1

POSSESSION (Arts. 523 to 561)

Definition and concept.
i) In general (Arts. 523-561 NCC)
ii) Who exercises (Arts. 524; 532; 535; 538 NCC)
iii) Status (Arts. 526-29 NCC)
. Essential requisites of possession.
i) Holding/control of thing or right.
ii) Animus possidendi.
. Degrees of holding of possession.
i) Mere holder without title
ii) With juridical title but not ownership.
iii) With just title or title sufficient to transfer ownership,
but not from the true owner.
iv) With just title from true owner.
. Cases of possession.
i) In ones own name; name of another. (Art. 524 NCC)
ii) Concept of owner; mere holder. (Art. 525 NCC)
iii) Good faith; bad faith. (Art. 526 NCC)
. What things or rights may be possessed. (Art. 530 NCC)
. What may not be possessed by private persons.
. Acquisition of possession.
i) Ways of acquiring possession (Art. 531 NCC)
ii) By whom possession acquired. (Art. 532 NCC)
iii) What does not affect possession (Arts. 536; 537; 538
1119)
. Effects of possession.
i) Right to be respected, protected and restored of
possession.
a) Actions to recover possession:
Accion interdictal
Accion publiciana
Accion reivindicatoria
Replevin
b) Self-help (Art. 429 NCC)
ii) Entitlement to fruits (Arts. 544 & 549 NCC)
iii) Reimbursement for expenses (Arts. 552; 553 NCC)
iv) Possession of movable acquired in good faith (Art. 559
NCC)
. Effect of possession in concept of owner.
i) Possession after lapse of time may ripen into full
ownership.
ii) Presumption of just title (Arts. 541; 1131 NCC)
iii) Possessor may bring actions (except accion
reivindicatoria)
iv) Self-help (Art. 429 NCC)
v) Register real right in Registry of Property.
vi) Good faith- right to fruits and reimbursement.
vii) Upon recovery of possession fruits and damages.
viii) Rights over the thing possessed that the law
authorizes.
ix) Good faithbad faith possession.
. Presumptions in favor of possessor.
i) Good faith until contrary is proved (Art. 529 NCC)
ii) Continuity of initial good faith (Art. 528 NCC)
iii) Same character in which possession was acquired
(Art. 529 NCC)
iv) Non-interruption of possession in favor of present
possessor (Arts. 554; 1120-24 NCC)
v) Art. 561 NCC.
vi) Other presumptions (Arts. 426; 533; 1078; 541; 1141
NCC)
. Possession may be lost by (Arts. 555-557 NCC):
i) Abandonment
ii) Assignment
iii) Destruction; goes out of commerce
iv) Possession by another (subject to Art. 537 NCC)

2

PLEASANTVILLE DEVELOPMENT
CORPORATION, petitioner, vs. COURT OF APPEALS,
WILSON KEE, C.T. TORRES ENTERPRISES, INC. and
ELDRED JARDINICO, respondents.
SYLLABUS
1. CIVIL LAW; PROPERTY; OWNERSHIP; BUILDER IN
GOOD FAITH; BUILDER IN GOOD FAITH DEFINED;
APPLICATION IN CASE AT BAR. Petitioner fails to
persuade this Court to abandon the findings and conclusions of
the Court of Appeals that Kee was a builder in good faith. Good
faith consists in the belief of the builder that the land he is
building on is his and his ignorance of any defect or flaw in his
title. And as good faith is presumed, petitioner has the burden of
proving bad faith on the part of Kee. At the time he built
improvements on Lot 8, Kee believed that said lot was what he
bought from petitioner. He was not aware that the lot delivered to
him was not Lot 8. Thus, Kee's good faith. Petitioner failed to
prove otherwise. cdll
2. ID.; AGENCY; PETITIONER, AS PRINCIPAL, IS
RESPONSIBLE FOR THE NEGLIGENCE OF ITS AGENT,
CTTEI, WHICH ACTED WITHIN THE SCOPE OF ITS
AUTHORITY. The rule is that the principal is responsible for
the acts of the agent, done within the scope of his authority, and
should bear the damage caused to third persons. On the other
hand, the agent who exceeds his authority is personally liable for
the damage. CTTEI was acting within its authority as the sole real
estate representative of petitioner when it made the delivery to
Kee. In acting within its scope of authority, it was, however,
negligent. It is this negligence that is the basis of petitioner's
liability, as principal of CTTEI, per Articles 1909 and 1910 of the
Civil Code.
3. ID.; DAMAGES; AMOUNT OF DAMAGES TO BE
AWARDED IS A FACTUAL ISSUE WHICH SHOULD BE
DETERMINED AFTER EVIDENCE IS ADDUCED. Now,
the extent and/or amount of damages to be awarded is a factual
issue which should be determined after evidence is adduced.
However, there is no showing that such evidence was actually
presented in the trial court; hence no damages could now be
awarded.
4. LEGAL ETHICS; ATTORNEY'S FEES; THE AWARD OF
ATTORNEY'S FEES LIES WITHIN THE DISCRETION OF
THE COURT AND DEPENDS UPON THE
CIRCUMSTANCES OF EACH CASE. The award of
attorney's fees lies within the discretion of the court and depends
upon the circumstances of each case. We shall not interfere with
the discretion of the Court of Appeals. Jardinico was compelled to
litigate for the protection of his interests and for the recovery of
damages sustained as a result of the negligence of petitioner's
agent.
D E C I S I O N
Is a lot buyer who constructs improvements on the wrong
property erroneously delivered by the owner's agent, a builder in
good faith? This is the main issue resolved in this petition for
review on certiorari to reverse the Decision 1 of the Court of
Appeals 2 in CA-G.R. SP No. 11040, promulgated on August 20,
1987. cda
By resolution dated November 13, 1995, the First Division of this
Court resolved to transfer this case (along with several others) to
the Third Division. After due deliberation and consultation, the
Court assigned the writing of this Decision to the
undersigned ponente.
The facts, as found by respondent Court, are as follows:
Edith Robillo purchased from petitioner a parcel of land
designated as Lot 9, Phase II and located at Taculing Road,
Pleasantville Subdivision, Bacolod City. In 1975, respondent
Eldred Jardinico bought the rights to the lot from Robillo. At that
time, Lot 9 was vacant.
Upon completing all payments, Jardinico secured from the
Register of Deeds of Bacolod City on December 19, 1978
Transfer Certificate of Title No. 106367 in his name. It was then
that he discovered that improvements had been introduced on Lot
9 by respondent Wilson Kee, who had taken possession thereof.
It appears that on March 26, 1974, Kee bought on installment Lot
8 of the same subdivision from C.T. Torres Enterprises, Inc.
(CTTEI), the exclusive real estate agent of petitioner. Under the
Contract to Sell on Installment, Kee could possess the lot even
before the completion of all installment payments. On January 20,
1975, Kee paid CTTEI the relocation fee of P50.00 and another
P50.00 on January 27, 1975, for the preparation of the lot plan.
These amounts were paid prior to Kee's taking actual possession
of Lot 8. After the preparation of the lot plan and a copy thereof
given to Kee, CTTEI through its employee, Zenaida Octaviano,
accompanied Kee's wife, Donabelle Kee, to inspect Lot 8.
Unfortunately, the parcel of land pointed by Octaviano was Lot 9.
Thereafter, Kee proceeded to construct his residence, a store, an
auto repair shop and other improvements on the lot.
After discovering that Lot 9 was occupied by Kee, Jardinico
confronted him. The parties tried to reach an amicable settlement,
but failed.
On January 30, 1981, Jardinico's lawyer wrote Kee, demanding
that the latter remove all improvements and vacate Lot 9. When
Kee refused to vacate Lot 9, Jardinico filed with the Municipal
Trial Court in Cities, Branch 3, Bacolod City (MTCC), a
complaint for ejectment with damages against Kee.
Kee, in turn, filed a third-party complaint against petitioner and
CTTEI.
The MTCC held that the erroneous delivery of Lot 9 to Kee was
attributable to CTTEI. It further ruled that petitioner and CTTEI
could not successfully invoke as a defense the failure of Kee to
give notice of his intention to begin construction required under
paragraph 22 of the Contract to Sell on Installment and his having
built a sari-sari store without the prior approval of petitioner
required under paragraph 26 of said contract, saying that the
purpose of these requirements was merely to regulate the type of
improvements to be constructed on the lot. 3
However, the MTCC found that petitioner had already rescinded
its contract with Kee over Lot 8 for the latter's failure to pay the
installments due, and that Kee had not contested the rescission.
The rescission was effected in 1979, before the complaint was
instituted. The MTCC concluded that Kee no longer had any right
over the lot subject of the contract between him and petitioner.
Consequently, Kee must pay reasonable rentals for the use of Lot
9, and, furthermore, he cannot claim reimbursement for the
improvements he introduced on said lot.
3

The MTCC thus disposed:
"IN VIEW OF ALL THE FOREGOING, judgment is hereby
rendered as follows:
1. Defendant Wilson Kee is ordered to vacate the premises of Lot
9, covered by TCT No. 106367 and to remove all structures and
improvements he introduced thereon;
2. Defendant Wilson Kee is ordered to pay to the plaintiff rentals
at the rate of P15.00 a day computed from the time this suit was
filed on March 12, 1981 until he actually vacates the premises.
This amount shall bear interests (sic) at the rate of 12 per cent
(sic) per annum.
3. Third-Party Defendant C.T. Torres Enterprises, Inc. and
Pleasantville Subdivision are ordered to pay the plaintiff jointly
and severally the sum of P3,000.00 as attorney's fees and P700.00
as cost and litigation expenses." 4
On appeal, the Regional Trial Court, Branch 48, Bacolod City
(RTC) ruled that petitioner and CTTEI were not at fault or were
not negligent, there being no preponderant evidence to show that
they directly participated in the delivery of Lot 9 to Kee. 5 It
found Kee a builder in bad faith. It further ruled that even
assuming arguendo that Kee was acting in good faith, he was,
nonetheless, guilty of unlawfully usurping the possessory right of
Jardinico over Lot 9 from the time he was served with notice to
vacate said lot, and thus was liable for rental.
The RTC thus disposed:
"WHEREFORE, the decision appealed from is affirmed with
respect to the order against the defendant to vacate the premises
of Lot No. 9 covered by Transfer Certificate of Title No. T-
106367 of the land records of Bacolod City; the removal of all
structures and improvements introduced thereon at his expense
and the payment to plaintiff (sic) the sum of Fifteen (P15.00)
Pesos a day as reasonable rental to be computed from January 30,
1981, the date of the demand, and not from the date of the filing
of the complaint, until he had vacated (sic) the premises, with
interest thereon at 12% per annum. This Court further renders
judgment against the defendant to pay the plaintiff the sum of
Three Thousand (P3,000.00) Pesos as attorney's fees, plus costs
of litigation.
"The third-party complaint against Third-Party Defendants
Pleasantville Development Corporation and C.T. Torres
Enterprises, Inc. is dismissed. The order against Third-Party
Defendants to pay attorney's fees to plaintiff and costs of
litigation is reversed." 6
Following the denial of his motion for reconsideration on October
20, 1986, Kee appealed directly to the Supreme Court, which
referred the matter to the Court of Appeals.
The appellate court ruled that Kee was a builder in good faith, as
he was unaware of the "mix-up" when he began construction of
the improvements on Lot 8. It further ruled that the erroneous
delivery was due to the negligence of CITEI, and that such wrong
delivery was likewise imputable to its principal, petitioner herein.
The appellate court also ruled that the award of rentals was
without basis.
Thus, the Court of Appeals disposed:
"WHEREFORE, the petition is GRANTED, the appealed
decision is REVERSED, and judgment is rendered as follows:
1. Wilson Kee is declared a builder in good faith with respect to
the improvements he introduced on Lot 9, and is entitled to the
rights granted him under Articles 448, 546 and 548 of the New
Civil Code.
2. Third-party defendants C.T. Torres Enterprises, Inc. and
Pleasantville Development Corporation are solidarily liable under
the following circumstances:
a. If Eldred Jardinico decides to appropriate the improvements
and, thereafter, remove these structures, the third-party
defendants shall answer for all demolition expenses and the value
of the improvements thus destroyed or rendered useless;
b. If Jardinico prefers that Kee buy the land, the third-party
defendants shall answer for the amount representing the value of
Lot 9 that Kee should pay to Jardinico.
3. Third-party defendants C.T. Torres Enterprises, Inc. and
Pleasantville Development Corporation are ordered to pay in
solidum the amount of P3,000.00 to Jardinico as attorney's fees,
as well as litigation expenses.
4. The award of rentals to Jardinico is dispensed with.
"Furthermore, the case is REMANDED to the court of origin for
the determination of the actual value of the improvements and the
property (Lot 9), as well as for further proceedings in conformity
with Article 448 of the New Civil Code." 7
Petitioner then filed the instant petition against Kee, Jardinico and
CTTEI.
The Issues
The petition submitted the following grounds to justify a review
of the respondent Court's Decision, as follows:
"1. The Court of Appeals has decided the case in a way probably
not in accord with law or the the (sic) applicable decisions of the
Supreme Court on third-party complaints, by ordering third-party
defendants to pay the demolition expenses and/or price of the
land;
"2. The Court of Appeals has so far departed from the accepted
course of judicial proceedings, by granting to private respondent
Kee the rights of a builder in good faith in excess of what the law
provides, thus enriching private respondent Kee at the expense of
the petitioner;
"3. In the light of the subsequent events or circumstances which
changed the rights of the parties, it becomes imperative to set
aside or at least modify the judgment of the Court of Appeals to
harmonize with justice and the facts;
"4. Private respondent Kee in accordance with the findings of
facts of the lower court is clearly a builder in bad faith, having
violated several provisions of the contract to sell on installments;
"5. The decision of the Court of Appeals, holding the principal,
Pleasantville Development Corporation (liable) for the acts made
by the agent in excess of its authority is clearly in violation of the
provision of the law; cdlex
4

"6. The award of attorney's fees is clearly without basis and is
equivalent to putting a premium in (sic) court litigation."
From these grounds, the issues could be re-stated as follows:
(1) Was Kee a builder in good faith?
(2) What is the liability, if any, of petitioner and its agent, C.T.
Torres Enterprises, Inc.? and
(3) Is the award of attorney's fees proper?

The First Issue: Good Faith
Petitioner contends that the Court of Appeals erred in reversing
the RTC's ruling that Kee was a builder in bad faith.
Petitioner fails to persuade this Court to abandon the findings and
conclusions of the Court of Appeals that Kee was a builder in
good faith. We agree with the followi ng observation of the Court
of Appeals:
"The roots of the controversy can be traced directly to the errors
committed by CTTEI, when it pointed the wrong property to
Wilson Kee and his wife. It is highly improbable that a purchaser
of a lot would knowingly and willingly build his residence on a
lot owned by another, deliberately exposing himself and his
family to the risk of being ejected from the land and losing all
improvements thereon, not to mention the social humiliation that
would follow.
"Under the circumstances, Kee had acted in the manner of a
prudent man in ascertaining the identity of his property. Lot 8 is
covered by Transfer Certificate of Title No. T-69561, while Lot 9
is identified in Transfer Certificate of Title No. T-106367. Hence,
under the Torrens system of land registration, Kee is presumed to
have knowledge of the metes and bounds of the property with
which he is dealing. . . .
xxx xxx xxx
"But as Kee is a layman not versed in the technical description of
his property, he had to find a way to ascertain that what was
described in TCT No. 69561 matched Lot 8. Thus, he went to the
subdivision developer's agent and applied and paid for the
relocation of the lot, as well as for the production of a lot plan by
CTTEI's geodetic engineer. Upon Kee's receipt of the map, his
wife went to the subdivision site accompanied by CTTEI's
employee, Octaviano, who authoritatively declared that the land
she was pointing to was indeed Lot 8. Having full faith and
confidence in the reputation of CTTEI, and because of the
company's positive identification of the property, Kee saw no
reason to suspect that there had been a misdelivery. The steps Kee
had taken to protect his interests were reasonable. There was no
need for him to have acted ex-abundantia cautela, such as being
present during the geodetic engineer's relocation survey or hiring
an independent geodetic engineer to countercheck for errors, for
the final delivery of subdivision lots to their owners is part of the
regular course of everyday business of CTTEI. Because of
CTTEI's blunder, what Kee had hoped to forestall did in fact
transpire. Kee's efforts all went to naught." 8
Good faith consists in the belief of the builder that the land he is
building on is his and his ignorance of any defect or flaw in his
title. 9 And as good faith is presumed, petitioner has the burden of
proving bad faith on the part of Kee. 10
At the time he built improvements on Lot 8, Kee believed that
said lot was what he bought from petitioner. He was not aware
that the lot delivered to him was not Lot 8. Thus, Kee's good
faith. Petitioner failed to prove otherwise.
To demonstrate Kee's bad faith, petitioner points to Kee's
violation of paragraphs 22 and 26 of the Contract of Sale on
Installment.
We disagree. Such violations have no bearing whatsoever on
whether Kee was a builder in good faith, that is, on his state of
mind at the time he built the improvements on Lot 9. These
alleged violations may give rise to petitioner's cause of action
against Kee under the said contract (contractual breach), but may
not be bases to negate the presumption that Kee was a builder in
good faith.
Petitioner also points out that, as found by the trial court, the
Contract of Sale on Installment covering Lot 8 between it and
Kee was rescinded long before the present action was instituted.
This has no relevance on the liability of petitioner, as such fact
does not negate the negligence of its agent in pointing out the
wrong lot to Kee. Such circumstance is relevant only as it gives
Jardinico a cause of action for unlawful detainer against Kee. Lex
Libris
Petitioner next contends that Kee cannot "claim that another lot
was erroneously pointed out to him" because the latter agreed to
the following provision in the Contract of Sale on Installment, to
wit:
"13. The Vendee hereby declares that prior to the execution of his
contract he/she has personally examined or inspected the property
made subject-matter hereof, as to its location, contours, as well as
the natural condition of the lots and from the date hereof whatever
consequential change therein made due to erosion, the said
Vendee shall bear the expenses of the necessary fillings, when the
same is so desired by him/her." 11
The subject matter of this provision of the contract is the change
of the location, contour and condition of the lot due to erosion. It
merely provides that the vendee, having examined the property
prior to the execution of the contract, agrees to shoulder the
expenses resulting from such change.
We do not agree with the interpretation of petitioner that Kee
contracted away his right to recover damages resulting from
petitioner's negligence. Such waiver would be contrary to public
policy and cannot be allowed. "Rights may be waived, unless the
waiver is contrary to law, public order, public policy, morals, or
good customs, or prejudicial to a third person with a right
recognized by law." 12
The Second Issue: Petitioner's Liability
Kee filed a third-party complaint against petitioner and CTTEI,
which was dismissed by the RTC after ruling that there was no
evidence from which fault or negligence on the part of petitioner
and CTTEI can be inferred. The Court of Appeals disagreed and
found CTTEI negligent for the erroneous delivery of the lot by
Octaviano, its employee.
Petitioner does not dispute the fact that CTTEI was its agent. But
it contends that the erroneous delivery of Lot 9 to Kee was an act
which was clearly outside the scope of its authority, and
consequently, CTTEI alone should be liable. It asserts that "while
[CTTEI] was authorized to sell the lot belonging to the herein
5

petitioner, it was never authorized to deliver the wrong lot to
Kee." 13
Petitioner's contention is without merit.
The rule is that the principal is responsible for the acts of the
agent, done within the scope of his authority, and should bear the
damage caused to third persons. 14 On the other hand, the agent
who exceeds his authority is personally liable for the damage. 15
CTTEI was acting within its authority as the sole real estate
representative of petitioner when it made the delivery to Kee. In
acting within its scope of authority, it was, however, negligent. It
is this negligence that is the basis of petitioner's liability, as
principal of CTTEI, per Articles 1909 and 1910 of the Civil Code.
Pending resolution of the case before the Court of Appeals,
Jardinico and Kee on July 24, 1987 entered into a deed of sale,
wherein the former sold Lot 9 to Kee. Jardinico and Kee did not
inform the Court of Appeals of such deal.
The deed of sale contained the following provision:
"1. That Civil Case No. 3815 entitled "Jardinico vs. Kee" which is
now pending appeal with the Court of Appeals, regardless of the
outcome of the decision shall be mutually disregarded and shall
not be pursued by the parties herein and shall be considered
dismissed and without effect whatsoever;" 16
Kee asserts though that the "terms and conditions in the said deed
of sale are strictly for the parties thereto" and that "(t)here is no
waiver made by either of the parties in said deed of whatever
favorable judgment or award the honorable respondent Court of
Appeals may make in their favor against herein petitioner
Pleasantville Development Corporation and/or private respondent
C.T. Torres Enterprises, Inc." 17
Obviously, the deed of sale can have no effect on the liability of
petitioner. As we have earlier stated, petitioner's liability is
grounded on the negligence of its agent. On the other hand, what
the deed of sale regulates are the reciprocal rights of Kee and
Jardinico; it stressed that they had reached an agreement
independent of the outcome of the case.
Petitioner further assails the following holding of the Court of
Appeals:
"2. Third-party defendants C.T. Torres Enterprises, Inc. and
Pleasantville Development Corporation are solidarily liable under
the following circumstances:
"a. If Eldred Jardinico decides to appropriate the improvements
and, thereafter, remove these structures, the third-party
defendants shall answer for all demolition expenses and the value
of the improvements thus destroyed or rendered useless;
"b. If Jardinico prefers that Kee buy the land, the third-party
defendants shall answer for the amount representing the value of
Lot 9 that Kee should pay to Jardinico." 18
Petitioner contends that if the above holding would be carried out,
Kee would be unjustly enriched at its expense. In other words,
Kee would be able to own the lot, as buyer, without having to pay
anything on it, because the aforequoted portion of respondent
Court's Decision would require petitioner and CTTEI jointly and
solidarily to "answer" or reimburse Kee therefor.
We agree with petitioner. cda
Petitioner's liability lies in the negligence of its agent CTTEI. For
such negligence, the petitioner should be held liable for damages.
Now, the extent and/or amount of damages to be awarded is a
factual issue which should be determined after evidence is
adduced. However, there is no showing that such evidence was
actually presented in the trial court; hence no damages could now
be awarded.
The rights of Kee and Jardinico vis-a-vis each other, as builder in
good faith and owner in good faith, respectively, are regulated by
law (i.e., Arts. 448, 546 and 548 of the Civil Code). It was error
for the Court of Appeals to make a "slight modification" in the
application of such law, on the ground of "equity". At any rate, as
it stands now, Kee and Jardinico have amicably settled through
their deed of sale their rights and obligations with regards to Lot
9. Thus, we delete items 2 (a) and (b) of the dispositive portion of
the Court of Appeals' Decision [as reproduced above] holding
petitioner and CTTEI solidarily liable.
The Third Issue: Attorney's Fees
The MTCC awarded Jardinico attorney's fees and costs in the
amount of P3,000.00 and P700.00, respectively, as prayed for in
his complaint. The RTC deleted the award, consistent with its
ruling that petitioner was without fault or negligence. The Court
of Appeals, however, reinstated the award of attorney's fees after
ruling that petitioner was liable for its agent's negligence.
The award of attorney's fees lies within the discretion of the court
and depends upon the circumstances of each case. 19 We shall
not interfere with the discretion of the Court of Appeals. Jardinico
was compelled to litigate for the protection of his interests and for
the recovery of damages sustained as a result of the negligence of
petitioner's agent. 20
In sum, we rule that Kee is a builder in good faith. The
disposition of the Court of Appeals that Kee "is entitled to the
rights granted him under the Articles 448, 546 and 548 of the
New Civil Code" is deleted, in view of the deed of sale entered
into by Kee and Jardinico, which deed now governs the rights of
Jardinico and Kee as to each other. There is also no further need,
as ruled by the appellate Court, to remand the case to the court of
origin "for determination of the actual value of the improvements
and the property (Lot 9), as well as for further proceedings in
conformity with Article 448 of the New Civil Code."
WHEREFORE, the petition is partially GRANTED. The Decision
of the Court of Appeals is hereby MODIFIED as follows:
(1) Wilson Kee is declared a builder in good faith;
(2) Petitioner Pleasantville Development Corporation and
respondent C.T. Torres Enterprises, Inc. are declared solidarily
liable for damages due to negligence; however, since the amount
and/or extent of such damages was proven during the trial, the
same cannot now be quantified and awarded;
(3) Petitioner Pleasantville Development Corporation and
respondent C.T. Torres Enterprises, Inc. are ordered to pay in
solidum the amount of P3,000.00 to Jardinico as attorney's fees,
as well as litigation expenses; and
(4) The award of rentals to Jardinico is dispensed with.
6

MARCIAL KASILAG, petitioner, vs. RAFAELA
RODRIGUEZ, URBANO ROQUE, SEVERO MAPILISAN
and IGNACIO DEL ROSARIO, respondents.
SYLLABUS
1. CONTRACTS, INTERPRETATION; MORTGAGE OF
IMPROVEMENTS UPON LAND ACQUIRED AS
HOMESTEAD. The cardinal rule in the interpretation of
contracts is to the effect that the intention of the contracting
parties should always prevail because their will has the force of
law between them. Article 1281 of the Civil Code consecrates this
rule and provides, further, that if the terms of a contract are clear
and leave no doubt as to the intention of the contracting parties,
the literal sense of its stipulations shall be followed; and if the
words appear to be contrary to the evident intention of the
contracting parties, the intention shall prevail. The contract set out
in Exhibit 1' should be interpreted in accordance with these rules.
As the terms thereof are clear and leave no room for doubt, it
should be interpreted according to the literal meaning of its
clauses. The words used by the contracting parties in Exhibit 1
clearly show that they intended to enter into the principal contract
of loan in the amount of P1,000, with interest at 12 per cent per
annum, and into the accessory contract of mortgage of the
improvements on the land acquired as homestead, the parties
having, moreover, agreed upon the pacts and conditions stated in
the deed. In other words, the parties entered into a contract of
mortgage of the improvements on the land acquired as
homestead, to secure the payment of the indebtedness for P1,000
and the stipulated interest thereon.
2. ID.; ID.; ID.; ANTICHRESIS. Another fundamental rule in
the interpretation of contracts, not less important than those
indicated is to the effect that the terms, clauses and conditions
contrary to law, morals and public order should be separated from
the valid and legal contract when such separation can be made
because they are independent of the valid contract which
expresses the will of the contracting parties. Addressing ourselves
now to the contract entered into by the parties, set out in Exhibit
1, we stated that the principal contract is that of loan and the
accessory that of mortgage of the improvements upon the land
acquired as a homestead. There is no question that the first of
these contracts is valid as it is not against the law. The second, or
the mortgage of the improvements, is expressly authorized by
section 116 of Act No. 2874, as amended by section 23 of Act
No. 3517. It will be recalled that by clause VIII of Exhibit 1 the
parties agreed that should E. A. fail to redeem the mortgage
within the stipulated period of four and a half years, by paying the
loan together with interest, she would execute in favor of the
petitioner an absolute deed of sale of the land for P1,000,
including the interest stipulated and owing. This stipulation was
verbally modified by the same parties after the expiration of one
year, in the sense that the petitioner would take possession of the
land and would benefit by the fruits thereof on condition that he
would condone the payment of interest upon the loan and he
would attend to the payment of the land tax. These pacts made by
the parties independently, were calculated to alter the mortgage
contract clearly entered into, converting the latter into a contract
of antichresis (article 1881 of the Civil Code). The contract of
antichresis, being a real incumbrance burdening the land, is illegal
and void because it is condemned by section 116 of Act No.
2874, as amended, but the clauses regarding the contract of
antichresis being independent and separable from the contract of
mortgage, can be eliminated, thereby leaving the latter in being
because it is legal and valid.
3. ID.; ID.; ID.; ID.; POSSESSION IN GOOD FAITH. It is a
fact that the petitioner is not conversant with the laws because he
is not a lawyer. In accepting the mortgage of the improvements he
proceeded on the well-grounded belief that he was not violating
the prohibition regarding the alienation of the land. In taking
possession thereof and in consenting to receive its fruits, he did
not know, as clearly as a jurist does, that the possession and
enjoyment of the fruits are attributes of the contract of antichresis
and that the latter, as a lien, was prohibited by section 116. These
considerations again bring us to the conclusion that, as to the
petitioner, his ignorance of the provisions of section 116 is
excusable and may, therefore, be the basis of his good faith. We
do not give much importance to the change of the tax declaration,
which consisted in making the petitioner appear as the owner of
the land, because such an act may only be considered as a sequel
to the change of possession and enjoyment of the fruits by the
petitioner, about which we have stated that the petitioner's
ignorance of the law is possible and excusable. We, therefore,
hold that the petitioner acted in good faith in taking possession of
the land and enjoying its fruits.
4. ID.; ID.; ID.; ID.; ID. The petitioner being a possessor in
good faith within the meaning of article 433 of the Civil Code and
having introduced the improvements upon the land as such, the
provisions of article 361 of the same Code are applicable;
wherefore, the respondents are entitled to have the improvements
and plants upon indemnifying the petitioner the value thereof
which we fix at P3,000, as appraised by the trial court; or the
respondents may elect to compel the petitioner to have the land by
paying its market value to be fixed by the court of origin.
D E C I S I O N
IMPERIAL, J p:
This is an appeal taken by the defendant-petitioner from the
decision of the Court of Appeals which modified that rendered by
the Court of First Instance of Bataan in civil case No. 1504 of
said court and held: that the contract, Exhibit "1" is entirely null
and void and without effect; that the plaintiffs-respondents, then
appellants, are the owners of the disputed land, with its
improvements, in common ownership with their brother Gavino
Rodriguez, hence, they are entitled to the possession thereof; that
the defendant-petitioner should yield possession of the land in
their favor, with all the improvements thereon and free from any
lien; that the plaintiffs-respondents jointly and severally pay to
the defendant-petitioner the sum of P1,000 with interest at 6 per
cent per annum from the date of the decision; and absolved the
plaintiffs-respondents from the cross-complaint relative to the
value of the improvements claimed by the defendant-petitioner.
The appealed decision also ordered the registrar of deeds of
Bataan to cancel certificate of title No. 325, in the name of the
deceased Emiliana Ambrosio and to issue in lieu thereof another
certificate of title in favor of the plaintiffs-respondents and their
brother Gavino Rodriguez, as undivided owners in equal parts,
free of all liens and incumbrances except those expressly
provided by law, without special pronouncement as to the costs.
The respondents, children and heirs of the deceased Emiliana
Ambrosio, commenced the aforesaid civil case to the end that
they recover from the petitioner the possession of the land and its
improvements granted by way of homestead to Emiliana
Ambrosio under patent No. 16074 issued on January 11, 1931,
with certificate of title No. 325 issued by the registrar of deeds of
Bataan on June 27, 1931 in her favor, under section 122 of Act.
7

No. 496, which land was surveyed and identified in the cadastre
of the municipality of Limay, Province of Bataan, as lot No. 285;
that the petitioner pay to them the sum of P650 being the
approximate value of the fruits which he received from the land;
that the petitioner sign all the necessary documents to transfer the
land and its possession to the respondents; that the petitioner be
restrained, during the pendency of the case, from conveying or
encumbering the land and its improvements; that the registrar of
deeds of Bataan cancel certificate of title No. 325 and issue in lieu
thereof another in favor of the respondents, and that the petitioner
pay the costs of suit.
The petitioner denied in his answer all the material allegations of
the complaint and by way of special defense alleged that he was
in possession of the land and that he was receiving the fruits
thereof by virtue of a mortgage contract, entered into between
him and the deceased Emiliana Ambrosio on May 16, 1932,
which was duly ratified by a notary public; and in counterclaim
asked that the respondents pay him the sum of P1,000 with 12 per
cent interest per annum which the deceased owed him and that,
should the respondents be declared to have a better right to the
possession of the land, that they be sentenced to pay him the sum
of P5,000 as value of all the improvements which he introduced
upon the land.
On May 16, 1932 Emiliana Ambrosio, in life, and the petitioner
executed the following public deed: "This agreement, made and
entered into this 16th day of May, 1932, by and between Emiliana
Ambrosio, Filipino, of legal age, widow and resident of Limay,
Bataan, P. I., hereinafter called the party of the first part, and
Marcial Kasilag, Filipino, of legal age, married to Asuncion
Roces, and resident at 312 Perdigon Street, Manila, P. I.,
hereinafter called party of the second part.
"WITNESSETH: That the parties hereto hereby covenant and
agree to and with each other as follows:
"ARTICLE I. That the party of the first part is the absolute
registered owner of a parcel of land in the barrio of Alagan,
municipality of Limay, Province of Bataan, her title thereto being
evidenced by homestead certificate of title No. 325 issued by the
bureau of Lands on June 11, 1931, said land being lot No. 285 of
the Limay Cadastre, General Land Registration Office Cadastral
Record No. 1054, bounded and described as follows:
"Beginning at point marked 1 on plan E-57394, N. 84 32' W.
614.82 m. from B. B. M. No. 3, thence N. 66 35' E. 307.15 m. to
point "2"; S. 5 07' W. to point "5"; 6 10' E. 104.26 m. to point
"4"; S. 82 17' W. to point "5"; S. 28 63' W. 72.26 m. to point
"6"; N. 71 09' W. to point "7"; N. 1 42' E. 173.72 m. to point 1,
point of beginning,
"Containing an area of 6.7540 hectares.
"Points 1, 2, 6 and 7, B. L.; points 3, 4 and 5, stakes; points 4, 5
and 6 on bank of Alagan River.
"Bounded on the North, by property claimed by Maria Ambrocio;
on the East, by Road; on the South, by Alagan River and
property claimed by Maxima de la Cruz; and on the West, by
property claimed by Jose del Rosario.
"Bearing true. Declination 0 51' E.
"Surveyed under authority of sections 12-22, Act No. 2874 and in
accordance with existing regulations of the Bureau of Lands, by
Mamerto Jacinto, public land surveyor, on July 8, 1927 and
approved on February 25, 1931.
"ARTICLE II. That the improvements on the above described
land consist of the following:
"Four (4) mango trees, fruit bearing: one hundred ten (110) hills
of bamboo trees; one (1) tamarind and six (6) bonga trees.
"ARTICLE III. That the assessed value of the land is P940 and
the assessed value of the improvements is P860, as evidenced by
tax declaration No. 3531 of the municipality of Limay, Bataan.
"ARTICLE IV. That for and in consideration of the sum of one
thousand pesos (P1,000) Philippine currency, paid by the party of
second part to the party of the first part, receipt whereof is hereby
acknowledged, the party of the first part hereby encumbers and
hypothecates, by way of mortgage, only the improvements
described in Articles II and III hereof, of which improvements the
party of the first part is the absolute owner.
"ARTICLE V. That the condition of said mortgage is such that if
the party of the first part shall well and truly pay, or cause to be
paid to the party of the second part, his heirs, assigns, or
executors, on or before the 16th day of November, 1936, or four
and one-half (41) years after date of the execution of this
instrument, the aforesaid sum of one thousand pesos (P1,000)
with interest at 12 Per cent per annum, then said mortgage shall
be and become null and void; otherwise the same shall be and
shall remain in full force and effect, and subject to foreclosure in
the manner and form provided by law for the amount due
thereunder, with costs and also attorney's fees in the event of such
foreclosure.
"ARTICLE VI. That the party of the first part shall pay all taxes
and assessments which are or may become due on the above
described land and improvements during the term of this
agreement
"ARTICLE VII. That within thirty (30) days after date of
execution of this agreement, the party of the first part shall file a
motion before the Court of First Instance at Balanga, Bataan, P.
I., requesting cancellation of Homestead Certificate of Title No.
325 referred to in Article I hereof and the issuance, in lieu
thereof, of a certificate of title under the provisions of Land
Registration Act No. 496, as amended by Act 3901.
"ARTICLE VIII. It is further agreed that if upon the expiration of
the period of time (4) years stipulated in this mortgage, the
mortgagor should fail to redeem this mortgage, she would execute
a deed of absolute sale of the property herein described for the
same amount as this mortgage, including all unpaid interests at
the rate of 12 per cent per annum, in favor of the mortgagee.
"ARTICLE IX. That in the event the contemplated motion under
Article VII hereof is not approved by the Court, the foregoing
contract of sale shall automatically become null and void, and the
mortgage stipulated under Article IV and V shall remain in full
force and effect. "In testimony whereof, the parties hereto have
hereunto set their hands the day and year first hereinbefore
written.
( Sgd. ) "MARCIAL KASILAG
( Sgd. ) EMILIANA AMBROSIO
8

"Signed in the presence of:
( Sgd. ) "ILLEGIBLE ( Sgd. ) GAVINO RODRIGUEZ
PHILIPPINE ISLANDS } BALANGA, BATAAN } ss.
"Before me this day personally appeared Emiliana Ambrosio
without cedula by reason of her sex, to me known and known to
me to be the person who signed the foregoing instrument, and
acknowledged to me that she executed the same as her free and
voluntary act and deed.
"I hereby certify that this instrument consists of three (3) pages
including this page of the acknowledgment and that each page
thereof is signed by the parties to the instrument and the witnesses
in their presence and in the presence of each other, and that the
land treated in this instrument consists of only one parcel.
"In witness whereof I have hereunto set my hand and affixed my
notarial seal, this 16th day of May, 1932.

