EASEMENTS
substituted in the present action.7
G.R. No. 152440 December 6, 2006
FELICITACION B. BORBAJO, petitioner,
vs.
HIDDEN VIEW HOMEOWNERS, INC., SPS. MARCELINA A. SARCON, and ELY D. SARCON,
ROBERTO B. ALVAREZ, CORAZON NOMBRADO, and GILBERT ANDRALES, in their personal
capacities, respondents.
RESOLUTION
TINGA, J.:
For resolution is a Motion for Reconsideration dated 21 March 2005 filed by respondents relative to the
Court’s Decision1 dated 31 January 2005. The dispositive portion of the Decision, which was in favor of
petitioner Felicitacion Borbajo, read as follows:
WHEREFORE, the Decision of the Court of Appeals dated 21 September 2001 is
REVERSED and SET ASIDE and the writ of preliminary injunction issued by the Regional
Trial Court of Cebu City, Branch 58, is made permanent, subject to the final outcome of Civil
Case No. 21239 pending before the Regional Trial Court of Cebu City, Branch 9.
No cost.
SO ORDERED.2
Respondents now argue that the aforementioned Civil Case No. 21239 pending before the Regional
Trial Court (RTC) of Cebu City, Branch 9, has since been resolved against petitioner, through a
Decision dated 22 April 2003,3which is apparently now final and executory.4 This decision concluded
that petitioner had fraudulently obtained the titles over the three (3) road lots that were at the heart of
that case, and this case as well. The dispositive portion of this decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendants spouses Danilo S. Borbajo and Felicitation B. Borbajo declaring null and void the
deed of sale executed by Jose Bontuyan (particularly the three road lots) in favor of
defendants. Consequently, TCT No. 117437, 117563 and 117564 are declared null and void.
The Register of Deeds of Cebu City is directed to cancel said certificates of title and to issue
new ones reinstating the certificates of title cancelled by the aforementioned certificates of
title.
SO ORDERED.5
Parenthetically, it bears noting that petitioner Borbajo had died on 20 December 2002, 6 a fact that was
made known to the Court only during the period for deliberation on the Motion for Reconsideration.
Counsel for petitioner manifests that her six (6) children, as her surviving legal heirs, should be
It should be recalled that the instant case arose from a complaint for injunction filed by petitioner
against the respondents, praying that the latter be enjoined from preventing the petitioner from passing
thru or otherwise making use of three (3) road lots inside Hidden View Subdivision I. It so happened
that these road lots were titled and registered in the name of the petitioner. It was on that basis that the
Court held that petitioner was entitled to the writ of injunction, as she could not be prevented from
availing of all the attributes of ownership under the Civil Code, as the owner of the road lots.8 The Court
also set aside the finding of the Court of Appeals that road lots cannot be sold to any person, under
Presidential Decree (P.D.) No. 957, as amended, noting instead the settled rule that a Torrens title
cannot be collaterally attacked.9
Nonetheless, the Court observed that a separate case for annulment of titles over the road lots was
then pending before the courts, and it was that case which would serve as the proper forum for the
claims regarding the legality of Borbajo’s titles over the road lots. The Court did state that if it were
found "that the titles of Borbajo were obtained fraudulently, her right to the road lots ceases as well as
her right-of-way by virtue of said titles."10 Hence, the dispositive portion which made the writ of
preliminary injunction permanent was tagged with a qualifier "subject to the final outcome of Civil Case
No. 21239 pending before the Regional Trial Court of Cebu City, Branch 9." 11
Petitioner, in her Comment to the Motion for Reconsideration, does not dispute that the RTC, Cebu
City, Branch 9 had issued the subject decision against her in Civil Case No. 21239. Instead, she claims
that the decision did not attain finality for the intervenors in Civil Case No. 21239 "were not furnished
copy (sic) of the decision."12 This claim cannot be accepted at face value, especially since an entry of
judgment, recording the Decision as final and executory, was issued by the RTC, Cebu City, Branch 9
on 26 June 2003.13 Petitioner does not allege that the intervenors who purportedly did not receive any
copy of the judgment have availed of any legal remedies as a result, and she cannot assert such failure
to acquit herself of any liability arising from that judgment.
