding, which appears valid but is, in fact, invalid,

ineffective, voidable or unenforceable, a cloud is thereby cast on the

complainant’s title to real property or any interest therein. .Verily, for an

action to quiet title to prosper, two indispensable requisite must concur,

namely: 1. the plaintiff or the complainant has a legal or an equitable title

to or interest in the real property subject of the action; and 2. the deed,

claim, encumbrance or proceeding claimed to be casting cloud on his

title must be shown to be in fact invalid or inoperative despite prima facie

appearance of validity or legal efficacy. Heirs of Enriquez Diaz vs Virata

498 SCRA 141.

Right of possession as an incident of ownership, exception.

Undeniably, under the law, jus possidendi is a necessary incident of

ownership. However, the owner cannot exercise this right to the prejudice

of a party whose possession is predicated on a contract like agency, trust,

pledge or lease, as in this case. Under the LPA between MMTC and DMCI,

the latter, as lessee, had a right of possession over the buses and it may

be deprived of said right only if it failed to pay its dues for three

consecutive months. Both the trial court and the appellate court

established that there was actually no default on the part of DMCI

justifying MMTC’s seizure of the buses. MMTC cannot now use the principle

of jus possidendi as an excuse for its unwarranted act and frustrate the

redelivery of the vehicles to DMCI. In addition, a party vested with the

right of possession to the property may set up this right even against the

owner thereof. Under Article 539 of the Civil Code, every possessor has a

right to be respected in his possession and, if deprived of such right, the

law shall restore it to him. In the case at bar, after having been unjustly

denied of its right of possession to the buses, DMCI is entitled to get them

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back from MMTC. But since the buses can no longer be returned in their

original state and considering further that DMCI has already paid their full

amount, the CA resolution ordering MMTC to instead pay DMCI their

value at the time of repossession is correct. Metro Manila Transit vs D.M.

Consortium 517 SCRA

Rule in case of double sale. Where it is immovable property that is

the subject of double sale, ownership shall be transferred 1. to the person

acquiring it who in good faith first recorded it in the Registry of Property; 2.

in default thereof, to the person in good faith was the first in possession; 3.

in default thereof, to the person who presents the oldest title, provided

there is good faith. Carillo vs. Court of Appeals 503 SCRA 66

Nature of letter of intent to purchase. No right of possession, which

is the only issue in an unlawful detainer case, arises from such Letter of

Intent which, as it clearly states, merely signifies intent to, not actually

transfer ownership. Altizo vs. BRYC-V Development Corporation 503 SCRA

87.

Principle of Possession in Good Faith. It has been said that good

faith is always presumed, and upon him who alleges bad faith on the part

of the possessor rests the burden of proof. Good faith is an intangible and

abstract quality with no technical meaning or statutory definition, and it

encompasses, among other things, an honest belief, the absence of

malice and the absence of design to defraud or to seek an

unconscionable advantage. An individual’s personal good faith is a

concept of his own mind and, therefore, may not conclusively be

determined by his protestations alone. It implies honesty of intention, and

freedom from knowledge of circumstances which ought to put the holder

upon inquiry. The essence of good faith lies in an honest belief in the

validity of one’s right, ignorance of a superior claim, and absence of

intention to overreach another. Applied to possession, one is considered

in good faith if he is not aware that there exists in his title or mode of

acquisition any flaw which invalidates it. Heirs of Marcelino Cabal vs

Cabal 497 SCRA 304

Principle of co-ownership. It is undisputed that Marcelino built his

house on the disputed property in 1949 with the consent of his father.

Marcelino has been in possession of the disputed lot since then with the

knowledge of his co-heirs, such that even before his father died in 1954,

when the co-ownership was created, his inheritance or share in the co-

ownership was already particularly designated or physically segregated.

Thus, even before Lot G was subdivided in 1976, Marcelino already

occupied the disputed portion and even then co-ownership did not apply

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over the disputed lot. Elementary is the rule that there is no co-ownership

where the portion owned is concretely determined and identifiable,

though not technically described, or that said portion is still embraced in

one and the same certificate of title does make said portion less

determinable or identifiable, or distinguishable, one from the other, nor

that dominion over each portion less exclusive, in their respective owners.

Heirs of Marcelino Cabal vs Cabal 497 SCRA 302

Adulterous relationship. Because the cohabitation of Villanueva

and Gonzales from 1927 to 1963 was adulterous, their property relations

during those 36 years were not governed by Article 144 of the Civil Code

which applies only if the couple living together is not in any way

incapacitated from getting married. According to the doctrine laid

down by Juaniza vs. Jose, 89 SCRA 306 (1979), no co-ownership exists

between parties to an adulterous relationship. In Agapay v. Palang,

276 SCRA 340 (1997), we expounded on this doctrine by declaring that

in such a relationship, it is necessary for each of the partners to prove

his or her actual contribution to the acquisition of

in order to be able to lay claim to any portion of it. Presumptions of co-

ownership and equal contribution do not apply. Rivera vs Heirs of

Romulado Villanueva 496 SCRA 136

Loss brought about by the concurrent negligence of two persons

shall be borne by the one who was in the immediate, primary and

overriding position to prevent it. FACTS: Guillermo Adriano is the

registered owner of a parcel of land. In 1990, he entrusted the original

owner’s copy of the title to the said land to Angelina Salvador, a distant

relative, for the purpose of securing a mortgage loan. However,

Angelina Salvador without the knowledge and consent of Guillermo

Adriano, mortgaged the land to Pangilinan by forging the signature of

Adriano for PhP60,000.00. The decision of the lower court in favor of

Adriano was reversed by the Court of Appeals it being that Adriano had

been negligent in entrusting and delivering his title to a distant relative

who undertook to find a money lender. ISSUE : Was Adriano negligent in

entrusting and delivering his TCT to a relative who was supposed to help

him find a money lender? And if so, was such negligence sufficient to

deprive him of his property? HELD : Pangilinan was not an innocent

mortgagee for value since he failed to observe due diligence in the grant

of the loan and in the execution of the real estate mortgage. Loss brought

about by the concurrent negligence of two persons shall be borne by the

one who was in the immediate, primary and overriding position to

prevent it. In the present case, the mortgagee who is engaged in the

business of lending money secured by real estate mortgages could have

easily avoided the loss by simply exercising due diligence in ascertaining

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the identity of the impostor who claimed to be the registered owner of

the property mortgaged. The negligence of Adriano is not enough to

offset the fault of Pangilinan himself in granting the loan. The former

should not be made to suffer for respondent’s failure to verify the identity

of the mortgagor and the actual status of the subject property before

agreeing to the real estate mortgage. ADRIANO VS PANGILINAN, 373

SCRA 544.

Ownership of the thing sold is a real right, which the buyer acquires

only upon delivery of the thing to him. And there is said to be delivery if

and when the thing sold is placed in control and possession of the

vendee. FACTS : On two separate occasions, Carmelo & Bauermann, Inc.

(Carmelo) executed two lease contracts in favor of Mayfair Theater, Inc.

(Mayfair) for the lease of a two-storey building for a period of 20 years.

Both contracts provide for a right of first refusal in favor of Mayfair.

Subsequently, Carmelo sold the leased premises to Equitorial Realty

Development, Inc. (Equitorial) without first offering the same to Mayfair.

As a result thereof, Mayfair filed a case against Equitorial and Carmelo for

the Annulment of the Deed of Sale executed by the latter to the former.

While the case was pending, Mayfair paid rents to Equitorial to avoid

eviction. The Supreme Court upheld the decision of the Court of Appeals

rescinding the Deed of Absolute Sale, ordering the return of the

purchase price to Equitorial and for Mayfair to buy the property from

Carmelo. In the meantime, Equitorial, representing as the owner of the

leased premises, filed a case against Mayfair for collection of unpaid

rents or reasonable compensation for Mayfair’s possession of the leased

premises after the expiration of the lease contracts. Issue : Is Equitorial

entitled to back rentals? Held : Rent is a civil fruit that belongs to the

owner of the property producing it by right of accession. Consequently

and ordinarily, the rentals that fell due from the time of the perfection of

the sale to Equitorial until its rescission by final judgment should belong

to the owner of the property during that period. Ownership of the thing

sold is a real right, which the buyer acquires only upon delivery of the

thing to him. And there is said to be delivery if and when the thing sold is

placed in control and possession of the vendee. Equitorial never took

actual control and possession of the property sold, in view of the timely

objection to the sale and the continued actual possession of the property.

The objection took the form of a court action impugning the sale which

was rescinded. While the execution of the deed of sale is recognized by

law as equivalent to the delivery of the thing sold, such constructive or

symbolic delivery, being merely presumptive, is deemed negated by the

failure of the vendee to take actual possession of the land sold. Delivery

has been described as a composite act, a thing in which both parties

must join and the minds of both parties concur. It is an act by which one

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party parts with the title to and the possession of the property, and the

other acquires the right to and the possession of the same. In its natural

sense, delivery means something in addition to the delivery of property or

title. It means transfer of possession. Both actual and constructive delivery

contemplate the absolute giving up of the control and custody of the

property on the part of the vendor, and the assumption of the same by

the vendee. The fact that Mayfair paid rentals to Equitorial during the

litigation should not be interpreted to mean either actual delivery or ipso

facto recognition of Equitorial’s title as the owner since they were made

merely to avoid imminent eviction. Equitorial never acquired ownership

not because the sale was void, but because the sale was not

consummated by a legally effective delivery of the property sold.

Equitorial Realty Development, Inc. vs Mayfair Theater, Inc. 370 SCRA 56.

The nature of the disputed machineries, i.e., that they were heavy,

bolted or cemented on the real property mortgaged, does not make them

ipso facto immovable under Article 415 (3) and (5) of the New Civil Code,

as the parties’ intent has to be looked into. FACTS : Ever Textile Mills, Inc.

(EVERTEX) obtained two loans from Philippine Bank of Communications

(PBCom) in 1975 and 1979. The first was secured by a Deed of Real and

Chattel Mortgage covering the lot where its factory stands, and the

machineries and equipment installed therein. The second was secured by

a Chattel Mortgage covering the same machineries and equipment.