(Sgd.) "NICOLAS NAVARRO
Notary Public
My commission expires December 31, 1933
"DOC. NO. 178
Page 36 of my register
Book NO. IV"
One year after the execution of the aforequoted deed, that is, in
1933, it came to pass that Emiliana Ambrosio was unable to pay
the stipulated interest as well as the tax on the land and its
improvements. For this reason, she and the petitioner entered into
another verbal contract whereby she conveyed to the latter the
possession of the land on condition that the latter would not
collect the interest on the loan, would attend to the payment of the
land tax, would benefit by the fruits of the land, and would
introduce improvements thereon. By virtue of this verbal contract,
the petitioner entered upon the possession of the land, gathered
the products thereof, did not collect the interest on the loan,
introduced improvements upon the land valued at P5,000,
according to him and on May 22, 1934 the tax declaration was
transferred in his name and on March 6, 1936 the assessed value
of the land was in- creased from P1,020 to P2,180.
After an analysis of the conditions of Exhibit "1" the Court of
Appeals came to the conclusion and so held that the contract
entered into by and between the parties, set out in the said public
deed, was one of absolute purchase and sale of the land and its
improvements. And upon this ruling it held null and void and
without legal effect the entire Exhibit 1 as well as the subsequent
verbal contract entered into between the parties, ordering,
however, the respondents to pay to the petitioner, jointly and
severally, the loan of P1,000, with legal interest at 6 per cent per
annum from the date of the decision. In this first assignment of
error the petitioner contends that the Court of appeals violated the
law in holding that Exhibit 1 is an absolute deed of sale of the
land and its improvements and that it is void and without any
legal effect.
The cardinal rule in the interpretation of contracts is to the effect
that the intention of the contracting parties should always prevail
because their will has the force of law between them. Article
1281 of the Civil Code consecrates this rule and provides, that if
the terms of a contract are clear and leave no doubt as to the
intention of the contracting parties, the literal sense of its
stipulations shall be followed; and if the words appear to be
contrary to the evident intention of the contracting parties, the
intention shall prevail. The contract set out in Exhibit I should be
interpreted in accordance with these rules. As the terms thereof
are clear and leave no room for doubt, it should be interpreted
according to the literal meaning of its clauses. The words used by
the contracting parties in Exhibit 1 clearly show that they
intended to enter into the principal contract of loan in the amount
of P1,000, with interest at 12 per cent per annum, and into the
accessory contract of mortgage of the improvements on the land
acquired as homesteads the parties having, moreover, agreed
upon the pacts and conditions stated in the deed. In other words,
the parties entered into a contract of mortgage of the
improvements on the land acquired as homestead, to secure the
payment of the indebtedness for P1,000 and the stipulated interest
thereon. In clause V the parties stipulated that Emiliana Ambrosio
was to pay, within four and a half years, or until November 16,
1936, the debt with interest thereon, in which event the mortgage
would not have any effect; in clause VI the parties agreed that the
tax on the land and its improvements, during the existence of the
mortgage, should be paid by the owner of the land; in clause VII
it was covenanted that within thirty days from the date of the
contract, the owner of the land would file a motion in the Court of
First Instance of Bataan asking that certificate of title No. 325 be
cancelled and that in lieu thereof another be issued under the
provisions of the Land Registration Act, No. 496, as amended by
Act No. 3901; in clause VIII the parties agreed that should
Emiliana Ambrosio fail to redeem the mortgage within the
stipulated period of four years and a half, she would execute an
absolute deed of sale of the land in favor of the mortgagee, the
petitioner, for the same amount of the loan of P1,000 including
unpaid interest; and in clause IX it was stipulated that in case the
motion to be presented under clause VII should be disapproved
by the Court of First Instance of Bataan, the contract of sale
would automatically become void and the mortgage would subsist
in all its force.
Another fundamental rule in the interpretation of contracts, not
less important than those indicated, is to the effect that the terms,
clauses and conditions contrary to law, morals and public order
should be separated from the valid and legal contract when such
separation can be made because they are independent of the valid
contract which expresses the will of the contracting parties.
Manresa, commenting on article 1255 of the Civil Code and
stating the rule of separation just mentioned, gives his views as
follows:
"On the supposition that the various pacts, clauses or conditions
are valid, no difficulty is presented; but should they be void, the
question is as to what extent they may produce the nullity of the
principal obligation. Under the view that such features of the
obligation are added to it and do not go to its essence, a criterion
based upon the stability of juridical relations should tend to
consider the nullity as confined to the clause or pact suffering
therefrom, except in case where the latter, by an established
connection or by manifest intention of the parties, is inseparable
from the principal obligation, and is a condition, juridically
speaking, of that the nullity of which it would also occasion." (
Manresa, Commentaries on the Civil Code, Volume 8, p. 575.)
9


The same view prevails in the Anglo-American law, as condensed
in the following words:
"Where an agreement founded on a legal consideration contains
several promises, or a promise to do several things, and a part
only of the things to be done are illegal, the promises which can
be separated, or the promise, so far as it can be separated, from
the illegality, may be valid. The rule is that a lawful promise
made for a lawful consideration is not invalid merely because an
unlawful promise was made at the same time and for the same
consideration, and this rule applies, although the invalidity is due
to violation of a statutory provision, unless the statute expressly
or by necessary implication declares the entire contract void. . . "
(13 C. J., par. 470, p. 512; New York Cent. etc. R. Co. v. Gray,
239 U. S., 583; 60 Law. ed., 451; U. S. v. Moran, 97 U. S., 413,
24 Law. ed., 1017: U. S. v. Ilodson, 10 Wall, 395; 19 Law ed.
937; Gelpcke v. Dubuque, 1 Wall. 175, 17 Law. ed., 520; U. S. v.
Bradly, 10 Pet. 343, 9 Law. ed., 448; Borland v. Prindle, 144 Fed.
713; Western Union Tel. Co. v. Kansas Pac. R. Co., 4 Fed., 284;
Northern Pac. R. Co. v. U. S., 15 Ct. Cl., 428.)
Addressing ourselves now to the contract entered into by the
parties, set out in Exhibit 1, we stated that the principal contract is
that of loan and the accessory that of mortgage of the
improvements upon the land acquired as a homestead. There is no
question that the first of these contracts is valid as it is not against
the law. The second, or the mortgage of the improvements, is
expressly authorized by section 116 of Act No. 2874, as amended
by section 23 of Act No. 3517, reading:
"SEC. 116. Except in favor of the Government or any of its
branches, units, or institutions, or legally constituted banking
corporations, lands acquired under the free patent or homestead
provisions shall not be subject to encumbrance or alienation from
the date of the approval of the application and for a term of five
years from and after the date of issuance of the patent or grant,
nor shall they become liable to the satisfaction of any debt
contracted prior to the expiration of said period; but the
improvements or crops on the land may be mortgaged or pledged
to qualified persons, associations, or corporations."
It will be recalled that by clause VIII of Exhibit 1 the parties
agreed that should Emiliana Ambrosio fail to redeem the
mortgage within the stipulated period of four and a half years, by
paying the loan together with interest, she would execute in favor
of the petitioner an absolute deed of sale of the land for P1,000,
including the interest stipulated and owing. This stipulation was
verbally modified by the same parties after the expiration of one
year, in the sense that the petitioner would take possession of the
land and would benefit by the fruits thereof on condition that he
would condone the payment of interest upon the loan and he
would attend to the payment of the land tax. These pacts made by
the parties independently were calculated to alter the mortgage
contract clearly entered into, converting the latter into a contract
of antichresis. (Article 1881 of the Civil Code.) The contract of
antichresis, being a real encumbrance burdening the land, is
illegal and void because it is condemned by section 116 of Act
No. 2874, as amended, but the clauses regarding the contract of
antichresis, being independent of and separable from the contract
of mortgage, can be eliminated, thereby leaving the latter in being
because it is legal and valid.
The foregoing considerations bring us to the conclusion that the
first assignment of error is well-founded and that error was
committed in holding that the contract entered into between the
parties was one of absolute sale of the land and its improvements
and that Exhibit 1 is null and void.
In the second assignment of error the petitioner contends that the
Court of Appeals erred in holding that he is guilty of violating the
Public Land Act because he entered into the contract, Exhibit 1.
The assigned error is vague and not specific. If it attempts to
show that the said document is valid in its entirety, it is not well-
founded because we have already said that certain pacts thereof
are illegal because they are prohibited by section 116 of Act No.
2874, as amended.
In the third assignment of error the petitioner insists that his
testimony, as to the verbal agreement entered into between him
and Emiliana Ambrosio, should have been accepted by the Court
of Appeals; and in the fourth and last assignment of error the
same petitioner contends that the Court of Appeals erred in
holding that he acted in bad faith in taking possession of the land
and in taking advantage of the fruits thereof, resulting in the
denial of his right to be reimbursed for the value of the
improvements introduced by him.
We have seen that subsequent to the execution of the contract,
Exhibit 1, the parties entered into another verbal contract whereby
the petitioner was authorized to take possession of the land, to
receive the fruits thereof and to introduce improvements thereon,
provided that he would renounce the payment of stipulated
interest and he would assume payment of the land tax. The
possession by the petitioner and his receipt of the fruits of the
land, considered as integral elements of the contract of
antichresis, are illegal and void agreements because, as already
stated, the contract of antichresis is a lien and as such is expressly
prohibited by section 116 of Act No. 2874, as amended. The
Court of Appeals held that the petitioner acted in bad faith in
taking possession of the land because he knew that the contract he
made with Emiliana Ambrosio was an absolute deed of sale and,
further, that the latter could not sell the land because it is
prohibited by section 116. The Civil Code does not expressly
define what is meant by bad faith, but section 433 provides that
"Every person who is unaware of any flaw in his title, or in the
manner of its acquisition, by which it is invalidated, shall be
deemed a possessor in good faith"; and provides, further, that
"Possessors aware of such flaw are deemed possessors in bad
faith." Article 1950 of the same Code, covered by Chapter II
relative to prescription of ownership and other real rights,
provides, in turn, that "Good faith on the part of the possessor
consists in his belief that the person from whom he received the
thing was the owner of the same, and could transmit the title
thereto." We do not have before us a case of prescription of
ownership, hence, the last article is not squarely in point. In
resume, it may be stated that a person is deemed a possessor in
bad faith when he knows that there is a flaw in his title or in the
manner of its acquisition, by which it is invalidated.
Borrowing the language of Article 433, the question to be
answered is whether the petitioner should be deemed a possessor
in good faith because he was unaware of any flaw in his title or in
the manner of its acquisition by which it is invalidated. It will be
noted that ignorance of the flaw is the keynote of the rule. From
the facts found established by the Court of Appeals we can
neither deduce nor presume that the petitioner was aware of a
flaw in his title or in the manner of its acquisition, aside from the
10

prohibition contained in section 116. This being the case, the
question is whether good faith may be premised upon ignorance
of the laws. Manresa, commenting on article 434 in connection
with the preceding article, sustains the affirmative. He says:
"We do not believe that in real life there are not many cases of
good faith founded upon an error of law. When the acquisition
appears in a public document, the capacity of the parties has
already been passed upon by competent authority, and even
established by appeals taken from final judgments and
administrative remedies against the qualification of registrars, and
the possibility of error is remote under such circumstances; but,
unfortunately, private documents and even verbal agreements far
exceed public documents in number, and while no one should be
ignorant of the law, the truth is that even we who are called upon
to know and apply it fall into error not infrequently. However, a
clear, manifest, and truly unexcusable ignorance is one thing, to
which undoubtedly refers article 2, and another and different
thing is possible and excusable error arising from complex legal
principles and from the interpretation of conflicting doctrines.
"But even ignorance of the law may be based upon an error of
fact, or better still, ignorance of a fact is possible as to the
capacity to transmit and as to the intervention of certain persons,
compliance with certain formalities and appreciation of certain
acts, and an error of law is possible in the interpretation of
doubtful doctrines." (Manresa, Commentaries on the Spanish
Civil Code. Volume IV, pp. 100, 101 and 102.)
According to this author, gross and inexeusable ignorance of the
law may not be the basis of good faith, but possible, excusable
ignorance may be such basis. It is a fact that the petitioner is not
conversant with the laws because he is not a lawyer. In accepting
the mortgage of the improvements he proceeded on the well-
grounded belief that he was not violating the prohibition
regarding the alienation of the land. In taking possession thereof
and in consenting to receive its fruits, he did not know, as clearly
as a jurist does, that the possession and enjoyment of the fruits are
attributes of the contract of antichresis and that the latter, as a
lien, was prohibited by section 116. These considerations again
bring us to the conclusion that, as to the petitioner, his ignorance
of the provisions of section 116 is excusable and may, therefore,
be the basis of his good faith. We do not give much importance to
the change of the tax declaration, which consisted in making the
petitioner appear as the owner of the land, because such an act
may only be considered as a sequel to the change of possession
and enjoyment of the fruits by the petitioner, to about which we
have stated that the petitioner's ignorance of the law is possible
and excusable. We, therefore, hold that the petitioner acted in
good faith in taking possession of the land and enjoying its fruits.

The petitioner being a possessor in good faith within the meaning
of article 433 of the Civil Code and having introduced the
improvements upon the land as such, the provisions of article 361
of the same Code are applicable; wherefore, the respondents are
entitled to have the improvements and plants upon indemnifying
the petitioner the value thereof which we fix at P3,000, as
appraised by the trial court; or the respondents may elect to
compel the petitioner to have the land by paying its market value
to be fixed by the court of origin.
The respondents also prayed in their complaint that the petitioner
be compelled to pay them the sum of P650, being the
approximate value of the fruits obtained by the petitioner from the
land. The Court of Appeals affirmed the judgment of the trial
court denying the claim or indemnity for damages, being of the
same opinion as the trial court that the respondents have not
established such damages. Under the verbal contract between the
petitioner and the deceased Emiliana Ambrosio, during the latter's
lifetime, the former would take possession of the land and would
receive the fruits of the mortgaged improvements on condition
that he would no longer collect the stipulated interest and that he
would attend to the payment of the land tax. This agreement, at
bottom, is tantamount to the stipulation that the petitioner should
apply the value of the fruits of the land to the payment of
stipulated interest on the loan of P1,000 which is, in turn, another
of the elements characterizing the contract of antichresis under
article 1881 of the Civil Code. It was not possible for the parties
to stipulate further that the value of the fruits be also applied to
the payment of the capital, because the truth was that nothing
remained after paying the interest at 12% per annum. This
interest, at the rate fixed, amounted to P120 per annum, whereas
the market value of the fruits obtainable from the land hardly
reached said amount in view of the fact that the assessed value of
said improvements was, according to the decision, P860. To this
should be added the fact that, under the verbal agreement, from
the value of the fruits had to be taken a certain amount to pay the
annual land tax. We mention these data here to show that the
petitioner is also not bound to render an accounting of the value
of the fruits of the mortgaged improvements for the reason stated
that said value hardly covers the interest earned by the secured
indebtedness.
For all the foregoing considerations, the appealed decision is
reversed, and we hereby adjudge: (1) that the contract of
mortgage of the improvements, set out in Exhibit 1, is valid and
binding (2) that the contract of antichresis agreed upon verbally
by the parties is a real incumbrance which burdens the land and,
as such, is null and without effect; (3) that the petitioner is a
possessor in good faith; (4) that the respondents may elect to have
the improvements introduced by the petitioner by paying the latter
the value thereof, P3,000, or to compel the petitioner to buy and
have the land where the improvements or plants are found, by
paying them its market value to be fixed by the court of origin,
upon hearing the parties; (5) that the respondents have a right to
the possession of the land and to enjoy the mortgaged
improvements; and (6) that the respondents may redeem the
mortgage of the improvements by paying to the petitioner within
three months the amount of P1,000, without interest, as that
stipulated is set off by the value of the fruits of the mortgaged
improvements which the petitioner received; and in default
thereof the petitioner may ask for the public sale of said
improvements for the purpose of applying the proceeds thereof to
the payment of his said credit. Without special pronouncement as
to the costs in all instances. So ordered.
Diaz, J., concur.
||| (Kasilag v. Rodriguez, G.R. No. 46623, December 07, 1939)
Banco Espanol Filipino v Peterson; G.R. No. L-3088. February
6, 1907.

11

EL BANCO ESPAOL-FILIPINO, plaintiff-appellant, vs.
JAMES PETERSON, sheriff of the city of Manila, ET
AL., defendants-appellees.
SYLLABUS
1. JUDGMENT; FINDINGS OF FACT; EVIDENCE. When
the findings of fact set forth in a judgment appealed from are
plainly and manifestly against the weight of evidence, taken at the
trial, such judgment is contrary to law and should be reversed.
2. CONTRACT OF PLEDGE. A contract of pledge which
unites the requisites required by articles 1857 and 1865 of the
Civil Code is perfectly valid and efficacious, when in addition the
creditor or a third person appointed by common consent of the
contracting parties has taken possession of the goods pledged.
(Art. 1863, Civil Code.)
3. POSSESSION, SYMBOLICAL DELIVERY OF. The
symbolical transfer by means of the delivery of the keys of the
premises in which are stored the goods pledged is sufficient to
consider the creditor, or the depositary appointed by common
consent of the parties, in legal possession of the same.
4. CONTRACT; FRAUD. Where in a suit for the nullification
of a contract it has not been alleged nor proved that in the
stipulations entered into there has been any fraud to the prejudice
of third persons, a finding of the court that such contract was
entered into in fraud of third person is erroneous.
D E C I S I O N
TORRES, J p:
On the 24th of October, 1905, the Spanish-Filipino Bank, a
corporation, through its attorneys, Del-Pan, Ortigas and Fisher,
filed a complaint against the sheriff of the city of Manila and the
other defendant, Juan Garcia, praying that judgment be rendered
against the said sheriff, declaring that the execution levied upon
the property referred to in the complaint, to wit, wines, liquors,
canned goods, and other similar merchandise, was illegal, and
directing the defendants to return the said goods to the plaintiff
corporation, and in case that he had disposed of the same, to pay
the value thereof, amounting to P30,000, Philippine currency, and
further that it be declared that the said plaintiff corporation, under
the contract of pledge referred to in the complaint had the right to
apply the proceeds of the sale of the said goods to the payment of
the debt of P40,000, Philippine currency, for the security of which
the said merchandise was pledged, with preference over the claim
of the other defendant, Juan Garcia and that both defendants be
held jointly liable to the plaintiff for the sum of P500, Philippine
currency, as damages, and the said defendants to pay the costs of
the proceedings, and for such other and further relief as the
plaintiff might be entitled to under the law. Plaintiff alleges in its
complaint that under the contract entered into on the 4th of
March, 1905, by and between the Spanish-Filipino Bank and
Francisco Reyes, the former, loaned to the latter the sum of
P141,702, Philippine currency; that on the same date Francisco
Reyes was already indebted to the bank in the sum of P84,415.38,
Philippine currency, which, added to the amount of the loan,
made a total of P226,117.38, Philippine currency, received by the
said Reyes as a loan from the plaintiff bank, the entire sum at an
annual interest of 8 per cent; that to secure the payment of these
two sums and the interest thereon, the debtor, Francisco Reyes, by
a public instrument executed before a notary on the aforesaid date
mortgaged in favor of the plaintiff bank several pieces of property
belonging to him, and pledged to the said bank part of his
personal property, specifying the proportion on which the said
real and personal property thus mortgaged and pledged in favor of
the plaintiff corporation would be respectively liable for the
payment of the debt; that the property pledged by the debtor to
the bank included a stock or merchandise, consisting of wines,
liquors, canned goods, and other similar articles valued at
P90,591.75, Philippine currency, then stored in the warehouses of
the debtor, Reyes, No. 12 Plaza Moraga, in the city of Manila,
which said goods and merchandise were liable for the payment of
the said sum of P90,591.75, Philippine currency; that in the
aforesaid deed of pledge it was agreed by and between the bank
and the debtor, Reyes, that the goods should be delivered to
Ramon Garcia y Planas for safe-keeping, the debtor having
actually turned over to the said Garcia y Planas the goods in
question by delivering to him the keys of the warehouse in which
they were kept; that in a subsequent contract entered into by and
between the debtor, Reyes, and the plaintiff bank on the 29th of
September, 1905, the said contract executed on the 4th of March
was modified so as to provide that the goods then (September 29)
in possession the depositary should only be liable for the sum of
P40,000, Philippine currency, the said contract of the 4th of
March remaining in all other respects in full force and effect, Luis
M.a Sierra having been subsequently appointed by agreement
between the bank and the debtor as depositary of the goods thus
pledged in substitution for the said Ramon Garcia y Planas.
On the 19th of October, 1905, in an action brought in the Court of
First Instance of the city of Manila by Juan Garcia y Planas
against Francisco Reyes and Ramon Agtarat, judgment was
rendered against the last-mentioned two for the sum of P15,000,
Philippine currency, to be paid by them severally or jointly, upon
which judgment execution was issued against the property of the
defendants, Reyes and Agtarap. On the aforesaid 19th day of
October, for the purpose of levying upon the property of the
defendants, the sheriff at the request of Garcia, the plaintiff in that
case, entered the warehouse where the goods pledged to the
plaintiff bank were stored under the custody of the depositary,
Sierra, and levied upon them as per list attached to the complaint
marked "Exhibit A." The sheriff seized the goods which had been
pledged to the bank, depriving the latter of the possession of the
same, to which said contract executed on the 4th of March, 1905.
Without the authority of the bank, Reyes could not dispose of the
said goods. The value of the goods seized by the sheriff was
P30,000, Philippine currency, the said sheriff, having refused, and
still refusing, to return to the same to the bank, notwithstanding
repeated demands made upon him to this effect, and it being
alleged in the complaint that unless prohibited by the court the
sheriff would proceed to sell the said goods at public auction and
apply the proceeds to the satisfaction of the judgment rendered in
favor of the Juan Garcia y Planas, while the other debtor Reyes
had not paid to the bank the P40,000, Philippine currency, to
secure the payment of which the goods mentioned in Exhibit A
had been pledged to the bank, that is, to secure the payment of a
sum in excess of the actual value of the goods in the hands of the
sheriff.
The defendant sheriff, James J. Peterson, and Juan Garcia, his
codefendant, through their attorneys, Hartigan, Marple, Rohde
and Gutierrez, answering the complaint, stated that they admitted
the allegations contained in paragraphs 1, 2, 3, 4, 5, 12, and 17 of
the complaint, but denied the allegations contained in paragraphs
6, 7, 8, 9, 10, 11, 14, 16, and 18. They further denied the
allegations contained in paragraph 12, with the exception that the
defendant sheriff levied upon the goods mentioned in Exhibit A
12

attached to the complaint for the purpose of satisfying the
judgment referred to therein; and also the allegations contained in
paragraph 13 of the complaint, with the exception that the sheriff
seized the property mentioned in Exhibit A under the execution
referred to therein; and finally defendants denied the allegation
contained in paragraph 15 of the complaint, with the exception of
the allegation that the value of the property seized is P30,000.
They accordingly asked that the action be dismissed and that it be
adjudged that the plaintiff had no interest whatever in the
property described in the complaint, and that the plaintiff be taxed
with the costs of these proceedings.
The testimony introduced by the parties having been received,
and the exhibits having been attached to the record, the court
below entered judgment on the 4th of January, 1906, dismissing
plaintiff's action and directing that the defendant recover from the
Spanish-Filipino Bank the costs of this action, for which
execution was duly issued. To this judgment counsel for plaintiff
excepted and announced his intention of prosecuting a bill of
exceptions, and further made a motion for a new trial on the
ground that the judgment of the court below was contrary to law
and that the findings of fact were plainly and manifestly contrary
to the weight of the evidence.
The decision of this case depends mainly upon the question as to
whether the contract of pledge entered into by and between the
Spanish-Filipino Bank and Francisco Reyes to secure a loan made
by the former to the latter was valid, all the requisites prescribed
by the Civil Code having been complied with.
If so, the bank's claim had preference over the claim of a third
person not secured, as was the bank's, by a pledge, with reference
to the property pledged to the extent of its value, and therefore
such property could not have been legally levied upon by the
sheriff at the request of the defendant, Juan Garcia. (Arts. 1921,
1922, Civil Code.)
The contract in question complies with all the requisites provided
in article 1857 of the Civil Code, such as that the property was
pledged to secure a debt, the date of the execution, the terms of
the pledge, and the property pledged, all of which appears in a
public document, and the property pledged was placed in the
hands of a third person by common consent of the debtor and
creditor, under the supervision of an agent of the bank. (Arts.
1863, 1865, 1866, 1869, 1871, Civil Code.) The defect alleged to
exist in the said contract is that the debtor, Reyes, continued in
possession of the property pledged; that he never parted with the
said property, and that neither the creditor nor the depositary
appointed by common consent of the parties were ever in
possession of the property pledged, and for this reason, and upon
the further ground that the contract was fraudulent, the court
below dismissed the complaint with the costs against the plaintiff.
In the motion for a new trial it was alleged by the plaintiff that the
judgment of the court below was contrary to law, and that the
findings of fact contained therein were plainly and manifestly
against the weight of the evidence. If plaintiffs contention is
correct, then the judgment of the court below should be reversed.
From the evidence introduced at the trial, both oral and
documentary, it appears that a third person, appointed by the
common consent of the debtor and creditor, was in possession of
the goods pledged in favor of the bank under the direct
supervision of an agent of the bank expressly appointed for this
purpose, and it has not been shown that the said Reyes continued
in the possession of the goods after they had been pledged to the
plaintiff bank.
Exhibit C and the testimony of Francisco Reyes, Luis M.a Sierra,
and Mariano Rodriguez corroborate the existence and authenticity
of the contract of pledge recorded in a public instrument and
conclusively and satisfactorily show that the debtor, after the
pledge of the property, parted with the possession of the same,
and that it was delivered to a third person designated by common
consent of the parties. For the purpose of giving this possession
greater effect, the pledgee appointed a person to examine daily
the property in the warehouse where the same was kept.
The witness Matias Garcia also testified as to the status of these
goods, and informed Juan Garcia of such status before the same
were levied upon.
The sheriff's testimony supports the allegation that the depositary,
Sierra, was present at the place where the goods were kept, as
well as the representative of the bank, Rodriguez, when he, the
sheriff, went there for the purpose of levying upon the said
property. He further testified that Rodriguez, the representative of
the bank, then protested and notified him that the property in
question was pledged to the Spanish-Filipino Bank.
The contract in question was, therefore, a perfect contract of
pledge under articles 1857 and 1863 of the Civil Code, it having
been conclusively shown that the pledgee took charge and
possession of the goods pledged through a depository and a
special agent appointed by it, each of whom had a duplicate key
to the warehouse wherein the said goods were stored, and that the
pledgee, itself, received and collected the proceeds of the goods
as they were sold.
The fact that the said goods continued in the warehouse which
was formerly rented by the pledgor, Reyes, does not affect the
validity and legality of the pledge, it having been demonstrated
that after the pledge had been agreed upon, and after the
depository appointed with the common consent of the parties had
taken possession of the said property, the owner, the pledgor,
could no longer dispose of the same, the pledgee being the only
one authorized to do so through the depositary and special agent
who represented it, the symbolical transfer of the goods by means
of the delivery of the keys to the warehouse where the goods were
stored being sufficient to show that the depositary appointed by
the common consent of the parties was legally placed in
possession of the goods. (Articles 438, 1463, Civil Code.)
The fact that the debtor, Reyes, procured purchasers and made
arrangements for the sale of the goods pledged and that the bills
for the goods thus sold were signed by him does not affect the
validity of the contract, for the pledgor, Reyes, continued to be
the owner of the goods, (art. 1869, Civil Code), he being the one
principally interested in the sale of the property on the best
possible terms.
As to the reservation stipulated in paragraph 13 of the contract
executed on the 4th of March, 1905, it could not affect the
contract in question for the reason that reservation referred to the
rent from the property mortgaged, to the bank and the dividends
from the shares of stock also pledged to the bank, and not the
merchandise so pledged, and such reservation could not have
rendered the contract of pledge null.
If the case is to be decided in accordance with the facts alleged
and established, the defendant not having introduced any
13

evidence to show that the said contract of pledge was fraudulent
as to other creditors, there was no legal ground upon which the
court below could have held that the contract evidenced by the
instrument in question was entered into to defraud other creditors
of the pledgor.
For the reason hereinbefore set out, and the judgment of the court
below being contrary to the evidence, the said judgment is hereby
reversed, and it is hereby adjudged that the plaintiff corporation,
under and by virtue of the contract of pledge in question, had a
preferential right over that of the defendant, Juan Garcia, to the
goods pledged or the value thereof, the value to be applied to the
payment of the debt of P40,000, Philippine currency, for the
security of which the said property was pledged, and the
defendants are accordingly hereby ordered to return to the
plaintiff corporation the property improperly levied upon, or to
pay its value, amounting to P30,000, Philippine currency, without
special provision as to costs. After the expiration of twenty days
let judgment be entered in accordance herewith, and ten days
thereafter the case be remanded to the court below for execution.
So ordered.
Spouses ISMAEL and
TERESITA MACASAET, petitioners, vs. Spouses VICENTE
and ROSARIO MACASAET, respondents.
D E C I S I O N
PANGANIBAN, J p:
The present case involves a dispute between parents and children.
The children were invited by the parents to occupy the latter's two
lots, out of parental love and a desire to foster family solidarity.
Unfortunately, an unresolved conflict terminated this situation.
Out of pique, the parents asked them to vacate the premises.
Thus, the children lost their right to remain on the property. They
have the right, however, to be indemnified for the useful
improvements that they constructed thereon in good faith and
with the consent of the parents. In short, Article 448 of the Civil
Code applies.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of
Court, assailing the March 22, 2002 Decision 2 and the June 26,
2002 Resolution 3 of the Court of Appeals (CA) in CA-GR SP
Nos. 56205 & 56467. The challenged Decision disposed as
follows:
"WHEREFORE, the assailed Decision is AFFIRMED with the
following MODIFICATIONS:
'1. Vicente and Rosario should reimburse Ismael and Teresita
one-half of the value of the useful improvements introduced in
the premises prior to demand, which is equivalent to P475,000.00.
In case the former refuse to reimburse the said amount, the latter
may remove the improvements, even though the land may suffer
damage thereby. They shall not, however, cause any more
impairment upon the property leased than is necessary.
'2. The award of attorney's fees is DELETED.
'3. The records of these consolidated cases are REMANDED to
the Court of origin for further proceedings to determine the option
to be taken by Vicente and Rosario and to implement the same
with dispatch." 4
The assailed Resolution denied petitioners' Motion for
Reconsideration. aAIcEH
The Facts
Petitioners Ismael and Teresita 5 Macasaet and Respondents
Vicente and Rosario Macasaet are first-degree relatives. Ismael is
the son of respondents, and Teresita is his wife.6
On December 10, 1997, the parents filed with the Municipal Trial
Court in Cities (MTCC) of Lipa City an ejectment suit against the
children. 7 Respondents alleged that they were the owners of two
(2) parcels of land covered by Transfer Certificate of Title (TCT)
Nos. T-78521 and T-103141, situated at Banay-banay, Lipa City;
that by way of a verbal lease agreement, Ismael and Teresita
occupied these lots in March 1992 and used them as their
residence and the situs of their construction business; and that
despite repeated demands, petitioners failed to pay the agreed
rental of P500 per week. 8
Ismael and Teresita denied the existence of any verbal lease
agreement. They claimed that respondents had invited them to
construct their residence and business on the subject lots in order
that they could all live near one other, employ Marivic (the sister
of Ismael), and help in resolving the problems of the
family. 9 They added that it was the policy of respondents to allot
the land they owned as an advance grant of inheritance in favor of
their children. Thus, they contended that the lot covered by TCT
No. T-103141 had been allotted to Ismael as advance inheritance.
On the other hand, the lot covered by TCT No. T-78521 was
allegedly given to petitioners as payment for construction
materials used in the renovation of respondents' house. 10
The MTCC 11 ruled in favor of respondents and ordered
petitioners to vacate the premises. It opined that Ismael and
Teresita had occupied the lots, not by virtue of a verbal lease
agreement, but by tolerance of Vicente and Rosario. 12 As their
stay was by mere tolerance, petitioners were necessarily bound by
an implied promise to vacate the lots upon demand. 13 The
MTCC dismissed their contention that one lot had been allotted as
an advance inheritance, on the ground that successional rights
were inchoate. Moreover, it disbelieved petitioners' allegation that
the other parcel had been given as payment for construction
materials. 14
On appeal, the regional trial court 15 (RTC) upheld the findings
of the MTCC. However, the RTC allowed respondents to
appropriate the building and other improvements introduced by
petitioners, after payment of the indemnity provided for by
Article 448 in relation to Articles 546 and 548 of the Civil
Code. 16 It added that respondents could oblige petitioners to
purchase the land, unless its value was considerably more than the
building. In the latter situation, petitioners should pay rent if
respondents would not choose to appropriate the building. 17
Upon denial of their individual Motions for Reconsideration, the
parties filed with the CA separate Petitions for Review, which
were later consolidated. 18
Ruling of the Court of Appeals
The CA sustained the finding of the two lower courts that Ismael
and Teresita had been occupying the subject lots only by the
tolerance of Vicente and Rosario. 19 Thus, possession of the
subject lots by petitioners became illegal upon their receipt of
respondents' letter to vacate it. 20
14