Hence, there is no doubt that a final judgment has been rendered canceling petitioner’s titles over the
road lots. It likewise appears that this decision has been executed. Attached to the Motion for
Reconsideration are certified true copies of three (3) Transfer Certificates of Title, each dated 24 June
2003, covering the three (3) road lots which are now registered in the name of Hidden View Subdivision
Homeowners Association, Inc.14 It is also stated in each of these titles that the previous titles in the
name of petitioner (T-117437, T-117563, and T-117564) have accordingly been cancelled by these new
titles.
Following the Court’s Decision, petitioner’s right to the road lots as well as her right-of-way by virtue of
her titles thereto, had ceased as a result of the decision rendered by the RTC, Cebu City, Branch 9.
Notably, even the petition itself conceded that "until and unless the certificate of title covering these
three road lots shall have been decreed to be null and void in a direct proceedings instituted for that
purpose, the same shall be respected and in case of violation of its use and enjoyment, the registered
owner thereof, is entitled to the protection of law."15 Consequently, the Writ of Injunction confirmed by
this Court had since become functus officio, the legal basis thereof having been expired by reason of
the 2003 RTC Cebu City Decision.
The Court still maintains that the Court of Appeals erred in failing to accord due recognition to
petitioner’s rights as the registered owner of the road lots, still extant at the time it rendered its Decision.
Yet considering that petitioner’s titles over the road lots have since been nullified in a final and
executory judgment which has in fact been executed, there is no longer any basis in law to entitle
petitioner to the sought injunctive relief, or for the Court to confirm that such right of relief still exists.
Page 1 of 44
WHEREFORE, in view of the Decision of the RTC, Cebu City, Branch 9, dated 22 April 2003, in Civil
Case No. 21239, the writ of preliminary injunction issued by the RTC, Cebu City, Branch 58 made
permanent by the Decision of this Court dated 31 January 2005 is hereby declared FUNCTUS
OFFICIO.
SO ORDERED.
G.R. No. 90596 April 8, 1991
SOLID MANILA CORPORATION, petitioner,
vs.
BIO HONG TRADING CO., INC. and COURT OF APPEALS, respondents.
SARMIENTO, J.:
This is an appeal filed by way of a petition for review on certiorari under Rule 45 of the Rules of Court.
1 Subsequently, the latter moved to have the order lifted, on the grounds that: (1) the easement referred
The petitioner raises two questions: (1) whether or not the Court of Appeals erred in reversing the trial
court which had rendered summary judgment; and (2) whether or not it erred in holding that an
easement had been extinguished by merger.
We rule for the petitioner on both counts.
It appears that the petitioner is the owner of a parcel of land located in Ermita, Manila, covered by
Transfer Certificate of Title No. 157750 of the Register of Deeds of Manila. The same lies in the vicinity
of another parcel, registered in the name of the private respondent corporation under Transfer
Certificate of Title No. 128784.
The private respondent's title came from a prior owner, and in their deed of sale, the parties thereto
reserved as an easement of way:
. . .a portion thereof measuring NINE HUNDRED FOURTEEN SQUARE METERS, more or
less, had been converted into a private alley for the benefit of neighboring estates, this being
duly annotated at the back of the covering transfer Certificate of title per regulations of the
Office of the City Engineer of Manila and that the three meterwide portion of said parcel along
the Pasig River, with an area of ONE HUNDRED SEVENTY NINE (179) SQUARE METERS,
more or less, had actually been expropriated by the City Government, and developed
pursuant to the beautification drive of the Metro Manila Governor. (p. 3, Record).2
As a consequence, an annotation was entered in the private respondent's title, as follows:
Entry No. 7712/T-5000 –– CONSTRUCTION OF PRIVATE ALLEY –– It is hereby made of
record that a construction of private alley has been undertaken on the lot covered by this title
from Concepcion Street to the interior of the aforesaid property with the plan and specification
duly approved by the City Engineer subject to the following conditions to wit: (1) That the
private alley shall be at least three (3) meters in width; (2) That the alley shall not be closed
so long as there's a building exists thereon (sic); (3) That the alley shall be open to the sky;
(4) That the owner of the lot on which this private alley has been constituted shall construct
the said alley and provide same with concrete canals as per specification of the City
Engineer; (5) That the maintenance and upkeep of the alley shall be at the expense of the
registered owner; (6) That the alley shall remain open at all times, and no obstructions
whatsoever shall be placed thereon; (7) That the owner of the lot on which the alley has been
constructed shall allow the public to use the same, and allow the City to lay pipes for sewer
and drainage purposes, and shall not act (sic) for any indemnity for the use thereof; and (8)
That he shall impose upon the vendee or new owner of the property the conditions
abovementioned; other conditions set forth in Doc. No. 4236, Page No. 11, Book No. 84 of
Nicasio P. Misa, Not. Pub. of Manila.3
The petitioner claims that ever since, it had (as well as other residents of neighboring estates) made
use of the above private alley and maintained and contributed to its upkeep, until sometime in 1983,
when, and over its protests, the private respondent constructed steel gates that precluded unhampered
use.