In 1981, EVERTEX purchased various machineries and equipment which it

installed in the factory. EVERTEX failed to meet its obligation prompting

PBCOm to commence extra-judicial foreclosure proceedings. An auction

sale was held wherein PBCom was the highest bidder. A certificate of sale

was issued. On March 7, 1984, PBCOm consolidated its ownership over the

lot and all the properties in it. In 1986, PBCOM leased the entire factory

premises to Ruby Tsai and later sold it to her, including the machineries

and equipment installed by EVERTEX in 1981. EVERTEX filed a complaint for

annulment of sale, etc. against PBCOM averring that the machineries

and equipment installed in 1981 are not covered by the mortgages. On

her part, Tsai contended that the disputed machineries, i.e. that they

were heavy, bolted and cemented on the real property mortgaged by

EVERTEX to PBCom, make them ipso facto immovable [either by

incorporation or purpose] under Art. 415, pars (3) and (5), hence,

covered by the real estate mortgage. ISSUE: Whether or not the disputed

properties are considered as immovable? If not, were they covered by

the chattel mortgage? HELD : The nature of the disputed machineries, i.e.,

that they were heavy, bolted or cemented on the real property

mortgaged, does not make them ipso facto immovable under Article 415

(3) and (5) of the New Civil Code, as the parties’ intent has to be looked

into. While it is true that the controverted properties appear to be

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immobile, a perusal of the Contract of Real and Chatttel Mortgage

executed by the parties show a contrary indication. In the case at bar,

the intention of the parties is to treat the said machineries and equipment

as chattels. The parties executed a Real Estate Mortgage and Chattel

Mortgage, instead of just Real Estate Mortgage if indeed their intention is

to treat all the properties included therein as immovable. Also attached to

the said contract is separate List of Machineries and Equipment”. These

facts evince the conclusion that the parties intend to treat the

machineries as chattels. Thus, the after-acquired properties must also be

treated as chattels. But considering that the disputed properties were

acquired in 1981 and could not have been involved in the 1975 or the

1979 chattel mortgages, it was an error to include such subject

machineries with the properties enumerated in the said chattel

mortgages. As the auction sale of the subject properties to PBCom is void,

no valid title passed in its favor. Consequently, the sale thereof to Tsai is

also a nullity. TSAI vs. COURT OF APPEALS, 366 SCRA 324; October 2, 2001.

There is no provision of law which grants the lessee a right of

retention over the leased premises on that ground. Art. 448 of the Civil

Code, in relation to Art. 546, which provides for 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 a

land in the belief that he is the owner thereof. FACTS : Petitioners were

lessees of a commercial unit located in Baclaran. The lease was for a

period of five (5) years, to expire in 1989. The contract expressly

provided for the renewal of the lease at the option of the lessee “in

accordance with the terms of agreement and conditions set by the

lessor.” Prior to the expiration of the lease, the parties discussed the

possibility of renewing it. They exchanged proposal and counter-

proposal but they failed to reach an agreement. Subsequently a case

for unlawful detainer was filed against petitioners. Petitioners contend

that they acted in good faith in not vacating the leased premises

after the expiration of the contract under the belief that they are

entitled to an extension of the lease and because they had made repairs

and improvements on the premises. ISSUE : Were the lessees entitled

to a right of retention of the leased premises until reimbursement of the

useful improvements made by them on the leased premises? HELD : The

fact that petitioners made repairs on the premises is not a reason to

retain the possession of the premises. There is no provision of law which

grants the lessee a right of retention over the leased premises on that

ground. Art. 448 of the Civil Code, in relation to Art. 546, which provides for

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 a land in the belief that he is the owner thereof. This

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right is not applicable to a mere lessee, otherwise, it would always be in his

power to “improve” his landlord out of the latter’s property. CHUA vs

COURT OF APPEALS, 301 SCRA 358.

Donation has the following elements: the reduction of the

patrimony of the donor; the increase in the patrimony of the donee; and,

the intent to do an act of liberality or animus donandi. Facts: During the

1987 elections, Manuel Abello, Jose Concepcion, Teodoro Regala, and

Avelino Cruz, who are partners in the ACCRA law firm, contributed

P882,661.31 each to the campaign funds of Edgardo Angara, then

running for the Senate. The BIR assessed each of them P263,032.66 for their

contributions. They questioned the assessment through a letter to the BIR.

They claimed that political or electoral contributions are not considered

gifts under the NIRC, and that, therefore, they are not liable for donor's

tax. Issue: Should the contributions to the campaign fund of Angara be

considered donations? Held: YES. Art. 725 defines donation as: “an act of

liberality whereby a person disposes gratuitously of a thing or right in favor

of another, who accepts it.” Donation has the following elements: the

reduction of the patrimony of the donor; the increase in the patrimony of

the donee; and, the intent to do an act of liberality or animus donandi.

The present case falls squarely within the definition of a donation. Abello,

et al each gave P882,661.31 to the campaign funds of Senator Angara,

without any material consideration. All three elements of a donation are

present: The patrimony of Abello, et al were reduced by P882,661.31 each

Angara's patrimony correspondingly increased by P3,530,645.249.There

was intent to do an act of liberality or animus donandi was present since

each of the petitioners gave their contributions without any consideration.

Manuel Abello vs CIR, Feb 23, 2005.

Simple Donation. Facts: On Jan 30, 1985, Catalina Jacob executed

in Canada a Deed of Donation over a Lot 8W in favor of her grandson,

Tito Lagazo. Following the donation, Tito checked with the Register of

Deeds and found out that the property was in the delinquent list, so that

he paid the installments in arrears and the remaining balance on the lot

and declared the said property in the name of Catalina Jacob. Issue:

Whether the donation was simple or onerous. Held: Simple. Even

conceding that Tito's full payment of the purchase price of the lot might

have been a burden to him, such payment was not however imposed by

the donor as a condition for the donation. Rather, the deed explicitly

stated: "That for and in consideration of the love and affection which the

DONEE inspires in the DONOR, and as an act of liberality and generosity

and considering further that the DONEE is a grandson of the DONOR, the

DONOR hereby voluntarily and freely gives, transfer[s] and conveys, by

way of donation unto said DONEE…xxx It is clear that the donor did

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not have any intention to burden or charge Tito as the donee. The words

in the deed are in fact typical of a pure donation. The payments made by

Tito were merely his voluntary acts. Lagazo vs. CA, 3-15-98.

Mortis causa donation. Facts: In April 11, 1958, Celestina Ganuelas

executed a Deed of Donation of Real Property covering 7 parcels of land

in favor of her niece Ursulina – “That, for and in consideration of the love

and affection which the DONOR has for the DONEE, and of the faithful

services the latter has rendered in the past to the former, the said DONOR

does by these presents transfer and convey, by way of DONATION, unto

the DONEE the property above, described, to become effective upon the

death of the DONOR; but in the event that the DONEE should die before

the DONOR, the present donation shall be deemed rescinded and of no

further force and effect.” On May 26, 1986 - Leocadia, et al [heirs of

Celestina] filed a complaint against Ursulina alleging that the donation

was a disposition mortis causa which failed to comply with the provisions

of the Civil Code regarding formalities of wills and testaments, hence, it

was void. Ursulina alleged that the donation contained in the deed is

inter vivos as the main consideration for its execution was the donor's

affection for the donee. Issue: Whether the donation is inter vivos or mortis

causa. Held: Mortis Causa. The distinguishing characteristics of a

donation mortis causa are the following: It conveys no title or ownership to

the transferee before the death of the transferor; or, what amounts to the

same thing, that the transferor should retain the ownership (full or naked)

and control of the property while alive; That before his death, the transfer

should be revocable by the transferor at will, ad nutum; but revocability

may be provided for indirectly by means of a reserved power in the donor

to dispose of the properties conveyed; That the transfer should be void if

the transferor should survive the transferee. In the subject donation, there

is nothing therein which indicates that any right, title or interest in the

donated properties was to be transferred to Ursulina prior to the death of

Celestina. The phrase "to become effective upon the death of the

DONOR" admits of no other interpretation but that Celestina intended to

transfer the ownership of the properties to Ursulina on her death, not

during her lifetime. More importantly, the provision in the deed stating that

if the donee should die before the donor, the donation shall be deemed

rescinded and of no further force and effect shows that the donation is a

postmortem disposition. One of the decisive characteristics of a donation

mortis causa is that the transfer should be considered void if the donor

should survive the donee. To classify the donation as inter vivos simply

because it is founded on considerations of love and affection is

erroneous. That the donation was prompted by the affection of the donor

for the donee and the services rendered by the latter is of no particular

significance in determining whether the deed constitutes a transfer inter

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vivos or not, because a legacy may have an identical motivation. In other

words, love and affection may also underline transfers mortis causa.

Ganuelas vs Cawed, 4-24-03

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end

*RECB

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PROPERTY**

Are power barges considered personal property? FACTS : NPC

entered into a lease contract with Polar Energy, Inc. over 3x30 MW diesel

engine power barges moored at Balayan Bay in Calaca, Batangas. The

contract was for a period of five years which states that NAPOCOR shall

be responsible for the payment of all real estate taxes as provided in

Article 10 of Energy Conversion Agreement. Polar Energy, Inc. assigned its

rights under the Agreement to FELS, who later on received an assessment

of real property taxes on the power barges and referred the same to NPC,

reminding it of its obligation to pay. NPC filed manifestation, stating that

power barges are not real property subject to real property assessment.

FELS also contends that notwithstanding the barges being real properties,

they are exempt from taxation. ISSUE: Whether power barges are

considered personal properties. HELD: No. As found by the appellate

court, the CBAA and LBAA, power barges are real property and are thus

subject to real property tax. Tax assessment by the tax examiners are

presumed correct and made in good faith; with tax payer having the

burden of proving otherwise. Moreover, Article 415 (9) of the New Civil

Code provides that “docks and structures which, though floating, are

intended by their nature and object to remain at a fixed place on a river,

lake or coast” are considered immovable property. Thus, power barges

are categorized as immovable property by destination, being in the

nature of machinery and other implements intended by the owner for an

industry or work which may be carried on in a building or on a piece of

land and which tend directly to meet the needs of said industry or work.