Citing Calubayan v. Pascual, 21 the CA further ruled that
petitioners' status was analogous to that of a lessee or a tenant
whose term of lease had expired, but whose occupancy continued
by tolerance of the owner. 22 Consequently, in ascertaining the
right of petitioners to be reimbursed for the improvements they
had introduced on respondents' properties, 23 the appellate court
applied the Civil Code's provisions on lease. The CA modified
the RTC Decision by declaring that Article 448 of the Civil Code
was inapplicable. The CA opined that under Article 1678 of the
same Code, Ismael and Teresita had the right to be reimbursed for
one half of the value of the improvements made. 24
Not satisfied with the CA's ruling, petitioners brought this
recourse to this Court. 25
The Issues
Petitioners raise the following issues for our consideration:
"1.a) Whether or not Section 17[,] Rule 70 of the Rules of Court
on Judgment should apply in the rendition of the decision in this
case;
b) Whether or not the Complaint should have been dismissed;
c) Whether or not damages including attorney's fees should have
been awarded to herein petitioners;
"2.a) Whether or not the rule on appearance of parties during the
Pretrial should apply on appearance of parties during Preliminary
Conference in an unlawful detainer suit;
b) Whether or not the case of Philippine Pryce Assurance
Corporation vs. Court of Appeals (230 SCRA 164) is applicable
to appearance of parties in an unlawful detainer suit;
"3. Whether or not Article 1678 of the Civil Code should apply to
the case on the matters of improvements, or is it Article 447 of
the Civil Code in relation to the Article 453 and 454 thereof that
should apply, if ever to apply the Civil Code;
"4. Whether or not the [D]ecision of the Court of Appeals is
supported by evidence, appropriate laws, rules and jurisprudence;
"5. Whether or not Assisting Judge Norberto Mercado of the
MTCC Lipa City should be held accountable in rendering the
MTCC [D]ecision;
"6. Whether or not Atty. Glenn Mendoza and Atty. Andrew
Linatoc of the same [l]aw office should be held accountable for
pursuing the [e]jectment case[.]" 26

The Court's Ruling
The Petition is partly meritorious.
First Issue:
Ejectment
Who is entitled to the physical or material possession of the
premises? At the outset, we stress that this is the main issue in
ejectment proceedings. 27 In the present case, petitioners failed to
justify their right to retain possession of the subject lots, which
respondents own. Since possession is one of the attributes of
ownership, 28 respondents clearly are entitled to physical or
material possession.
Allegations of the Complaint
Petitioners allege that they cannot be ejected from the lots,
because respondents based their Complaint regarding the
nonpayment of rentals on a verbal lease agreement, which the
latter failed to prove. 29 Petitioners contend that the lower courts
erred in using another ground (tolerance of possession) to eject
them.
In actions for unlawful detainer, possession that was originally
lawful becomes unlawful upon the expiration or termination of
the defendant's right to possess, arising from an express or
implied contract. 30 In other words, the plaintiff's cause of action
comes from the expiration or termination of the defendant's right
to continue possession. 31 The case resulting therefrom must be
filed within one year from the date of the last demand.
To show a cause of action in an unlawful detainer, an allegation
that the defendant is illegally withholding possession from the
plaintiff is sufficient. The complaint may lie even if it does not
employ the terminology of the law, provided the said pleading is
couched in a language adequately stating that the withholding of
possession or the refusal to vacate has become unlawful. 32 It is
equally settled that the jurisdiction of the court, as well as the
nature of the action, is determined from the averments of the
complaint. 33
In the present case, the Complaint alleged that despite demands,
petitioners "refused to pay the accrued rentals and [to] vacate the
leased premises." 34 It prayed that judgment be rendered
"[o]rdering [petitioners] and all those claiming rights under them
to vacate the properties . . . and remove the structures . . .
constructed thereon." 35Effectively then, respondents averred that
petitioners' original lawful occupation of the subject lots had
become unlawful. CSDcTH
The MTCC found sufficient cause to eject petitioners. While it
disbelieved the existence of a verbal lease agreement, it
nevertheless concluded that petitioners' occupation of the subject
lots was by mere tolerance of respondents. Basing its conclusion
on the fact that the parties were close relatives, the MTCC ruled
thus:
". . . [T]he parties herein are first degree relatives. Because of
this relationship, this Court takes judicial notice of the love, care,
concern and protection imbued upon the parents towards their
[children], i.e., in the instant case, the love, care, concern and
protection of the [respondents] to the [petitioners]. With this in
mind, this Court is inclined to believe the position of the
[petitioners] that there was no such verbal lease agreement
between the parties herein that took place in 1992. . . .
"From the allegations of the [petitioners], this Court is convinced
that their stay and occupancy of the subject premises was by mere
tolerance of the [respondents], and not by virtue of a verbal lease
agreement between them." 36
Having found a cause of action for unlawful detainer, the MTCC
(as well as the RTC and the CA) did not err in ordering the
ejectment of petitioners as prayed for by respondents. There was
no violation of Section 17 of Rule 70 37 of the Rules of Court. As
earlier explained, unlawful detainer was sufficiently alleged in the
Complaint and duly proven during the trial. Significantly, the
issue of whether there was enough ground to eject petitioners was
raised during the preliminary conference. 38
Not Merely Tolerated Possession
Petitioners dispute the lower courts' finding that they occupied the
subject lots on the basis of mere tolerance. They argue that their
occupation was not under such condition, since respondents had
invited, offered and persuaded them to use those properties. 39
This Court has consistently held that those who occupy the land
of another at the latter's tolerance or permission, without any
15

contract between them, are necessarily bound by an implied
promise that the occupants will vacate the property upon
demand. 40 A summary action for ejectment is the proper remedy
to enforce this implied obligation. 41The unlawful deprivation or
withholding of possession is to be counted from the date of the
demand to vacate. 42
Toleration is defined as "the act or practice of permitting or
enduring something not wholly approved of." 43 Sarona
v. Villegas 44 described what tolerated acts means, in this
language:
"Professor Arturo M. Tolentino states that acts merely tolerated
are 'those which by reason of neighborliness or familiarity, the
owner of property allows his neighbor or another person to do on
the property; they are generally those particular services or
benefits which one's property can give to another without material
injury or prejudice to the owner, who permits them out of
friendship or courtesy.' . . . And, Tolentino continues, even
though 'this is continued for a long time, no right will be acquired
by prescription." . . . Further expounding on the concept,
Tolentino writes: 'There is tacit consent of the possessor to the
acts which are merely tolerated. Thus, not every case of
knowledge and silence on the part of the possessor can be
considered mere tolerance. By virtue of tolerance that is
considered as an authorization, permission or license, acts of
possession are realized or performed. The question reduces itself
to the existence or non-existence of the permission." 45
We hold that the facts of the present case rule out the finding of
possession by mere tolerance. Petitioners were able to establish
that respondents had invited them to occupy the subject lots in
order that they could all live near one other and help in resolving
family problems. 46 By occupying those lots, petitioners
demonstrated their acceptance of the invitation. Hence, there was
a meeting of minds, and an agreement regarding possession of the
lots impliedly arose between the parties.
The occupancy of the subject lots by petitioners was not merely
"something not wholly approved of" by respondents. Neither did
it arise from what Tolentino refers to as "neighborliness or
familiarity." In point of fact, their possession was upon the
invitation of and with the complete approval of respondents, who
desired that their children would occupy the premises. It arose
from familial love and a desire for family solidarity, which are
basic Filipino traits.
Right to Use the Lots Terminated
That Ismael and Teresita had a right to occupy the lots is
therefore clear. The issue is the duration of possession. In the
absence of a stipulation on this point, Article 1197 of the Civil
Code allows the courts to fix the duration or the period.
"Article 1197. If the obligation does not fix a period, but from its
nature and the circumstances it can be inferred that a period was
intended, the courts may fix the duration thereof.
"The courts shall also fix the duration of the period when it
depends upon the will of the debtor.
"In every case the courts shall determine such period as may
under the circumstances have been probably contemplated by the
parties. Once fixed by the courts, the period cannot be changed by
them."
Article 1197, however, applies to a situation in which the parties
intended a period. Such qualification cannot be inferred from the
facts of the present case.
To repeat, when Vicente and Rosario invited their children to use
the lots, they did so out of parental love and a desire for solidarity
expected from Filipino parents. No period was intended by the
parties. Their mere failure to fix the duration of their agreement
does not necessarily justify or authorize the courts to do so. 47
Based on respondents' reasons for gratuitously allowing
petitioners to use the lots, it can be safely concluded that the
agreement subsisted as long as the parents and the children
mutually benefited from the arrangement. Effectively, there is a
resolutory condition in such an agreement. 48 Thus, when a
change in the condition existing between the parties occurs
like a change of ownership, necessity, death of either party or
unresolved conflict or animosity the agreement may be
deemed terminated. Having been based on parental love, the
agreement would end upon the dissipation of the
affection. ICTacD
When persistent conflict and animosity overtook the love and
solidarity between the parents and the children, the purpose of the
agreement ceased. 49 Thus, petitioners no longer had any cause
for continued possession of the lots. Their right to use the
properties became untenable. It ceased upon their receipt of the
notice to vacate. And because they refused to heed the demand,
ejectment was the proper remedy against them. Their possession,
which was originally lawful, became unlawful when the reason
therefor love and solidarity ceased to exist between them.
No Right to Retain Possession
Petitioners have not given this Court adequate reasons to reverse
the lower courts' dismissal of their contention that Lots T-78521
and T-103141, respectively, were allegedly allotted to them as
part of their inheritance and given in consideration for past debts.
The right of petitioners to inherit from their parents is merely
inchoate and is vested only upon the latters' demise. Indisputably,
rights of succession are transmitted only from the moment of
death of the decedent. 50 Assuming that there was an "allotment"
of inheritance, ownership nonetheless remained with respondents.
Moreover, an intention to confer title to certain persons in the
future is not inconsistent with the owners' taking back possession
in the meantime for any reason deemed sufficient. 51 Other than
their self-serving testimonies and their affidavits, petitioners
offered no credible evidence to support their outlandish claim of
inheritance "allocation."
We also agree with the lower courts that petitioners failed to
prove the allegation that, through a dation in payment, Lot T-
78521 had been transferred to the latter as payment for
respondents' debts. 52 The evidence presented by petitioners
related only to the alleged indebtedness of the parents arising
from the latter's purported purchases and advances. 53 There was
no sufficient proof that respondents had entered into a contract of
dation to settle the alleged debt. Petitioners even stated that there
was a disagreement in the accounting of the purported debt, 54 a
fact that disproves a meeting of the minds with the parents.
Petitioners also admitted that a portion of the alleged debt is the
subject matter of a collection case against respondents (Civil Case
No. 0594-96). 55 Thus, the former's allegation that the
indebtedness has been paid through a dation cannot be given
16

credence, inconsistent as it is with their action to recover the same
debt.
Despite their protestations, petitioners recognized the right of the
parents to recover the premises when they admitted in their
Position Paper filed with the MTCC that respondents had a title to
the lots.
"The [respondents] want to get their property because the title is
theirs, the [petitioners] do not object but what is due the
[petitioners] including the reparation for the tarnish of their
dignity and honor must be given the [petitioners] for the benefits
of their children before the premises will be turned over." 56
As a rule, the right of ownership carries with it the right of
possession.
Second Issue:
Appearance at the Preliminary Conference
Section 8 of Rule 70 of the Rules of Court requires the
appearance of the plaintiff and the defendant during the
preliminary conference. On the basis of this provision, petitioners
claim that the MTCC should have dismissed the case upon the
failure of respondents to attend the conference. However,
petitioners do not dispute that an attorney-in-fact with a written
authorization from respondents appeared during the preliminary
conference. 57 The issue then is whether the rules on ejectment
allow a representative to substitute for a party's personal
appearance.
Unless inconsistent with Rule 70, the provisions of Rule 18 on
pretrial applies to the preliminary conference. 58 Under Section 4
of this Rule, the nonappearance of a party may be excused by the
showing of a valid cause; or by the appearance of a
representative, who has been fully authorized in writing to enter
into an amicable settlement, to submit to alternative modes of
dispute resolution, and to enter into stipulations or admissions of
facts and of documents. 59
Section 4 of Rule 18 may supplement Section 8 of Rule 70. Thus,
the spirit behind the exception to personal appearance under the
rules on pretrial is applicable to the preliminary conference. If
there are valid reasons or if a representative has a "special
authority," a party's appearance may be waived. As petitioners are
challenging only the applicability of the rules on pretrial to the
rule on preliminary conference, the written authorization from
respondents can indeed be readily considered as a "special
authorization."
Third Issue:
Rights of a Builder in Good Faith
As applied to the present case, accession refers to the right of the
owner to everything that is incorporated or attached to the
property. 60 Accession industrial building, planting and
sowing on an immovable is governed by Articles 445 to 456 of
the Civil Code. DTESIA
Articles 447 and 1678 of the
Civil Code Inapplicable
To buttress their claim of reimbursement for the improvements
introduced on the property, petitioners cite Article 447. 61 They
allege that the CA erred in applying Article 1678, since they had
no lease agreement with respondents.
We clarify. Article 447 is not applicable, because it relates to the
rules that apply when the owner of the property uses the materials
of another. It does not refer to the instance when a possessor
builds on the property of another, which is the factual milieu here.
In view of the unique factual setting of the instant case, the
contention of petitioners regarding the inapplicability of Article
1678 deserves attention. The CA applied the provisions on lease,
because it found their possession by mere tolerance comparable
with that of a lessee, per the pronouncement in Calubayan
v. Pascual, 62 from which we quote:
". . . It has been held that 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 that he will vacate upon demand, failing which a
summary action for ejectment is the proper remedy against them.
The status of defendant is analogous to that of a lessee or tenant
whose term of lease has expired but whose occupancy continued
by tolerance of the owner. In such a case, the unlawful
deprivation or withholding of possession is to be counted from
the date of the demand to vacate." 63 (Emphasis in the original.)
As explained earlier, Ismael and Teresita's possession of the two
lots was not by mere tolerance, a circumstance that negates the
applicability of Calubayan.
Article 448 Applicable
On the other hand, when a person builds in good faith on the land
of another, the applicable provision is Article 448, which
reads: 64
"Article 448. The owner of the land on which anything has been
built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in Articles 546 and 548, or
to oblige the one who built or planted to pay the price of the land,
and the one who sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case,
he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity.
The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof."
This Court has ruled that this provision covers only cases in
which the builders, sowers or planters believe themselves to be
owners of the land or, at least, to have a claim of title
thereto. 65 It does not apply when the interest is merely that of a
holder, such as a mere tenant, agent or usufructuary. 66 From
these pronouncements, good faith is identified by the belief that
the land is owned; or that by some title one has the right to
build, plant, or sow thereon. 67
However, in some special cases, this Court has used Article 448
by recognizing good faith beyond this limited definition. Thus,
in Del Campo v. Abesia, 68 this provision was applied to one
whose house despite having been built at the time he was still
co-owner overlapped with the land of another. 69 This article
was also applied to cases wherein a builder had constructed
improvements with the consent of the owner. The Court ruled that
the law deemed the builder to be in good faith. 70 In Sarmiento
17

v. Agana,71 the builders were found to be in good faith despite
their reliance on the consent of another, whom they had
mistakenly believed to be the owner of the land. 72
Based on the aforecited special cases, Article 448 applies to the
present factual milieu. The established facts of this case show that
respondents fully consented to the improvements introduced by
petitioners. In fact, because the children occupied the lots upon
their invitation, the parents certainly knew and approved of the
construction of the improvements introduced thereon. 73 Thus,
petitioners may be deemed to have been in good faith when they
built the structures on those lots. DcICEa
The instant case is factually similar to Javier v. Javier. 74 In that
case, this Court deemed the son to be in good faith for building
the improvement (the house) with the knowledge and consent of
his father, to whom belonged the land upon which it was built.
Thus, Article 448 75 was applied.
Rule on Useful Expenses
The structures built by petitioners were "useful" improvements,
because they augmented the value or income of the bare
lots. 76 Thus, the indemnity to be paid by respondents under
Article 448 is provided for by Article 546, which we quote:
"Art. 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefor.
"Useful expenses shall be refunded only to the possessor in good
faith with the same right of retention, the person who has defeated
him in the possession having the option of refunding the amount
of the expenses or of paying the increase in value which the thing
may have acquired by reason thereof."
Consequently, respondents have the right to appropriate as
their own the building and other improvements on the subject
lots, but only after (1) refunding the expenses of petitioners or (2)
paying the increase in value acquired by the properties by reason
thereof. They have the option to oblige petitioners to pay the price
of the land, unless its value is considerably more than that of the
structures in which case, petitioners shall pay reasonable rent.
In accordance with Depra v. Dumlao, 77 this case must be
remanded to the trial court to determine matters necessary for the
proper application of Article 448 in relation to Article 546. Such
matters include the option that respondents would take and the
amount of indemnity that they would pay, should they decide to
appropriate the improvements on the lots. We disagree with the
CA's computation of useful expenses, which were based only on
petitioners' bare allegations in their Answer. 78
Ruling on Improvement Justified
While, ordinarily, the jurisdiction of the MTCC on ejectment
proceedings is limited to the issue of physical or material
possession of the property in question, this Court finds it
necessary to abbreviate the issue on the improvements in relation
to Article 448. First, the determination of the parties' right to
those improvements is intimately connected with the MTCC
proceedings in the light of the ejectment of petitioners. Second,
there is no dispute that while they constructed the improvements,
respondents owned the land. Third, both parties raised no
objection when the RTC and the CA ruled accordingly on this
matter.
Equitable considerations compel us to settle this point
immediately, pro hoc vice, to avoid needless delay. Both parties
have already been heard on this issue; to dillydally or equivocate
would not serve the cause of substantial justice.
Other Issues Raised
Given the foregoing rulings, it is no longer necessary to address
petitioners' allegation that the MTCC judge and respondents'
lawyers should be respectively held personally accountable for
the Decision and for filing the case. 79 The insinuation of
petitioners that the lawyers manipulated the issuance of a
false barangay certification is unavailing. 80Their contention that
respondents did not attend the barangay conciliation proceedings
was based solely on hearsay, which has little or no probative
value. 81
WHEREFORE, the assailed Decision and Resolution of the Court
of Appeals are AFFIRMED with the following
MODIFICATIONS:
1. The portion requiring Spouses Vicente and
Rosario Macasaet to reimburse one half of the value of the useful
improvements, amounting to P475,000, and the right of Spouses
Ismael and Rosita Macasaet to remove those improvements (if the
former refuses to reimburse) is DELETED.
2. The case is REMANDED to the court of origin for further
proceedings to determine the facts essential to the proper
application of Articles 448 and 546 of the Civil Code, specifically
to the following matters:
a. Spouses Vicente and Rosario Macasaet's option to appropriate
as their own the improvements on the lots, after paying the
indemnity, as provided under Article 546 in relation to Article
448 of the Civil Code; or in requiring Spouses Ismael and
Rosita Macasaet to pay for the value of the lots, unless it is
considerably more than that of the improvements, in which case
petitioners shall pay reasonable rent based upon the terms
provided under the Civil Code
b. The value of the useful expenses incurred by Spouses Ismael
and Rosita Macasaet in the construction of the improvements on
the lots
c. The increase in value acquired by the lots by reason of the
useful improvements
d. Spouses Vicente and Rosario Macasaet's choice of type of
indemnity to be paid (whether b or c)
e. Whether the value of the lots is considerably more than that of
the improvements built thereon
No pronouncement as to costs. aTEACS
SO ORDERED.

18

EDUARDO CUAYCONG ET AL., plaintiff-appellee, vs.
RAMONA BENEDICTO ET AL., defendants-appellants.
SYLLABUS
1. ROADS AND STREETS; EASEMENTS; REGISTRATION
OF LAND; TORRENTS TITLE. Unless is made to appear
upon the certificate of title that the boundaries of any given
highway, way, or private way upon the land have been
determined, the right to such highway, way, or private way is
unaffected by the registration of the title.
2. REALTY; ENCUMBRANCES; PRESUMPTIONS. Real
property is presumed to be free from liens and encumbrances.
3. ROADS AND STREETS; UPKEEP BY GOVERNMENT;
PRESUMPTION. Where it appears that a road has been kept
in repair by private enterprise and that the Government has not
contributed to the cost of its construction or maintenance, such
road will be presumed to be private.
4. ID; PRESUMPTION; USER; TOLERANCE; PUBLIC USE.
The mere fact that a tract of land has been used for a long time
as a road will not warrant the presumption that it has been
dedicated to the public.
5. REALITY; PRESCRIPTION; POSSESSION; TOLERANCE .
Possession, to constitute the foundation of a perspective right,
must be possession under claim of title. Acts of a possessory
character performed by one who holds by the mere tolerance of
the owner cannot be made the basis of the perspective acquisition
of rights.
6. IMMEMORIAL POSSESSION; EVIDENCE. Under the
Spanish law the proof of immemorial possession required
something more than the memory of living witnesses.
7. EASEMENTS OF WAY; USER; TOLERANCE;
PRESCRIPTION. The permissive use by an adjacent
proprietor of a road or path over the land of another no matter
how long continued, will not create an easement of way
prescription.
D E C I S I O N
FISHER, J p:
The issues in this case relate to the right of plaintiff to make use
of two roads existing on the Hacienda Torena, a tract of land in
the municipality of Victorias, Negros Occidental, the property of
the defendants, Blasa Benedicto and Ramona Benedicto. One of
these roads is referred to in the proceedings as the Nanca-
Victorias road and the other as the Dacuman-Toreno road. The
court of First Instance held that those of the plaintiffs who
claimed to be entitled to make use of the Dacuman-Toreno road
had failed to establish the asserted right, and dismissed the action
as to them. From this decision they appealed to this court but,
their brief not having been filed within the time prescribed by the
rules, their appeal was dismissed, on motion of defendants, by
resolution dated February 14, 1916. Consequently, the issues
presented on this appeal are limited to those which relate to the
rights of the parties with respect to the Nanca-Victorias road, and
the determination of the correctness of the decision of the court
concerning that part of the controversy submitted to its decision.
The allegations in the complaint with respect to the Nanca-
Victorias road are that the appellees, Eduardo Cuaycong, Lino
Cuaycong, and Eulalio Dolor, are the owners of a group of
hacienda situated between the southern boundary of the Hacienda
Toreno and the barrio of Nanca, of the municipality of Saravia,
and that the appellees Silverio Ginoo, Gervasio Ascalon, and Juan
Ledesma, are the lessees of part of said hacienda; that for more
than twenty years the appellees and their predecessors in interest
have made use of the Nanca-Victorias road, which crosses the
Hacienda Toreno, openly, publicly, and continuously, with the
knowledge of the owners of the said hacienda, for the purpose of
conveying the products of their hacienda to the town of Victorias
and to the landing place there situated, and for the purpose of
transporting supplies from those points to their haciendas, making
use of the said road by means of carts, carabaos, and other usual
means of transportation; that there is no outlet to a public road
from the hacienda occupied by these plaintiffs, the only road and
way by which the products of the plaintiffs' property can be taken
to the town of Victorias and to the landing place there being
across the Hacienda Toreno by the road marked on the plan
attached to the complaint; that on the fifteenth day of November,
1912, the defendants closed the road in question at the point at
which it crosses the Hacienda Toreno, and refused to permit
plaintiffs to continue using it; that plaintiffs were about to
commence to grind their crop of sugar cane, and that, if prevented
from transporting their sugar across the Hacienda Toreno to their
point of embarcation, would suffer damages difficult to estimate.
Upon these averments of fact plaintiffs prayed for a judgment that
they are entitled to use the road in question as they have been
using in the past, and that a perpetual injunction be issued against
plaintiffs restraining them from impeding such use. Upon the
filing of the complaint, plaintiffs moved the court to issue a
preliminary injunction restraining defendants from interfering
with the use of the road during the pendency of the suit, which
motion was granted by the court.
Defendants in their answer put in issue all the special averments
of the complaint, as above set forth, and by way of counterclaim
and special defense, averred that the road crossing the Hacienda
Toreno, over which plaintiffs claim the right of passage, is the
private property of defendants; and, further, that they have not
refused plaintiffs permission to pass over this road but have
required them to pay toll for the privilege of doing so. Defendants
also claimed damages for the use of the road by plaintiffs during
the pendency of the suit, alleging that the preliminary injunction
had been improvidently issued upon false statements contained in
the verified complaint filed by plaintiffs.
The case was tried in July, 1913. The court on December 8, 1913,
rendered judgment, dismissing the complaint with respect to the
plaintiffs Felix Suarez, Probo Jereza, Enrique Azcona, and
Melecio Pido, these being the plaintiffs who claimed the right to
use the Dacuman-Toreno road. With respect to the Nanca-
Victorias road, the court held that it was a public highway over
which the public had acquired a right of use of immemorial
prescription, and ordered the issuance of a perpetual injunction
against plaintiffs, restraining them from interfering in any manner
with the use of the said road.
The conclusion of the court with respect to the facts affecting the
Nanca-Victorias road are as follows:
"Turning to a consideration of the evidence relative to the Nanca-
Victorias road we find incontestable proof that it has been in
existence for at least forty years. That the hacenderos located in
19

the southwestern section of Victorias and the public generally
passed over it freely and that it was used for all purposes of
transportation of farm produce, animals, etc. and by pedestrians
as well as carromatas and other conveyances without break or
interruption until two or three years ago when the defendants
announced that the road was private and that those who wished to
pass over it with sugar carts would be obliged to pay as toll of ten
centavos-all-other vehicles, it appears, were permitted to pass free
of charge. This arrangement seems to have existed during the
years of 1911 and 1912 and part of 1913, the money being
collected apparently from some hacenderos and not from others.
There is some reason to believe from the evidence presented by
defendants themselves that the practice of making these payments
to hacienda 'Toreno' originated in an attempt to raise a fund for
the repair of the road. There is no evidence that any other
hacenderos between Nanca and Victorias or any other person
made any attempt to close the road or to collect toll. On the
contrary the road appears to have been repaired by the hacederos
when it needed repairing and everyone used it on equal terms
until the defendants in 1910 or 1911 interposed the objection that
the road in dispute was private. This we think is a fair deduction
from the evidence and although it is asserted that toll was
collected at an earlier date by the late Leon Montinola, brother of
the defendant Ruperto Montinola, there is no tangible evidence
that this was so and all the circumstances are strongly indicative
of the fact that toll has been paid only during the years of 1911,
1912, and part of 1913."
The request presented by the assignment of error are in effect:
(a) Is the Nanca-Victorias road at the point at which it traverses
the Hacienda Toreno a public highway or not?
(b) If it be held that the road in question is not a public highway,
have plaintiff proven their acquisition of an easement of way over
the Hacienda Toreno at the point traversed by the road in
question?
The trial judge, in holding that the road in question is public,
bases his conclusion upon the fact, which he deems to have been
proven, that the road has been in existence "from time
immemorial," and had been "continuously used as a public road .
. . and open to public as such for thirty or forty years . . . until . . .
the defendants undertook to claim it as private and to collect toll
for the passage of carts." (Bill of Exceptions, p. 56.) There is no
doubt that for he past thirty or forty years a road has existed
between the former site of the town of Victorias and the barrio of
Nanca, of the municipality of Saravia, and that road crosses
defendants' hacienda. It is also true that during this period the
plaintiffs and their predecessors in the ownership of the hacienda
now held by them have made use of this road for the purpose of
going and coming from their haciendas to the town of Victorias;
but the question is whether this use was limited to the plaintiffs,
and their tenants and employees, or whether it was, as held by the
lower court, a use enjoyed by the public in general. Plaintiffs
produced only two witnesses, Segundo de Leon (stet. notes, pp.
21-22) and Eduardo Cuaycong, (stet. notes, pp. 27-33) to testify
as regards the use of the Nanca-Victorias road. Several other
witnesses testified on behalf of plaintiffs, but their testimony
relates to the Dacuman-Toreno road, which is not involved in this
appeal. We have carefully read the testimony of the witnesses
Leon and Cuaycong, given upon their direct and cross
examination, but we have been unable to find that either of them
has testified that the road in question was ever used by the public
in general. These witnesses testified with regard to the use of the
road by the present and former owners and occupants of the
estates of Bacayan, Esperanza, Alacaigan, Pusot, and Dolores for
the transportation of the products of these estates to the town of
Victorias, and of supplies and agricultural implements from
Victorias to the haciendas, but neither of them testified expressly
that any other use had been made of said road. Nevertheless, it
may be reasonably inferred from the testimony of these witnesses
that all persons having occasion to travel between Victorias and
the haciendas of Bacayan, Esperanza, Alacaigan, Pusot, and
Dolores, whether or not they were owners, tenants, or employees
of said estates, made use of the road now in dispute, crossing the
Hacienda Toreno, and to this limited extent it may be said that the
public made use of the road, but there is nothing in the evidence
to indicate that the so-called public use extended beyond this.
Apart from the fact that there is no direct evidence to support the
finding of the court concerning the general public use of the road
in dispute, the record contains data strongly tending to show that
when the complaint was filed plaintiffs did content that the road
was a public highway, but merely contended that they had
acquired by prescription an easement of way across the Hacienda
Toreno. For example, the action is entitled an "action concerning
a right of way." (Bill of Exceptions, pp. 64 and 65.) It is not
averred in the complaint averred in the complaint that the road in
question was used by the public. On the contrary, it is averred that
it was used by the plaintiffs and their predecessors. The averment
in paragraph 8 of the complaint that the plaintiff have no other
"outlet to a public road" than that which they have been
accustomed to use by going to the town of Victorias also shows
that when they commenced this action they had in mind the
provisions of articles 564, et seq. of the Civil Code, which relate
to the method of establishing the compulsory easement of way.
The owners of an existing easement, as well as those whose
properties are adjacent with a public road, have no occasion to
invoke these provisions of the Code, which relate to the creation
of new rights, and not the enforcement of rights already in
existence.
It is true that in the opening statement made to the court, counsel
for plaintiffs, who was not the same attorney by whom the
complaint was signed, stated that plaintiffs contend that the road
in question is public, but as no evidence was introduced tending
to establish this contention concerning the Nanca-Victorias road,
counsel for defendants had no occasion to object upon the ground
that such testimony was not relevant to the averments of the
complaint. No evidence was taken to indicate that at any time
since the road in question has been in existence any part of the
expense of its upkeep has been defrayed by the general
government, the province, or the municipality. The trial judge
said upon this subject:
"It is also true whatever repairs were made on the road were made
irregularly. The municipality of Victorias had no funds to devote
to the construction and repair of road, and the upkeep of the road
depending entirely therefore on the initiative of the persons who
used it, was attended to only at such times as repairs were
absolutely necessary." (Bill of Exceptions, p. 49.)
The court also held that appears from the government grant issued
in 1885 to the original owner of the hacienda adjacent to the
Hacienda Toreno on its western boundary, that the Nanca-
Victorias road at that time separated that estate from the Jalbuena
Hacienda, and that these facts constitute "circumstantial evidence
that the document to which the court refers, and we agree that the
road in question existed in 1885; but we do not believe that the
20