On December 6, 1984, the petitioner commenced suit for injunction against the private respondent, to
have the gates removed and to allow full access to the easement.
The court a quo shortly issued ex parte an order directing the private respondent to open the gates.
to has been extinguished by merger in the same person of the dominant and servient estates upon the
purchase of the property from its former owner; (2) the petitioner has another adequate outlet; (3) the
petitioner has not paid any indemnity therefor; and (4) the petitioner has not shown that the right-of-way
lies at the point least prejudicial to the servient estate.
The private respondent's opposition notwithstanding, the trial court issued a "temporary writ of
preliminary injunction to continue up to the final termination of the case upon its merits upon the posting
of a P5,000.00 bond by the plaintiff.4 (the petitioner herein).
Thereafter, the respondent corporation answered and reiterated its above defenses.
On April 15, 1986, the petitioner moved for summary judgment and the court a quo ruled on the same
as follows:
In view of the foregoing, this Court finds it unnecessary to try this case on the merit (sic) and hereby
resolve (sic) to grant the plaintiffs motion for summary judgment. (pp. 15-107, Record).5
On January 19, 1987, the trial court rendered judgment against the private respondent, the dispositive
portion of which states:
WHEREFORE, judgment is hereby rendered making permanent the temporary mandatory
injunction, that had been issued against the defendant, and for the defendant to pay the
plaintiff the costs of this suit.
The defendant's counterclaim against the plaintiff is hereby dismissed, for lack of merit.
(Summary Judgment, p. 6).6
The private respondent appealed to the respondent Court of Appeals.
Page 2 of 44
Meanwhile, the private respondent itself went to the Regional Trial Court on a petition for the Servitudes are merely accessories to the tenements of which they form part. 10 Although they are
cancellation of the annotation in question. The court granted cancellation, for which the petitioner possessed of a separate juridical existence, as mere accessories, they can not, however, be
instituted CA-G.R. SP No. 13421 of the respondent Court of Appeals which ordered the restoration of alienated11 from the tenement, or mortgaged separately.12
the annotation "without prejudice [to] the final outcome of7 the private respondent's own appeal (subject
of this petition).
The fact, however, that the alley in question, as an easement, is inseparable from the main lot is no
argument to defeat the petitioner's claims, because as an easement precisely, it operates as a limitation
In reversing the trial court which had, as earlier mentioned, rendered summary judgment, the on the title of the owner of the servient estate, specifically, his right to use (jus utendi).
respondent Court of Appeals held that the summary judgment was improper and that the lower court
erroneously ignored the defense set up by the private respondent that the easement in question had
As the petitioner indeed hastens to point out, the deed itself stipulated that "a portion thereof [of the
been extinguished. According to the Appellate Court, an easement is a mere limitation on ownership
tenement] measuring NINE HUNDRED FOURTEEN SQUARE METERS, more or less, had been
and that it does not impair the private respondent's title, and that since the private respondent had
converted into a private alley for the benefit of the neighboring estates. . ." 13 and precisely, the former
acquired title to the property, "merger" brought about an extinguishment of the easement.
owner, in conveying the property, gave the private owner a discount on account of the easement, thus:

The petitioner submits that the respondent Court of Appeals erred, because the very deed of sale
WHEREAS, to compensate for the foregoing, the parties hereto agreed to adjust the
executed between the private respondent and the previous owner of the property "excluded" the alley in
purchase price from THREE MILLION SEVEN HUNDRED NINETY THOUSAND FOUR
question, and that in any event, the intent of the parties was to retain the "alley" as an easement
HUNDRED FORTY PESOS (P3,790,440.) to THREE MILLION FIVE HUNDRED THREE
notwithstanding the sale.