FELS ENERGY, INC. vs. THE PROVINCE OF BATANGAS G.R No. 168557,

February 16, 2007

Schools, public markets, cemeteries built by local government units

are in the nature of patrimonial property. FACTS: The Municipal

Government of Paniqui, Tarlac built a school, a public market, and a

cemetery on an untitled parcel of land. OCTs were issued in the name of

the municipality. Pursuant to a Petition for Reconstitution filed by the

municipality, the RTC ordered the cancellation and reconstitution of the

same as TCTs, registered in the name of the municipality. Petitioners, in

seeing that the cancelled OCTs named their ascendants as former owners

of the land as its indigenous inhabitants, filed a case against respondents

and prayed for the cancellation of the TCTs and for reconveyance of the

lands, alleging that their ascendants were not given the opportunity to

appear or answer and present their side at the cadastral proceedings

involving the subject properties. ISSUE: May the Municipality have the land

registered in its name? HELD: YES. Properties of local government units are

limited to properties for public use and patrimonial property. Property for

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public use can be used by everybody, even by strangers or aliens, in

accordance with its nature; but nobody can exercise over it the rights of a

private owner. A school, a public market, and a cemetery were built

upon the subject property. Schools, public markets and cemeteries are

not for the free and indiscriminate use of everyone. The government

regulates the determination of the persons allowed to study in such

schools, or put up stalls in the public market, or bury their dead in public

cemeteries. The subject property is patrimonial property. IN THE MATTER OF

REVERSION/RECALL OF RECONSTITUTED OCT NO. 0-116 V. REGISTRY OF

DEEDS OF TARLAC, ET.AL. G.R. No. 171304; October 10, 2007

Reclaimed lands are part of the public domain, as such, they

cannot be levied and sold at public auction. FACTS: The Ministry of Public

Works and Highways (Ministry) reclaimed from the sea a 21-hectare

parcel of land in Iloilo City and constructed thereon the Iloilo Fishing Port

Complex (IFPC). Upon completion, the Ministry turned over IFPC to the

Philippine Fisheries Development Authority (PFDA). The City of Iloilo

assessed the entire IFPC for real property taxes. The assessment remained

unpaid. To satisfy the tax delinquency, the City of Iloilo scheduled the sale

at public auction of the IFPC. PFDA filed an injunction case but the parties

subsequently agreed to avail of administrative proceedings instead. ISSUE:

May the IFPC be sold at public auction in order to satisfy the tax liabilities

of PFDA? HELD: NO. PFDA is not a GOCC but an instrumentality of the

national government which is generally exempt from payment of real

property tax. However, said exemption does not apply to the portions of

the IFPC which the PFDA leased to private entities. With respect to these

properties, the PFDA is liable to pay real property tax. The IFPC, a property

of public dominion, cannot be sold at public auction to satisfy the tax

delinquency. The tax delinquency should be satisfied through means

other than the sale at public auction. PHILIPPINE FISHERIES DEVELOPMENT

AUTHORITY V. CA G.R. No. 169836, July 31, 2007

Absence of proof that the land sought to be registered is alienable

and disposable, the same is presumed to be inalienable land of the

public domain. FACTS: In 1993, Lourdes Jardeleza executed a Deed of

Absolute Sale selling to petitioner a parcel of unregistered land. Petitioner

then filed a verified Application for Registration over the subject property

but the same was opposed by respondent Republic of the Philippines. The

RTC ordered the issuance of title in her name. On appeal, the CA

reversed the decision holding that other than petitioner’s own general

statements and tax declarations, no other evidence was presented to

prove her possession of the property for the period required by law. ISSUE:

May petitioner register the subject property in her name? HELD: NO. The

applicant for registration of a parcel of land must prove 1) possession of

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the subject land under a bona fide claim of ownership from 12 June 1945

or earlier; and 2) the classification of the land as alienable and

disposable land of the public domain. The petitioner failed to discharge

the burden of proof imposed on her by law. The Deed of Sale did not

state the duration of the time during which the vendor (or her

predecessors-in-interest) possessed the subject property in the concept of

an owner. Petitioner’s presentation of tax declarations of the subject

property, as well as tax receipts of payment of the realty tax, are of little

evidentiary weight and do not necessarily prove ownership. The evidence

failed to prove that the subject property is alienable and disposable; the

same must still be considered as inalienable land of public domain which

belongs to the state and cannot be the subject of registration. FERNANDA

ARBIAS V. CA AND REPUBLIC G.R. No. 173808, September 17, 2008

What is the nature of accession? FACTS : Respondents filed a

complaint against petitioners for “Cancellation of Tax Declaration and

Recovery of Possession with Damages” (accion publiciana) involving a lot

and another lot abutting the titled property. According to the

respondents, the property was declared for taxation purposes under their

names and the corresponding taxes were paid thereon. The petitioners

occupied a portion of the property fronting the China Sea, as well as the

lot within the salvage area. The respondents pointed out that whatever

alleged claims the petitioners had on the property was acquired through

a Deed of Waiver of Rights executed in 1986 in their favor by another

“squatter” Alfonso Bactad. For their part, the petitioners claimed that they

had been in possession of the property since 1984 and declared the

property for taxation purposes under their names. They filed an

application for miscellaneous sales patent which was certified as

alienable and disposable land by the barangay captain. ISSUE: Whether

petitioners are entitled to the possession of the area outside the titled

property of the respondents and is within the Salvage Zone. HELD: No.

Petitioners should be ejected even if the portion occupied by them is in

the salvage zone. The ownership of property gives the right by accession

to everything which is produced thereby, or which is incorporated or

attached thereto, either naturally or artificially (Article 440, Civil Code).

Accession is the right of the owner of a thing to the products of said thing

as well as to whatever is inseparably attached thereto as an accessory.

While it is true that the salvage zone cannot be the subject of commerce,

the adjoining owner thereof, the respondents in this case, have the priority

to use it. Moreover, the law provides the different modes of acquiring

ownership and accession in not among the modes of acquiring

ownership. Accession is a right implicitly included in ownership, without

which it will have no basis or existence. In general, the right to accession is

automatic (ipso jure), requiring no prior act on the part of the owner of

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the principal. SPOUSES PELAGIO GULLA and PERLITA GULLA vs. HEIRS OF

ALEJANDRO LABRADOR (G.R No. 149418 July 27, 2006)

Who shall own that portion of land segregated through the formation

of a new creek by man-made means? FACTS: Petitioners and

respondents are the owners of two (2) adjoining parcels of land. The two

properties have a common boundary: a creek which ran from south to

north, such that petitioners’ property was bounded by said creek on the

west, while that of respondents was bounded by the same creek on the

east. Due to constant heavy rains and flood, water from the creek

overflowed and destroyed the irrigation canal located at the north of the

property in dispute. In order to minimize the damage to the irrigation

canal, the National Irrigation Administration (NIA) diverted the course of

the creek so rain water will not go directly to the irrigation canal. As a

result, the course of the creek which originally ran from south to north and

which used to separate the respective properties of the parties was

instead diverted to run from south to northwest, passing through the

middle portion of the respondents’ property and resulting in the formation

of a new creek. Consequently, the NIA asked the permission of Manuel

Leonen, one of the herein respondents, to allow it to use the new creek as

an irrigation canal. Manuel Leonen consented. The portion segregated by

the new creek, consisting of 1, 336.5 square meters, is the strip of land

subject of this controversy. Petitioners contend that no new creek was

created and that the present creek is the same creek which bounds their

property on the west, thus making them the owners of the property in

question. ISSUE: Whether the petitioners have the right over the disputed

property. HELD: No. The evidence on record clearly establish that there

used to be an old creek originally running from south to north and

separating the property of the petitioners from that of the respondents.

Then, due to expediency and necessity of protecting the irrigation canal

in the area, the course of that creek was subsequently diverted to run

from south to northwest, cutting through the property of the respondents.

Hence, the portion segregated (the subject property) from respondents’

land as a result of such diversion continues to be their property and they

shall retain ownership of the same. MR. AND MRS. ALEJANDROM PAND-

ODEN vs. ISABEL LEONON, ET AL. G.R No. 138939, December 6, 2006

Are lessees builder in good faith to entitle them to a right of

reimbursement under Art. 448 of the Civil Code and the consequent right

of retention? FACTS: Petitioners, dealers of Pilipinas Shell, have been in

possession of a parcel of land leased to it by respondent under a 10-year

Lease Agreement. When the lease contract expired, petitioners remained

in possession of the property on which they built improvements despite

demands to vacate from the respondent. Hence, respondents filed a

16

complaint for ejectment. Petitioners contend that neither respondent nor

his agents performed any act to prevent them from introducing the

improvements on the leased premises. Article 453 of the New Civil Code

which provides that 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” should be applied.

Petitioners thus conclude that being builders in good faith, until they are

reimbursed of the Two Million Peso-value of the improvements that had

introduced on the property, they have the right of retention or

occupancy thereof. ISSUE: Whether petitioners are builders in good faith

and are thus entitled to the full value of the improvements they had

introduced on the property. HELD: No, Petitioners were allowed only to

occupy the property because they are dealers of Pilipinas Shell, therefore

considered as agents of Pilipinas Shell. The provision on lease under the

New Civil Code should be applied. The right of the lessor upon termination

of a lease contract with respect to useful improvements of the leased

property by a lessee is covered by Art. 1678. This provides that the lessor

upon termination of the lease shall pay the lessee one-half of the value of

the improvements at that time and should the lessor refuse to reimburse

said amount, the lessee may remove the improvements, even though the

principal thing may suffer damage thereby. Jurisprudence dictates that

Article 448 covers only cases in which the builders believe themselves to

be the owners of the land or at least have a claim of title thereto and not

when the interest is merely that of a holder, such as a tenant. Hence, it is

the lessor who is given the option, upon termination of the lease contract

either to appropriate the useful improvements by paying one-half of their

value at the time or to allow the lessee to remove the improvements.