document in question proves that the said road was a public
highway.
Another circumstance established by the evidence, and which is
of some importance in the determination of this issue, is that
although the defendants closed the Nanca-Victorias road in the
month of February, 1911, and since that time have collected toll
from persons passing over it with carts loaded with sugar,
including those belonging to several of the plaintiffs, nothing was
done by them to prevent the continuation of this commenced. It is
natural to assume that if plaintiffs and considered that the road in
question was public, they would have protested immediately
against the action of the defendants, and would have either
commenced a civil action, as they subsequently did, or would
have brought about a prosecution under section 16 of Act No.
1511.
Upon the evidence taken and admission contained in the
pleadings and those made during the course of the trial we
consider that the following findings are warranted:
1. The town of Victorias has always been the shipping point of
the products of the Hacienda Toreno, and of the haciendas of
appellees, as we place from which supplies were brought to those
properties.
2. For thirty or forty years before the commencement of the suit a
wagon road, herein called the Nanca-Victorias road, has been in
existence, connecting the haciendas of appellees with the town of
Victorias, and this road traverses the property of defendants.
Since the removal of the town of Victorias to a new site the
Nanca-Victorias road has been used by appellees in travelling
between their properties and the provincial road which crosses the
Hacienda Toreno from east to west.
3. No public funds have at any time been expanded on the
construction or upkeep of the Nanca-Victorias road, but from
time to time work has been done on it by the laborers employed
by the present and former owners of the Hacienda Toreno and the
haciendas owned by the appellees and their predecessors in title.
4. The Nanca-Victorias wagon road, including that part of it
which crosses the Hacienda Toreno, has for thirty-five or forty
years been used by the appellees and their predecessors in title for
the transportation, by the usual means, of the products of their
estates to their shipping points in or near the town of Victorias,
and the transportation to their estates of all supplies required by
them, and has been used by all persons having occasion to travel
to and from all or any of the estates now owned by the appellees.
5. The use of the Nanca-Victorias road in the manner and by the
persons above mentioned was permitted without objection by the
owners of the Hacienda Toreno until the year 1911, when they
closed it, and began charging a toll of 5 centavos for each cart
which passed over the road, including carts belonging to the
appellants, until restrained from continuing to do so by the
preliminary injunction granted in this case.
6. The Nanca-Victorias road constitutes the only outlet from the
estates of appellants to the nearest public road which is the
provincial road which crosses the Hacienda Toreno from east to
west.
Upon these facts the questions of law to be decided are:
(a) Is the Nanca-Victorias road a public highway?
(b) If the Nanca-Victorias road, or that part of it which crosses the
Hacienda Toreno, is not a public highway, is it subject to a
private easement of way in favor of the appellees?
The defendants are the owners of the Hacienda Toreno under a
Torrens title issued in accordance with the Land Registration Act,
conferring to them its absolute ownership, subject only to the
limitations of paragraph four of section 39 of said Act. It is
admitted that there is no annotation on the certificate of title
regarding the road here in question, either as a "public road" or a
a "private way established by law" and, therefore, the questions
presented by this appeal are to be determined precisely as they
would be had the Hacienda Toreno not been brought under the
operation of the Land Registration Act. The plaintiffs being the
owners of the property in question, the presumption of law is that
it is free from any lien or encumbrance whatever, and the burden
therefore rests upon plaintiffs to establish the contrary. As this
court said in the case of Fabie vs. Lichauco and the children of
Francisco L. Roxas (11 Phil. Rep., 14):
"It is a settled doctrine of law that a property is assumed to be free
from all encumbrance unless the contrary is proved."
There is admittedly no evidence to show that the land occupied by
the road here in question was at any time conveyed to the general
government or any of its political subdivisions by the presents or
any of the former owners of the Hacienda Toreno. There is no
evidence, even remotely, tending to show that the road existed
prior to the time when the property now known as the Hacienda
Toreno passed from the State into private ownership. The record
fails to disclose any evidence whatever tending to show that the
Government has at any time asserted any right or title in or to the
land occupied by the road, or that it has incurred any expense
whatever in its upkeep or construction. The Civil Code defines as
public roads those which are constructed by the State (art. 339),
and a provincial and town roads those " the expense of which is
borne by such towns or provinces." (Civil Code, art. 344.) While
it is not contended that this definition is exclusive, it does show
that during the Spanish regime, under normal conditions, roads
which were public were maintained at the public expense, and
that the fact that at no time was any expense incurred by the
Government with respect to the road here in question tends
strongly to support the contention of the defendants that it is
private way.
During the Spanish regime the law required each able bodied
citizen not within one of the exempted classes to work a certain
number of days in each year, his labor to be devoted to "services
of general utility" to the municipality of his residence. (Royal
Decree of July 11, 1883, Art. 5.) Under this Decree and the
Regulations for its enforcement (Berriz, vol. 11, 258) the greater
part of the work on the public roads of the Islands was
accomplished. Had the road here in question been a public way, it
is reasonable to assume that the polistas of the town of Victorias
would have been employed in maintaining it. It is most significant
that no mention is made in the testimony of the plaintiffs'
witnesses of any work of this character having been done on the
road at any time, particularly in view of the fact that their
attention was drawn to this point. (Stet. notes, pp. 8, 10, 11, 12,
13, and 14.)
The evidence shows that the repairs were made by the owners of
the estates benefited by the road, and by their laborers, as a purely
voluntary act for their own convenience and interest. There being
no evidence of a direct grant to the government of the land
21

occupied by the road in question or that any Government funds or
labor were expended upon it, the question presents itself whether
the use to which the road has been put was such as to justify the
conclusion of the lower court that it has become public property.
There being no evidence that the original use of the road by
plaintiffs' predecessors was based upon any express grant of the
fee to the road or of an easement of way, or that it began under
the assertion of a right on their part, the presumption must be that
the origin of the use was the mere tolerance or license of the
owners of the estates affected.
This being so, has that merely permissive use been converted
into a title vested in the public at large, or in the plaintiffs by
reason of their ownership of the land beneficially affected by the
use?
Had it been shown that the road had been maintained at the public
expense, with the acquiescence of the owners of the estates
crossed by it, this would indicate such adverse possession by the
government as in course of time would ripen into title or warrant
the presumption of a grant or of a dedication. But in this case
there is no such evidence, and the claims of plaintiffs, whether
regarded as members of the public asserting a right to use the
road as such, or as persons claiming a private easement of way
over the land of another must be regarded as resting upon the
mere fact of user.
If the owner of a tract of land, to accommodate his neighbors or
the public in general, permits them to across his property, it is
reasonable to suppose that it is not his intention, in so doing, to
divest himself of the ownership of the land so used, or to establish
an easement upon it, and that the persons to whom such
permission, tacit or express, is granted, do not regard their
privilege of use as being based upon anything more than the mere
tolerance of the owner. Clearly, such permissive use is in its
inception based upon an essentially revocable license. If the use
continues for a long period of time, no change being made in the
relations of the parties by any express or implied agreement, does
the owner of the property affected lose his right of revocation?
Or, putting the same question in another form, does the mere
permissive use ripen into title by prescription?
It is a fundamental principle of the law in this jurisdiction
concerning the possession of real property that such possession is
not affected by acts of a possessory character which are "merely
tolerated" by the possessor, or which are due to his license (Civil
Code, arts. 444 and 1942). This principle is applicable not only
with respect to the prescription of the dominium as a whole, but,
to the prescription of right in rem. In the case of Cortes vs.
Palanca Yu-Tibo (2 Phil. Rep., 24, 38), the Court said:
"The provision of article 1942 of the Civil Code to the effect that
acts which are merely tolerated produce no effect with respect to
possession is applicable as much to the prescription of real rights
as to the prescription of the fee, it being a glaring and self-evident
error to affirm the contrary, as does the appellant in his motion
papers. Possession is the fundamental basis of the prescription.
Without it no kind of prescription is possible, not even the
extraordinary. Consequently, if acts of mere tolerance produce no
effect respect to possession, at that article provides, in conformity
with article 444 of the same Code, it is evident that they can
produce no effect with respect to prescription, whether the
prescriptive acquisition be of a fee or of real rights, for the same
reason holds in one and the other case; that is, that there has been
no true possession in the legal sense of the word." (See also Ayala
de Roxas vs. Maglonso, 8 Phil. Rep., 745; Municipality of
Caceres vs. Director of Lands and Roman Catholic Bishop of
Nueva Caceres, 24 Phil. Rep., 485.)
Possession, under the Civil Code, to constitute the foundation of a
prescriptive right, must be possession under claim of title (en
concepto de dueo), to use the common law equivalent of the
term, it must be adverse. Acts of possessory character performed
by one who holds by mere tolerance of the owner are clearly
not en concepto de dueo, and such possessory acts, no matter
how long so continued, do not start the running of the period of
prescription.
A similar question was presented in the case of the Roman
Catholic Archbishop of Manila vs. Roxas (22 Phil. Rep., 450), in
which case it appeared that Roxas, the owner of the Hacienda de
San Pedro Macati, claimed a right of way across the property of
the church to Calle Tejeron, a public street of the town of San
Pedro Macati. The proof showed that the road in question had
been used by the tenants of the Hacienda de San Pedro Macati for
the passage of carts in coming and leaving the hacienda "from
time immemorial," and further that the road had been used for
time out of mind, not only by the tenants of the hacienda but by
many other people in going and coming from a church half-way
between the boundary line of the hacienda and Calle Tejeron. The
court held that the facts did not give rise to a perspective right of
easement in favor of the owner of the hacienda, upon the ground
that such use "is to be regarded as permissive and under an
implied license, and not adverse. Such a use is not inconsistent
with the only use which the proprietor thought fit to make of the
land, and until the appellee thinks proper to enclose it, such use is
not adverse and will not preclude it from enclosing the land when
other views of its interest render it proper to do so. And though an
adjacent proprietor may make such use of the open land more
frequently than another, yet the same rule will apply unless there
be some decisive act indicating a separate and exclusive use
under a claim of right. A different doctrine would have a
tendency to destroy all neighborhood accommodations in the way
of travel; for if it were once understood that a man, by allowing
his neighbor to pass through his farm without objection over the
pass-away which he used himself, would thereby, after the lapse
of time, confer a right on such neighbor to require the pass-way to
be kept open for his benefit and enjoyment, a prohibition against
all such travel would immediately ensue."
The decisions of the supreme court of Louisiana, a State whose
jurisdiction is based, as is our own, upon the Roman Law, and
whose Civil Code is taken, as is our own, very largely from the
Code of Napoleon, are particularly persuasive in matters of this
character. In the case of Torres vs. Fargoust (37 La. Ann., 497),
cited by appellants in their brief, in which the issues were very
similar to those of the present case, the court held that
"The mere fact that for thirty or forty years the public was
permitted to pass over this ground would not of itself constitute
the place a locus publicus . . . dedication must be shown by
evidence so conclusive as to exclude all idea of private
ownership; . . . such dedication can not be inferred from mere
user alone; . . . no one is presumed to give away his property. The
burden is on him who avers a divestiture of ownership to prove it
clearly.'
We are, therefore, of the opinion, and so hold, that upon the facts
established by the evidence it does not appear that the road in
question is a public road or way. We are also of the opinion that
22

plaintiff have failed to show that they have acquired by
prescription a private right of passage over the lands of
defendants. The supreme court of Spain has decided that under
the law in force before the enactment of decided that under the
law in force before the enactment of the Civil Code, the easement
of way was discontinuous, and that while such an easement might
be acquired by prescription, it must be used in good faith, in the
belief of the existence of the right, and such user must have been
continuous from time immemorial. (Judgment of December 15,
1882.) In the appealed decision the court below says that the
plaintiff and their predecessors made use of the road in question
"from time immemorial," but there is no evidence whatever in the
record to support this finding, although it is true that the evidence
shows the existence of the road and its use by the plaintiffs and
their predecessors for thirty-five or forty years. Speaking of the
evidence required under the present Code of Civil Procedure to
show immemorial use of an easement, this court said in the case
of Ayala de Roxas vs. Case (8 Phil. Rep., 197, 198):
"The third Partida in title 31, law 15 . . . says that discontinuous
servitudes . . . must be proved by usage or a term so long that men
can not remember its commencement. . . . In many judgments the
supreme court of Spain has refused to accept proof of any definite
number of years as a satisfaction of this requirement of the law . .
. We are of the opinion that in order to establish a right of
prescription [title of prescription based upon use from time
immemorial] something more is required than the memory of
living witnesses. Whether this something should be the
declaration of persons long dead, repeated by those who testify,
as exacted by the Spanish law, or should be the common
reputation of ownership recognized by the Code of Procedure, it
is unnecessary for us to decide. On either theory the appellant has
filed in this proof . . . "
The same thing may be said in this case. Witnesses has testified
that they have known the road for a certain period of years,
beginning at a time prior to the enactment of the Civil Code, but
no evidence has been made to prove immemorial use by either of
the means of proof mentioned in this decision cited, nor is
immemorial user averred in the complaint as the basis of the
right. It is evident, therefore, that no vested right by user from
immemorial had been acquired by plaintiffs at the time the Civil
Code took effect. Under that Code (art. 539) no discontinuous
easement could be acquired by prescription in any event.
Assuming, without deciding, that this rule has been changed by
the provisions of the present Code of Civil Procedure relating to
prescription, and that since its enactment discontinuous easement
may be acquired by prescription, it is clear that this would not
avail plaintiffs. The Code of Civil Procedure went into effect on
October 1, 1901. The term of prescription for the acquisition of
rights in real estate is fixed by the Code (sec. 41) at ten years. The
evidence shows that in February, 1911, before the expiration of
the term of ten years since the time the Code of Civil Procedure
took effect, the defendants interrupted the use of the road by
plaintiffs by constructing and maintaining a toll gate on it and
collecting toll from persons making use of it with carts and
continued preliminary injunction by the trial court in December,
1912. Our conclusion is, therefore, that plaintiffs have not
acquired by prescription a right to an easement of way over the
defendants' property; that their use of the Nanca-Victorias road
across the Hacienda Toreno was due merely to the tacit license
and tolerance of the defendants and their predecessors in title; that
the license was essentially revocable; and that, therefore, the
defendants were within their rights when they closed the road in
1911.

While in the allegation from plaintiffs' complaint it might be
inferred that it was their purpose to seek to impose upon
defendants the easement to which arts. 564 et seq. of the Civil
Code relate, that purpose was evidently abandoned, and the case
was tried upon a wholly different theory. Proof was offered to
show that the right of passage across defendants' land is necessary
to enable plaintiffs to get their products to market, but there was
no offer on their part to pay defendants the indemnity required by
section 564.
For the reasons stated the judgment of the court below is
reversed, the injunction issued against defendants is dissolved,
and the action is dismissed. No costs will be allowed on this
appeal. So ordered.


PEREGRINA ASTUDILLO, petitioner-appellant, vs. THE
BOARD OF DIRECTORS OF PEOPLE'S HOMESITE AND
HOUSING CORPORATION, RAMON P. MITRA, SALUD
O. MITRA, and REGISTER OF DEEDS, QUEZON
CITY, respondents-appellees.
D E C I S I O N
AQUINO, J p:
Peregrina Astudillo appealed from the "resolution" dated April
18, 1967 of the Court of First Instance of Rizal, Quezon City
Branch V, granting the motion for summary judgment filed by
Ramon P. Mitra and dismissing her petition
for certiorari and mandamus (Civil Case No. Q-8741). LibLex
According to the pleadings of respondents Mitra and the People's
Homesite and Housing Corporation (PHHC) * , Mitra on
December 28, 1957 applied, in behalf of his minor son, Ramon
Mitra Ocampo, for the purchase of Lot 16, Block E-155 of the
East Avenue Subdivision of the PHHC in Piahan, Quezon City.
His application was approved on January 3, 1958. He made a
downpayment of P840, an amount equivalent to ten percent of the
price of the lot. On September 9, 1961 the PHHC and Mitra
executed a contract of conditional sale. After Mitra had paid in
full the price, which totalled more than nine thousand pesos, a
final deed of sale was executed in his favor on February 18, 1965.
Transfer Certificate of Title No. 89875 was issued to him on
March 1, 1965.
The lot in question is actually in the possession of Peregrina
Astudillo. She constructed thereon a residential house (a shanty,
according to Mitra). She admits that she has been squatting on the
said lot "uninterruptedly since 1957 up to the present" (p. 52,
Record). She filed with the administrative investigating
committee of the PHHC a request dated February 24, 1963,
praying for the cancellation of the award of Lot 16 to
Congressman Mitra and asking the committee to recommend that
it be re-awarded to her. No action was taken on that request.
On May 3, 1965 Peregrina filed in the lower court her
aforementioned petition against the PHHC board of directors, the
register of deeds of Quezon City and the spouses Ramon P. Mitra
and Salud O. Mitra. She questioned the legality of the award of
Lot 16 to Mitra. She asked that Lot 16 be sold to her.
23

After the respondents had filed their answers, the Mitra spouses
filed a verified motion for summary judgment. They assumed that
there was no genuine issue as to any material fact. Peregrina
Astudillo opposed the motion. The parties submitted memoranda.
The lower court treated the motion for summary judgment as a
motion to dismiss. It dismissed Peregrina's petition on the
grounds that she is a mala fide squatter and that the sale of Lot 16
to Mitra cannot be assailed by means of certiorari and mandamus.
Peregrina appealed to this Court.
Her four assignments of error raise questions of law. She
contends that the lower court erred in holding that certiorari and
mandamus do not lie in this case and that she has no right to
question the award to Mitra, and in not holding that the award of
Lot 16 to him was in contravention of the Anti-Graft and Corrupt
Practice Law and of the constitutional provision that a Senator or
Representative should not directly or indirectly be financially
interested in any contract with the government of any subdivision
or instrumentality thereof during his term of office.
In the ultimate analysis the issue is whether Peregrina Astudillo
has a cause of action to annul the sale of Lot 16 to Mitra and to
compel the PHHC board to award that lot to her.
We hold that she has no cause of action to impugn the award to
Mitra and to require that she be allowed to purchase the lot. As a
squatter, she has no possessory rights over Lot 16. In the eyes of
the law, the award to Mitra did not prejudice her since she was
bereft of any rights over the said lot which could have been
impaired by that award (Baez vs. Court of Appeals, L-30351,
September 11, 1974, 59 SCRA 15, 22).
The record does not show, and Peregrina does not claim, that she
is a member of the Piahan Homeowners Association some of
whose members are "deserving squatters" (Kempis vs. Gonzales,
L-31701, October 31, 1974, 60 SCRA 439).
In the familiar language of procedure, she was not entitled to sue
Mitra and the PHHC for the enforcement or protection of a right,
or the prevention of a wrong. Those respondents did not commit
any delict or wrong in violation of her rights because, in the first
place, she has no right to the lot. Not being principally or
subsidiarily bound in the contract of sale between Mitra and the
PHHC, she is not entitled to ask for its annulment (Art. 1397,
Civil Code).
Peregrina invokes the PHHC charter (erroneously referred to as
section 11 of Commonwealth Act No. 648) which provides that
the PHHC should acquire buildings so as to provide "decent
housing for those who may be unable otherwise to provide
themselves therewith" and that it should acquire large estates for
their resale to bona fideoccupants.
Those provisions do not sustain her action in this case. They do
not justify her act of squatting on a government-owned lot and
then demanding that the lot be sold to her because she does not
yet own a residential lot and house. She is not a bona
fide occupant of Lot 16.
The State is committed to promote social justice and to maintain
adequate social services in the field of housing (Secs. 6 and 7,
Art. 11, New Constitution). But the State's solicitude for the
destitute and the have-nots does not mean that it should tolerate
usurpations of property, public or private.
"In carrying out its social readjustment' policies, the government
could not simply lay aside moral standards, and aim to favor
usurpers, squatters, and intruders, unmindful of the lawful and
unlawful origin and character of their occupancy. Such a policy
would perpetuate conflicts instead of attaining their just solution"
(Bernardo vs. Bernardo, 96 Phil. 202, 206).
Indeed, the government has enunciated a militant policy against
squatters. Thus, Letter of Instruction No. 19 dated October 2,
1972 orders city and district engineers "to remove all Illegal
constructions, including buildings . . . and those built without
permits on public or private property" and provides for the
relocation of squatters (68 O.G. 7962. See Letter of Instruction
No. 19-A). As noted by Justice Sanchez, "since the last global
war, squatting on another's property in this country has become a
widespread vice" (City of Manila vs. Garcia, L-26053, February
21, 1967, 19 SCRA 413, 418).
The lower court did not err in holding that Peregrina Astudillo
cannot use the special civil actions of certiorari and mandamus to
secure a judicial review of the award of Lot 16 to Mitra. Rule 65
of the Rules of Court provides:
"SECTION 1. Petition for certiorari. When any tribunal,
board, or officer exercising judicial functions, has acted without
or in excess of its or his jurisdiction, or with grave abuse of
discretion and there is no appeal, nor any plain, speedy, and
adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court
alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings, as the law
requires, of such tribunal, board or officer.
"The petition shall be accompanied by a certified true copy of the
judgment or order subject thereof, together with copies of all
pleadings and documents relevant and pertinent thereto."
"SEC. 3. Petition for mandamus. When any tribunal,
corporation, board, or person unlawfully neglects the performance
of an act which the law specifically enjoins as a duty resulting
from an office, trust, or station, or unlawfully excludes another
from the use and enjoyment of a right or office to which such
other is entitled, and there is no other plain, speedy and adequate
remedy in the ordinary courts of law, the person aggrieved
thereby may file a verified petition in the proper court alleging the
facts with certainty and praying that judgment be rendered
commanding the defendant, immediately or at some other
specified time, to do the act required to be done to protect the
rights of the petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the defendant."
Respondent PHHC board is not the board contemplated in section
1 of Rule 65. It does not exercise judicial functions. The award
being questioned was a routinary corporate act that was within the
board's competence. No jurisdictional issue was involved in that
award. Certiorari lies only for the correction of jurisdictional
errors (Gov't. of the P.I. vs. Judge of 1st Instance of Iloilo, 34
Phil. 157, 159).
Nor is the relief sought by Peregrina Astudillo, which is to
compel the PHHC board to cancel the award of Lot 16 to Mitra
and to resell it to her, a right that can be enforced bymandamus.
What she wants is to force the PHHC to execute a contract of sale
in her favor. That is not within the purview of the writ
of mandamus.
24

Thus, it was held that "the writ of mandamus is not an appropriate
or even admissible remedy to enforce the performance of a
private contract which has not been fully performed by either
party" (Quiogue vs. Romualdez, 46 Phil. 337). In Jacinto vs.
Director of Lands, 49 Phil. 853, a petition for a writ
of mandamus to compel the Director of Lands to execute a deed
of conveyance for certain lots in favor of the petitioner was
denied. Generally, title to property cannot be litigated in
a mandamus proceeding (City of Manila vs. Posadas, 48 Phil.
309, 337).
It is not a ministerial duty of the PHHC board to award Lot 16 to
Peregrina. Anyway, it has already been shown that as a squatter
she is not clothed with any right to Lot 16 that may be enforced in
a court of justice.
The PHHC board completely ignored the alleged demands of
Peregrina for the purchase of Lot 16. It did not render any
decision against her. Its inaction cannot be assailed
bycertiorari or mandamus.
Peregrina's other assignment of error is that the award of Lot 16
to Congressman Mitra was a violation of section 3(h) of the Anti-
Graft and Corrupt Practices Law and of section 17, Article VI of
the 1935 Constitution, now section 11, Article VIII of the new
Constitution.
On the other hand, Mitra contends that the PHHC performs
proprietary functions. He observed that the following highranking
officials were awarded PHHC lots: Felixberto Serrano,
Dominador Aytona, Manuel Lim, Fernando Lopez, Pacita M.
Gonzales, Genaro Magsaysay, Daniel Romualdez, Felipe A.
Abrigo, Bartolome Cabangbang, Juan Duran, Manuel Enverga,
Angel Fernandez, Jose Nuguid, Antonio de Pio, Lorenzo Teves,
Faustino Tobia, Pedro Trono, Marcelino Veloso and Valeriano
Yancha.
We are of the opinion that assignment of error need not be
resolved in this case. Having shown that Peregrina has no cause
of action to assail the award of Lot 16 to Mitra, it follows that in
this particular case she cannot assail that award by invoking the
provisions of the Anti-Graft and Corrupt Practices Law and the
Constitution. This is not the proper forum for the ventilation of
that question. (See Commonwealth Act No. 626; Hernandez vs.
Albano, 112 Phil. 506; Solidum and Concepcion, Jr. vs.
Hernandez, 117 Phil. 335). cdphil
WHEREFORE, the lower court's order of dismissal is affirmed.
No costs.
SO ORDERED.
Barredo, Antonio and Concepcion, Jr., JJ., concur.

Peran v CFI; G.R. No. L-57259. October 13, 1983.





ANGEL P. PERAN, petitioner, vs. THE HONORABLE
PRESIDING JUDGE, BRANCH II, COURT OF FIRST
INSTANCE OF SORSOGON, 10th JUDICIAL DISTRICT,
RAMON ESPERA and ENCARNACION EVASCO,
as private-respondents, respondents.
SYLLABUS
1. CIVIL LAW; PROPERTY; POSSESSION; PROOF OF
TITLE OR LAWFUL RIGHT THERETO, A PRE-REQUISITE;
CASE AT BAR. Private respondents admit that the land in
question was originally owned by Jose Evasco. The tax
declarations covering their house clearly state "house built on
land owned by Jose Evasco under Tax No. 1599." Since the land
had been partitioned to Alejandro Evasco by his father, Jose
Evasco, respondent Encarnacion can lay no claim to the property
even as a grand-daughter of Jose Evasco. Respondents may have
been in possession of the portion they occupy prior to petitioner
but they have not proved their title thereto, nor their right to
possess the same. As the 2nd Municipal Circuit Court of Bulusan-
Barcelona found, no concrete evidence was introduced by
respondents on this point. Moreover, it is noteworthy that the
validity of the "Repartition Extra-judicial" whereby said lot was
adjudicated to Mejandro Evasco by his father Jose Evasco,
predecessors-in-interest of petitioner, had never been challenged.
2. ID.; ID.; ID.; POSSESSION BY MERE TOLERANCE;
BECOMES ILLEGAL UPON REFUSAL TO VACATE ON
DEMAND BY THE OWNER. If at all, private respondents`
possession of their portion of the property was by mere tolerance
of petitioner's predecessors- in-interest, which, however, does not
vest in them a right which they can assert against petitioner.
Possession by tolerance is lawful, but this becomes illegal when,
upon demand to vacate by the owner, the possessor refuses to
comply with such demand.
3. ID.; ID.; ID.; ID.; ID.; REMEDY THEREFOR. A possessor
by tolerance is necessarily bound by an implied promise to vacate
upon demand, failing which a summary action for ejectment is the
proper remedy against him. It is not necessary that there be a
formal agreement or contract of lease before an unlawful detainer
suit may be filed against a possessor by tolerance. Neither is prior
physical possession of the property by petitioner an indispensable
requisite. The ruling of respondent Court, therefore, that since the
only issue in forcible entry and illegal detainer action is the
physical possession of real property possession de facto and
not possession de jure whoever has prior possession, no matter
in what character, is protected by law, is erroneous under the
factual millieu herein.
4. REMEDIAL LAW; SPECIAL CIVIL ACTIONS;
EJECTMENT CASE; ONE-YEAR PERIOD WITHIN WHICH
TO FILE COMMENCES FROM THE TIME OF DEMAND TO
VACATE. A Forcible Entry and Unlawful Detainer action
must be brought within one year from the unlawful deprivation or
withholding of possession. The one-year period of limitation
commences from the time of demand to vacate, and when several
demands are made, the same is counted from the last letter of
demand. Demand may either be personal or in writing. The
demand to vacate having been made by petitioner in January,
1979 and the enjectment suit having been instituted on February
8, 1979, the 2nd Municipal Circuit Court of Bulusan-Barcelona
acted well within its jurisdiction in taking cognizance of the case.
D E C I S I O N
25

MELENCIO-HERRERA, J p:
The decision of the then Court of First Instance of Sorsogon,
Branch II, Gubat, Sorsogon, rendered in the exercise of its
appellate jurisdiction, dismissing Civil Case No. 1277, entitled
"Angel P. Peran vs. Encarnacion Evasco, et al.", for Forcible
Entry and Illegal Detainer, is being assailed in this Petition for
Review on Certiorari on a question of law. Said Decision reversed
the judgment of the 2nd Municipal Circuit Court of Bulusan-
Barcelona, Sorsogon, for Forcible Entry & Illegal Detainer.
The antecedent facts follow:
The property in question, an unregistered residential land, with an
area of 1,225 square meters more or less, situated at Tagdon,
Barcelona, Sorsogon, was originally owned by Jose Evasco. On
December 29, 1950, Jose Evasco executed a 'Reparticion
Extrajudicial' whereby he partitioned his properties among his
five heirs. 1 Subject property was one of those alloted to his son,
Alejandro Evasco, who had it surveyed in 1956 (Exhibits "I" and
"I-1"), and who had it declared in his name under Tax Declaration
No. 1900. The other heirs received their own shares, one of them,
the deceased Anacleto Evasco, one of whose children was listed
as Encarnacion, possibly, the principal private respondent herein.
Alejandro Evasco sold his property to Jose E. Torella on
December 31, 1972, 2 who declared it for taxation purposes under
Tax Declaration No. 5157. 3 On July 10, 1977, Jose E. Torella, in
turn, sold the land to Jose Enriquez Sabater, 4 and the latter also
declared the property in his name under Tax Declaration No.
7127. 5 Petitioner Angel P. Peran acquired the land by purchase
from Jose Enriquez Sabater on December 27, 1978, 6 and
subsequently declared it, too, in his name under Tax Declaration
No. 7310. 7 The sale was duly recorded in the Register of Deeds'
Office of the province of Sorsogon on January 3, 1979 in
accordance with the provisions of Sec. 194 of the Revised
Administrative Code as amended by Act No. 3344.
Sometime in January 1979, petitioner personally asked private
respondents, Encarnacion Evasco and her common-law husband
Ramon Espera, whose house is erected on a 440 square meter
portion (44 sq. ms. according to petitioner) of the lot in question,
to remove the same and vacate the premises. Respondents
refused, and consequently, a confrontation between the parties
was had before the Municipal Mayor of Barcelona and later
before the Municipal Judge of Bulusan-Barcelona to settle the
dispute, but to no avail.
On February 8, 1979, petitioner filed a complaint for Forcible
Entry and Illegal Detainer against private respondents before the
2nd Municipal Circuit Court of Bulusan-Barcelona, seeking the
ejectment of the latter from the portion in question contending
that respondents are mere squatters thereon; that they had
prevented plaintiff from entering the property and deprived him
of possession; and that they were tolerating persons in getting soil
and bringing about a gradual erosion of the land to his extreme
prejudice.
Private respondents answered denying the material allegations of
the Complaint, and alleging that they are the lawful possessors for
more than twenty (20) years of the said portion, which formerly
belonged to Jose Evasco, grandfather of Encarnacion Evasco; and
that petitioner has no right to eject them therefrom.
On September 1, 1979, the 2nd Municipal Circuit Court of
Bulusan-Barcelona rendered its Decision ordering private
respondents to vacate the lot in question, return its possession to
petitioner, reimburse him attorney's fees of P300.00 and litigation
expenses, and to pay the costs. Reconsideration of the said
decision filed by private respondents was denied by said Court on
November 12, 1979. Private respondents appealed to respondent
Court of First Instance of Sorsogon, Branch II. llcd
Respondent Court reversed the Municipal Circuit Court and
dismissed the case on March 28, 1980, ruling that said Court had
no jurisdiction over the case as the same was filed only on
February 4, (8), 1979, which was well beyond the one-year-
period of limitation, the cause of action having accrued from the
sale of the property by Alejandro Evasco to Jose E. Torella on
December 31, 1972; and that since the only issue in an illegal
detainer case is physical possession, "whoever has prior
possession, no matter in what character, is protected by law."
Reconsideration of the said Decision sought by petitioner was
denied by respondent Court.
Petitioner appealed said judgment directly to this Tribunal on a
question of law, raising as the lone issue:
. . . "whether the respondent court was in error when for purposes
of determining the jurisdiction of the 2nd Municipal Circuit Court
of Bulusan-Barcelona, to try Civil Case No. 1227, for Illegal
Detainer:
(a) it reckoned the counting of one-year period within which to
file the action from the sale of the property in question by
Alejandro Evasco to Jose Torella on December 31, 1972 and not
from the date of demand made by the petitioner upon the
respondents; and
(b) by assuming that `prior possession in whatever character is
protected by law'."
We rule for petitioner.
Private respondents admit that the land in question was originally
owned by Jose Evasco. The tax declarations covering their house
clearly state "house built on land owned by Jose Evasco under
Tax No. 1599", 8 Since the land had been partitioned to
Alejandro Evasco by his father, Jose Evasco, respondent
Encarnacion can lay no claim to the property even as a grand-
daughter of Jose Evasco. Respondents may have been in
possession of the portion they occupy prior to petitioner but they
have not proved their title thereto, nor their right to possess the
same. As the 2nd Municipal Circuit Court of Bulusan-Barcelona
found, no concrete evidence was introduced by respondents on
this point. Moreover, it is noteworthy that the validity of the
`Reparticion Extrajudicial" whereby said lot was adjudicated to
Alejandro Evasco by his father Jose Evasco, predecessors-in-
interest of petitioner, had never been challenged.
If at all, private respondents' possession of their portion of the
property was by mere tolerance of petitioner's predecessors-in-
interest, which, however, does not vest in them a right which they
can assert against petitioner. Possession by tolerance is lawful,
but this becomes illegal when, upon demand to vacate by the
owner, the possessor refuses to comply with such demand. 9 A
possessor by tolerance is necessarily bound by an implied
promise to vacate upon demand, failing which a summary action
for ejectment is the proper remedy against him. 10 It is not
necessary that there be a formal agreement or contract of lease
before an unlawful detainer suit may be filed against a possessor
by tolerance. 11 Neither is prior physical possession of the
26

property by petitioner an indispensable requisite. 12 The ruling of
respondent Court, therefore, that "since the only issue in forcible
entry and illegal detainer action is the physical possession of real
property possession de facto and not possession de jure
whoever has prior possession, no matter in what character, is
protected by law," is erroneous under the factual milieu herein.