THOUSAND TWO HUNDRED FORTY PESOS (P3,503,240.00)14

As already stated at the outset, the Court finds merit in the petition.
Hence, and so we reiterate, albeit the private respondent did acquire ownership over the property ––
including the disputed alley –– as a result of the conveyance, it did not acquire the right to close that
There is no question that an easement, as described in the deed of sale executed between the private alley or otherwise put up obstructions thereon and thus prevent the public from using it, because as a
respondent and the seller, had been constituted on the private respondent's property, and has been in servitude, the alley is supposed to be open to the public.
fact annotated at the back of Transfer Certificate of Title No. 128784. Specifically, the same charged
the private respondent as follows: "(6) That the alley shall remain open at all times, and no obstructions
The Court is furthermore of the opinion, contrary to that of the Court of Appeals, that no genuine merger
whatsoever shall be placed thereon; (7) That the owner of the lot on which the alley has been
took place as a consequence of the sale in favor of the private respondent corporation. According to the
constructed shall allow the public to use the same, and allow the City to lay pipes for sewer and
Civil Code, a merger exists when ownership of the dominant and servient estates is consolidated in the
drainage purposes, and shall not [ask] for any indemnity for the use thereof. . ."8 Its act, therefore, of
same person.15 Merger then, as can be seen, requires full ownership of both estates.
erecting steel gates across the alley was in defiance of these conditions and a violation of the deed of
sale, and, of course, the servitude of way.
One thing ought to be noted here, however. The servitude in question is a personal servitude, that is to
say, one constituted not in favor of a particular tenement (a real servitude) but rather, for the benefit of
The Court then is of the opinion that injunction was and is proper and in denying injunctive relief on
the general public.
appeal, the respondent Appellate Court committed an error of judgment and law.

Personal servitudes are referred to in the following article of the Civil Code:
It is hardly the point, as the Court of Appeals held, that the private respondent is the owner of the
portion on which the right-of-way had been established and that an easement can not impair ownership.
The petitioner is not claiming the easement or any part of the property as its own, but rather, it is Art. 614. Servitudes may also be established for the benefit of a community, or of one or
seeking to have the private respondent respect the easement already existing thereon. The petitioner is more persons to whom the encumbered estate does not belong.16
moreover agreed that the private respondent has ownership, but that nonetheless, it has failed to
observe the limitation or encumbrance imposed on the same
In a personal servitude, there is therefore no "owner of a dominant tenement" to speak of, and the
easement pertains to persons without a dominant estate, 17 in this case, the public at large.
There is therefore no question as to ownership. The question is whether or not an easement exists on
the property, and as we indicated, we are convinced that an easement exists.
Merger, as we said, presupposes the existence of a prior servient-dominant owner relationship, and the
termination of that relation leaves the easement of no use. Unless the owner conveys the property in
It is true that the sale did include the alley. On this score, the Court rejects the petitioner's contention favor of the public –– if that is possible –– no genuine merger can take place that would terminate a
that the deed of sale "excluded" it, because as a mere right-of-way, it can not be separated from the personal easement.
tenement and maintain an independent existence. Thus:
For this reason, the trial court was not in error in rendering summary judgment, and insofar as the
Art. 617. Easements are inseparable from the estate to which they actively or passively respondent Court of Appeals held that it (the trial court) was in error, the Court of Appeals is in error.