SAMUEL PARILLA, et al. vs. DR. PROSPERO PILAR G.R No. 167680, November

30, 2006

A planter in good faith cannot remove the improvements he

introduced on the land he purchased. FACTS: Danilo Reyes bought a

parcel of land from Regina Castillo in whose name the land was

registered. Reyes then introduced improvements and planted fruit trees

thereon. He applied for the transfer of the title in his name. It turned out

that a portion of the land is part of the timberland of Oriental Mindoro,

considered as non-alienable public land; it cannot be subject to any

disposition or acquisition under existing law, nor can it be registered. Reyes

filed a Motion to Remove Improvements introduced on the property. He

averred that he occupied in good faith the subject land and that he is

likewise a sower and planter in good faith. ISSUE: Can Reyes remove the

improvements he made on the land? HELD: NO. To allow Reyes to remove

the fruit-bearing trees now full-grown on the subject land, even if he is

17

legally entitled to do so, would violate the implicit mandate of Article 547

of the Civil Code. The options Reyes may exercise under Arts. 448 and 546

of the Civil Code have been restricted. It is no longer feasible to permit

him to remove the trees he planted. The only equitable alternative would

be to order the Republic to pay Reyes the value of the improvements he

introduced on the property. REPUBLIC V. HON. NORMELITO BALLOCANAG

AND REYES, G.R. No. 163794, November 28, 2008

The landowner can make a choice either by appropriating the

building by paying the proper indemnity or obliging the builder to pay the

price of the land. FACTS: Since 1910, petitioners and their predecessors-in-

interest have been occupying a lot in Laguna. They built their houses and

apartment building thereon. In 1982, respondents found that they were

the true owners of the lot occupied by petitioners. In 1988, respondents

filed a Complaint for Recovery of Possession with Damages against

petitioners, alleging that they were the lawful owners of the lot as

evidenced by a Certificate of Title issued by the Register of Deeds of

Laguna. On the other hand, petitioners alleged that they were the

owners of the lot as shown by the TCT issued by the Register of Deeds of

Laguna and that respondents’ action was barred by prescription. The

result of the resurvey showed that the lot was registered in the name of

Margarita Almada, respondents’ predecessor-in-interest. It was also

discovered that the lot covered by the TCT was not the lot presently

occupied by petitioners. ISSUES: 1] Is the Complaint for Recovery of

Possession barred by prescription? 2]Are petitioners builders in good faith?

HELD: 1] NO. Title to registered land shall not be acquired by prescription

or adverse possession. Neither can prescription be allowed against the

hereditary successors of the registered owner, because they step into the

shoes of the decedent and are merely the continuation of the personality

of their predecessor-in-interest. The respondents are the lawful owners of

the lot and thus should be placed in possession thereof. 2] YES. Petitioners

and their predecessor-in-interest were in good faith when they built their

houses and apartment building on the lot. Thus, Art. 448, 546 and 548 of

the NCC apply in this case. The landowner can make a choice either by

appropriating the building by paying the proper indemnity or obliging the

builder to pay the price of the land. OCHOA V. APETA, ET. AL, G.R. No.

146259, September 13, 2007

The express consent by the landowner to allow relatives to stay on

his property to enjoy the fruits thereof and to build their own house and

stay thereat as long as they like creates a usufruct which is extinguished

upon the fulfillment of a resolutory condition and the usufructuary is not

entitled to a reimbursement for the improvements made on the property.

FACTS: Petitioner acquired the subject property initially for the purpose of

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letting respondent Arlene Pernes, her niece, move from Mandug to

Davao City proper, but later wanted the property to be also available to

any of her kins. She made known this intention in a document. Following

her retirement from the USA, she came back to the Philippines to stay with

the respondents on the house they built on the subject property. In the

course of time, their relations turned sour. Petitioner sued for unlawful

detainer against the respondents. Respondents interposed petitioner’s

written declaration, wherein she expressly signified her desire for the

spouses to build their house on her property and stay thereat for as long

as they like. The petitioner asserts that the Civil Code provision on usufruct

applies in the case at bar and that the usufructuary rights of the

respondents had already ceased. ISSUES: 1] Whether the Civil Code

provisions on usufruct apply in the instant case; 2] If in the affirmative,

whether the usufruct may be deemed to have been extinguished; and 3]

Whether respondents are entitled to reimbursement for the improvements

introduced. HELD: 1] Yes. It is undisputed that petitioner, in a document

dated July 21, 1986, made known her intention to give respondents and

her other kins the right to use and to enjoy the fruits of her property. The

respondents were given the right “to build their own house” on the

property and to stay thereat “as long as they like”. The established facts

undoubtedly gave respondents not only the right to use the property but

also granted them the right to enjoy the fruits thereof; 2] Yes. Article 603

(2) provides that usufruct is extinguished”…by the fulfillment of any

resolutory condition provided in the title creating the usufruct. “As

provided in the July 21, 1986 document, the occurrence of any of the

following: the loss of the atmosphere of cooperation, the bickering or the

cessation of harmonious relationship between/among kin constitutes a

resolutory condition which, by express wish of the petitioner, extinguishes

the usufruct. The continuing animosity between the petitioner and

respondents, and the violence and humiliation she was made to endure,

despite her advanced age and frail condition, are enough factual bases

to consider the usufruct as having been terminated; 3] No since, the

usufructuary might improve the owner out of his property. MERCEDES

MORALIDAD vs. SPS. DIOSDADO PERNES and ARLENE PERNES GR. No.

152809, August 3, 2006

A lessee is neither a builder in good faith nor in bad faith. His rights

are governed by Art. 1678 of the Civil Code under which the lessor has the

option of paying one-half of the value of the improvements which the

lessee made in good faith, which are suitable for the use for which the

lease is intended, and which have not altered the form and substance of

the land. The lessee may remove the improvements should the lessor

refuse to reimburse. FACTS: Respondent leased a portion of the Nayong

Pilipino Complex to petitioner Sulo sa Nayon, Inc. for the construction and

19

operation of a hotel building, the Philippine Village Hotel. The lease was

for an initial period of 21 years, renewable for a period of 25 years upon

due notice in writing to respondent at least 6 months before its expiration.

After the expiration of the original contract, petitioner sent respondent a

letter notifying the latter of their intention to renew the contract. The

parties agreed to the renewal of the contract for another 25 years and for

payment by petitioner of monthly rental at the rate of P20.00 per sq.m,

which shall be subject to an increase of 20% at the end of every 3 years.

Petitioners defaulted in the payment of their monthly rental. Respondent

repeatedly demanded petitioners to pay the arrears and to vacate the

premises but such demand fell on deaf ears. Respondent then filed a

complaint for unlawful detainer against petitioner. ISSUE: Are Arts. 448 and

546 of the Civil Code applicable in the instant case? HELD: NO. Article 448,

in relation to 546 concerning refund of necessary expense, apply only to a

case where one builds, plants, or sows on land in which he believes

himself to have a claim of title, and not to lands where the only interest of

the builder, planter or sower is that of a holder, such as tenant.

Introduction of valuable improvements on the leased premises does not

give the petitioners the right of retention and reimbursement which

rightfully belongs to a builder in good faith. Otherwise, such a situation

would allow the lessee to easily improve the lessor out of its property. A

lessee is neither a builder in good faith nor in bad faith. His rights are

governed by Art. 1678 of the Civil Code under which the lessor has the

option of paying one-half of the value of the improvements which the

lessee made in good faith, which are suitable for the use for which the

lease is intended, and which have not altered the form and substance of

the land. The lessee may remove the improvements should the lessor

refuse to reimburse. SULO SA NAYON, INC. V. NAYONG FILIPINO

FOUNDATION, G.R. No. 170923, January 20, 2009

Accrued interest yield on a bank deposit is a form of accession,

forming part of the principal, and therefore belongs to the owner of the

principal amount. FACTS: Petitioner, represented by the Toll Regulatory

Board (TRB), filed a complaint for expropriation against landowners whose

properties would be affected by the construction, rehabilitation and

expansion of the North Luzon Expressway. Respondent Holy Trinity Realty

and Development Corporation (HTRDC) was one of the affected

landowners. TRB filed an Urgent Ex-Parte Motion for the issuance of a Writ

of Possession, manifesting it deposited a sufficient amount to cover the

payment of 100% of the zonal value of the affected properties with the

Land Bank of the Philippines (LBP). The HTRDC filed a Motion to Withdraw

Deposit including the interest which accrued thereon. The RTC issued an

Order directing the manager of LBP-South Harbor to release the deposit in

favor of HTRDC. The RTC reversed its ruling prompting the HTRDC to

20

appeal the decision to the CA. The CA ruled that HTRDC is entitled to the

interest which accrued on the amount deposited in the expropriation

account by virtue of accession. The Republic contends HTRDC is entitled

only to the zonal value of the expropriated property, nothing more and

nothing less. ISSUE: Is HTRDC entitled to the interest which accrued on the

amount deposited in the expropriation account by virtue of accession?

HELD: YES. The right of accession is conferred by ownership of the principal

property. The principal property is part of the deposited amount in the

expropriation account. Since HTRDC is entitled to and is the owner of the

principal amount deposited by TRB, the interest yield, as accession, in a

bank deposit should likewise pertain to it as the owner of the money

deposited. REPUBLIC V. HOLY TRINITY REALTY DEVELOPMENT CORP. G.R.

No. 172410, April 14, 2008

A person acquiring property through fraud becomes, by operation

law, a trustee of an implied trust for the benefit of the real owner of the

property. When an action for reconveyance is nonetheless filed, it would

be in the nature of a suit for quieting of title, an action that is

imprescriptible. FACTS: The late Dominga Lustre owned a residential lot

which was mortgaged to the spouses Santos. Dominga then sold the

property to Natividad. The cancellation of the mortgage and the sale of

the property were both inscribed in the title. Thereafter, the spouses

Santos transferred the property, by way of sale, to their son Froilan. The

heirs of Dominga filed a complaint for Declaration of Inexistence of

Contract, Annulment of Title, Reconveyance and Damages against

Froilan, averring that the sale of the property to Natividad was simulated

as Dominga’s signature was forged and that the spouses Santos also

simulated another Deed of Sale transferring the property to Froilan.