A Forcible Entry and Unlawful Detainer action must be brought
within one year from the unlawful deprivation or withholding of
possession. 13 The one-year-period of limitation commences
from the time of demand to vacate, and when several demands are
made, the same is counted from the last letter of
demand. 14 Demand may either be personal or in writing. 15 The
demand to vacate having been made by petitioner in January
1979, and the ejectment suit having been instituted on February 8,
1979, the 2nd Municipal Circuit Court of Bulusan-Barcelona
acted well within its jurisdiction in taking cognizance of the
case. prLL
WHEREFORE, the assailed Decision of respondent Court of First
Instance of Sorsogon, Branch II, in Civil Case No. 1227, is SET
ASIDE, and the Decision of the 2nd Municipal Circuit Court of
Bulusan-Barcelona is hereby reinstated.
Costs against private respondents.
SO ORDERED.

ALFONSO YU and SOLEDAD YU, petitioners, vs. HON.
JUDGE REYNALDO P. HONRADO, Presiding Judge of the
Court of First Instance of Rizal, Branch XXV-Pasig,
MARCELO STEEL CORPORATION, Detective CARLOS
C. NUESTRO and PEOPLE OF THE
PHILIPPINES, respondents.
D E C I S I O N
AQUINO, J p:
For adjudication in this certiorari prohibition and mandamus case
is the possession of about forty-two metric tons of scrap engine
blocks (valued at more than forty thousand pesos), part of a stock
which Marcelo Steel Corporation sold to an alleged swindler and
which scrap iron was allegedly purchased in good faith by the Yu
spouses from the swindler but retrieved from the purchasers by
Marcelo Steel Corporation by means of a search warrant.
The record shows that on June 27, 1978, Detective Carlos C.
Nuestro of the police department of Makati, Metro Manila filed
with the Court of First Instance of Rizal, Pasig Branch XXV an
application for a search warrant, entitled "People vs. Alfonso Yu,
Proprietor, Soledad Junk Shop, 171-173 Maria Clara Street,
Corner 8th Avenue, Grace Park, Caloocan, Metro Manila."
In that application, Nuestro alleged that he "has been informed
and verily believes that Alfonso Yu" was in possession of "about
55 metric tons of unstripped assorted cast iron engine blocks
embezzled" and that he "has verified the report and found (it) to
be a fact" (p. 41, Rollo).
In his testimony before respondent Judge, Nuestro declared that
he had personal knowledge that Alfonso Yu kept the said engine
blocks, which were "embezzled"; that the said goods were
purchased by Carlito Refuerzo on June 10, 1978 from Marcelo
Steel Corporation; that Refuerzo paid for the goods with a check
in the sum of P61,808.25, which check was dishonored for
insufficient funds; that Refuerzo sold the engine blocks on June
12, 1978 to the Soledad Junk Shop and that Refuerzo was later
apprehended and detained in the municipal jail of Makati (pp. 5-8
and 44-47, Rollo).
On that same day, June 27, or after the taking of Nuestro's
testimony, respondent Judge issued a search warrant,
commanding any peace officer to search the premises of the
Soledad Junk Shop, to seize therefrom "55 metric tons of
unstripped assorted cast iron engine blocks" and bring them to the
court "to be dealt with as the law directs" (pp. 43, 47-48, Rollo).
Nuestro and four policemen implemented the search warrant on
the following day, June 28. They seized from the Soledad Junk
Shop 42.8 metric tons of engine blocks, which were loaded in six
trucks and brought for safekeeping to the premises of Marcelo
Steel Corporation, Punta, Sta. Ana, Manila with the
understanding that they were in custodia legis (pp. 102-107,
Rollo).
On July 12, 1978, the spouses Alfonso Yu and Soledad Yu filed
with respondent Judge a motion to set aside the search warrant
and for the return of the engine blocks. Marcelo Steel Corporation
opposed the motion.
After hearing, respondent Judge denied the motion in his order of
November 9, 1978. The Yus' motion for the reconsideration of
that order was also denied. On March 1, 1979, they filed in this
Court the instant petition.
Parallel to or contemporaneously with the search warrant
proceeding was the complaint for estafa filed by Marcelo Steel
Corporation against Refuerzo, Soledad Yu and Refuerzo's
confederates in the office of the provincial fiscal of Rizal (I. S.
No. 78-6734).
Assistant Fiscal Ricardo S. Sumaway in a resolution dated
October 22, 1979 in the case of Marcelo Steel Corporation vs.
Refuerzo, et al. found that Refuerzo, Ernesto Dumlao, Jose Alla
and two other persons named Larry and Boy defrauded Marcelo
Steel Corporation in the sum of P95,434.50 as the value of 90,890
kilos of scrap materials delivered to Refuerzo which were not
paid for and that the Soledad Junk Shop paid Refuerzo P44,000
for 50,000 kilos of scrap materials (p. 306-310, Rollo). LibLex
Fiscal Sumaway found that Soledad Yu was not a co-conspirator
of Refuerzo and that she was an innocent purchaser for value (p.
309, Rollo).
The fiscal filed in the Court of First Instance of Rizal an
information for estafa also dated October 22, 1979 charging
Refuerzo, Dumlao, and Alla with having obtained through false
pretenses from Marcela Steel Corporation 90,890 kilos of scrap
cast iron engine blocks valued at P95,434.50 (Criminal Case No.
32394, p. 311, Rollo).
However, because the accused in that case have not been arrested,
the trial court in its order of April 30, 1980 temporarily archived
the case. Thus, there is no movement in that case.
On the other hand, it is imperative that a resolution be rendered as
to the conflicting claims of the Yu spouses and Marcelo Steel
Corporation with respect to the scrap engine blocks.
27

Considering the present situation of the parties and the absence of
any final judgment in the estafa case as to the civil liability of the
accused to make restitution, we hold that the Yu spouses are
entitled to retain possession of the scrap engine blocks.
This case is governed by the ruling in Chua Hai vs. Kapunan, Jr.;
etc. and Ong Shu, 104 Phil. 110 "that the acquirer and possessor
in good faith of a chattel or movable property is entitled to be
respected and protected in his possession, as if he were the true
owner thereof, until a competent court rules otherwise".
It was further ruled in the Chua Hai case that "the filing of an
information charging that the chattel was illegally obtained
through estafa from its true owner by the transferor of the bona
fide possessor does not warrant disturbing the possession of the
chattel against the will of the possessor".
In the Chua Hai case, it appears that Roberto Soto purchased on
January 31, 1956 for P6,137.70 from Ong Shu's hardware store
700 sheets of corrugated galvanized iron and 249 pieces of round
iron bar. Soto issued a bouncing check in payment for the GI
sheets.
He sold in Pangasinan 165 GI sheets of which 100 were sold to
Chua Hai. Soto was charged with estafa in the Court of First
Instance of Manila. In that case, Ong Shu, the seller and
complainant, filed a petition asking that the 700 GI sheets, which
were deposited with the Manila Police Department, be returned to
him.
Chua Hai opposed the petition as to the 100 GI sheets. The trial
court ordered the return of the GI sheets to Ong Shu on condition
that, as to the 100 sheets, he should post in favor of Chua Hai a
bond for twice the value of the 100 GI sheets.
This Court reversed that order because "the possession of
movable property acquired in good faith is equivalent to a title"
and "every possessor has a right to be respected in his possession"
(Arts. 539 and 559, Civil Code).
The instant case is similar to the Chua Hai case. The Yu spouses
bought the scrap engine blocks in good faith for P44,000 from the
alleged swindler without any notice that the same were obtained
under false pretenses or by means of a bouncing check. The
purchase by the Yu spouses of the scrap engine blocks from
Refuerzo, doing business under the tradename C. C. Varried
Corporation, was covered by a sales invoice and seemed to have
been made in the ordinary course of business (p. 223, Rollo).
Marcelo Steel Corporation contends, that it recovered the scrap
engine blocks by means of a valid warrant. The Yu spouses
counter that the search warrant was void because it was issued
without probable cause on the basis of Nuestro's hearsay
testimony.
We hold that the search warrant was lawfully issued. Respondent
Judge complied with the requirements for its issuance as
prescribed in section 3, Article IV of the Constitution and in
sections 3 and 4, Rule 126 of the Rules of Court. LibLex
While Nuestro's knowledge of the alleged estafa was initially
hearsay, yet his comprehensive investigation of the case enabled
him to have direct knowledge of the sale made by Pablo Tiangco
of Marcelo Steel Corporation to Refuerzo and the sale made by
Refuerzo and his confederates to the Yu spouses.
Nuestro's testimony was a sufficient justification for an
examining magistrate to conclude that the scrap engine blocks
were the subject of estafa. That conclusion was confirmed by the
filing of the information for estafa.
But from the fact that the search warrant was validly issued, it
does not follow that Marcelo Steel Corporation is entitled to
retain the same. There is as yet no decree of restitution in the
criminal case entitling Marcelo Steel Corporation to recover the
scrap iron from the third person who bought it in good faith and
for value.
Article 105 of the Revised Penal Code provides that the
restitution of the thing itself must be made whenever possible
"even though it be found in the possession of a third person who
has acquired it by lawful means, saving to the latter his action
against the proper person who may be liable to him". However,
there is no restitution in case "the thing has been acquired by the
third person in the manner and under the requirements which, by
law, bar an action for its recovery".
Hence, in the absence of any adjudication as to the civil liability,
there is no legal basis for allowing Marcelo Steel Corporation to
recover possession of the scrap engine blocks. Indeed, there is
cogency in the view of Justice Felix in his concurring opinion in
the Chua Hai case that restitution should not be required in a case
where the offended party voluntarily delivered the thing to the
offender-purchaser in the expectation of being paid the price and
where, thereafter, the offender sold the thing to an innocent third
party. That situation should be distinguished from the cases of
theft and robbery where the offended party was involuntarily
deprived of his property (104 Phil. 110, 120). LLphil
The case may be viewed from another angle. Since Marcelo Steel
Corporation and the Yu spouses acted in good faith, the question
is which of them should suffer the loss occasioned by the acts of
the alleged swindler?
The answer is found in the rule, enunciated by Justice Holmes in
Eliason vs. Wilborn, 281 U. S. 457 (applied here by analogy),
that, "as between two innocent persons, one of whom must suffer
the consequence of a breach of trust, the one who made it possible
by his act of confidence must bear the loss".
WHEREFORE, respondent Marcelo Steel Corporation is ordered
to return and deliver to the Yu spouses within ten days from
notice of the entry of judgment in this case the 42.8 tons of scrap
engine blocks in question. No costs.
SO ORDERED.

28

FELIPA CORDERO (Deceased) MAURO OCAMPO,
CASIMIRO OCAMPO and ELISEA
OCAMPO, petitioners, vs. VICTORIA P. CABRAL,
ALEJANDRO BERBOSO, DALMACIO MONTAOS and
HONORABLE COURT OF APPEALS, respondents.
SYLLABUS
1. REMEDIAL LAW; APPEAL; SCOPE; ONLY QUESTIONS
RAISED WITHIN THE ISSUES MADE BY THE PARTIES IN
THE PLEADINGS IN THE COURT BELOW; ENTERTAINED
ON APPEAL. It is a well-settled rule that, except questions on
jurisdiction, no question will be entertained on appeal unless it
has been raised in the court below and it is within the issues made
by the parties in their pleadings.
2. ID.; ID.; JUDGMENT OF APPELLATE COURT BASED ON
A GROUND NOT LITIGATED IN THE TRIAL COURT; CASE
AT BAR. In this, case, the Court of Appeals erred when it
rendered a decision based on a ground which was not litigated in
the trial court and which could not have been raised on appeal.
The ground to be sure, is the supposed oral contract of sale made
to the predecessors of the defendants covering the disputed piece
of land. The supposed oral contract of sale was never an issue.
3. CIVIL LAW; PROPERTY; POSSESSION; GOOD FAITH
CEASES AND BAD FAITH BEGINS UPON SERVICES OF
SUMMONS. The defendants, by their own admission, are in
possession of the disputed land. There is no evidence that they
were possessors in bad faith. However, their good faith ceased
when they were served with summons to answer the complainant.
(Art. 528, Civil Code; Tacas vs. Tobon, 53 Phil. 356 [1929]). As
possessors in bad faith from the service of the summons they
"shall reimburse the fruits received and those which the legitimate
possessor could have received . . ." (Art. 549, Civil Code)
D E C I S I O N
ABAD SANTOS, J p:
Petition to review a decision of the defunct Court of Appeals.
In Civil Case No. 2323 of the defunct Court of First Instance of
Bulacan, Felipa Cordero and her children Mauro, Casimiro and
Elisea all surnamed Ocampo sued Victoria Cabral, Alejandro
Berboso and Dalmacio Montaos in a Complaint which reads as
follows: LibLex
"1. That the plaintiffs are all of legal age, all residing and with
postal address at Meycauayan, Bulacan; Felipa Cordero is a
widow while Elisea Ocampo is single; and the defendants are all
of legal age, Victoria P. Cabral is married but she is living apart
and separate from her husband so the latter is not included herein
as party defendant, and all of them are residing and with postal
address at Meycauayan, Bulacan, where they may be served with
summons;
2. That Mr. Gregorio Z. Ocampo of Meycauayan, Bulacan,
husband of the plaintiff Felipa Cordero and father of the other
plaintiffs surnamed Ocampo, died on May 17, 1958, and that said
deceased left several properties, which were inherited by the
plaintiffs, one of which is a parcel of land described as follows:
A parcel of land (Lot No. 5, plan Psu. 43302), with the
improvements thereon, situated in the barrio of Saluysoy,
Municipality of Meycauayan. Bounded on the N. by Sapa and
properties of Pedro Dazo and Catalino Exaltacion; on the NE. by
property of Trinidad Rodriguez & Mateo Mistica; on the SE. by
properties of Vicente Mistica, Antonio Rodriguez, Hermogenes
Blanco, Lucio Sulbera and Pablo Francia; on the SW. by
properties of Concepcion Rodriguez and Alejandro de la Cruz;
and on NW. by a Sapa . . .; containing an area of Seventy-eight
thousand one hundred and eighty-one square meters (78,181),
more or less. With TRANSFER CERTIFICATE OF TITLE NO.
14513 in the name of Gregorio Z. Ocampo and has Tax
Declaration No. 2819 and is assessed at P4,290.00.
which parcel of land was originally registered in accordance with
the Land Registration Act on December 14, 1933, and was
registered and/or transferred in the name of Mr. Gregorio Z.
Ocampo on July 31, 1934;
3. That after the death of the said Mr. Gregorio Z. Ocampo the
plaintiffs herein took possession of the properties left by him,
among others is the afore-described parcel of land which is a
riceland, but they found out that the southern portion of the same
with an area 4,303 square meters, more or less, upon verification,
was possessed by the defendants herein, Victoria P. Cabral,
Alejandro Berboso and Dalmacio Montaos; and that the
defendant Victoria P. Cabral claimed to be the owner of said
portion while her co-defendants co-possessed the same as her
tenants;
4. That the plaintiffs demanded of the defendants to surrender to
the former possession of the afore-mentioned portion of land
and/or vacate it but they refused and failed to do so, and the
defendant Victoria P. Cabral continued claiming to be the owner
of the same while her co-defendants continued recognizing her as
the owner thereof instead of the plaintiffs; that the plaintiffs had
the afore-described parcel of land (with T.C.T. No. 14513)
relocated in the presence of the defendants' representatives and it
was found and/or determined that the afore-said portion of land
with the area of 4,303 square meters, more or less, was a part of
the plaintiffs' land with T.C.T. No. 14513; that even after the said
relocation the defendant Victoria P. Cabral persisted and still
persist in her claim of ownership over the said portion and her co-
defendants persisted and still persist in recognizing her as the
owner thereof instead of the plaintiffs; that the defendants
continue in possession of the same; and that the defendants still
refuse and fail to surrender and/or vacate said portion of land
inspite of demands made on them by the plaintiffs;
5. That because of the defendants' occupancy of the afore-
mentioned plaintiffs' portion of land with the area of 4,303 square
meters, more or less, to the exclusion of the latter, the said
plaintiffs failed to realize a yearly harvest of at least ten (10)
cavanes of palay at the rate of P10.00 per cavan, from the harvest-
time of 1958 up to the present;
6. That because of the defendants' refusal to recognize plaintiffs'
ownership over the afore-mentioned portion of land and also
because of their refusal and failure to surrender and/or vacate the
same the plaintiffs were forced to employ the services of the
undersigned counsel to institute this action at an agreed fees of
P500.00.
WHEREFORE, premises considered, the plaintiffs herein
respectfully pray of this Hon. Court to render judgment in favor
of the plaintiffs and against the defendants thus ordering them:
a) To recognize the ownership of the plaintiffs over the afore-
mentioned portion of land with an area of 4,303 square meters,
29

more or less, and to surrender it to the plaintiffs or vacate the
same;
b) To deliver, jointly and severally, to the plaintiffs palay in the
amount of ten (10) cavanes or pay their market price at the rate of
P10.00 per cavan per harvest-time beginning the year 1958 up to
the time of their delivery or payment.
c) To pay, jointly and severally, the plaintiffs' lawyer's fees in the
amount of P500.00; and
d) To pay the costs of this suit.
And to grant any remedy and relief just and equitable in the
premises." (Record on Appeal, pp. 2-6.).
The Answer of the defendants contains the following allegations:
"I. That defendants have no knowledge or information sufficient
to form a belief as to the truth of the allegations in paragraph 2 of
the complaint;
II. That defendants admit being in possession of the portion of
land alleged in paragraph 3 of the complaint, as said portion of
land belongs to defendant Victoria P. Cabral;
III. That defendants deny the allegation in paragraph 4 of the
complaint to the effect that the said portion of 4,303 square
meters, more or less, is a part of the plaintiffs' land;
IV. That defendants have no knowledge or information sufficient
to form a belief as to the truth of the allegations in paragraph 5 of
the complaint;
V. That defendants likewise have no knowledge or information
sufficient to form a belief as to the truth of the allegations in
paragraph 5 of the complaint;
And by way of SPECIAL DEFENSE, defendants allege: prcd
VI. That defendant Victoria P. Cabral and her predecessors in
interest before her are the real owners, and have been in actual,
adverse, peaceful and continuous possession, of that portion of
land claimed by the plaintiffs in their complaint, which portion is
more particularly described as Lot 5-B of plan Psd-11496, duly
approved by the Director of Lands on December 21, 1935;
VII. That the deceased Gregorio Z. Ocampo and/or his heirs, the
herein plaintiffs, have admitted, acknowledged and recognized
the defendant Cabral and her predecessors in said portion of land,
as the real owners thereof;
VIII. That the deceased Gregorio Z. Ocampo and his predecessors
in interest, as well as the defendant Cabral and her predecessors
in interest, have always recognized as the boundary between their
respective properties, a barrio road which has existed since the
Spanish regime and has continued to exist up to the present time;
and all the residents of the rural areas using said barrio road know
for a fact that, with respect to the respective properties of the
parties hereto, said road is the boundary between said properties;
IX. That the inclusion of that portion claimed by the plaintiffs in
their complaint in the original registration of their property was
obtained thru error or fraud by the original applicant, but was
never possessed by him nor by his successors in interest, as they
have always openly recognized the ownership of said portion as
belonging to defendant Cabral and her predecessors in interest
before her;
And by way of COUNTER CLAIM, defendants allege:
X. That all the foregoing paragraphs are pleaded herein and made
parts hereof;
XI. That the defendant Victoria P. Cabral is the real owner of Lot
No. 5-B, plan Psd-11496, with an area of 4,303 square meters,
more or less, erroneously or fraudulently included in the property
described in Transfer Certificate of Title No. 14513 of the
Register of Deeds of the Province of Bulacan, registered in the
name of the deceased Gregorio Z. Ocampo and now claimed by
the herein plaintiffs;
XII. That defendant Cabral and her predecessors in interest have
been in possession of said portion of land for more than fifty
years, their possession being actual, adverse, peaceful and
continuous, as owners thereof;
XIII. That said deceased Gregorio Z. Ocampo and/or his heirs,
and their predecessors in interest have openly admitted,
acknowledged and recognized the defendant Victoria P. Cabral
and her predecessors in interest as the real owners of said portion
of land, Lot 5-B plan Psd-11496, and said Gregorio Z. Ocampo
and/or his heirs and their predecessors in interest have never been
in possession of said portion of land;
XIV. That the plaintiffs, claiming to be the heirs of the deceased
Gregorio Z. Ocampo, are therefore under obligation to execute a
deed of transfer of said portion of land in favor of the true owner
thereof, the herein defendant Victoria P. Cabral, in accordance
with law;
XV. That because of the present action filed by the plaintiffs, the
defendants have suffered damages in the amount of P1,000.00;
WHEREFORE:, defendants pray that judgment be rendered:
(a) dismissing the complaint, with costs against the plaintiffs;
(b) declaring the defendant Victoria P. Cabral as the owner of
Lot-5-B, plan Psd-11496, which has been erroneously included in
the property of the deceased Gregorio Z. Ocampo covered by
Transfer Certificate of Title No. 14513, Bulacan, and ordering the
herein plaintiffs to execute a deed of transfer of said Lot No. 5-B,
plan Psd-11496 in favor of the defendant Victoria P. Cabral; and
(c) ordering the plaintiffs to pay to the defendants the sum of
P1,000.00.
Defendants further pray for such other reliefs and remedies which
may be proper and just under the premises." (R.A., pp. 8-13.)
The plaintiffs filed a Reply and Answer to Counterclaim as
follows:
"1. That the plaintiffs deny the allegation in paragraph II of the
Answer that the portion of land now under litigation belongs to
the defendant Victoria P. Cabral, and likewise deny the
allegations in paragraphs VI and XI of the same that the
defendant Victoria P. Cabral and her predecessors in interest are
the real owners of this portion (under litigation) with an area of
4,303 square meters, Lot 5-B of plan Psd-11496 with Transfer
Certificate of Title No. 14513 in the name of Mr. Gregorio Z.
30

Ocampo, because the truth is that the said Mr. Ocampo and his
successors in interest, the plaintiffs herein, are the real owners
thereof; and that said portion is a part and is included in the
plaintiffs' big parcel of land known as Lot 5, Psu-43302, and
covered by the afore-mentioned Certificate;
That the defendant Victoria P. Cabral and her predecessors in
interest were never the owners of the said portion of land and in
fact none of them, much less Victoria P. Cabral, has been in
possession or in possession of any title or any document either
public or private, showing his or her ownership, and not even a
Tax Declaration for taxation purposes; the truth is that when the
late Mr. Antonio Rodriguez, original owner of the land with plan
Psu-100536, adjacent to that of the plaintiffs, sold said land to his
successor Segunda Prodon he did not include in the said sale this
portion, under litigation, Lot 5-B, of plan Psd-11496 with an area
of 4,303 square meters, more or less, knowing that it did not
belong to him; and because of Segunda Prodon has not acquired
this portion of land with an area of 4,303 square meters, more or
less, it is clear, therefore, that she could not have transmitted it to
her successors including the herein defendant, Victoria P. Cabral;
2. That the plaintiffs deny the defendants' allegations in
paragraphs VI and XII of their Answer that the defendant Victoria
P. Cabral and her predecessors in interest have been in actual,
adverse, peaceful and continuous possession of this portion of
land for a period of more than 50 years because the truth is that, if
they were ever in possession of the same, their possession was
'not adverse' and 'not continuous'. When Mr. Gregorio Z. Ocampo
bought the parcel of land known as Lot 5, Psu-43302 with an area
of 78,181 square meters, more or less, in 1934, (wherein this
portion under litigation is included) the said Mr. Ocampo took
possession of this whole land. In the year 1935 the adjoining
owner of the said property, the late Mr. Antonio Rodriguez and
predecessor of the defendant Victoria P. Cabral, requested Mr.
Ocampo to sell to him a portion of said land with an area of 4,303
square meters, more or less, to which Mr. Ocampo agreed. As
there was already a meeting of the mind Mr. Rodriguez requested
Mr. Ocampo that he be allowed to possess the said portion as they
were going to make the formal deed of sale, to which proposition
Mr. Ocampo likewise agreed. This proposed sale never
materialized so if Mr. Rodriguez ever possessed the said portion
of land, now under litigation, he did not possess it as owner but
only as a 'prospective owner'. His possession cannot, therefore, be
termed 'adverse'. Such possession cannot also be termed
'continuous' for 50 years because Mr. Ocampo was in possession
of the same in 1934 before Mr. Rodriguez came in possession of
the same, first, with the consent and later by toleration of Mr.
Ocampo.
Granting but without admitting, that the defendant Cabral and her
predecessors in interest have been in possession of this portion of
land with an area of 4,303 square meters, more or less for more
than 50 years, does she mean to imply now that she acquires
ownership over the same by virtue of 'prescription'? She must
remember that this property is titled under Act 496 and, therefore,
'imprescriptible',
3. That the plaintiffs deny the defendants' allegations in
paragraphs VI and IX of their Answer that the plaintiffs have
admitted, acknowledged and recognized the defendant Cabral and
her predecessors in said land as the real owners thereof, because
the truth is that the plaintiffs are the real owners of the same, and
that they have never admitted, acknowledged nor recognized the
defendant Cabral nor any of her predecessors in interest as the
owners of said portion of land;
4. That the plaintiffs admit the allegation in paragraph VIII of the
Answer that the defendant Victoria P. Cabral owns an adjoining
property which is described in her plan Psu-100536 but they deny
there is a 'barrio road' between her land and that of the plaintiffs
which serves as the boundary and that there has never been any
road much less a barrio road between their properties.
That, if the defendants are referring to Lot 5-B, plan Psd-11496,
and the rest of the land of the plaintiffs Lot No. 5, Psu-43302,
which said Lot 5-B is a part, the plaintiffs deny the existence of
such road much less a barrio road, and that there has never been a
road therein. With the permission of the Hon. Court the existence
or non-existence of a road can be verified by an ocular inspection
and if need be with the aid of a licensed surveyor;
5. That the plaintiffs deny the allegations in paragraphs IX and
XIII of the Answer that Mr. Gregorio Z. Ocampo and his
successors in interest have never been in possession of this
portion of land now under litigation. Mr. Gregorio Z. Ocampo
took possession of said property after he bought it in 1934 and if
the predecessors in interest of the defendant Cabral happened to
be in its possession it was, first, with the consent of Mr. Ocampo
and later by his toleration as we have already explained in
paragraph 2 of this Reply;
6. That the plaintiffs deny the allegation in paragraph IX of the
Answer that the inclusion of this portion of property under
litigation was 'obtained thru error or fraud' by the original
applicant, and they likewise deny the allegation in paragraph XI
of the Answer that this portion with an area of 4,303 square
meters, more or less, was erroneously and fraudulently included
in the property described in Transfer Certificate of Title No.
14513 of the Register of Deeds of the Province of Bulacan,
because in truth and in fact there was no such error or fraud. The
title of this property was granted and obtained in a regular
proceeding. If there was any error or fraud the predecessor in
interest of the defendant Victoria P. Cabral would have filed a
petition for review or would have sued for damages. Or the said
defendant or any of her predecessors in interest would have
resorted to some legal remedy.
The fact is that the defendant Victoria P. Cabral or any of her
predecessors in interest did not sincerely and honestly believe that
they were the owners of this portion of property. In fact they did
not have and do not have any kind of title or any kind of
document, either public or private, over this property and they did
not even have this property declared in their names for taxation
purposes. LibLex
Granting, but without admitting, that the title to this property was
obtained either by error or fraud yet the defendant Victoria P.
Cabral can have no valid claim against the plaintiffs because she
has never been the owner of said property and also because the
plaintiffs' predecessor, Mr. Gregorio Z. Ocampo, acquired this
property as 'an innocent purchaser, in good faith and for value.'
7. That the plaintiffs deny the allegation in paragraph XIV of the
Answer that the plaintiffs are under obligation to execute a deed
of transfer of the portion of land in favor of the defendant
Victoria P. Cabral because, first, the title to this land was obtained
in a regular proceeding where there was neither error nor fraud;
second, said defendant or her predecessors in interest are not the
owners of said land much less said defendant Cabral who has
31

nothing at all in her possession to show any kind of right over
said portion of land, and third, Mr. Gregorio Z. Ocampo, the
predecessor in interest of the plaintiffs, acquire this property as an
'innocent purchaser, in good faith and for value', and
8. That the plaintiffs have no knowledge or information sufficient
to form a belief as to the truth of the allegation in paragraph XV
of the defendants' Answer (Counterclaim).
WHEREFORE, it is respectfully prayed of this Hon. Court to
grant the plaintiffs' Petition in their Complaint." (R.A., pp. 14-
21.)
It can be seen that the thrust of the Complaint is that a piece of
land covered by T.C.T. No. 14513 in the name of Gregorio Z.
Ocampo was illegally possessed by the defendants. Upon the
other hand, the thrust of the Answer is that "the defendant
Victoria P. Cabral is the real owner of Lot No. 5-B, plan Psd-
11496, with an area of 4,303 square meters, more or less,
erroneously or fraudulently included in the property described in
Transfer Certificate of Title No. 14513 of the Register of Deeds
of the Province of Bulacan, registered in the name of the deceased
Gregorio Z. Ocampo and now claimed by the herein plaintiffs."
(Answer, par. XI.)
The decision of the trial court is not clear as to whether or not the
disputed lot is included in T.C.T. No. 14513. However, the
decision contains the following statement: "if it is included in
their title, such title is void insofar as the portion of the Pandayan
road is concerned." (R.A., p. 30.). cdll
The trial court gave the following judgment:
"WHEREFORE, plaintiffs' complaint is hereby DISMISSED,
without costs. For lack of proof that plaintiffs were in bad faith in
the filing of the present action, defendants' counter-claim is
likewise dismissed." (R.A., p. 30.)
The plaintiffs appealed to the Court of Appeals and made the
following assignment of errors:
"I. THE LOWER COURT ERRED IN HOLDING THAT THE
PANDAYAN ROAD IS LOCATED INSIDE THE PROPERTY
DESCRIBED IN T.C.T. NO. 14513 AND INCONSEQUENTLY
HOLDING THAT THE SAME CONSTITUTES THE
BOUNDARY LINE BETWEEN THE PROPERTIES OF
PLAINTIFFS-APPELLANTS AND DEFENDANT-APPELLEE
VICTORIA CABRAL.
II. THE LOWER COURT ERRED IN HOLDING THAT T.C.T.
NO. 14513 IS 'VOID INSOFAR AS THE PORTION FROM
THE PANDAYAN ROAD IS CONCERNED', AND IN NOT
HOLDING THAT SAID T.C.T. IS INCONTROVERTIBLE.
III. THE LOWER COURT ERRED IN GIVING IMPORTANCE
TO DEFENDANTS-APPELLEES' ALLEGED 'OPEN,
CONTINUOUS AND ADVERSE POSSESSION' AND IN
DISMISSING PLAINTIFFS-APPELLANTS' COMPLAINT."
(Brief, pp. a-b.)
The Court of Appeals found as a fact: "That disputed portion Lot
5-a is admittedly part of the land originally registered in the name
of plaintiff's predecessor in interest, there should be no question
that that title had become imprescriptible and original registrant
as well as his successors had the right to vindicate their ownership
against any body else." (Rollo, p. 54.) 06cdasia
But the Court of Appeals went further. Seizing a statement in the
Reply and Answer to Counterclaim filed by the plaintiffs, it held
that Gregorio Z. Ocampo had by an oral contract sold the
disputed land to Antonio Rodriguez the defendant's predecessor
in interest. The Court of Appeals further said "that agreement oral
albeit, became binding upon Ocampo, it was even executed in
part by the actual delivery of possession, it amounted to a
supervening fact, posterior to the title, and the fact that Ocampo's
title was not afterwards cancelled can not at all mean that the title
could be used as a weapon to annul that posterior agreement by
Ocampo voluntarily entered into and by reason of which he had
delivered possession unto defendant's predecessor; of course, no
deed of sale was formalized for a reason not clear in the evidence,
but whether or not formalized, it was a binding personal
agreement upon Ocampo." (Rollo, pp. 56-57.)
The statement upon which the Court of Appeals built its decision
is as follows:
"When Mr. Gregorio Z. Ocampo bought the parcel of land known
as Lot 5, Psu-43302 with an area of 78,181 square meters, more
or less, in 1934, (wherein this portion under litigation is
included), the said Mr. Ocampo took possession of this whole
land. In the year 1935 the adjoining owner of the said property,
the late Mr. Antonio Rodriguez and predecessor of the defendant
Victoria P. Cabral, requested Mr. Ocampo to sell to him a portion
of said land with an area of 4,303 square meters, more or less, to
which Mr. Ocampo agreed. As there was already a meeting of the
mind Mr. Rodriguez requested Mr. Ocampo that he be allowed to
possess the said portion as they were going to make the formal
deed of sale, to which proposition Mr. Ocampo likewise agreed.
This proposed sale never materialized so if Mr. Rodriguez ever
possessed the said portion of land, now under litigation, he did
not possess it as owner but only as a 'prospective owner'. His
possession cannot, therefore, be termed 'adverse'. Such possession
cannot also be termed 'continuous' for 50 years because Mr.
Ocampo was in possession of the same in 1934 before Mr.
Rodriguez came to possession of the same, first, with the consent
and later by toleration of Mr. Ocampo." (R.A. pp. 15-16.)
It passes understanding why the plaintiffs mentioned a non-
consummated transaction between Gregorio Z. Ocampo and
Antonio Rodriguez when the defendants made no claim of such
transaction nor was the name of Antonio Rodriguez even
mentioned in their Answer. Cdpr
Even as the Court of Appeals found that the disputed piece of
land is registered in the name of the plaintiffs but because of the
supposed oral sale of the same to the predecessors of the
defendants, it affirmed the judgment of the trial court dismissing
the complaint for the recovery of the land.
The instant petition assails the Court of Appeals for rendering a
decision based on a ground which was never raised nor discussed
whether in the trial court or before it by any of the parties. The
ground to be sure, is the supposed oral contract of sale made to
the predecessors of the defendants covering the disputed piece of
land.
The petition is highly impressed with merit.
It is a well-settled rule that, except questions on jurisdiction, no
question will be entertained on appeal unless it has been raised in
the court below and it is within the issues made by the parties in
their pleadings. (See cases cited in II Moran, Rules of Court, pp.
504-505 [1970].)
32