belong.9

Page 3 of 44
Summary judgments under Rule 34 of the Rules of Court are proper where there is no genuine issue as
to the existence of a material fact, and the facts appear undisputed based on the pleadings,
depositions, admissions, and affidavits of record.18 In one case, this Court upheld a decision of the trial
court rendered by summary judgment on a claim for money to which the defendant interposed the
defense of payment but which failed to produce receipts.19We held that under the circumstances, the
defense was not genuine but rather, sham, and which justified a summary judgment. In another case,
we rejected the claim of acquisitive prescription over registered property and found it likewise to be
sham, and sustained consequently, a summary judgment rendered because the title challenged was
covered by a Torrens Certificate and under the law, Torrens titles are imprescriptible.20
We also denied reconveyance in one case and approved a summary judgment rendered thereon, on
the ground that from the records, the plaintiffs were clearly guilty of laches having failed to act until after
twenty-seven years.21 We likewise allowed summary judgment and rejected contentions of economic
hardship as an excuse for avoiding payment under a contract for the reason that the contract imposed
liability under any and all conditions.22
In the case at bar, the defense of merger is, clearly, not a valid defense, indeed, a sham one, because
as we said, merger is not possible, and secondly, the sale unequivocally preserved the existing
easement. In other words, the answer does not, in reality, tender any genuine issue on a material fact
and can not militate against the petitioner's clear cause of action.
As this Court has held, summary judgments are meant to rid a proceeding of the ritual of a trial where,
from existing records,23 the facts have been established, and trial would be futile.
What indeed, argues against the posturing of the private respondent –– and consequently, the
challenged holding of the respondent Court of Appeals as well –– is the fact that the Court of Appeals
itself had rendered judgment, in its CA-G.R. No. 13421, entitled Solid Manila Corporation v. Ysrael, in
which it nullified the cancellation of the easement annotated at the back of the private respondent's
certificate of title ordered by Judge Ysrael in LRC Case No. 273. As the petitioner now in fact insists,
the Court of Appeals' judgment, which was affirmed by this Court in its Resolution dated December 14,
1988, in G.R. No. 83540, is at least, the law of the case between the parties, as "law of the case" is
known in law, e.g.:
xxx xxx xxx
Law of the case has been defined as the opinion delivered on a former appeal. More
specifically, it means that whatever is once irrevocably established as the controlling legal
rule of decision between the same parties in the same case continues to be the law of the
case, whether correct on general principles or not, so long as the facts on which such
decision was predicated continue to be the facts of the case before the court. (21 C.J.S. 330)
(Emphasis supplied).
It may be stated as a rule of general application that, where the evidence on a second or
succeeding appeal is substantially the same as that on the first or preceding appeal, all
matters, questions, points, or issues adjudicated on the prior appeal are the law of the case
on all subsequent appeals and will not be considered or readjudicated therein. (5 C.J.S.
1267) (Emphasis supplied.)
In accordance with the general rule stated in Section 1821, where, after a definite
determination, the court has remanded the cause for further action below, it will refuse to
examine question other than those arising subsequently to such determination and remand,
or other than the propriety of the compliance with its mandate; and if the court below has
proceeded in substantial conformity to the directions of the appellate court, its action will not
be questioned on a second appeal.
As a general rule a decision on a prior appeal of the same case is held to be the law of the
case whether that decision is right or wrong, the remedy of the party deeming himself
aggrieved being to seek a rehearing. (5 C.J.S. 1276-77). (Emphasis supplied.)
Questions necessarily involved in the decision on a former appeal will be regarded as the law
of the case on a subsequent appeal, although the questions are not expressly treated in the
opinion of the court, as the presumption is that all the facts in the case bearing on the point
decided have received due consideration whether all or none of them are mentioned in the
opinion. (5 C.J.S. 1286-87). (Emphasis supplied.)24
CA-G.R. No. 13421 is the law of the case because clearly, it was brought to determine the rights of the
parties regarding the easement, subject of the controversy in this case, although as a petition for
"cancellation of annotation" it may have, at a glance, suggested a different cause of action.