Petitioners allege that the respondents’ right of action had prescribed.

ISSUE: Is respondents’ action barred by prescription? HELD: NO. The action

for reconveyance on the ground that the certificate of title was obtained

by means of a fictitious deed of sale is an action for the declaration of its

nullity, which does not prescribe. A person acquiring property through

fraud becomes, by operation law, a trustee of an implied trust for the

benefit of the real owner of the property. An action for reconveyance

based on an implied trust prescribes in 10 years. The prescriptive period

applies only if there is an actual need to reconvey the property as when

the plaintiff is not in possession of the property. Otherwise, if plaintiff is in

possession of the property, prescription does not commence to run

against him. When an action for reconveyance is nonetheless filed, it

would be in the nature of a suit for quieting of title, an action that is

imprescriptible. SPS. SANTOS, ET. AL. V. HEIRS OF DOMINGA LUSTRE G.R. No.

151016, August 6, 2008

21

The real owner is deemed to be in actual possession of a property

despite the presence of a caretaker. It is not necessary that the owner of

a parcel of land should himself occupy the property as someone in his

name may perform the act. If the person claiming to be owner of the

property is in actual possession thereof, the right to seek reconveyance,

which in effect seeks to quiet title, does not prescribe. FACTS: A parcel of

land, originally registered in petitioner Lucia’s name, was later sold to

Angelica, her daughter. Lucia continued to pay the real estate due on

the subject lot. She then designated Vivian as caretaker of the subject lot.

Vivian built a house on it and resided therein. When Angelica died,

private respondents executed an Extra-Judicial Settlement of her estate

which included the subject lot. The title was transferred to the

respondents. Lucia demanded the return of the lot from respondents to

no avail. She filed a Complaint against respondents for the declaration of

nullity of Deed of Absolute Sale, annulment of the extra-judicial settlement

and partition of estate and reconveyance of land title with damages.

ISSUE: Is the complaint filed by Lucia meritorious and not barred by

prescription? HELD: YES. Lucia is the rightful owner of the land; Angelica or

respondents did not, attempt to exercise any act of dominion over it.

Lucia was in actual possession of the property through Vivian, the

caretaker it is not necessary that the owner of a parcel of land should

himself occupy the property as someone in his name may perform the

act. Lucia also paid the realty taxes. The complaint is not barred by

prescription an action for reconveyance prescribes in 10 years, the

reckoning point of which is the date of registration of the deed or the

date of issuance of the certificate of title over the property. If the person

claiming to be owner of the property is in actual possession thereof, the

right to seek reconveyance, which in effect seeks to quiet title, does not

prescribe. One in actual possession of a piece of land claiming to be the

owner thereof may wait until his possession is disturbed or his title is

attacked before taking steps to vindicate his right. His undisturbed

possession gives him the continuing right to seek the aid of a court of

equity to ascertain the nature of the adverse claim of a third party and its

effect on his title, which right can be claimed only by one who is in

possession. Thus, considering that Lucia continuously possessed the

subject lot, her right to institute a suit to clear the cloud over her title

cannot be barred by the statute of limitations. LUCIA CARLOS ALINO V.

HEIRS OF ANGELICA LORENZO G.R. No. 159550, June 27, 2008

The intention to abandon implies a departure, with the avowed

intent of never returning, resuming, or claiming the right and the interest

that have been abandoned. FACTS: Since 1955, spouses Francisco had

been in the possession of the subject property. They allege that in 1989,

they borrowed P50,000 from petitioner Eugenia Castellano and in return,

22

Eugenia will cultivate and possess the property until full payment of the

loan and that in 1992, they offered to pay the loan but Eugenia refused to

accept the payment. They learned that Eugenia was able to secure

emancipation patent and certificate of title over the subject property in

the name of Erlaine, her son, without their knowledge and consent. The

spouses filed a petition for cancellation of the patent before the DARAB.

The petitioners argue that spouses Francisco informed them that they

would no longer redeem the land and thus a transfer was later initiated.

ISSUE: Did the respondent-spouses abandon their rights over the land

when they surrendered possession of the same to Eugenia in

consideration of the loan? HELD: NO. Abandonment requires: (1) a clear

and absolute intention to renounce a right or claim or to abandon a right

or property; and (2) an external act by which that intention is expressed or

carried into effect. The intention to abandon implies a departure, with the

avowed intent of never returning, resuming, or claiming the right and the

interest that have been abandoned. It was not shown that spouses

Francisco had a clear and absolute or irrevocable intent to abandon the

land. Their surrender of possession did not amount to abandonment; there

was an obligation on the part of Eugenia to return possession to the

spouses upon full payment of the loan. EUGENIA CASTELLANO, ET. AL. V.

SPS. FRANCISCO, ET. AL, G.R. No. 155640, May 7, 2008

A cloud which may be removed by suit to quiet title is not created

by mere verbal or parol assertion of ownership of or an interest in property,

where there is a written of factual basis for the asserted right. FACTS:

Petitioners claim that they and their predecessors-in-interest have been in

possession of the disputed parcel of land since time immemorial. When

petitioners decided to apply for the judicial registration of the property,

they found out that portions of the land have been occupied by

respondents. Petitioners filed a complaint for quieting of title, averring that

the allegations of spouses Calderon that they purchased their property

and Macapagal’s claim that he applied for a Free Patent were judicial

admissions which they consider as cloud upon their interest in the disputed

property. ISSUE: May a verbal or parol assertion be considered as a cloud

in the title? HELD: NO. A cloud which may be removed by suit to quiet title

is not created by mere verbal or parol assertion of ownership of or an

interest in property, where there is a written of factual basis for the

asserted right. NO. Petitioners must first establish their legal or equitable

title to, or interest in the real property. A claim of right based on acquisitive

prescription or adverse possession constitutes a removable cloud on title.

While petitioners alleged that respondents’ claim of adverse possession

casts a cloud on their interest in the land , such allegations has not been

proved since the alleged falsified documents relied upon by respondents

to justify their possession were merely marked as exhibits but were never

23

formally offered in evidence by petitioners. EFREN TANDOG, ET. AL. V.

RENATO MACAPAGAL, ET. AL, G.R. No. 144208, September 11, 2007

A co-owner is entitled to sell his undivided share; a sale of the

entire property by a co-owner without the consent of the other co-owners

is not null and void. Only the rights of the co-owner-seller are transferred,

making the buyer a co-owner of the property. FACTS: Two lots in Lapu-

Lapu City were adjudicated in 4 equal shares. The heirs of Tito Dignos

were awarded ¼ share in the two lots, but they sold the entire two lots to

the Civil Aeronautics Administration (CAA) without the knowledge of

respondents, adjudicatees of the ¾ portion of the two lots. CAA’s

successor-in-interest, the Mactan Cebu International Airport Authority

(MCIAA), erected a security fence traversing one of the lots and

relocated a number of families thereon. Respondents filed a Complaint

for Quieting of Title against MCIAA, alleging they have not sold, alienated

or disposed their shares in the lots and that the existence of tax

declarations in favor of petitioners would cast a cloud on their titles. The

RP, represented by the MCIAA, maintained that from the time the lots

were sold to CAA, it had been in open, continuous, exclusive, and

notorious possession thereof; through acquisitive prescription, it had

acquired valid title to the lots since it was a purchaser in good faith and

for value; and assuming that it did not have just title, it had by, possession

for over 30 years, acquired ownership thereof by extraordinary

prescription. ISSUE: Do respondents have the right to recover the lots?

HELD: YES. A co-owner is entitled to sell his undivided share; a sale of the

entire property by a co-owner without the consent of the other co-owners

is not null and void. Only the rights of the co-owner-seller are transferred,

making the buyer a co-owner of the property. Petitioners’ insistence that it

acquired the property through acquisitive prescription, if not ordinary,

then extraordinary, does not lie. REPUBLIC V. HEIRS OF DIGNOS-SORONO,

ET. AL., G.R. No. 171571, March 24, 2008

The right to seek partition is imprescriptible and cannot be barred

by laches. The only exception is when a co-owner repudiates the co-

ownership. FACTS: Don Fabian married twice and had 8 children, 4 from

each union. After the death of his first wife and during the early part of his

second marriage, he filed an intestate proceeding for the estate of his

deceased first wife, Soledad Monteroso. The intestate estate of Soledad

was partitioned and distributed to her 4 children in equal shares. The heirs

of Benjamin Monteroso, son of Don Fabian and Soledad, filed a complaint

against their uncle, Tirso Monteroso, alleging that their uncle, to whom the

land allotted to their father was entrusted, refused to surrender the same

when they demanded delivery upon their reaching the age of majority.

Tirso countered that the portion pertaining to Benjamin was in the

24

possession of their sister, Soledad Monteroso-Cagampang. Tirso, in turn,

filed a Complaint for Partition and Damages with Receivership against his

stepmother, Sofia Pendejito, and all his full and half-siblings and/or their

representatives. ISSUE: Is the cause of action of Tirso one for partition and

hence imprescriptible? HELD: YES. Partition is the proper remedy to Tirso

who is a co-owner of the subject properties by virtue of his being a

compulsory heir of Don Fabian. Acquisitive prescription or laches does not

lie against Tirso, the general rule being that prescription does not run

against a co-owner or co-heir. The right to seek partition is imprescriptible

and cannot be barred by laches. The only exception is when a co-owner

repudiates the co-ownership. MONTEROSO V. COURT OF APPEALS, G.R.