In this case, the Court of Appeals erred when it rendered a
decision based on a ground which was not litigated in the trial
court and which could not have been raised on appeal. That the
supposed oral contract of sale was never an issue is demonstrated
by the following:
1. The pleadings of the parties have been purposely reproduced in
full above. It can be seen therefrom that no issue in respect of the
supposed oral sale actually emerged.
2. The decision of the trial court is absolutely silent on the
supposed oral contract of sale.
3. The plaintiffs who appealed the decision of the trial court to the
Court of Appeals did not make an assignment of error in respect
of the supposed oral sale.
The Court of Appeals found as a fact that the disputed piece of
land is registered in the name of the plaintiffs' predecessor.
The defendants claimed in their answer that they and their
predecessors are the owners of the land in dispute but that the
plaintiffs' predecessor was able to register the same in his name
through error or fraud.
However, the trial court made no categorical finding on this claim
of the defendants otherwise it would have granted the affirmative
relief which they asked, namely: "(b) declaring the defendant
Victoria P. Cabral as the owner of Lot 5-B, plan Psd-11496,
which has been erroneously included in the property of the
deceased Gregorio Z. Ocampo covered by Transfer Certificate of
Title No. 14513, Bulacan, and ordering the herein plaintiffs to
execute a deed of transfer of said Lot No. 5-B, plan Psd-11496 in
favor of the defendant Victoria P. Cabral." The Court of Appeals
did not deal with this issue because there was no appeal made by
the defendants. cdll
The following conclusions have to be made.
1. The disputed land is included in T.C.T. No. 14513 issued to
Gregorio Z. Ocampo, the predecessor of the plaintiffs.
2. The original registration which includes the disputed land was
not vitiated by error or fraud.
3. The Court of Appeals erred when it held that Gregorio Z.
Ocampo had orally sold the disputed land to the predecessors of
the defendants.
4. The defendants, by their own admission, are in possession of
the disputed land. There is no evidence that they were possessors
in bad faith. However, their good faith ceased when they were
served with summons to answer the complaint. (Art. 528, Civil
Code; Tacas vs. Tobon, 53 Phil. 356 [1929].) As possessors in
bad faith from the service of the summons they "shall reimburse
the fruits received and those which the legitimate possessor could
have received, . . ." (Art. 549, Civil Code.)
WHEREFORE, the judgment of the Court of Appeals is hereby
reversed and another one rendered in that the defendants shall
vacate and surrender the land in question to the plaintiffs; and the
defendants shall also account for the fruits thereof pursuant to
Article 549 of the Civil Code from the service of the summons.
Costs against the defendants.
SO ORDERED.
Makasiar (Chairman), Aquino, Concepcion, Jr.,
Guerrero and Escolin, JJ., concur.

GABRIEL LASAM, applicant-appellee, vs. THE DIRECTOR
OF LANDS and JOSE CHAN HONG HIN, ET
AL., opponents-appellants.
SYLLABUS
1. REGISTRATION OF LAND; GENUINENESS OF TITLE
AND IDENTITY OF LAND; NECESSARY EVIDENCE. An
applicant for registration of land, if he relies on a document
evidencing his title thereto, must prove not only the genuineness
of his title but the identity of the land therein referred to. The
document in such a case is either a basis of his claim for
registration or not at all. If, as in this case, he only claims a
portion of what is included in his title, he must clearly prove that
the property sought to be registered is included in that title.
2. ID.; POSSESSION UNDER LAND REGISTRATION ACT;
CONSTRUCTIVE POSSESSION. While "possession in the
eyes of the law does not mean that a man has to have his feet on
every square meter of ground before it can be said that he is in
possession", possession under paragraph 6 of section 54 of Act
No. 926, as amended by paragraph (b) of section 45 of Act No.
2874, is not gained by mere nominal claim. The mere planting of
a sign or symbol of possession cannot justify a Magellan-like
claim of dominion over an immense tract of territory. Possession
as a means of acquiring ownership, while it may be constructive,
is not a mere fiction.
D E C I S I O N
LAUREL, J p:
On January 24, 1930, Gabriel Lasam filed with the Court of First
Instance of Cagayan an application for the registration of 152
parcels of land containing a total area of 24,723,436 square
meters, situated in the municipality of Solana, Province of
Cagayan, described in the plan Exhibit K attached to the
application. These 152 parcels include the parcel No. 9 here
involved.
According to the lower court, the portions of said parcel No. 9
which were opposed during the time of survey were delimited and
marked on its plan Psu-67516 attached to the record as lots A to
Z, AA to HH, MM to ZZ, AAA to ZZZ, AAAA to ZZZZ,
AAAAA, to FFFFF, NNNNN, 35 to 38, and 111 to 143, all
inclusive. (Decision of the lower court, Bill of Exceptions of the
Government, p. 35.)
The Director of Lands opposed the application on the ground that
it is not supported by any title fit for registration and that the land
sought to be registered is public land. The brothers Felipe, Jose,
and Salvador, all surnamed Narag, who are first cousins to the
applicant Lasam, also filed opposition on the ground that they are
the owners of parcel No. 9. Oppositions were also filed by Tomas
Furigay and 35 other persons as homesteaders; by the provincial
fiscal, representing the Director of Forestry, on the ground that
portions thereof are public forests; by Francisco Caronan and
some 71 other parties, claiming the parcels occupied by them as
their exclusive properties; by Jose Chan Hong Hin, on the ground
that the application includes his property of about 22 hectares and
50 ares; and by Mauro Antonio, on the ground that the application
33

includes the portion occupied by him and belonging to him. Pablo
Soriano succeeded in having the order of general default set aside
as to him and was allowed to register his opposition at a later
date. Amended applications and oppositions by the parties were
subsequently permitted to be filed.
After a protracted hearing, the lower court rejected all the
oppositions filed, declared the applicant, Gabriel Lasam, the
owner of parcel No. 9, as indicated in the plan Psu-67516 (Exhibit
K), and decreed the registration of said parcel in his favor.
On September 10, 1934, counsel for various oppositors, after
excepting to the decision, filed a motion for new trial which was
denied, and the case was brought before this court by bill of
exceptions.
The Narag brothers and the Director of Forestry appear to have
abandoned their opposition. They made no attempt to substantiate
their claims at the trial.
Counsel for the Director of Lands, et al. and for Jose Chan Hong
Hin, et al. make various assignments of error in their respective
briefs. It is not believed necessary however, to consider each and
every assignment made as the questions presented may, in our
opinion, be reduced to the following propositions: (a) Whether or
not the applicant, Gabriel Lasam, is entitled to the registration of
parcel No. 9 on the basis of the document presented as Exhibit L,
hereinafter to be referred to, or in the alternative, whether or not
he is entitled to registration on the basis of public, continuous,
and adverse possession under a claim of ownership during the
time prescribed by law (par. 9, application); and in the negative,
(b) whether or not the numerous oppositors excluding the
homesteaders are entitled to the parcels which they allege are
included in the controverted parcel No. 9. The rights of the
homesteaders necessarily depend on the resolution of these two
propositions.
Exhibit L purports to be an application, dated June 27, 1873,
addressed by Domingo Narag 1. to the Alcalde Mayor, in which
the former stated that he had been in possession of the land above
described and asked that informacion testifical be admitted.
The informacion testifical was had before the Alcalde Mayor and
appears to have been approved by the Judge of the Court of First
Instance without objection on the part of the fiscal. It is the theory
of the applicant that Domingo Narag 1., the original owner of
parcel No. 5, described in Exhibit L, owed P1,000 from the
applicant's father, which amount Narag needed for his candidacy
as gobernadorcillo of Tuguegarao, Cagayan, in 1880; that the
original of Exhibit L was turned over by the applicant to his
lawyer, Vicente Marasigan, who lost it, and for this reason, only a
certified copy of the document marked Exhibit L was presented;
and that the fifth parcel mentioned in the document, Exhibit L, is
the same parcel No. 9 described in the plan, Exhibit K. The
Government contends that Exhibit L is not a valid title and does
not confer ownership and that even if it were valid, it does not
cover so extensive an area as that appearing on the plan, Exhibit
K.
The land designated as the fifth parcel is described in Exhibit L as
follows:
"5.a Un terreno o pasto de ganados vacunos llamado Maguirig o
Cagguban que linda al poniente con el estero Pangul, al oriente
con el pueblo de la Solana al norte con el sitio llamado Maasim y
Calabbacao y al sur con el sitio llamado Atayao el cual tiene un
cabida de siete mil brazas y herede de mis Padres hace veinte y
dos aos y en la actualidad es donde posee mis ganados de
procreacion."
Parcel No. 9, the registration of which is applied for in these
proceedings, is described thus (brief of claimant appellee, p. 61):
"Por el norte con los barrios de Iraga, Bauan y Bangag;
"Por el este con el Centro y los barrios de Basi, Natapian y Lanna;
"Por el sur con la carretera provincial; y.
"Por el oeste barrios de Maguirig, Cagguban y estero Pangul."
We are of the opinion that the court below committed no error in
receiving Exhibit L as evidence for the claimant, but its admission
by the court below does not necessarily entitle the applicant,
Gabriel Lasam, to the registration of the parcel claimed by him in
these proceedings. It is apparent that parcel No. 9, as indicated in
the plan, Exhibit K, is not the same parcel No. 5 described in
document Exhibit L. Whereas Exhibit L gives as boundaries on
the north the sitios of Maasin and Calabbacao, Exhibit K gives
the barrios of Iraga, Bauan, and Bangag; on the east Exhibit L
gives the pueblo of Solana, whereas Exhibit K gives "el Centro y
los barrios de Basi, Natappian y Lanna"; on the west Exhibit L
gives estero Pangul, whereas Exhibit K gives the barrios of
Maguirig, Cagguban and estero Pangul; on the south Exhibit L
gives the sitio of Atayao, whereas Exhibit K gives the carretera
provincial. While there may be partial identity as to boundaries on
the east and west, such identity is lacking as to the boundaries on
the north and south. This discrepancy is accentuated by the
admission of the applicant that the parcel whose registration is
sought is much smaller than that described in paragraph 5 of
Exhibit L. The explanation given by the surveyor, Jose Mallanao,
presented as witness by the claimant, is as follows:
"Because on the north side when we went around the lot and I
asked for the barrios of Maasin and Calabbacao, the applicant
pointed to me a place very far from where he was at the time and
where he actually occupied the land, and on the south side he
indicated to me the provincial road. I asked why he should not
take the actual land indicated by this title and he told me that he
was not occupying that portion. That is the reason why I took up
the boundary on the south as provincial road. On the east side he
indicated to me the center of the municipality of Solana, barrios
of Basi, Nangalisan and Lanna, and on the west is a public land
partly bounded by the barrios of Maguirig, and Cagguban and
estero Pangul."
An applicant for registration of land, if he relies on a document
evidencing his title thereto, must prove not only the genuineness
of his title but the identity of the land therein referred to. The
document in such a case is either a basis of his claim for
registration or not at all. If, as in this case, he only claims a
portion of what is included in his title, he must clearly prove that
the property sought to be registered is included in that title. The
surveyor, Jose Mallannao, did not actually check up the
boundaries of parcel No. 5 as described in Exhibit L, and in
testifying that parcel No. 9, in Exhibit K, is smaller than that
described as parcel No. 5 in Exhibit L, he relied mostly on
hearsay. For instance, when asked whether north of barrios Iraga,
Bauan, and Bangag of the land described in plan Exhibit K he
would locate the sitios of Maasin and Calabbacao, he replied:
"They said that Calabbacao is north of that barrio Iraga yet."
(Italics ours.)
34


Aside from what has been said with reference to discrepancies in
the boundaries, we cannot overlook the fact that the area in
Exhibit L is vaguely given as 7,000brazas. The surveyor for the
applicant, Jose Mallannao, calculated the area of the property
described in paragraph 5 of Exhibit L on the basis of 7,000
square brazas or 49,000,000 square brazas as 15,695,500 hectares
more or less (s. n. pp. 820-822). The area claimed here according
to the amended application of February 26, 1930, and plan
Exhibit K is 24,723,437 square meters. According to the
applicant, before his occupation of the land ceded by Domingo
Narag 1., only about 2 hectares were cultivated. (s. n. p. 56,
Gabriel Lasam.) And, with reference to the payment of land tax,
the Solicitor-General in his brief (p. 12) makes the following
observation:
"The property appears to have been declared for taxation
purposes as evidenced by revisions of tax declarations, Exhibits
G-20 and G-21 (pp. 136, 137, record). There had been previous
declarations with an area of about 294 hectares (id.) but,
according to Exhibit G-22 (p. 138, record), the area which was
not previously declared contains 1,685 hectares:
"With the exception of a statement in which it appears that land
tax was paid in 1902 (p. 140, id.) there appears in the record no
tax receipts evidencing the payment of taxes continuously from
1902 up to this time."
It is not necessary to pass upon the contention of the Solicitor-
General that the informacion testifical (Exhibit L) is of no legal
effect because of failure subsequently to solicit composition title
pursuant to the Royal Decree of June 25, 1880
(Fuster vs. Director of Lands, G. R. No. 40129, Dec. 29, 1934), or
to convert possession into a registration of ownership in
accordance with article 393 of the Mortgage Law (Fernandez
Hermanos vs. Director of Lands (57 Phil., 929), for even if we
were to accord all the legal force to this document (Exhibit L), it
would not serve as a basis for the registration of 24,723,437
square meters.
Having arrived at this conclusion as to Exhibit L, is the applicant
entitled to registration because of the required possession during
the time prescribed by law? We have examined the evidence on
this point both testimonial and documentary, and while there is
evidence showing that the claimant might have possessed a
portion of the parcel claimed by him and the registration of which
is sought, we find the evidence lacking in certainty as to the
particular portion occupied and the extent thereof. Counsel for the
applicant invokes the doctrine laid down by us in
Ramos vs. Director of Lands (39 Phil., 175, 180). (See
also Roales vs. Director of Lands, 51 Phil., 302, 304.) But it
should be observed that the application of the doctrine of
constructive possession in that case is subject to certain
qualifications, and this court was careful to observe that among
these qualifications is "one particularly relating to the size of the
tract in controversy with reference to the portion actually in
possession of the claimant." While, therefore, "possession in the
eyes of the law does not mean that a man has to have his feet on
every square meter of ground before it can be said that he is in
possession", possession under paragraph 6 of section 54 of Act
No. 926, as amended by paragraph (b) of section 45 of Act No.
2874, is not gained by mere nominal claim. The mere planting of
a sign or symbol of possession cannot justify a Magellan-like
claim of dominion over an immense tract of territory. Possession
as a means of acquiring ownership, while it may be constructive,
is not a mere fiction. In the present case, upon the description of
7,000 brazas as the area of the land said to have been originally
possessed by Domingo Narag 1. and conveyed to the applicant,
only two hectares of which were according to the applicant
himself cultivated at the time of such transfer, the applicant
would, on the basis of the computation hereinabove referred to
and given at the trial by surveyor Jose Mallannao, be entitled
under Exhibit L to more than 13,000 hectares, although only
2,432 odd hectares are now being sought for registration in these
proceedings. The fact, however, that he is claiming only a portion
of the land claimed by him to be included in his title, the further
fact that according to his own testimony he has given up more
than 1,000 hectares to the Bureau of Forestry, the discrepancies in
the boundaries, his tax declarations, and the existence of
numerous homesteaders and claimants are significant and tend to
show that his possession over the entire portion of the land sought
to be registered is not "such as to apprise the community and the
world that the entire land was for his enjoyment".
(Ramos vs.Director of Lands, supra.)
Our attention is next directed to the decision of this court in
Pamittan vs. Lasam and Mallonga (60 Phil., 908) which,
according to counsel for the claimant Lasam, is determinative of
the ownership of the property now sought to be registered. Said
case refers to an action for partition between the heirs of Sofia
Pamittan, wife of Gabriel Lasam, originally brought in the Court
of First Instance and appealed to this court. The trial court in that
case found that parcel No. 7 which is said to correspond to
parcel No. 9 sought to be registered in these proceedings
"although acquired during the existence of the conjugal
partnership, was proven to be the exclusive property of the
husband Gabriel Lasam". This court could not have passed upon
the question whether parcel No. 7 was the same parcel No. 9 in
these proceedings; nor could it have passed upon the conflicting
claims with reference to parcel No. 9, now sought to be
registered. Whatever was said in that case could not bind the
oppositors in the present case, who were not parties thereto.
The grounds for opposition of the various oppositors are
divergent and are based on (a) possession from time immemorial;
(b) acquisition by inheritance, purchase and donations propter
nuptias and inter vivos; (c) payment of land taxes from 1906,
1915, and 1918 up to the filing of oppositions; and (d) acquisition
"a titulo de composicion" with the State. These oppositors denied
being tenants of the applicant Lasam. After perusal of the
evidence presented by them, we are constrained to accept the
conclusion of the lower court that none of the portions or lots
claimed by them or any one of them has been sufficiently
identified, either by the oral or documentary evidence which they
presented. In view thereof, and because of the insufficiency of the
evidence presented, we are of the opinion that the lower court
committed no error in dismissing their oppositions.
In view of the foregoing, the judgment of the lower court is
reversed, without prejudice to the filing by the applicant, Gabriel
Lasam, of a new application and plan covering the portion of the
land actually occupied by him since July 25, 1894. Upon the
determination of that portion by the lower court, let judgment be
rendered accordingly. The remaining portion or portions of lot
No. 9 as indicated on plan Psu-67516 (Exhibit K) are hereby
declared public lands, to be disposed of or otherwise dealt with in
accordance with law. Without pronouncement as to costs. So
ordered.
35

Avancea, C. J., Villa-Real, Abad Santos, Imperial,
Diaz and Concepcion, JJ., concur.
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.
ALBERTO ESTOISTA, defendant-appellant.
SYLLABUS
1. CRIMINAL LAW; ILLEGAL POSSESSION OF FIREARMS.
It being established that the defendant was alone when he
walked to the plantation where he was to hunt with the rifle of his
father, in whose name the firearm was licensed, and that the son,
away from his father's sight and control, carried the gun for the
only purpose of using it, as in fact he did with fatal consequences,
the evidence support the son's conviction for the offense of illegal
possession of firearm which was in accordance with law.
2. ID.; ID.; U. S. vs. SAMSON (16 Phil., 323), EXPLAINED.
The implied holding in U. S. vs. Samson (16 Phil., 323) that the
intention to possess is an essential element of a violation of the
Firearms Law was not intended to imply title or right to the
weapon to the exclusion of everyone else. The court did not mean
only intention to own but also intention to use. From the very
nature of the subject matter of the prohibition, control or
dominion of the use of the weapon by the holder regardless of
ownership is, of necessity, the essential factor.
3. ID.; ID.; ID.; MEANING OF THE TERMS "CONTROL"
AND "DOMINION." The terms "control" and "dominion" are
relative terms not susceptible of exact definition, and opinions on
the degree and character of control or dominion sufficient to
constitute a violation vary. The rule laid down by United States
courts - rule which we here adopt - is that temporary, incidental,
casual or harmless possession or control of a firearm is not
violation of a statute prohibiting the possessing or carrying of this
kind of weapon. A typical example of such possession is where "a
person picks up a weapon or hands it to another to examine or
hold for a moment, or to shoot at some object." (Sanderson vs.
State, 5 S.W., 138; 68 C. J., 22.)
4. CONSTITUTIONAL LAW; CRUEL AND UNUSUAL
PUNISHMENT; PENALTY PROVIDED FOR IN Republic Act
No. 4 DEEMED CONSTITUTIONAL. Without deciding
whether the prohibition of the Constitution against infliction of
cruel and unusual punishment applies both to the form of the
penalty and the duration of imprisonment, confinement from 5 to
10 years for possessing or carrying firearm is not cruel or
unusual, having due regard to the prevalent conditions which the
law proposes to curb.
5. CRIMINAL LAW; PENALTIES; ILLEGAL POSSESSION
OF FIREARM. As Republic Act No. 4 provides a penalty of
from 5 to 10 years imprisonment for illegal possession of a
firearm, the court can not but impose upon the offender the
minimum at least of the penalty provided. In this case, however,
considering the degree of malice of the defendant, application of
the law to its full extent would be too harsh, and a
recommendation is made to the President to reduce to fix months
the penalty imposed upon this defendant.
6. CRIMINAL LAW; ILLEGAL POSSESSION OF FIREARMS;
CONSTITUTIONAL LAW; CRUEL AND UNUSUAL
PUNISHMENT; FIVE YEARS' IMPRISONMENT, NOT
CRUEL AND UNUSUAL. To come under the constitutional
ban against cruel and unusual punishment, the penalty imposed
must be "flagrantly and plainly oppressive," "wholly
disproportionate to the nature of the offense as to shock the moral
sense of the community." (24 C. J. S., 1187-1188.) Five years'
confinement for possessing firearms can not be said to be cruel
and unusual, barbarous, or excessive to the extent of being
shocking to public conscience.
7. ID.; ID.; CONFISCATION OF FIREARMS BELONGING TO
A PERSON OTHER THAN THE DEFENDANT. Section 1
of Republic Act No. 4 does not say that firearms unlawfully
possessed or carried are to be confiscated only if they belong to
the defendant, nor is such intention deducible from the language
of the Act. Except perhaps where the lawful owner was innocent
of, or without fault in, the use of his property by another,
confiscation accords with the legislative intent. Ownership or
possession of firearms is not a natural right protected by the
constitutional prohibition against depriving one of his property
without due process of law. Above the right to own property is
the inherent attribute of sovereignty the police power of the
state to protect its citizens and to provide for the safety and good
order of society. (16 C. J. S., 539, 540.) Pursuant to the exercise
of police power, the right to private property may be limited,
restricted, and impaired so as to promote the general welfare,
public order and safety. (Id., 611). The power of the legislature to
prohibit the possession of deadly weapon carries with it the power
to provide for the confiscation or forfeiture of weapons
unlawfully used or allowed by the licensed owner to be used.
D E C I S I O N
TUASON, J p:
Prosecuted in the Court of First Instance of Lanao for homicide
through reckless imprudence and illegal possession of firearm
under one information, the appellant was acquitted of the first
offense and found guilty of the second, for which he was
sentenced to one year imprisonment. This appeal is from that
sentence raising factual, legal and constitutional questions. The
constitutional question, set up after the submission of the briefs,
has to do with the objection that the penalty from 5 to 10 years
of imprisonment and fines provided by Republic Act No. 4 is
cruel and unusual.
As to the facts. The firearm with which the appellant was charged
with having in his possession was a rifle and belonged to his
father, Bruno Estoista, who held a legal permit for it. Father and
son lived in the same house, a little distance from a 27-hectare
estate belonging to the family which was partly covered with
cogon grass, tall weeds and second growth trees. From a spot in
the plantation 100 to 120 meters from the house, the defendant
took a shot at a wild rooster and hit Diragon Dima, a laborer of
the family who was setting a trap for wild chickens and whose
presence was not perceived by the accused.
The evidence is somewhat conflicting on whether the owner of
the rifle was with the accused at the time of the accidental killing.
Bruno Estoista testified that on the morning of the accident,
February 10, 1949, his son told him that there were wild chickens
on the plantation "scratching palay and corn" plants and asked if
he might shoot them; that Bruno told his son to wait, got the rifle
from the house or locker, handed it over to Alberto who is a
"sharp- shooter" and "shoots better," and walked about 20 meters
behind the young man; that Bruno was that far from Alberto when
the latter fired and accidentally wounded their servant.
36

The defendant's key testimony is: "When I heard wild rooster
crowing I told my father about the said wild rooster crowing near
our house and he told me to shoot the said wild rooster, so I went
to shoot it."
Bruno's testimony at the trial is in direct contradiction to his and
his son's statements at the Constabulary headquarters on the same
morning of the shooting, and sworn to by them before the justice
of the peace soon after.
Bruno related on that occasion that Alberto "went to hunt for wild
roosters;" that "later on my son Alberto came to inform me that
he had accidentally hit our laborer;" that thereupon he "went with
my son to see what happened." Queried "who was with Alberto
when he went out hunting," Bruno replied, "He was alone."
On his part, the defendant declared on the same occasion that
Diragon Dima, after being shot, requested to be taken to his
(Dima's) house; that as the accused was able to carry the wounded
man on]y about 50 meters, Dima asked the defendant to call
Bruno "who was in the house" which Alberto did. To the
question who his companion was when he shot at a rooster,
Alberto said, "I was alone."
There is not the slightest ground to believe that these affidavits
contained anything but the truth, especially that part regarding
Bruno's whereabouts when the defendant used the rifle. Both
affiants are very intelligent, the affidavits were executed
immediately upon their arrival at the Constabulary headquarters,
there is no hint of any undue pressure brought to bear upon either
of them, and, above all, they stood to gain nothing from the
statement that the accused was unaccompanied. In contrast,
Bruno's testimony in court was interested, given with his son's
acquittal in view. And especially is the father's veracity in court to
be distrusted because by Alberto's unsolicited admission, he had
been in the habit of going out hunting in other places and for
target practices, and because by Bruno's unwitting admission, his
son, who had no gun of his own, is a sharpshooter and shoots
better.
It being established that the defendant was alone when he walked
to the plantation with his father's gun, the next question that
presents itself is: Does this evidence support conviction as a
matter of law?
In United States vs. Samson (16 Phil., 323), cited by defense
counsel, it was held that carrying a gun by order of the owner
does not constitute illegal possession of firearm. The facts in that
case were that a shotgun and nine cartridges which belonged to
one Pablo Padilla, who had a proper permit to possess them, were
seized by the police from Samson while walking in the town of
Santa Rosa, Nueva Ecija. Padilla was to use the shotgun in
hunting that day and, as he was coming along on horseback, sent
Samson on ahead.
Republic Act No. 4, amending section 2692 of the Revised
Administrative Code, in its pertinent provision is directed against
any person who possesses any firearm, ammunition therefor, etc.
A point to consider in this connection is the meaning of the word
"possesses. "It goes without saying that this word was employed
in its broad sense so as to include "carries" and "holds." This has
to be so if the manifest intent of the Act is to be effective. The
same evils, the same perils to public security, which the Act
penalizes exist whether the unlicensed holder of a prohibited
weapon be its owner or a borrower. To accomplish the object of
this law the proprietary concept of the possession can have no
bearing whatever. "Ownership of the weapon is necessary only
insofar as the ownership may tend to establish the guilt or
intention of the accused." It is remarkable that in the United
States, where the right to bear arms for defense is ensured by the
federal and many state constitutions, legislation has been very
generally enacted severely restricting the carrying of deadly
weapons, and the power of state legislatures to do so has been
upheld.

In the light of these considerations, it is a mistake to point to
United States vs. Samson, supra, as authority for the appellant's
plea for acquittal. The implied holding in that case that the
intention to possess is an essential element of a violation of the
Firearms Law was not intended to imply title or right to the
weapon to the exclusion of everyone else. The court did not mean
only intention to own but also intention to use. From the very
nature of the subject matter of the prohibition control or dominion
of the use of the weapon by the holder regardless of ownership is,
of necessity, the essential factor.
The terms "control" and "dominion" themselves are relative terms
not susceptible of exact definition, and opinions on the degree and
character of control or dominion sufficient to constitute a
violation vary. The rule laid down by United States courts rule
which we here adopt is that temporary, incidental, casual or
harmless possession or control of a firearm is not a violation of a
statute prohibiting the possessing or carrying of this kind of
weapon. A typical example of such possession is where "a person
picks up a weapon or hands it to another to examine or hold for a
moment, or to shoot at some object." (Sanderson vs. State, 5
S.W., 138; 68 C.J., 22)
Appellant's case does not meet the above test. His holding or
carrying of his father's gun was not incidental, casual, temporary
or harmless. Away from his father's sight and control, he carried
the gun for the only purpose of using it, as in fact he did, with
fatal consequences.
Incidentally, herein lies a fundamental difference between the
case at bar and the Samson case. Although Samson had physical
control of his employer's shotgun and cartridges, his possession
thereof was undoubtedly harmless and innocent, as evidenced by
the fact that, apparently, he bore them in full view of the people
he met and of the authorities. Unlike the appellant herein, Samson
carried the gun solely in obedience to its owners order or request
without any inferable intention to use it as a weapon. It is of
interest to note that even in the United States where, as stated, the
right to bear arms as a means of defense is guaranteed, possession
such as that by Samson is by the weight of authority considered a
violation of similar statutes.
Without deciding whether the prohibition of the Constitution
against infliction of cruel and unusual punishment applies both to
the form of the penalty and the duration of imprisonment, it is our
opinion that confinement from 6 to 10 years for possessing or
carrying firearm is not cruel or unusual, having due regard to the
prevalent conditions which the law proposes to suppress or curb.
The rampant lawlessness against property, person, and even the
very security of the Government, directly traceable in large
measure to promiscuous carrying and use of powerful weapons,
justify imprisonment which in normal circumstances might
appear excessive. If imprisonment from 5 to 10 years is out of
proportion to the present case in view of certain circumstances,
37

the law is not to be declared unconstitutional for this reason. The
constitutionality of an act of the legislature is not to be judged in
the light of exceptional cases. Small transgressors for which the
heavy net was not spread are, like small fishes, bound to be
caught, and it is to meet such a situation as this that courts are
advised to make a recommendation to the Chief Executive for
clemency or reduction of the penalty. (Art. 5, Revised Penal
Code; People vs. De la Cruz, 92 Phil. 906.)
The sentence imposed by the lower court is much below the
penalty authorized by Republic Act No. 4. The judgment is
therefore modified so as to sentence the accused to imprisonment
for five years. However, considering the degree of malice of the
defendant, application of the law to its full extent would be too
harsh and, accordingly, it is ordered that copy of this decision be
furnished to the President, thru the Secretary of Justice, with the
recommendation that the imprisonment herein imposed be
reduced to six months. The appellant will pay the costs of both
instances.
Paras, C.J., Pablo, Bengzon, Padilla, Montemayor, Reyes, Jugo,
Bautista Angelo and Labrador, JJ., concur.
RESOLUTION
December 3, 1953
TUASON, J.:
The constitutionality of Republic Act No. 4, with reference to the
penalty therein provided, was carefully considered. In branding
imprisonment for five years too harsh and out of proportion in
this case, we had in mind that six months was commensurate and
just for the appellant's offense, taking into consideration his
intention and the degree of his malice, rather than that it infringes
the constitutional prohibition against the infliction of cruel and
unusual punishment.
It takes more than merely being harsh, excessive, out of
proportion, or severe for a penalty to be obnoxious to the
Constitution. "The fact that the punishment authorized by the
statute is severe does not make it cruel and unusual." (24 C. J. S.,
1187- 1188.) Expressed in other terms, it has been held that to
come under the ban, the punishment must be "flagrantly and
plainly oppressive," "wholly disproportionate to the nature of the
offense as to shock the moral sense of the community."(Idem.)
Having in mind the necessity for a radical measure and the public
interest at stake, we do not believe that five years' confinement
for possessing firearms, even as applied to appellant's and similar
cases, can be said to be cruel and unusual, barbarous, or excessive
to the extent of being shocking to public conscience. It is of
interest to note that the validity on constitutional grounds of the
Act in question was contested neither at the trial nor in the
elaborate printed brief for the appellant; it was raised for the first
time in the course of the oral argument in the Court of Appeals. It
is also noteworthy, as possible gauge of popular and judicial
reaction to the duration of the imprisonment stipulated in the
statute, that some members of the court at first expressed
opposition to any recommendation for executive clemency for the
appellant, believing that he deserved imprisonment within the
prescribed range.
The sufficiency of the evidence for appellant's conviction
under Republic Act No. 4 likewise had received close attention
and study. There is no need on our part to add anything to what
has been said, except to point out for clarification that the
references to defendant's previous uses of his father's gun and the
fatal consequences of his last use of it, were made simply to
emphasize that his possession of the prohibited weapon was not
casual, incidental, or harmless. His previous conduct was relevant
in determining his motive and intention, and to disprove the claim
that his father followed his son so as not to lose control of the
firearm. It was far from the thought of the court to condemn the
appellant for acts with which he had not been charged or of which
he had been pronounced innocent.
The confiscation of the gun is, in our opinion, in accordance with
section 1 of Republic Act No. 4, which reads:
"SECTION 1. Section twenty-six hundred and ninety-two of the
Revised Administrative Code, as amended by Commonwealth
Act Numbered fifty-six, is hereby further amended to read as
follows:
"SEC. 2692. Unlawful manufacture, dealing in, acquisition,
disposition, or possession of firearms, or ammunition therefor, or
instrument used or intended to be used in the manufacture of
firearms or ammunition. Any person who manufactures, deals
in, acquires, disposes, or possesses, any firearm, parts of firearms,
or ammunition therefor, or instrument or implement used or
intended to be used in the manufacture of firearms or ammunition
in violation of any provision of sections eight hundred and
seventy-seven to nine hundred and six, inclusive, of this Code, as
amended, shall, upon conviction, be punished by imprisonment
for a period of not less than one year and one day nor more than
five years, or both such imprisonment and a fine of not less than
one thousand pesos nor more than five thousand pesos, in the
discretion of the court. If the article illegally possessed is a rifle,
carbine, grease gun, bazooka, machine gun, submachine gun,
hand grenade, bomb, artillery of any kind or ammunition
exclusively intended for such weapons, such period of
imprisonment shall be not less than five years nor more than ten
years. A conviction under this section shall carry with it the
forfeiture of the prohibited article or articles to the Philippine
Government.
"The possession of any instrument or implement which is directly
useful in the manufacture of firearms or ammunition on the part
of any person whose business or employment does not deal with
such instrument or implement shall be prima facie proof that such
article is intended to be used in the manufacture of firearms or
ammunition."
This provision does not say that firearms unlawfully possessed or
carried are to be confiscated only if they belong to the defendant,
nor is such intention deducible from the language of the act. We
are inclined to, and do, believe that, except perhaps where the
lawful owner was innocent of, or without fault in, the use of his
property by another, confiscation accords with the legislative
intent.
We can foresee the objection that such legislation deprives one of
his property without due process of law. The answer to this is that
ownership or possession of firearms is not a natural right
protected by the Constitution. Above the right to own property is
the inherent attribute of sovereignty - the police power of the state
to protect its citizens and to provide for the safety and good order
of society. (16 C. J. S., 539, 540.) Pursuant to the exercise of
police power, the right to private property may be limited,
restricted, and impaired so as to promote the general welfare,
public order and safety. (Id., 611.) The power of the legislature to
38

prohibit the possession of deadly weapon carries with it the power
to provide for the confiscation or forfeiture of weapons
unlawfully used or allowed by the licensed owner to be used.


PERSHING TAN QUETO, petitioner, vs. COURT OF
APPEALS, JUAN POMBUENA and RESTITUTA
TACALINAR GUANGCO DE POMBUENA, respondents.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF
THE TRIAL AND APPELLATE COURTS NOT BINDING
WHEN BASED ON ERRONEOUS INFERENCES. The
finding by both the Court of First Instance and the Court of
Appeals, that the disputed lot is paraphernal and that TAN
QUETO is a builder in bad faith were regarded by Us in our
assailed decision as findings of facts and thus ordinarily
conclusive on Us. Assuming they are factual findings, still if they
are erroneous inferences from certain facts, they cannot bind this
court.
2. CIVIL LAW; PERSONS AND FAMILY RELATIONS;
PROPERTY ACQUIRED BY BOTH SPOUSES THROUGH
ONEROUS TITLE, CONJUGAL. The land is conjugal, not
paraphernal. How was ownership transferred, if at all, from her
mother to RESTITUTA? The fact is ownership was acquired
by both JUAN and RESTITUTA by tradition (delivery) as a
consequence of the contract of sale (See Art. 712, Civil Code)
with P50.00 (then a considerable amount) as the cause or
consideration of the transaction. The lot is
thereofconjugal, having been acquired by the spouses
thru onerous title (the money used being presumably conjugal,
there being no proof that RESTITUTA had paraphernal funds of
her own).
3. ID.; CONTRACTS; DONATION; VOID FOR NON-
COMPLIANCE WITH FORMALITIES OF LAW.
The oral donation of the lot cannot be a valid
donation intervivos because it was not executed in a public
instrument (Art. 749, Civil Code), nor as valid donation mortis
causa for the formalities of a will were not complied with.
4. ID.; ID.; CONTRACTUAL TRANSMISSION OF FUTURE
INHERITANCE, PROHIBITED. The allegation that the
transfer was a conveyance to RESTITUTA of her hereditary share
in the estate of her mother (or parents) cannot be sustained for the
contractual transmission of future inheritance is generally
prohibited.
5. ID.; ID.; SALE; NOT FICTITIOUS; PRESENCE OF VALID
CONSIDERATION. The contention that the sale was fictitious
or simulated (and therefore void) is bankrupt. Firstly, there was a
valid consideration thereof. Secondly, assuming that there had
indeed been a simulation, the parties thereto cannot use said
simulation to prejudice a stranger to said strategem (like
petitioner herein).
6. ID.; POSSESSION; BUILDER IS BAD FAITH ENTITLED
TO REIMBURSEMENT WHERE OWNER OF THE LAND
FAILED TO PROHIBIT CONSTRUCTION OF BUILDING.
Was Tan Queto a possessor and builder in good faith or in bad
faith Even assuming that despite registration of the lot as
conjugal, Tan Queto nursed the belief that the lot was actually
RESTITUTA's (making him in bad faith ), still RESTITUTA's
failure to prohibit him from building despite her knowledge that
construction was actually being done, makes her also in bad faith.
The net resultant of mutual bad faith would entitle TAN QUETO
to the rights of a builder in good faith (Art. 448, Civil code), ergo,
reimbursement should be given him if RESTITUTA decides to
appropriates that building for herself (Art. 448, Civil Code).
7. ID.; DIFFERENT MODES OF ACQUIRING OWNERSHIP;
BARTER; CASE AT BAR. TAN QUETO having bartered his
own and small house with the questioned lot with JUAN (who has
been adverted to by a court decision and by the OCT a conjugal
owner) may be said to be the OWNER-POSSESSOR of the lot.
Certainly he is not merely a possessor orbuilder in good faith (this
phrase presupposes ownership in another); much less is he a
builder in bad faith. He is a builder-possessor (jus
possidendi) because he is the OWNER himself. Please note that
the Chapter on Possession (jus possessionis, not jus possidenti) in
the Civil Code refers to a possessor other than the owner. Please
note further that the difference between a builder (or possessor) in
good faith and one in bad faith is that the former is NOT AWARE
of the defect or flaw in his title or mode of acquisition while the
latter is AWARE of such defect or flaw (Art. 526, Civil Code).
But in either case there is a flaw or defect. In the case of TAN
QUETO there is no such flaw or defect because it is he himself
(not somebody else) who is the owner of the property. Our
decision promulgated on May 16, 1983 is hereby SET ASIDE,
and a new one is hereby rendered declaring the questioned lot
together with the building thereon, as TAN QUETO's exclusive
property.
R E S O L U T I O N
PARAS, J p:
This is a Motion for Reconsideration of the decision dated May
16, 1983 of this Court * in the above-entitled case, asking for the
reversal of said decision on the following grounds: cdphil
1. Decision erred in disregarding the fact that Lot No. 304-B was
registered in the name of the husband, Juan Pombuena, as per
OCT No. 0-1160 issued pursuant to the November
22, 1938 Decision (Exh. 3) of the Cadastral Court in Cadastral
Case No. 12, G.L.R.O. Cad. Rec. No. 1638, and that petitioner
had the right to rely on said OCT;
2. The Decision erred in misinterpreting the admission in the
Answer of petitioner to the complaint in the unlawful detainer
Case No. 448 (City Court of Ozamiz City) as his admission that
Lot 304-B is the paraphernal property of the wife, Restituta
Tacalinar;
3. The Decision erred in reforming the Contract of Sale (Exh. B)
of Lot 304-B from Basilides Tacalinar (mother) to the respondent,
Restituta Tacalinar Guangco de Pombuena, from a sale to a
conveyance of the share of the wife Restituta Tacalinar (daughter)
in the future hereditary estate of her parents;
4. The Decision erred in over-looking that the barter agreement is
an onerous contract of exchange, whereby private respondents-
spouses received valuable consideration, concessions and other
benefits therefor and in concluding that `the barter agreement has
no effect;'
39

5. The Decision erred in disregarding the fact that petitioner
constructed his concrete building on Lot No. 304-B in good
faith relying OCT No. 0-1160, after the dismissal of the ejectment
case and only after the execution of said barter agreement;
6. The Decision erred in confusing the conclusion of law that
petitioner is a builder in bad faith with a finding of fact. The rule
is that questions of law are reviewable on appeal or by certiorari.
Moreover, the rule on finding of fact is subject to well-
settled exceptions. (pp. 257-258, Rollo).
It will be recalled that the undisputed relevant facts indicate:
(1) that Restituta Tagalinar Guangco de Pombuena
(RESTITUTA, for short) received the questioned lot (no. 304-B),
of the Cadastre Survey of the Municipality of Centro, Misamis
Occidental either as a purported donation or by way of purchase
on (February 11, 1927) (with P50.00) as the alleged consideration
thereof;
(2) that the transaction took place during her mother's lifetime,
her father having predeceased the mother;
(3) that the donation or sale was consummated while
RESTITUTA was already married to her husband Juan Pombuena
(JUAN, for short);
(4) that on January 22, 1935, JUAN filed for himself and his
supposed co-owner RESTITUTA an application for a Torrens
Title over the land;
(5) that under date of November 22, 1938 a decision was
promulgated in G.L.R.C. No. 1638 (Cadastral Case No. 12)
pronouncing JUAN (`married to RESTITUTA') as the owner of
the land;
(6) that on September 22, 1949 a contract of lease over the lot
was entered into between Pershing Tan Queto (TAN QUETO, for
short, the herein petitioner) and RESTITUTA (with the consent of
her husband JUAN) for a period of ten (10) years;
(7) that on December 27, 1960 RESTITUTA sued TAN QUETO
for unlawful detainer (the lease contract having expired) before
the Municipal Court of Ozamis City;
(8) that as a consequence of the cadastral case, an Original
Certificate of Title (Exh. 10) was issued in JUAN's name
("married to RESTITUTA") on April 22, 1962;
(9) that the unlawful detainer case was won by the spouses in the
Municipal Court; but on appeal in the Court of First Instance, the
entire case was DISMISSED because of an understanding (barter)
whereby TAN QUETO became the owner of the disputed lot, and
the spouses RESTITUTA and JUAN in turn became the owners
of a parcel of land (with the house constructed thereon)
previously owned (that is, before the barter) by TAN QUETO;
(10) that after the barter agreement dated October 10, 1962
between JUAN and TAN QUETO, the latter constructed (See p.
257, Rollo, Vol. II) on the disputed land a concrete building,
without any objection on the part of RESTITUTA;
(11) that later, RESTITUTA sued both JUAN and TAN QUETO
for reconveyance of the title over the registered but disputed lot,
for annulment of the barter, and for recovery of the land with
damages.
The two principal issues are clearly the following: LibLex
(1) Is the questioned lot paraphernal or conjugal?
(2) In having constructed the building on the lot, should TAN
QUETO be regarded as a builder in good faith (and hence entitled
to reimbursement) or a builder inbad faith (with no right to
reimbursement)?
The finding by both the Court of First Instance and the Court of
Appeals that the disputed lot is paraphernal and that TAN
QUETO is a builder in bad faith were regarded by Us in Our
assailed decision as findings of facts and thus ordinarily
conclusive on Us. Assuming they are factual findings, still if they
are erroneous inferences from certain facts, they cannot bind this
Court.
A second hard look at the circumstances of the case has
constrained Us to rule as follows:
(1) The land is conjugal, not paraphernal. How was ownership
transferred, if at all, from her mother to RESTITUTA? The oral
donation of the lot cannot be a valid donationinter-vivos because
it was not executed in a public instrument (Art. 749, Civil Code),
nor as a valid donation mortis causa for the formalities of a will
were not complied with. The allegation that the transfer was a
conveyance to RESTITUTA of her hereditary share in the estate
of her mother (or parents) cannot be sustained for the contractual
transmission of future inheritance is generally prohibited.
The fact is ownership was acquired by both JUAN and
RESTITUTA by tradition (delivery) as a consequence of the
contract of sale (See Art. 712, Civil Code) with P50.00 (then a
considerable amount) as the cause or consideration of the
transaction. The lot is therefore conjugal, having been acquired by
the spouses thru onerous title (the money used being presumably
conjugal, there being no proof that RESTITUTA had paraphernal
funds of her own). The contention that the sale was fictitious or
simulated (and therefore void) is bankrupt. Firstly, there was a
valid consideration therefor. Secondly, assuming that there had
indeed been a simulation, the parties thereto cannot use said
simulation to prejudice a stranger to said strategem (like
petitioner herein).
One nagging question has been posed. But did not TAN QUETO
admit in his Answer that RESTITUTA was the owner of the lot.
This is not so. He admitted RESTITUTA was "anowner"
(not the owner) of the lot, and this is true, for she was a co-owner
(with JUAN, and therefore "an owner." Surely, there is no
admission of RESTITUTA's exclusive ownership. And yet this is
the basis of the trial court's conclusion that the lot was indeed
paraphernal.
(2) Was Tan Queto a possessor and builder in good faith or in bad
faith?.
Even assuming that despite registration of the lot as conjugal, Tan
Queto nursed the belief that the lot was actually RESTITUTA's
(making him in bad faith), still RESTITUTA's failure to prohibit
him from building despite her knowledge that construction was
actually being done, makes her also in bad faith. The net resultant
of mutual bad faith would entitle TAN QUETO to the rights of a
builder in good faith (Art. 448, Civil Code), ergo, reimbursement
should be given him if RESTITUTA decides to appropriate the
building for herself (Art. 448, Civil Code). prLL
40

However, as already previously intimated, TAN QUETO having
bartered his own lot and small house with the questioned lot with
JUAN (who has been adverted to by a court decision and by the
OCT a conjugal owner) may be said to be the OWNER-
POSSESSOR of the lot. Certainly he is not merely a possessor
or builder in good faith (this phrase presupposes ownership
in another); much less is he a builder in bad faith. He is a builder-
possessor (jus possidendi) because he is the OWNER himself.
Please note that the Chapter on Possession (jus
possessionis, not jus possidendi) in the Civil Code refers to a
possessor other than the owner. Please note further that the
difference between a builder (or possessor) in good faith and one
in bad faith is that the former is NOT AWARE of the defect or
flaw in his title or mode of acquisition while the latter is AWARE
of such defect or flaw (Art. 526, Civil Code). But in either case
there is a flaw or defect. In the case of TAN QUETO there is no
such flaw or defect because it is he himself (not somebody else)
who is the owner of the property.
WHEREFORE, Our decision promulgated on May 16, 1983 is
hereby SET ASIDE, and a new one is hereby rendered declaring
the questioned lot together with the building thereon, as TAN
QUETO's exclusive property. No costs.
SO ORDERED.

EDCA PUBLISHING & DISTRIBUTING
CORP., petitioner, vs. THE SPOUSES LEONOR and
GERARDO SANTOS, doing business under the name and
style of "SANTOS BOOKSTORE," and THE COURT OF
APPEALS, respondents.
D E C I S I O N
CRUZ, J p:
The case before us calls for the interpretation of Article 559 of the
Civil Code and raises the particular question of when a person
may be deemed to have been "unlawfully deprived" of movable
property in the hands of another. The article runs in full as
follows:
ART. 559. The possession of movable property acquired in good
faith is equivalent to a title. Nevertheless, one who has lost any
movable or has been unlawfully deprived thereof, may recover it
from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been
unlawfully deprived has acquired it in good faith at a public sale,
the owner cannot obtain its return without reimbursing the price
paid therefor.
The movable property in this case consists of books, which were
bought from the petitioner by an impostor who sold it to the
private respondents. Ownership of the books was recognized in
the private respondents by the Municipal Trial Court, 1 which
was sustained by the Regional Trial Court, 2 which was in turn
sustained by the Court of Appeals.3 The petitioner asks us to
declare that all these courts have erred and should be reversed.
This case arose when on October 5, 1981, a person identifying
himself as Professor Jose Cruz placed an order by telephone with
the petitioner company for 406 books, payable on
delivery. 4 EDCA prepared the corresponding invoice and
delivered the books as ordered, for which Cruz issued a personal
check covering the purchase price of P8,995.65. 5 On October 7,
1981, Cruz sold 120 of the books to private respondent Leonor
Santos who, after verifying the seller's ownership from the
invoice he showed her, paid him P1,700.00. 6
Meanwhile, EDCA having become suspicious over a second
order placed by Cruz even before clearing of his first check, made
inquiries with the De la Salle College where he had claimed to be
a dean and was informed that there was no such person in its
employ. Further verification revealed that Cruz had no more
account or deposit with the Philippine Amanah Bank, against
which he had drawn the payment check. 7 EDCA then went to the
police, which set a trap and arrested Cruz on October 7, 1981.
Investigation disclosed his real name as Tomas de la Pea and his
sale of 120 of the books he had ordered from EDCA to the private
respondents. 8
On the night of the same date, EDCA sought the assistance of the
police in Precinct 5 at the UN Avenue, which forced their way
into the store of the private respondents and threatened Leonor
Santos with prosecution for buying stolen property. They seized
the 120 books without warrant, loading them in a van belonging
to EDCA, and thereafter turned them over to the petitioner. 9
Protesting this high-handed action, the private respondents sued
for recovery of the books after demand for their return was
rejected by EDCA. A writ of preliminary attachment was issued
and the petitioner, after initial refusal, finally surrendered the
books to the private respondents. 10 As previously stated, the
petitioner was successively rebuffed in the three courts below and
now hopes to secure relief from us.
To begin with, the Court expresses its disapproval of the arbitrary
action of the petitioner in taking the law into its own hands and
forcibly recovering the disputed books from the private
respondents. The circumstance that it did so with the assistance of
the police, which should have been the first to uphold legal and
peaceful processes, has compounded the wrong even more
deplorably. Questions like the one at bar are decided not by
policemen but by judges and with the use not of brute force but of
lawful writs.
Now to the merits.
It is the contention of the petitioner that the private respondents
have not established their ownership of the disputed books
because they have not even produced a receipt to prove they had
bought the stock. This is unacceptable. Precisely, the first
sentence of Article 559 provides that "the possession of movable
property acquired in good faith is equivalent to a title," thus
dispensing with further proof.
The argument that the private respondents did not acquire the
books in good faith has been dismissed by the lower courts, and
we agree. Leonor Santos first ascertained the ownership of the
books from the EDCA invoice showing that they had been sold to
Cruz, who said he was selling them for a discount because he was
in financial need. Private respondents are in the business of
buying and selling books and often deal with hard-up sellers who
urgently have to part with their books at reduced prices. To
Leonor Santos, Cruz must have been only one of the many such
sellers she was accustomed to dealing with. It is hardly bad faith
for any one in the business of buying and selling books to buy
them at a discount and resell them for a profit.
41

But the real issue here is whether the petitioner has been
unlawfully deprived of the books because the check issued by the
impostor in payment therefor was dishonored.
In its extended memorandum, EDCA cites numerous cases
holding that the owner who has been unlawfully deprived of
personal property is entitled to its recovery except only where the
property was purchased at a public sale, in which event its return
is subject to reimbursement of the purchase price. The petitioner
is begging the question. It is putting the cart before the horse.
Unlike in the cases invoked, it has yet to be established in the
case at bar that EDCA has been unlawfully deprived of the books.
The petitioner argues that it was, because the impostor acquired
no title to the books that he could have validly transferred to the
private respondents. Its reason is that as the payment check
bounced for lack of funds, there was a failure of consideration
that nullified the contract of sale between it and Cruz.
The contract of sale is consensual and is perfected once
agreement is reached between the parties on the subject matter
and the consideration. According to the Civil Code: cdll
ART. 1475. The contract of sale is perfected at the moment there
is a meeting of minds upon the thing which is the object of the
contract and upon the price.
From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the
form of contracts.
xxx xxx xxx
ART. 1477. The owner ship of the thing sold shall be transferred
to the vendee upon the actual or constructive delivery thereof.
ART. 1478. The parties may stipulate that ownership in the thing
shall not pass to the purchaser until he has fully paid the price.
It is clear from the above provisions, particularly the last one
quoted, that ownership in the thing sold shall not pass to the buyer
until full payment of the purchase price only if there is a
stipulation to that effect. Otherwise, the rule is that such
ownership shall pass from the vendor to the vendee upon the
actual or constructive delivery of the thing sold even if the
purchase price has not yet been paid.
Non-payment only creates a right to demand payment or to
rescind the contract, or to criminal prosecution in the case of
bouncing checks. But absent the stipulation above noted, delivery
of the thing sold will effectively transfer ownership to the buyer
who can in turn transfer it to another.
In Asiatic Commercial Corporation v. Ang, 11 the plaintiff sold
some cosmetics to Francisco Ang, who in turn sold them to Tan
Sit Bin. Asiatic not having been paid by Ang, it sued for the
recovery of the articles from Tan, who claimed he had validly
bought them from Ang, paying for the same in cash. Finding that
there was no conspiracy between Tan and Ang to deceive Asiatic,
the Court of Appeals declared:
Yet the defendant invoked Article 464 12 of the Civil Code
providing, among other things that "one who has been unlawfully
deprived of personal property may recover it from any person
possessing it." We do not believe that the plaintiff has been
unlawfully deprived of the cartons of Gloco Tonic within the
scope of this legal provision. It has voluntarily parted with them
pursuant to a contract of purchase and sale. The circumstance that
the price was not subsequently paid did not render illegal a
transaction which was valid and legal at the beginning. LLjur
In Tagatac v. Jimenez, 13 the plaintiff sold her car to Feist, who
sold it to Sanchez, who sold it to Jimenez. When the payment
check issued to Tagatac by Feist was dishonored, the plaintiff
sued to recover the vehicle from Jimenez on the ground that she
had been unlawfully deprived of it by reason of Feist's deception.
In ruling for Jimenez, the Court of Appeals held:
The point of inquiry is whether plaintiff-appellant Trinidad C.
Tagatac has been unlawfully deprived of her car. At first blush, it
would seem that she was unlawfully deprived thereof, considering
that she was induced to part with it by reason of the chicanery
practiced on her by Warner L. Feist. Certainly, swindling, like
robbery, is an illegal method of deprivation of property. In a
manner of speaking, plaintiff-appellant was "illegally deprived"
of her car, for the way by which Warner L. Feist induced her to
part with it is illegal and is punished by law. But does this
"unlawful deprivation" come within the scope of Article 559 of
the New Civil Code?
xxx xxx xxx
. . . The fraud and deceit practiced by Warner L. Feist earmarks
this sale as a voidable contract (Article 1390 N.C.C.). Being a
voidable contract, it is susceptible of either ratification or
annulment. If the contract is ratified, the action to annul it is
extinguished (Article 1392, N.C.C.) and the contract is cleansed
from all its defects (Article 1396, N.C.C.); if the contract is
annulled, the contracting parties are restored to their respective
situations before the contract and mutual restitution follows as a
consequence (Article 1398, N.C.C.).

However, as long as no action is taken by the party entitled, either
that of annulment or of ratification, the contract of sale remains
valid and binding. When plaintiff-appellant Trinidad C. Tagatac
delivered the car to Feist by virtue of said voidable contract of
sale, the title to the car passed to Feist. Of course, the title that
Feist acquired was defective and voidable. Nevertheless, at the
time he sold the car to Felix Sanchez, his title thereto had not
been avoided and he therefore conferred a good title on the latter,
provided he bought the car in good faith, for value and without
notice of the defect in Feist's title (Article 1506, N.C.C.). There
being no proof on record that Felix Sanchez acted in bad faith, it
is safe to assume that he acted in good faith.
The above rulings are sound doctrine and reflect our own
interpretation of Article 559 as applied to the case before us.
Actual delivery of the books having been made, Cruz acquired
ownership over the books which he could then validly transfer to
the private respondents. The fact that he had not yet paid for them
to EDCA was a matter between him and EDCA and did not
impair the title acquired by the private respondents to the books.
One may well imagine the adverse consequences if the phrase
"unlawfully deprived" were to be interpreted in the manner
suggested by the petitioner. A person relying on the seller's title
who buys a movable property from him would have to surrender
it to another person claiming to be the original owner who had not
yet been paid the purchase price therefor. The buyer in the second
42

sale would be left holding the bag, so to speak, and would be
compelled to return the thing bought by him in good faith without
even the right to reimbursement of the amount he had paid for it.
It bears repeating that in the case before us, Leonor Santos took
care to ascertain first that the books belonged to Cruz before she
agreed to purchase them. The EDCA invoice Cruz showed her
assured her that the books had been paid for on delivery. By
contrast, EDCA was less than cautious in fact, too trusting
in dealing with the impostor. Although it had never transacted
with him before, it readily delivered the books he had ordered (by
telephone) and as readily accepted his personal check in payment.
It did not verify his identity although it was easy enough to do
this. It did not wait to clear the check of this unknown drawer.
Worse, it indicated in the sales invoice issued to him, by the
printed terms thereon, that the books had been paid for on
delivery, thereby vesting ownership in the buyer. Cdpr
Surely, the private respondent did not have to go beyond that
invoice to satisfy herself that the books being offered for sale by
Cruz belonged to him; yet she did. Although the title of Cruz was
presumed under Article 559 by his mere possession of the books,
these being movable property, Leonor Santos nevertheless
demanded more proof before deciding to buy them.
It would certainly be unfair now to make the private respondents
bear the prejudice sustained by EDCA as a result of its own
negligence. We cannot see the justice in transferring EDCA's loss
to the Santoses who had acted in good faith, and with proper care,
when they bought the books from Cruz.
While we sympathize with the petitioner for its plight, it is clear
that its remedy is not against the private respondents but against
Tomas de la Pea, who has apparently caused all this trouble. The
private respondents have themselves been unduly
inconvenienced, and for merely transacting a customary deal not
really unusual in their kind of business. It is they and not EDCA
who have a right to complain.
WHEREFORE, the challenged decision is AFFIRMED and the
petition is DENIED, with costs against the petitioner.