No. 105608, April 30, 2008

A co-owner may file an action for recovery of possession against a

co-owner who takes exclusive possession of the entire co-owned

property. FACTS: During their marriage, Feliciano Sr. and Lorenza acquired

a 120 sq. m. lot, upon which they built their conjugal home. After the

death of Lorenza, her heirs failed to partition their hereditary shares in their

inheritance. Paz Lachica, with whom Feliciano, Sr. was married 2 days

before his death, is the owner of a 192 sq.m. lot. She later sold 40.10 sq. m.

of the property leaving her with only 151.9 sq. m. After Feliciano Sr. died,

his heirs failed to partition their hereditary shares in their inheritance. In

1969, Lachica was issued a Tax Declaration covering the remaining 151.9

sq. m. of lot. A new tax declaration was issued increasing the 151.9 sq. m.

lot to 336 sq. m., which included the 120 sq. m. property previously owned

by Feliciano, Sr. and Lorenza. Lachica sold the 336 sq. m. parcel of land to

petitioners. Charlito Coja’s application for the issuance of title was

opposed by respondents, heirs of Feliciano, Sr. and they filed an action for

recovery of possession and ownership against petitioners. They claim to

be the owners of the subject property being the true and lawful heirs of

Feliciano Sr. and Lorenza. Lachica alleged she acquired the property

before her marriage to Feliciano Sr. and that she had been in actual and

physical possession of the same for more than 15 years before she sold the

property to the petitioners. ISSUE: Do the respondents have a right over

the subject land? HELD: YES. The 120 sq. m. land less the hereditary share

of Lachica belongs to respondents. Considering that Lachica, the

predecessor-in-interest of petitioners, was a co-owner of the subject

property; and considering further that partition of the property is wanting,

this Court is precluded from directing the petitioners to return specific

portions of the property to respondents. In lieu thereof, the co-ownership

between the parties over the subject property is recognized. A co-owner

may file an action for recovery of possession against a co-owner who

takes exclusive possession of the entire co-owned property. The only

effect of such action is recognition of the co-ownership. Courts cannot

25

proceed with the actual partitioning of the co-owned property. Judicial or

extra-judicial partition is necessary to effect physical division of the subject

property. SPS. COJA V. COURT OF APPEALS, ET. AL, G.R. No. 151153,

December 10, 2007

The law limits the term of a co-ownership to ten years, but this term

limit may nevertheless be extended. FACTS: The subject land is registered

in the name of Timoteo Ungab. Petitioner Anita Ungab is the only child of

Timoteo. The heirs of Timoteo’s siblings filed a complaint for partition,

accounting and reconveyance of the subject land. Before trial, the

parties submitted a written compromise agreement, which was approved

by the court. The parties did not have the land partitioned but divided the

proceeds thereof in accordance with the decision. Anita later on refused

to give respondents their respective shares. Respondents then filed

against petitioners a complaint for recovery of possession, partition

enforcement of compromise agreement. Petitioners assert that Anita is

the sole owner of the land. Respondents counter that they are not

claiming as heirs of Timoteo, but as his co-owners, alleging that the land

was governed by a state of co-ownership even before the title was issued

as shown by the Affidavit of Acknowledgment signed by Timoteo, Anita

herself, and her mother Aurelia. ISSUE: Are respondents co-owners of the

subject land? HELD: YES. The execution of the Affidavit of

Acknowledgment and the compromise agreement prove the intention to

establish an express trust wherein the respondents, as trustors, reposed

their confidence on petitioner Anita and her mother, as trustees, that they

will hold the land subject of the co-ownership. Petitioners argue that the

co-ownership was already extinguished because the Civil Code provides

that an agreement to keep a thing undivided shall not exceed ten years.

Indeed, the law limits the term of a co-ownership to ten years, but this

term limit may nevertheless be extended. ANITA UNGAB-VALEROSO, ET.

AL. V. AMANCIA UNGAB-GRADO, ET. AL., G.R. No. 163081, June 15, 2007

Possession may be exercised in one’s own name or in that of

another. FACTS: Respondents filed a Petition for Reconstitution of the

original of TCT No. 335986 and Issuance of the corresponding Owner’s

Duplicate thereof over a lot, alleging that she was the owner in fee simple

of the said property. Petitioner alleged that the court did not acquire

jurisdiction to hear the petition because it was proven that respondent

was no longer in possession of the lot; it was Editha, her Attorney-in-Fact,

who was in possession thereof. ISSUE: Is respondent in possession of the lot

in question? HELD: YES. The fact that Editha testified that it was her family

who were residing on the subject lot did not negate the statement in the

petition for reconstitution that it was respondent who was in possession

thereof. Possession may be exercised in one’s own name or in that of

26

another. Editha exercised possession over the land in the name of

respondent. REPUBLIC V. LOURDES ALONTE, G.R. No. 162787, June 13, 2008

Possession in good faith ceases the moment defects in the title are

made known to the possessors, by extraneous evidence or by suit for

recovery of the property by the true owner. Such interruption takes place

upon service of summons. A possessor in good faith is entitled to the fruits

so long as his possession is not legally interrupted. FACTS: During their

lifetime, the spouses Macahilig were the owners of 7 parcels of land. The

spouses Macahilig had 7 children, namely: Dionesio, Emeliano, Mario,

Ignacio, Eusebio, Tarcela and Maxima. Maxima entered into a Deed of

Extra-Judicial Partition with the heirs of her 2 deceased brothers namely:

Mario and Eusebio, over several parcels of land owned by her parents.

One of these land was an irrigated riceland which, per the Deed of

Partition, was divided between heirs of Mario and Eusebio. Subsequently,

the riceland was sold by Maxima to petitioners. Respondents then filed

an action for reconveyance against petitioners alleging that the Deed of

Sale was null and void since Maxima had no right to sell the same as she

was not the owner thereof. Petitioners claimed that they were possessors

in good faith and that under Art.544, a possessor in good faith was entitled

to the fruits received before the possession is legally interrupted; thus, if

indeed petitioners are jointly and severally liable to respondents for the

produce, of the subject land, the liability should be reckoned only for 1991

and not 1984. ISSUE: Are petitioners’ contentions meritorious? HELD: YES.

Possession acquired in good faith does not lose this character, except

when facts exist which show that the possessor is not unaware that he

possesses the thing improperly or wrongfully. Possession in good faith

ceases the moment defects in the title are made known to the possessors,

by extraneous evidence or by suit for recovery of the property by true

owner. Such interruption takes place upon service of summons. A

possessor in good faith is entitled to the fruits so long as his possession is not

legally interrupted. Petitioners received the summons and the complaint

on August 5, 1991; petitioners’ good faith ceased only on the day they

received the summons. Consequently, petitioners should pay respondents

10 cavans of palay per annum beginning August 5, 1991 instead of 1984.

DACLAG, ET. SL V. MACAHILIG, ET. AL., G.R. No. 159578, July 28, 2008

Ordinary acquisitive prescription requires possession of things in

good faith and with just title for the time fixed by law; without good faith

and just title, acquisitive prescription can only be extraordinary in

character. Regarding real or immovable property, ordinary acquisitive

prescription requires a period of possession of 10 years, while

extraordinary acquisitive prescription requires an uninterrupted adverse

possession of 30 years. FACTS: Respondents rely on an Affidavit executed

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by Valentin Rañon declaring himself to be the true and lawful owner of

the subject property. They claim they built a house thereon where they

previously resided. When they were already residing in Manila, fire razed

and destroyed the said house. Nonetheless, they continued to visit and

pay the real estate taxes thereon. Respondents discovered that the land

was already in the name of another. They filed a Complaint claiming

ownership over the land. Petitioners claim they are the rightful owners of

the land, having acquired the same from their predecessors-in-interest,

spouses Alcantara, who in turn bought it from its owner in 1936. Petitioners

aver that they had religiously paid the real estate taxes on the property

and that in 1977, their predecessor-in-interest filed a Notice of Adverse

Claim against Valentin Rañon. ISSUE: Did the respondents acquire

ownership over the subject property through uninterrupted and adverse

possession thereof for 30 years, without need of title or of good faith?

HELD: YES. Prescription is a mode of acquiring ownership and other real

rights over immovable property. The party who asserts ownership by

adverse possession must prove the presence of the essential elements of

acquisitive prescription. Acquisitive prescription of real rights may be

ordinary or extraordinary. Ordinary acquisitive prescription requires

possession of things in good faith and with just title for the time fixed by

law; without good faith and just title, acquisitive prescription can only be

extraordinary in character. Regarding real or immovable property,

ordinary acquisitive prescription requires a period of possession of 10

years, while extraordinary acquisitive prescription requires an

uninterrupted adverse possession of 30 years. From the time the Affidavit

was executed, prescription began to run against petitioners for it was a

repudiation of petitioners’ legal title. Moreover, respondents’ occupation

of the subject property, without interruption and in the concept of an

owner, led to ownership via extraordinary acquisitive prescription. HEIRS

OF MARCELINA CRISOLOGO V. RAÑON, ET. AL., G.R. No. 171068,

September 5, 2007

Requisites for quieting of title. FACTS: Inocencio Lucasan and his

wife Julianita were the owners of 2 lots in Bacolod City. The Pacific

Banking Corporation (PBC) extended a P5,000.00 loan to Lucasan, with

Carlos Benares as his co-maker. They failed to pay the loan when it

became due and demandable. Consequently, PBC filed a collection

case. The RTC rendered a decision ordering Lucasan and Benares to

solidarily pay but for their failure to do so, a writ of execution was issued

directing the sheriff to levy on the properties owned by Lucasan. The lots

were sold at public auction and were awarded to PBC as the highest

bidder. The auction sale was not assailed and the property was not

redeemed. However, PBC failed to file a petition for consolidation of

ownership. Thereafter, Lucasan paid his loans with the mortgagee bank.

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He also filed a petition for declaratory relief with the RTC seeking

confirmation of his rights. The Philippine Deposit Insurance Corporation, as

receiver and liquidator of PBC, moved to dismiss the complaint for lack of

cause of action. ISSUE: Is the dismissal of petitioner’s action proper? HELD:

YES. Quieting of title is a remedy for the removal of any cloud of doubt or

uncertainty with respect to real property. An action may also be brought

to prevent a cloud from being cast upon title to real property or any

interest therein. To avail of the remedy of quieting of title, two (2)

indispensable requisites must concur, namely: (1) the plaintiff or

complainant has a legal or an equitable title to or interest in the real

property subject of the action; and (2) the deed, claim, encumbrance or

proceeding claimed to be casting a cloud on his title must be shown to

be in fact invalid or inoperative despite its prima facie appearance of

validity or legal efficacy. Unfortunately, the foregoing requisites are

wanting in this case. Lucasan can pursue all the legal and equitable

remedies to impeach or annul the execution sale prior to the issuance of

a new certificate of title in favor of PBC. However, the remedy he had

chosen cannot prosper because he failed to satisfy the requisites

provided for by law. LUCASAN V. PDIC, G.R. No. 176929, July 4, 2008

What is an action to quiet title? What is sufficient to make out an

action to quiet title? FACTS: Spouses Ragasa entered into a contract with

Oakland Development Resources Corporation (ODRC) for the purchase in

installments of a piece of property. They took possession of the property

and resided thereat together with their relatives who continued to

occupy the same whenever the plaintiffs would leave for Italy where they

both worked. Plaintiffs were able to fully pay for the agreed purchase

price of the property. Accordingly, a Deed of Absolute Sale was executed

by ODRC, and the original owner’s copy of its TCT of the Registry of Deeds

was accordingly turned over to them. However, despite the execution of

the Deed, ODRC failed to cause the transfer of title to plaintiffs.

Sometime in March 1999, petitioner Consorcia Ragasa, upon

learning that ODRC was no longer functional as a corporate entity,

decided to cause the transfer of registration of the property’s TCT. She

was surprised to learn from the Registry of Deeds that in 1995, the property

in question was sold by defendant Ex-Officio Sheriff to defendants Spouses

Roa as the highest bidder. Accordingly petitioners filed a complaint

against private respondents and the public respondent Ex Officio Sheriff.

Private respondents moved for the dismissal of the complaint on the

grounds of prescription and laches. The RTC granted the motion and held

that petitioners’ action was barred by prescription for having been filed

more than four years after the registration of the execution sale. ISSUE:

Whether the suit petitioners commenced was an “action upon an injury to

their rights” contemplated in Article 1146 of the Civil Code which must be

29

filed within four years. HELD: No. Petitioner’s complaint was essentially one

for quieting of title to real property under Article 476 of the Civil Code. To

make out an action to quiet title under the foregoing provision, the

initiatory pleading has only to set forth allegations showing that (1) the

plaintiff has “title” to real property or any interest therein” and (2) the

defendant claims an interest therein adverse to the plaintiff’s arising from

an “instrument, record, claim, encumbrance, or proceeding which is

apparently valid or effective but is in truth and in fact invalid, ineffective,

voidable, or unenforceable.” Thus, the averments in petitioner’s complaint

that (1) they acquired ownership of a piece of land by tradition or delivery

as a consequence of sale and (2) private respondents subsequently

purchased the same piece of land at an allegedly void execution sale

were sufficient to make out an action to quiet title under Article 476. SPS.

EDESITO & CONSORCIA RAGASA vs. SPS. GERARDO & RODRIGA ROA, et al.

G.R No. 141964, June 30, 2006

When does prescription begin to run in an action to quiet title?

FACTS: Plaintiffs’ father, Enrique Santos, was the owner of the property

subject of this action. After his death, they inherited the property. Enrique

Santos, during his lifetime, and respondents, after the death of the former,

had been in actual, continuous and peaceful possession of the property

until 1994 when the Iglesia ni Cristo (INC) barred respondents from

fencing their property. Plaintiffs filed a complaint for Quieting of Title

and/or Accion Reinvindicatoria against INC. Defendant argues that the

very nature of the action to quiet title presupposes that plaintiffs must be

in actual and material possession of the property, but it was defendant

which had been in possession of the property since 1984 when it acquired

title thereon. The action of plaintiffs prescribed in ten years from 1984

when defendant allegedly acquired title over the property. On the other

hand, plaintiffs argue that the prescriptive period for the actions should be

reckoned from 1996, when defendant claimed ownership over the

property and barred plaintiffs form fencing their property, not in 1984

when the TCT was issued by the Register of Deeds in the name of

defendant as owner. ISSUE: Whether the action for quieting of title/

accion reinvindicatoria has prescribed. HELD: No. Since the respondents

were in actual or physical possession of the property when they filed their

complaint against petitioner, the prescriptive period for the

reinvindicatory action had not even commenced to run, even if petitioner

was able to secure title over the property in 1984. The reason for this is that

one who is in actual possession of a piece of land claiming to be the

owner thereof may wait until his possession is disturbed or his title is

attacked before taking steps to vindicate his right, the reason for the rule

being, that his undisturbed possession gives him a continuing right to seek

the aid of a court of equity to ascertain and determine the nature of the

30

adverse claim of a third party and its effect on his own title, which right

can be claimed only by one who is in possession. IGLESIA NI CRISTO vs.

THELMA A. PONFERRADA, et al. G.R No. 168943, October 27, 2006

May a co-owner who was declared in default for failure to file

answer be entitled to participate in determining the price of sale and to

share in the proceeds thereof upon partition of the property owned in

common? FACTS: Petitioner and respondents co-owned two parcels of

land. The respondents allege that they informed the petitioner of their

desire to have the subject properties partitioned based on the

percentage of each co-owner’s share but petitioner refused.

Respondents then filed a complaint for partition of the subject property.

Petitioner moved to dismiss this but was denied by the lower court.

Petitioner filed a petition for certiorari and prohibition but the same was

dismissed by the Court of Appeals. During the pendency of such petition,

the lower court, at the instance of the defendants, declared the

petitioner in default. The petitioner appealed but was denied by the lower

court. A motion for new trial was thereafter filed by the petitioner but was

denied. Petitioner insists that the appellate court erred in not reversing

the declaration of default despite the fact that she questioned the

default order in the petition for review on time and that it was error for the

trial court to allow the sale of the entire property in dispute. Respondents

argue that petitioner was correctly declared in default because of her

obstinate refusal to file an answer despite being ordered to do so by the

trial court. They also allege that they cannot be compelled to remain in

co-ownership only because of petitioner’s unjustified refusal to consent to

a partition. ISSUE: Whether the order of the court authorizing the sale of

the subject property is valid. HELD: No. There are two phases in every

action for partition. The first phase is determination of whether a co-

ownership in fact exists and a partition is proper. The second phase

commences when it appears that the parties are unable to agree upon

the partition directed by the court. In that event, partition shall be done

for the parties by the court with the assistance of not more than three

commissioners. The proceedings in this case have only reached the first

phase. There is no question that a co-ownership exists between petitioner

and respondents. To this extent, the trial court was correct in decreeing

partition in line with the Civil Code provision that no co-owner shall be

obliged to remain in the co-ownership. However, the trial court went

astray when it also authorized the sale of the subject properties to a third

party and the division of the proceeds thereof as the court conditioned

the sale upon the price and terms acceptable to respondents only and

adjudicated the proceeds of the sale again only to the respondents.

CONSOLACION AUSTRIA vs. CONSTANCIA LICHAUCO, et al., G.R No.

170080, April 4, 2007

31

Possession resulting from a void or illegal acquisition cannot be the

basis of prescription against a co-owner. FACTS: The sisters Maria and

Felipa inherited from their parents 2 adjoining parcels of land. Maria

married Eleuterio Valera, while Felipa, married Fidel Generosa. Maria and

Eleuterio were childless, while Felipa and Fidel had three (3) children,

namely, Alfonso, Pedro and Florencio. Long after Maria’s death, Eleuterio

married the herein respondent, Pacita Prangan-Valera. Eleuterio

executed an affidavit adjudicating unto himself as sole heir the property

left behind by Maria. Eleuterio died, survived by his second wife, Pacita.

The Generosa brothers executed a Deed of Extrajudicial Partition that

they are the sole heirs of Eleuterio. Respondent filed the complaint in this

case against them, alleging that when Eleuterio died, respondent

continued in possession of the same property until her possession was

interrupted when the brothers surreptitiously took possession of the

property in 1991 on the basis of a falsified deed; that she filed a criminal

complaint for falsification of public document; and that the brothers were

convicted in said case and subsequently applied for probation. The

brothers basically sought refuge on their claim of prescription, alleging

that they have been in possession of the disputed property for more than

20 years. ISSUE: Whether the petitioners are the owners of the property

with respect to the ½ awarded to respondent by acquisitive prescription

having been in possession thereof for more than 20 years. HELD: No. The

positive mandate of Article 494 of the Civil Code conferring

imprescriptibility to actions of a co-owner or co-heir against his co-owners

or co-heirs should preempt and prevail over all abstract arguments based

only on equity. Certainly, laches cannot be set up to resist the

enforcement of an imprescriptible legal right, and the herein respondent

can validly vindicate her inheritance despite the lapse of time. The herein

parties are co-owners of the subject property. In order that title may

prescribe in favor of one of the co-owners, it must be clearly shown that

he has repudiated the claims of the others, and that they were apprised

of his claim of adverse and exclusive ownership, before the prescriptive

period begins to run. The petitioner’s claim they were in possession of the

property for more than 30 years appears unsupported. In fact, their own

evidence belied their claim of prescription and possession of the property.

It was only in 1991, after the death of Eleuterio that they, on the basis of

the falsified deed of extrajudicial partition, took possession of the property.

As it is, the petitioners could not invoke acquisitive prescription because

their mode of acquisition was illegal and void. Ordinary acquisitive

prescription requires possession of things in good faith and with just title of

the time fixed by law. PEDRO GENEROASA, et al. vs. PACITA PRANGAN-

VALERA G.R No. 166521, August 31, 2006

32

Tacit consent by the government coupled with the payment of real

property taxes may be the basis of a lawful possession and therefore

cannot be summarily disturbed without judicial intervention. FACTS:

Sometime in 1942, the spouses Luciano and Consolacion Venturillo

occupied a public land and erected thereon a house and paid the

required taxes in accordance with the directions of the City Assessor’s

Office. Sometime in 2000, Rowena Venturillo- Sucaldito filed a sales

application with the DENR. The inspectors submitted a report

recommending the approval of Sucaldito’s application. No immediate

action, however, was taken by respondent City Engineer on the report.