JAIME LEDESMA, petitioner, vs. THE HONORABLE
COURT OF APPEALS and CITIWIDE MOTORS,
INC., respondents.
SYLLABUS
1. CIVIL LAW; POSSESSION; REQUISITES TO MAKE
POSSESSION OF MOVABLE PROPERTY EQUIVALENT TO
TITLE. It is quite clear that a party who (a) has lost any
movable or (b) has been unlawfully deprived thereof can recover
the same from the present possessor even if the latter acquired it
in good faith and has, therefore, title thereto for under the first
sentence of Article 559, such manner of acquisition is equivalent
to a title. There are three (3) requisites to make possession of
movable property equivalent to title, namely: (a) the possession
should be in good faith; (b) the owner voluntarily parted with the
possession of the thing; and (c) the possession is in the concept of
owner. (TOLENTINO, A.M., Civil Code of the Philippines, Vol.
II, 1983 ed., 275-276, citing 2-II Colin and Capitant 942; De
Buen: Ibid., 1009, 2 Salvat 165; 4 Manresa 339). Undoubtedly,
one who has lost a movable or who has been unlawfully deprived
of it cannot be said to have voluntarily parted with the possession
thereof. This is the justification for the exceptions found under the
second sentence of Article 559 of the Civil Code.
2. CIVIL LAW; SPECIAL CONTRACTS; CONTRACT OF
SALE; ABSENCE OF CONSIDERATION; EFFECT
THEREOF. There was a perfected unconditional contract of
sale between private respondent and the original vendee. The
former voluntarily caused the transfer of the certificate of
registration of the vehicle in the name of the first vendee even
if the said vendee was represented by someone who used a
fictitious name and likewise voluntarily delivered the cars and
the certificate of registration to the vendee's alleged
representative. Title thereto was forthwith transferred to the
vendee. The subsequent dishonor of the check because of the
alteration merely amounted to a failure of consideration which
does not render the contract of sale void, but merely allows the
prejudiced party to sue for specific performance or rescission of
the contract, and to prosecute the impostor for estafa under
Article 315 of the Revised Penal Code.
D E C I S I O N
DAVIDE, JR., J p:
Petitioner impugns the Decision of 22 September 1988 of
respondent Court of Appeals 1 in C.A.-G.R. CV No.
05955 2 reversing the decision of then Branch XVIII-B (Quezon
City) of the then Court of First Instance (now Regional Trial
Court) of Rizal in a replevin case, Civil Case No. Q-24200, the
dispositive portion of which reads: cdll
"Accordingly, the Court orders the plaintiff to return the
repossessed Isuzu Gemini, 1977 Model vehicle, subject of this
case to the defendant Ledesma. The incidental claim (sic) for
damages professed by the plaintiff are dismissed for lack of merit.
On defendant's counterclaim, Court (sic) makes no
pronouncement as to any form of damages, particularly, moral,
exemplary and nominal in view of the fact that Citiwide has a
perfect right to litigate its claim, albeit by this pronouncement, it
did not succeed." 3
which was supplemented by a Final Order dated 26 June 1980,
the dispositive portion of which reads:
"IN VIEW OF THE FOREGOING, the Court grants defendant
Ledesma the sum of P35,000.00 by way of actual damages
recoverable upon plaintiff's replevin bond. Plaintiff and its surety,
the Rizal Surety and Insurance Co., are hereby ordered jointly and
severally to pay defendant Jaime Ledesma the sum of P10,000.00
as damages for the wrongful issue of the writ of seizure, in line
with Rule 57, Sec. 20, incorporated in Rule 60, Sec. 10.
In conformity with the rules adverted to, this final order shall
form part of the judgment of this Court on September 5, 1979.
The motion for reconsideration of the judgment filed by the
plaintiff is hereby DENIED for lack of merit. No costs at this
instance." 4
The decision of the trial court is anchored on its findings that (a)
the proof on record is not persuasive enough to show that
defendant, petitioner herein, knew that the vehicle in question was
the object of a fraud and a swindle 5 and (b) that plaintiff, private
respondent herein, did not rebut or contradict Ledesma's evidence
that valuable consideration was paid for it.
43

The antecedent facts as summarized by the respondent Court of
Appeals are as follows:
"On September 27, 1977, a person representing himself to be Jojo
Consunji, purchased purportedly for his father, a certain Rustico
T. Consunji, two (2) brand new motor vehicles from plaintiff-
appellant Citiwide Motors, Inc., more particularly described as
follows: llcd
a) One (1) 1977 Isuzu Gemini, 2-door Model PF 50ZIK, with
Engine No. 751214 valued at P42,200.00; and
b) One (1) 1977 Holden Premier Model 8V41X with Engine No.
198-1251493, valued at P58,800.00.
Said purchases are evidenced by Invoices Nos. 3054 and 3055,
respectively. (See Annexes A and B).
On September 28, 1977, plaintiff-appellant delivered the two-
above described motor vehicles to the person who represented
himself as Jojo Consunji, allegedly the son of the purported
buyers Rustico T. Consunji, and said person in turn issued to
plaintiff-appellant Manager's Check No. 066-110-0638 of the
Philippine Commercial and Industrial Bank dated September 28,
1977 for the amount of P101,000.00 as full payment of the value
of the two (2) motor vehicles.
However, when plaintiff-appellant deposited the said check, it
was dishonored by the bank on the ground that it was tampered
with, the correct amount of P101.00 having been raised to
P101,000.00 per the bank's notice of dishonor (Annexes F and G).
On September 30, 1977, plaintiff-appellant reported to the
Philippine Constabulary the criminal act perpetrated by the
person who misrepresented himself as Jojo Consunji and in the
course of the investigation, plaintiff-appellant learned that the real
identity of the wrongdoer/impostor is Armando Suarez who has a
long line of criminal cases against him for estafa using this
similar modus operandi.
On October 17, 1977, plaintiff-appellant was able to recover the
Holden Premier vehicle which was found abandoned somewhere
in Quezon City.
On the other hand, plaintiff-appellant learned that the 1977 Isuzu
Gemini was transferred by Armando Suarez to third persons and
was in the possession of one Jaime Ledesma at the time plaintiff-
appellant instituted this action for replevin on November 16,
1977.
In his defense, Jaime Ledesma claims that he purchases (sic) and
paid for the subject vehicle in good faith from its registered
owner, one Pedro Neyra, as evidenced by the Land Transportation
Commission Registration Certificate No. RCO1427249. prLL
After posting the necessary bond in the amount double the value
of the subject motor vehicle, plaintiff-appellant was able to
recover possession of the 1977 Isuzu Gemini as evidenced by the
Sheriff's Return dated January 23, 1978." 6
After trial on the merits, the lower court rendered the decision and
subsequently issued the Final Order both earlier adverted to,
which plaintiff (private respondent herein) appealed to the
respondent Court of Appeals; it submitted the following
assignment of errors:
"The trial court erred.
I
IN HOLDING THAT THE DEFENDANT IS ENTITLED TO
THE POSSESSION OF THE CAR;
II
IN HOLDING THAT THE DEFENDANT IS AN INNOCENT
PURCHASER IN GOOD FAITH AND FOR VALUE;
III
IN RULING THAT THE PLAINTIFF SHOULD RETURN THE
CAR TO DEFENDANT, DISMISSING ITS CLAIM FOR
DAMAGES, AND GRANTING DEFENDANT P35,000.00
DAMAGES RECOVERABLE AGAINST THE REPLEVIN
BOND AND P101,000.00 DAMAGES FOR ALLEGED
WRONGFUL SEIZURE;
IV
IN RENDERING THE DECISION DATED SEPTEMBER 3,
1979 AND THE FINAL ORDER DATED JUNE 26, 1980." 7
In support of its first and second assigned errors, private
respondent cites Article 559 of the Civil Code which provides:
"ARTICLE 559. The possession of movable property acquired in
good faith is equivalent to a title. Nevertheless, one who has lost
any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been
unlawfully deprived, has acquired it in good faith at a public sale,
the owner cannot obtain its return without reimbursing the price
paid therefor."
Without in any way reversing the findings of the trial court that
herein petitioner was a buyer in good faith and for valuable
consideration, the respondent Court ruled that: cdll
"'Under Article 559, Civil Code, the rule is to the effect that if the
owner has lost a thing, or if he has been unlawfully deprived of it,
he has a right to recover it not only from the finder, thief or
robber, but also from third persons who may have acquired it in
good faith from such finder, thief or robber. The said article
establishes two (2) exceptions to the general rule of
irrevendicability (sic), to wit: when the owner (1) has lost the
thing, or (2) has been unlawfully deprived thereof. In these cases,
the possessor cannot retain the thing as against the owner who
may recover it without paying any indemnity, except when the
possessor acquired it in a public sale.' (Aznar vs. Yapdiangco, 13
SCRA 486).
Put differently, where the owner has lost the thing or has been
unlawfully deprived thereof, the good faith of the possessor is not
a bar to recovery of the movable unless the possessor acquired it
in a public sale of which there is no pretense in this case.
Contrary to the court's assumption, the issue is not primarily the
good faith of Ledesma for even if this were true, this may not be
invoked as a valid defense, if it be shown that Citiwide was
unlawfully deprived of the vehicle.
44

In the case of Dizon vs. Suntay, 47 SCRA 160, the Supreme
Court had occasion to define the phrase unlawfully deprived, to
wit:
'. . . it extends to all cases where there has been no valid
transmission of ownership including depositary or lessee who has
sold the same. It is believed that the owner in such a case is
undoubtedly unlawfully deprived of his property and may recover
the same from a possessor in good faith.'

xxx xxx xxx
In the case at bar, the person who misrepresented himself to be
the son of the purported buyer, Rustico T. Consunji, paid for the
two (2) vehicles using a check whose amount has been altered
from P101.00 to P101,000.00. There is here a case of estafa.
Plaintiff was unlawfully deprived of the vehicle by false pretenses
executed simultaneously with the commission of fraud (Art. 315
2(a) R.P.C.). Clearly, Citiwide would not have parted with the
two (2) vehicles were it not for the false representation that the
check issued in payment thereupon (sic) is in the amount of
P101,000.00, the actual value of the two (2) vehicles." 8
In short, said buyer never acquired title to the property; hence, the
Court rejected the claim of herein petitioner that at least,
Armando Suarez had a voidable title to the property.
His motion for reconsideration having been denied in the
resolution of the respondent Court of 12 December
1988, 9 petitioner filed this petition alleging therein that: LLjur
"A
THE HONORABLE COURT OF APPEALS ERRED IN
APPLYING ARTICLE 559 OF THE NEW CIVIL CODE TO
THE INSTANT CASE DESPITE THE FACT THAT PRIVATE
RESPONDENT CITIWIDE MOTORS, INC. WAS NOT
UNLAWFULLY DEPRIVED OF THE SUBJECT CAR, AS IN
FACT CITIWIDE VOLUNTARILY PARTED WITH THE
TITLE AND POSSESSION OR (sic) THE SAME IN FAVOR
OF ITS IMMEDIATE TRANSFEREE.
B
THE FACTUAL MILIEU OF THE INSTANT CASE FALLS
WITHIN THE OPERATIVE EFFECTS OF ARTICLES 1505
AND 1506 OF THE NEW CIVIL CODE CONSIDERING THAT
THE IMMEDIATE TRANSFEREE OF THE PRIVATE
RESPONDENT CITIWIDE MOTORS, INC., ACQUIRED A
VOIDABLE TITLE OVER THE CAR IN QUESTION WHICH
TITLE WAS NOT DECLARED VOID BY A COMPETENT
COURT PRIOR TO THE ACQUISITION BY THE
PETITIONER OF THE SUBJECT CAR AND ALSO BECAUSE
PRIVATE RESPONDENT, BY ITS OWN CONDUCT, IS NOW
PRECLUDED FROM ASSAILING THE TITLE AND
POSSESSION BY THE PETITIONER OF THE SAID CAR." 10
There is merit in the petition. The assailed decision must be
reversed.
The petitioner successfully proved that he acquired the car in
question from his vendor in good faith and for valuable
consideration. According to the trial court, the private
respondent's evidence was not persuasive enough to establish that
petitioner had knowledge that the car was the object of a fraud
and a swindle and that it did not rebut or contradict petitioner's
evidence of acquisition for valuable consideration. The
respondent Court concedes to such findings but postulates that the
issue here is not whether petitioner acquired the vehicle in that
concept but rather, whether private respondent was unlawfully
deprived of it so as to make Article 559 of the Civil Code apply.
It is quite clear that a party who (a) has lost any movable or (b)
has been unlawfully deprived thereof can recover the same from
the present possessor even if the latter acquired it in good faith
and has, therefore, title thereto for under the first sentence of
Article 559, such manner of acquisition is equivalent to a title.
There are three (3) requisites to make possession of movable
property equivalent to title, namely: (a) the possession should be
in good faith; (b) the owner voluntarily parted with the possession
of the thing; and (c) the possession is in the concept of owner. 11
Undoubtedly, one who has lost a movable or who has been
unlawfully deprived of it cannot be said to have voluntarily parted
with the possession thereof. This is the justification for the
exceptions found under the second sentence of Article 559 of the
Civil Code.
The basic issue then in this case is whether private respondent
was unlawfully deprived of the cars when it sold the same to
Rustico Consunji, through a person who claimed to be Jojo
Consunji, allegedly the latter's son, but who nevertheless turned
out to be Armando Suarez, on the faith of a Manager's Check
with a face value of P101,000.00, dishonored for being altered,
the correct amount being only P101.00. Cdpr
Under this factual milieu, the respondent Court was of the
opinion, and thus held, that private respondent was unlawfully
deprived of the car by false pretenses.
We disagree. There was a perfected unconditional contract of sale
between private respondent and the original vendee. The former
voluntarily caused the transfer of the certificate of registration of
the vehicle in the name of the first vendee even if the said
vendee was represented by someone who used a fictitious name
and likewise voluntarily delivered the cars and the certificate
of registration to the vendee's alleged representative. Title thereto
was forthwith transferred to the vendee. The subsequent dishonor
of the check because of the alteration merely amounted to a
failure of consideration which does not render the contract of sale
void, but merely allows the prejudiced party to sue for specific
performance or rescission of the contract, and to prosecute the
impostor for estafa under Article 315 of the Revised Penal Code.
This is the rule enunciated in EDCA Publishing and Distributing
Corp. vs. Santos, 12 the facts of which do not materially and
substantially differ from those obtaining in the instant case. In
said case, a person identifying himself as Professor Jose Cruz,
dean of the De la Salle College, placed an order by telephone with
petitioner for 406 books, payable upon delivery. Petitioner
agreed, prepared the corresponding invoice and delivered the
books as ordered, for which Cruz issued a personal check
covering the purchase price. Two (2) days later, Cruz sold 120
books to private respondent Leonor Santos who, after verifying
the seller's ownership from the invoice the former had shown her,
paid the purchase price of P1,700.00. Petitioner became
suspicious over a second order placed by Cruz even before his
first check had cleared, hence, it made inquiries with the De la
Salle College. The latter informed the petitioner that Cruz was not
in its employ. Further verification revealed that Cruz had no more
45

account or deposit with the bank against which he drew the
check. Petitioner sought the assistance of the police which then
set a trap and arrested Cruz. Investigation disclosed his real name,
Tomas de la Pea, and his sale of 120 of the books to Leonor
Santos. On the night of the arrest; the policemen whose assistance
the petitioner sought, forced their way into the store of Leonor
and her husband, threatened her with prosecution for the buying
of stolen property, seized the 120 books without a warrant and
thereafter turned said books over to the petitioner. The Santoses
then sued for recovery of the books in the Municipal Trial Court
which decided in their favor; this decision was subsequently
affirmed by the Regional Trial Court and sustained by the Court
of Appeals. Hence, the petitioner came to this Court by way of a
petition for review wherein it insists that it was unlawfully
deprived of the books because as the check bounced for lack of
funds, there was failure of consideration that nullified the contract
of sale between it and the impostor who then acquired no title
over the books. We rejected said claim in this wise:
"The contract of sale is consensual and is perfected once
agreement is reached between the parties on the subject matter
and the consideration. According to the Civil Code:
ART. 1475. The contract of sale is perfected at the moment there
is a meeting of minds upon the thing which is the object of the
contract and upon the price.
From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the
form of contracts. prcd
xxx xxx xxx
ART. 1477. The ownership of the thing sold shall be transferred
to the vendee upon the actual or constructive delivery thereof.
ART. 1478. The parties may stipulate that ownership in the thing
shall not pass to the purchaser until he has fully paid the price.
It is clear from the above provisions, particularly the last one
quoted, that ownership in the thing sold shall not pass to the buyer
until full payment of the purchase price only if there is a
stipulation to that effect. Otherwise, the rule is that such
ownership shall pass from the vendor to the vendee upon the
actual or constructive delivery of the thing sold even if the
purchase price has not yet been paid.
Non-payment only creates a right to demand payment or to
rescind the contract, or to criminal prosecution in the case of
bouncing checks. But absent the stipulation above noted, delivery
of the thing sold will effectively transfer ownership to the buyer
who can in turn transfer it to another." 13
In the early case of Chua Hai vs. Hon. Kapunan, 14 one Roberto
Soto purchased from the Youngstown Hardware, owned by
private respondent, corrugated galvanized iron sheets and round
iron bars for P6,137.70, in payment thereof, he issued a check
drawn against the Security Bank and Trust Co. without informing
Ong Shu that he (Soto) had no sufficient funds in said bank to
answer for the same. In the meantime, however, Soto sold the
sheets to, among others, petitioner Chua Hai. In the criminal case
filed against Soto, upon motion of the offended party, the
respondent Judge ordered petitioner to return the sheets which
were purchased from Soto. Petitioner's motion for reconsideration
having been denied, he came to this Court alleging grave abuse of
discretion and excess of jurisdiction. In answer to the petition, it
is claimed that inter alia, even if the property was acquired in
good faith, the owner who has been unlawfully deprived thereof
may recover it from the person in possession of the same unless
the property was acquired in good faith at a public
sale. 15 Resolving this specific issue, this Court ruled that Ong
Shu was not illegally deprived of the possession of the property:
". . . It is not denied that Ong Shu delivered the sheets to Soto
upon a perfected contract of sale, and such delivery transferred
title or ownership to the purchaser. Says Art. 1496:
'Art. 1496. The ownership of the thing sold is acquired by the
vendee from the moment it is delivered to him in any of the ways
specified in articles 1497 to 1501, or in any other manner
signifying an agreement that the possession is transferred from
the vendor to the vendee.' (C.C.)
The failure of the buyer to make good the price does not, in law,
cause the ownership to revest in the seller until and unless the
bilateral contract of sale is first rescinded or resolved pursuant to
Article 1191 of the new Civil Code. llcd
And, assuming that the consent of Ong Shu to the sale in favor of
Soto was obtained by the latter through fraud or deceit, the
contract was not thereby rendered void ab initio, but only
voidable by reason of the fraud, and Article 1390 expressly
provides that:
'ART. 1390. The following contracts are voidable or annullable,
even though there may have been no damage to the contracting
parties:
(1) Those where one of the parties is incapable of giving consent
to a contract;
(2) Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a proper
action in court. They are susceptible of ratification.'
Agreeably to this provision, Article 1506 prescribes:
'ARTICLE 1506. Where the seller of goods has a voidable title
thereto, but his title has not been avoided at the time of the sale,
the buyer acquires a good title to the goods, provided he buys
them in good faith, for value, and without notice of the seller's
defect of title.' (C.C.)
Hence, until the contract of Ong Shu with Soto is set aside by a
competent court (assuming that the fraud is established to its
satisfaction), the validity of appellant's claim to the property in
question can not be disputed, and his right to the possession
thereof should be respected." 16
It was therefore erroneous for the respondent Court to declare that
the private respondent was illegally deprived of the car simply
because the check in payment therefor was subsequently
dishonored; said Court also erred when it divested the petitioner,
a buyer in good faith who paid valuable consideration therefor, of
his possession thereof.LLjur
WHEREFORE, the challenged decision of the respondent Court
of Appeals of 22 September 1988 and its Resolution of 12
December 1988 in C.A.-G.R. CV No. 05955 are hereby SET
ASIDE and the Decision of the trial court of 3 September 1979
46

and its Final Order of 26 June 1980 in Civil Case No. Q-24200
are hereby REINSTATED, with costs against private respondent
Citiwide Motors, Inc.
SPOUSES ANDRES SUOBIRON and SOCORRO
SUOBIRON, JOSE SULLANO JR. and IRENEO
FERRARIS, petitioners, vs. COURT OF APPEALS,
SYLLABUS
1. LAND REGISTRATION; Act No. 3110; RECONSTITUTION
OF LOST OR DESTROYED COURT RECORD,
REQUIREMENTS; COMPLIED WITH IN CASE AT BAR.
In the case at bench, the requirements of the law for the
reconstitution of a court record were fulfilled. The clerk of court,
soon after liberation, sent a notice to the then presiding judge of
the Court of First Instance of Iloilo informing him of the
destruction of all court records in the province. Acting thereon the
judge immediately issued an order for their reconstitution which
was published in two (2) newspapers of general circulation in the
Province and City of Iloilo once a week for six (6) months.
Copies of the motion for reconstitution were served by the
movant (the now deceased Luis Adelantar) on the oppositors
through their respective counsel. It appearing that Atty. Felix
Evidente was not the oppositors' counsel of record the allegation
that no notice was served on him may no longer be relevant. The
Adelantar spouses might have failed to submit in the
reconstitution proceedings an authentic copy of respondent court's
resolution of 23 March 1943 as what they submitted instead was
the order dated 10 June 1944 of the CFI in LRC Case No. 673
directing compliance with and execution of the resolution quoted
in the order. But we find that this is another instance of
substantial compliance with Act 3110, particularly Sec. 3 thereof,
regarding presentation by the interested parties of all copies of
motions, decrees, orders and other documents in their possession
relative to the record or records to be reconstituted.
2. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT;
DOCTRINE OF RES JUDICATA; APPLICABLE IN CASE AT
BAR. The decision in Civil Case No. 938 declaring the
Adelantar spouses owners of the two (2) parcels of land claimed
by Basilia Lorezo, Isabel Lorezo and Canuto Lucero is conclusive
upon the parties therein as well as their successors-in-interest, the
parties therein, under the doctrine of res judicata.
3. CIVIL LAW; PROPERTY; POSSESSION; POSSESSOR IN
GOOD FAITH LIABLE TO PROPERTY OWNER FOR THE
NET PRODUCE FROM THE TIME FORMERS POSSESSION
IN GOOD FAITH IS LEGALLY INTERRUPTED BY THE
SERVICE OF SUMMONS. The trial court held petitioners
liable to private respondents for the net produce of the properties
in question from the time the former's possession in good faith
was legally interrupted when they were served summons in
connection with private respondents' complaint for recovery of
possession with damages filed 22 July 1970, docketed as Civil
Case No. 8283, at the rate of P1,500.00 per hectare or P39,750.00
for 26.5 hectares annually until possession was restored. It may
be that petitioners acquired the disputed properties in good faith
and had since then occupied the same but such bona
fide character of possession ceased when they were served
summons. Possession acquired in good faith may not lose this
character except in the case and from the moment facts exist
which show that the possessor is not unaware that he possesses
the thing improperly or wrongfully, conformably with Art. 528 of
the Civil Code. cda
D E C I S I O N
Petitioner-spouses Andres Suobiron and Socorro Suobiron, Jose
Sullano Jr. and Ireneo Ferraris instituted on 2 December 1980 an
action to annul the orders dated 25 August 1945 and 28 January
1946 of the then Court of First Instance (CFI) of Iloilo in LRC
Case No. 673, GLRO Record No. 54404, as well as OCT Nos.
69237 and 69238 and the corresponding decrees issued by the
Land Registration Commission. Public respondents Land
Registration Commission and Register of Deeds of the Province
of Iloilo, and private respondents Fortunata Ponce Vda. de
Adelantar, Caridad A. Chanco, Florecita A. Montilla, Evangelina
A. Coscolluela, and Remedios, Lynde, Douglas and Protacio, all
surnamed Adelantar, were named defendants.
Petitioners alleged in their complaint that the land registration
court acted without or in excess of jurisdiction in issuing both
orders because the requirements of the law on reconstitution of
court records were not complied with thus rendering void not
only the orders but also the decrees and certificates of title issued
thereunder.
Private respondents denied the allegations for the annulment of
the orders and decrees. They counterclaimed for the delivery to
them of the property in litigation consisting of 26.5 hectares of
sugarland and for the payment of the net produce which they
could have received had they not been deprived of possession
thereof.
From the evidence and the admission of the parties the trial court
found that the two (2) parcels of land were previously subject of
LRC Case No. 673, GLRO Record No. 54404, before the CFI of
Iloilo and that aside from the Director of Lands, the other
oppositors who appeared therein were Doroteo Legarde and
Bernabe, Basilia, Quintin and Fortunato, all surnamed
Lorezo. LLcd
On 1 September 1941, after due notice, publication and hearing,
the CFI rendered judgment adjudicating the parcels of land in
favor of spouses Luis Adelantar and Fortunata Ponce. The
oppositors elevated the decision to the Court of Appeals. On 23
March 1943, however, for failure of the oppositors to pay the
docket fees and to deposit the estimated cost of printing the
record on appeal within the reglementary period, the appellate
court dismissed the appeal.
On 22 March 1945, four days after the American forces liberated
Panay Island, the CFI was reorganized. Pursuant to Act
3110, 1 the clerk of court submitted a report stating that all court
records were destroyed or burned as a result of the battle for
liberation. Thereafter, on 7 June 1945 the court issued an order
directing the reconstitution of the records. The order was
published in two (2) leading newspapers in Iloilo City, namely,
"Ang Tigbatas" and "The Times," once a week for six (6) months.
On 18 August 1945 Luis Adelantar filed a motion for
reconstitution of the records of LRC Case No. 673 furnishing
copies thereof to oppositors Sabas, Ireneo, Pilar and Preciosa, all
surnamed Lucero, and Bernabe, Basilia, Quintin and Fortunato,
all surnamed Lorezo, through their respective counsel, as well as
the Provincial Fiscal of Iloilo representing the Director of Lands.
The oppositors did not however appear when the motion was
heard on 25 August 1945. Thus on the same day the CFI gave due
course to the motion for reconstitution.
47

On 28 January 1946, on motion of the Adelantar spouses, the CFI
directed the issuance of decrees covering the property in litigation
after which Decrees Nos. 766623 and 766624 were issued by the
Land Registration Commission. On the basis of these decrees
OCT Nos. 69237 and 69238 were issued in the name of the
spouses Luis Adelantar and Fortunata Ponce.
Taking advantage in the meantime of the chaotic conditions
during the war, Quintin Lorezo and Bernabe Lorezo entered the
litigated property and appropriated the produce thereof to the
damage and prejudice of the registered owners. Consequently, on
26 August 1947 the Adelantars filed an action in the CFI of Iloilo
against the Lorezos for recovery of possession, docketed as Civil
Case No. 938. Basilia Lorezo, Isabel Lorezo and Canuto Lucero
intervened and were allowed to file their answers.
On 3 September 1953 the CFI rendered judgment declaring the
Adelantar spouses owners of the property and ordering the
receiver earlier appointed by the court to deliver to them the
possession thereof as well as the produce received by the receiver
since his appointment.
The decision having become final and executory the trial court
issued a writ of execution which was implemented by the
Provincial Sheriff on 27 February 1954 by delivering to the
spouses Luis Adelantar and Fortunata Ponce the possession of the
two (2) parcels of land. On the same occasion Luis Adelantar
accepted from the receiver the produce consisting of five
(5) bultos of palay. However, after the delivery of the property by
the Provincial Sheriff to the Adelantars, Quintin, Basilia, Bernabe
and Fortunato Lorezo re-entered the premises. Other persons
followed suit.
The property soon became the subject of a cadastral survey.
Fortunata Ponce, who was already a widow, filed an answer
claiming ownership. The spouses Andres Suobiron and Socorro
Suobiron also filed an answer claiming ownership of portions
thereof by purchases from Quintin in 1960, from Basilia and
Isabel Lorezo in 1961, and from Canuto Lucero in 1969 thus
prompting the cadastral court to advise the parties to file the
proper action and to litigate the question of ownership.
Accordingly, on 22 July 1970 Fortunata Ponce and the other
private respondents, as heirs of Luis Adelantar, filed an action for
quieting of title and for recovery of possession with damages
before the CFI of Iloilo, docketed as Civil Case No. 8283. The
complaint however was dismissed without prejudice.
On 21 December 1972 petitioners sought annulment of the
certificates of title of the Adelantars but their action was also
dismissed without prejudice on 22 February 1980. Thus
petitioners filed their complaint alleging co-ownership of the
property.
On 29 August 1986, finding no factual nor legal basis to grant
petitioners' prayer, the trial court dismissed the complaint and
directed them to vacate the property and deliver possession
thereof to private respondents and to pay them jointly and
severally P39,750.00 annually as net produce from 1970 until
possession was restored to the latter, P10,000.00 as attorney's
fees, and to pay the costs of suit. 2
On 19 January 1993 respondent Court of Appeals affirmed the
ruling of the trial court except with respect to the award of
attorney's fees which was deleted as no reason was given
therefor. 3 On 15 March 1993 the motion for reconsideration was
denied. 4
Petitioners raise these issues before us: whether the provisions of
Act 3110 have been complied with; whether the decision in Civil
Case No. 938 is conclusive upon them; and, whether they are
liable to private respondents for damages.
Petitioners allege that Act 3110 was violated since (a) the general
notice of loss required to be served by registered mail to
interested parties and its publication in the Official Gazette were
not complied with; (b) no notice of loss was sent to counsel of
record of their predecessors-in-interest; and, (c) no duly certified
or authentic copy of the Court of Appeals' resolution of 23 March
1943 was produced in the reconstitution proceedings. They also
claim that the decision in Civil Case No. 938 is not conclusive
upon them because the subject matter thereof does not involve the
legality of the reconstitution of LRC Case No. 673, and that
damages should not have been awarded against them as their
possession of the parcels of land was lawful.
We affirm the decision of the Court of Appeals as we find no
reversible error therein. Sections 1, 2 and 3 of Act 3110 provide:
SECTION 1. As soon as practicable after the occurrence of any
fire or other public calamity resulting in the loss of all or part of
the records of judicial proceedings on file in the office of the
clerk of a Court of First Instance, said officer shall send a notice
by registered mail to the Secretary of Justice, the Attorney-
General, 5 the Director of Lands, the Chief of the General Land
Registration Office, 6 the clerk of the Supreme Court, the judge
of the province, the register of deeds of the province, the
provincial fiscal; and all lawyers who may be interested, stating
the date on which such fire or public calamity occurred and
whether the loss or destruction was total or partial, and giving a
brief list of the proceedings not affected in case the loss or
destruction was partial.
SECTION 2. Upon receipt of the notice mentioned in the
preceding section, the court shall issue or cause to be issued a
general notice which shall be addressed and sent by registered
mail to the lawyers and officers mentioned in the preceding
section, and to such other persons as might be interested, advising
them of the destruction of the records, with a brief list of the
proceedings not affected in case the destruction was partial, and
of the time fixed by this Act for the reconstitution of the
destroyed records.
This notice shall also be published in the Official Gazette and in
one of the newspaper most widely read in the province, once a
week, for four consecutive weeks.
SECTION 3. The parties to civil cases, or their counsels, shall
appear and file, within thirty days after having been notified in
accordance with the next preceding section, an application for the
reconstitution of the records in which they are interested, and the
clerk of the court, upon receiving such application, shall send
notice to all parties interested, or their counsels, of the day, hour,
and place when the Court will proceed to the reconstitution,
requesting them to present, on said day and hour, and at said
place, all copies of motions, decrees, orders, and other documents
in their possession, having reference to the record or records to be
reconstituted. cdtai
As may be gleaned from the above, the Act provides that after the
occurrence of any fire or other public calamity resulting in the
48

loss of all or part of the records of judicial proceedings, the clerk
of court shall send a notice by registered mail, among other
officers, to the judge of the province and all lawyers who may be
interested in the proceedings (Sec. 1) and upon receipt of such
notice, the court shall issue a general notice which shall be
addressed and sent by registered mail to said lawyers and offices,
and to such other persons as might be interested, advising them of
the destruction of the records. This notice shall be published in
the Official Gazette and in one of the newspapers of wide
circulation in the province once a week for four consecutive
weeks (Sec. 2). The Act likewise provides that any interested
party or his counsel shall appear and file within thirty days after
having been notified of the destruction as above stated an
application for the reconstitution of the records of the case, and
the clerk of court upon receiving such application shall send
notice to other parties interested or their counsel of the day, hour
and place when the court will proceed with the reconstitution
(Sec. 3).
This briefly is the procedure laid down by Act 3110 for the
reconstitution of a court record in case of loss or destruction.
In Paluay v. Bacudao 7 we held that there was substantial
compliance with the law if the clerk of court sent a notice to the
judge of the province informing him of the destruction of all court
records in the province and that acting thereon the judge
immediately issued an order for their reconstitution which was
published in a newspaper of general circulation in the city or
province once a week for six (6) months. The law was considered
substantially complied with even if it did not appear that notice of
the destruction was ever served by registered mail to all lawyers
or persons who appeared to be interested in the cases affected. It
was enough that the applicant sent a copy of his petition for
reconstitution to the oppositors or their counsel in order that they
may be notified of the date and place of the hearing thereof. 8
In the case at bench, the requirements of the law for the
reconstitution of a court record were fulfilled. The clerk of court,
soon after liberation, sent a notice to the then presiding judge of
the Court of First Instance of Iloilo informing him of the
destruction of all court records in the province. Acting thereon the
judge immediately issued an order for their reconstitution which
was published in two (2) newspapers of general circulation in the
Province and City of Iloilo once a week for six (6) months.
Copies of the motion for reconstitution were served by the
movant (the now deceased Luis Adelantar) on the oppositors
through their respective counsel. It appearing that Atty. Felix
Evidente was not the oppositors' counsel of record the allegation
that no notice was served on him may no longer be relevant.
The Adelantar spouses might have failed to submit in the
reconstitution proceedings an authentic copy of respondent court's
resolution of 23 March 1943 as what they submitted instead was
the order dated 10 June 1994 of the CFI in LRC Case No. 673
directing compliance with and execution of the resolution quoted
in the order. 9But we find that this is another instance of
substantial compliance with Act 3110, particularly Sec. 3 thereof,
regarding presentation by the interested parties of all copies of
motions, decrees, orders and other documents in their possession
relative to the record or records to be reconstituted.
The decision in Civil Case No. 938 declaring the Adelantar
spouses owners of the two (2) parcels of land claimed by Basilia
Lorezo, Isabel Lorezo and Canuto Lucero is conclusive upon the
parties therein as well as their successors-in-interest, the parties
herein, under the doctrine of res judicata. The trial court held
petitioners liable to private respondents for the net produce of the
properties in question from the time the former's possession in
good faith was legally interrupted when they were served
summons in connection with private respondents' complaint for
recovery of possession with damages filed 22 July 1970, docketed
as Civil Case No. 8283, at the rate of P1,500.00 per hectare or
P39,750.00 for 26.5 hectares annually until possession was
restored. It may be that petitioners acquired the disputed
properties in good faith and had since then occupied the same but
such bona fide character of possession ceased when they were
served summons. Possession acquired in good faith may not lose
this character except in the case and from the moment facts exist
which show that the possessor is not unaware that he possesses
the thing improperly or wrongfully, conformably with Art. 528 of
the Civil Code. CDTInc
As early as Rodriguez v. Francisco, 10 this Court already ruled
that
. . . on the date of the service of summons upon appellee in this
case considering that (appellant) was thereafter declared owner by
final judgment (G.R. No. L-12039), appellee's possession in good
faith was interrupted and hence from that time he lost the right to
the fruits. 11
In turn, that decision was based on Tacas v. Tobon 12 where this
Court, citing Manresa, 13 stated
But to every possessor in good faith there comes a time when he
is considered a possessor in bad faith. When the owner or
possessor with a better right comes along, when he becomes
aware that what he had taken for granted is at least doubtful, and
when he learns the grounds in support of the adverse contention,
good faith ceases. The possessor may still believe that his right is
more secure, because we resign ourselves with difficulty to the
sight of our vanishing hopes; but when the final judgment of the
court deprives him of the possession, all illusion necessarily
disappears. Although he may not have been convinced of it
before, the possessor becomes aware that his possession is
unlawful from the time he learns of the complaint, from the time
he is summoned to the trial. It is at this time that his possession is
interrupted, according to Article 1945, and that he ceases to
receive the fruits, according to the first paragraph of Article 451.
The ruling of the court retroacts to that time; but shall good faith
be deemed to cease then? Although there is a great difference
between requiring the possessor in good faith to return the fruits
he received from the time when his possession was legally
interrupted, and considering him a possessor in bad faith for all
legal purposes from that time, the law had to establish a definite
rule on the matter, which is none other than that deducible from a
combination of Articles 452, 1945 and 435. Whether or not the
defendant be a possessor in good faith, for there is no doubt that
he can be, and the law makes no attempt to deny it, from the
service of judicial summons, there exists an act that this possessor
knows that his right is not secure, that someone disputes it, and
that he may yet lose it; and if the court holds that restitution be
made, that time determines all the legal consequences of the
interruption, the time when the possession in good faith ceased to
be so before the law . . . .
WHEREFORE, the petition is DENIED. The decision of
respondent Court of Appeals dated 19 January 1993 and its
resolution of 15 March 1993 are MODIFIED. Costs against
petitioners.