Respondent City Engineer asked the petitioners to secure a building

permit for the house erected on the lot, after it was shown that said

structure had no building permit. The petitioners then hired an engineer

who prepared the necessary plans and other documents, which were

submitted to the respondent City Engineer. However, they were not issued

the building permit. The Zoning Administrator wrote petitioners that

the area they were occupying is a road right-of-way. Respondent City

Engineer also sent petitioners a Notice of Order of Removal. The

petitioners filed a petition for mandamus with a prayer for the issuance of

a writ of preliminary injunction but the same was dismissed. ISSUE: Whether

petitioners have the lawful right of possession over the land. HELD: Yes. The

heirs of Venturillo, through their parents, have continuously possessed and

occupied the land on which the house sought to be refurbished stands

since 1942. This possession was with the tacit consent and authorization of

the City Government. In fact, the City Assessor’s Office directed the

Venturillos to file tax declarations and pay real property taxes thereon

which they have consistently complied with. By virtue of the City

Government’s tacit consent, the Heirs of Venturillo are not squatters on

public land but are in lawful possession thereof, including the house

subject of the summary demolition order of respondent City Engineer. The

Heirs of Venturillo have a clear and unmistakable legal right not to be

disturbed in their lawful possession of the property unless the proper

judicial tribunal has determined that the same constitutes a nuisance in

law. HRS. OF SPS. LUCIANO et al. vs. HON. JESUS V. QUITAIN, et al. G.R No.

157972, October 30, 2006

May the dominant estate allow other persons to enjoy the right

way granted to it under the original writ of injunction? FACTS: Petitioner

and his wife owned lots in Tali Beach Subdivision, owned by private

respondent Far East Enterprises, Inc. and also two parcels of land

adjacent to the subdivision. To gain access to the two parcels petitioner

has to pass through private respondent’s subdivision. Private respondent

then barricaded the front gate of petitioner’s property to prevent

petitioner and his family from using the subdivision roads to access said

33

parcels. A Complaint for Right of Way with prayer for preliminary

prohibitive injunction was filed by petitioner against private respondent.

The trial court held that barricading the property to prevent the petitioner

from entering it deprived him of his ownership rights and caused

irreparable damage and injuries. Accordingly, the writ of preliminary

injunction was issued. Petitioner then used the subdivision road to

transport heavy equipment and construction materials to develop his

property. Consequently, private respondent moved to dissolve the writ

claiming that the petitioner violated its right to peaceful possession and

occupation of Tali Beach Subdivision. The petitioner moved to clarify the

writ. Petitioner prayed that his contractors, visitors, and other

representatives be allowed access and persons he has authorized to

install power lines over private respondent’s property. The trial court

issued a Joint Resolution amending the original writ. The acts prohibited

and allowed under the amended writ amounted to a premature

adjudication on the merits of the main case on whether or not petitioner

has a right of way, which is still pending before the trial court. Private

respondent filed a petition for certiorari with the Court of Appeals, which

reinstated the original writ. The petitioner moved for reconsideration, but

the same was denied. ISSUE: Whether the original writ established an

easement of right of way giving the right of passage not only to the

petitioner and his household, but also to his visitors, contractors,

construction workers, authorized persons, heavy equipment machinery,

and construction materials as well as the installation of power lines. HELD:

No. At the time the writ was applied for in 1995, there was still no

construction going on in the property. The use of the subdivision roads for

ingress and egress of construction workers, heavy equipment, delivery of

construction materials, and installation of power lines, are clearly not part

of the status quo in the original writ. Under Article 656 of the new Civil

Code, if the right of way is indispensable for the construction, repair,

improvement, alteration or beautification of a building, a temporary

easement is granted after payment of indemnity for the damage caused

to the servient estate. In the present case, the trial court found that

irrespective of which route petitioner used in gaining access to his

property, he has to pass private respondent’s subdivision. Petitioner may

be granted a temporary easement. The temporary easement in the

original writ differs from the permanent easement of right of way tried in

the main case. However, the law provides that temporary easement is

allowed only after the payment o the proper indemnity. Additionally, the

installation of electric power lines is a permanent easement not covered

by Article 656. Neither can installation of electric power lines be subject to

a preliminary injunction for it is not part of the status quo. FAUSTO R.

PREYSLER, JR. vs. COURT OF APPEALS, et. al. G.R. No. 158141, July 11, 2006

34

Effect of declaration by the court that the titles to the road lots

burdened by an easement of right of way are null and void. FACTS:

Petitioner filed a complaint against the respondents, praying that the

latter be enjoined from preventing the petitioner from passing thru or

otherwise making use of three road lots inside Hidden View Subdivision I.

These road lots were titled and registered in the name of the petitioner. A

separate case for annulment of titles over the road lots was then pending

before the courts. The Regional Trial Court issued a writ of preliminary

injunction. However, on appeal, petitioners obtain an adverse decision.

The Supreme Court, on review, made the writ of preliminary injunction

permanent subject to the outcome of the civil case for the annulment of

titles over the road lots. The judgment in such civil case concluded that

petitioner had fraudulently obtained the titles and declared the Deed of

Sale covering the road lots null and void and the certificates of title were

thus cancelled. Hence, this Motion for Reconsideration. ISSUE: Whether

petitioner lost her right-of-way upon losing the right to the road lots. HELD:

Yes. Since it was found that the titles of Borbajo were obtained

fraudulently, her right to the road lots ceases as well as her right-of-way by

virtue of said titles. A final judgment has been rendered canceling

petitioners titles over the road lots. It appears that such decision has been

executed. Attached to the Motion for Reconsideration are certified true

copies of three (3) Transfer Certificates of Title covering the three (3) road

lots which are now registered in the name of Hidden View Subdivision

Homeowners Association, Inc. It is also stated in each of these titles that

the previous titles in the name of petitioner have accordingly been

cancelled by these new titles. Petitioner’s right to the road lots as well as

her right-of-way by virtue of her titles thereto, had ceased as a result of

the decision annulling the Deed of Sale. Notably, even the petition itself

conceded that “until and unless the certificate of title covering these

road lots shall have been decreed to be null and void in a direct

proceedings instituted for that purpose, the same shall be respected and

in case of violation of its use and enjoyment, the registered owner thereof,

is entitled to the protection of law.” FELICITACION B. BORBAJO vs. HIDDEN

VIEW HOMEOWNERS, INC. et al., G.R. No. 152440, December 6, 2006

Requisites for the establishment of compulsory easement of right of

way . FACTS: Glorificacion and Sol Vertudazo and their co-respondents

established their permanent residence on a 300 sq. m. lot. Their property

was landlocked being bordered on all sides by different lots. As an access

route going to Quiñones Street and the public highway, they utilized a

proposed undeveloped barangay road on the south side of their property

owned by Rosario Quiñones. Petitioner-spouses Mejorada bought

Rosario’s lot adjacent to respondent’s property. Included therein is an

area measuring 55.5 sq. m. which serves as an adequate outlet to

35

Quiñones Street, now the subject of the present controversy. For several

years, respondents and the general public have been using that area as

a passageway to and from Quiñones Street. Petitioners closed the

passageway by building a new garage for their service jeep. Respondents

filed a complaint with the RTC praying for a grant of easement of right of

way over petitioner’s property. ISSUE: Are respondents entitled to an

easement of right of way? HELD: YES. Respondents are entitled to legal or

compulsory right of way because they have complied with the following

requisites: (a) the estate is surrounded by other immovable and is without

adequate outlet to a public highway; (b) payment of proper indemnity;

(c) the isolation was not due to the proprietor’s own facts, and (d) the

right of way claimed is at a point least prejudicial to the servient estate.

MEJORDA V. VERTUDAZO, G.R. No. 151797, October 11, 2007

May the improvements introduced by a possessor not in the

concept of an owner on a property belonging to another be offset

against the harvests he derived therefrom? FACTS: Daniel Aquino is a

registered owner of a land which he mortgaged with the Development

Bank of the Philippines (DBP). As the property was in danger of being

foreclosed, respondents sold to petitioners a portion of the land with the

agreement that petitioners would assume the remaining mortgage

obligation of respondents with the DBP and the balance shall be paid to

respondents. Petitioners were allowed by respondents to take possession

of the land. Subsequently, petitioners applied for a re-structuring of the

mortgage loan with the DBP for a period of ten years. Petitioners then

went to DBP to pay for the amortization but they found out that

respondents had paid the bank and the latter told the former that they

would return whatever the petitioners paid for the land and threatened to

withdraw the title from the bank. Petitioners filed with the trial court for

Specific Performance with Preliminary Injunction and Damages and three

days later, respondents withdrew the amount which they had paid to the

bank. During the pendency of the case, petitioners were able to fully

settle the loan with the DBP. The trial court rendered a decision assailed

by herein petitioners on the ground, among others, that offsetting the

claim of improvements by petitioners and the claim of the fruits derived

from the land by respondents is erroneous citing Article 546 and 547 of the

Civil Code. Petitioners argue that as possessors in good faith and in the

concept of an owner, they are entitled to the fruits received before

possession was legally interrupted and they must be reimbursed for their

expenses or for the increase on the value the subject property may have

acquired by reason thereof. ISSUE: Whether there is legal ground to order

the offsetting of the claim of improvements by petitioners to the claim the

fruits derived from the land by respondents. HELD: Yes. The records show

that both parties failed to prove their claims through any receipt or

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document. Despite the lack of proof, the trial court ordered that whatever

improvements spent on the land shall be offset from the fruits derived

therefrom. The plaintiffs claimed that they were able to improve the land

after possession was given to them. No receipts were shown to guide the

court as to how much were the costs of the improvements. Likewise the

defendants claimed that the plaintiffs were able to cultivate land and

harvest palay although their testimonies to this effect are based on their

presumptions and calculations not on actual harvest such that the court

also cannot make determination of the real fruits derived from the land.

This being so, the court shall just offset the claim of improvements to the

claim of fruits derived from the land and then place the parties in their

previous positions before the agreement. Whatever improvements spent

on the land shall be compensated from the fruits derived therefrom.

LAURENCIO C. RAMEL, et al. vs. DANIEL AQUINO, et al. G.R No. 133208, July

31, 2006

**SBC