And for reasons of fair play, the private respondent can not validly reject CA-G.R. No. 13421 as the law
of the case, after all, it was the one that initiated the cancellation proceedings with the Regional Trial
Court in LRC No. 273 that precipitated that appeal. In the second place, the proceedings for
cancellation of annotation was in fact meant to preempt the injunction decreed by the lower court in this
case. Plainly and simply, the private respondent is guilty of forum-shopping, as we have described the
term:
xxx xxx xxx
There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party
seeks a favorable opinion (other than by appeal or certiorari) in another. The principle applies
not only with respect to suits filed in the courts but also in connection with litigations
commenced in the courts while an administrative proceeding is pending, as in this case, in
order to defeat administrative processes and in anticipation of an unfavorable administrative
ruling and a favorable court ruling. This is specially so, as in this case, where the court in
which the second suit was brought, has no jurisdiction. 25
to which contempt is a penalty.26
As it happened, in its effort to shop for a friendly forum, the private respondent found an unfriendly court
and it can not be made to profit from its act of malpractice by permitting it to downgrade its finality and
deny its applicability as the law of the case.
As a personal servitude, the right-of-way in question was established by the will of the owner.
In the interesting case of North Negros Sugar Co., Inc. v. Hidalgo,27 this Court, speaking through
Justice Claro Recto, declared that a personal servitude (also a right of way in that case) is established
by the mere "act"28 of the landowner, and is not "contractual in the nature,"29 and a third party (as the
petitioner herein is a third party) has the personality to claim its benefits. In his separate opinion,
however, Justice Jose Laurel maintained that a personal or voluntary servitude does require a contract
and that "[t]he act of the plaintiff in opening the private way here involved did not constitute an offer . . .
"30 and "[t]here being no offer, there could be no acceptance; hence no contract." 31
Page 4 of 44
The Court sees no need to relive the animated exchanges between two legal titans (they would contend
even more spiritedly in the "larger" world of politics) to whom present scholars perhaps owe their
erudition and who, because of the paths they have taken, have shaped history itself; after all, and
coming back to the case at bar, it is not disputed that an easement has been constituted, whereas it
was disputed in North Negros' case. Rather, the question is whether it is still existing or whether it has
been extinguished. As we held, our findings is that it is in existence and as a consequence, the private
respondent can not bar the public, by erecting an obstruction on the alley, from its use.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals is SET ASIDE and the
decision of the Regional Trial Court is hereby REINSTATED. The petitioner and its counsel are hereby
required to SHOW CAUSE why they should not be punished for contempt of court, and also
administratively dealt with in the case of counsel, for forum shopping.
IT IS SO ORDERED.
G.R. No. 137882 February 04, 2005
SPS. ELIZABETH DE LA CRUZ and ALFREDO DE LA CRUZ, petitioners,
vs.
OLGA RAMISCAL represented by ENRIQUE MENDOZA, Respondent.
DECISION
CHICO-NAZARIO, J.:
This petition for review assails (1) the Resolution1 dated 11 September 1998 of the Court of Appeals
which dismissed the appeal filed by petitioners from the Decision dated 31 July 1997 of the Regional
Trial Court (RTC), Branch 91, Quezon City, for Demolition of Illegally Constructed Structure, and (2) the
Resolution2 dated 05 March 1999 denying the subsequent motion for reconsideration.
The following facts, as recapitulated by the trial court, are undisputed.
Respondent Olga Ramiscal is the registered owner of a parcel of land located at the corner of 18th
Avenue and Boni Serrano Avenue, Murphy, Quezon City, covered by Transfer Certificate of Title (TCT)
No. 300302 of the Register of Deeds for Quezon City.3 Petitioners SPS. ELIZABETH and ALFREDO DE
LA CRUZ are occupants of a parcel of land, with an area of eighty-five (85) square meters, located at
the back of Ramiscal’s property, and covered by TCT No. RT-56958 (100547) in the name of
Concepcion de la Peña, mother of petitioner Alfredo de la Cruz.4
The subject matter of this case is a 1.10-meter wide by 12.60-meter long strip of land owned by
respondent which is being used by petitioners as their pathway to and from 18th Avenue, the nearest
public highway from their property. Petitioners had enclosed the same with a gate, fence, and roof. 5
In 1976, respondent leased her property, including the building thereon, to Phil. Orient Motors. Phil.
Orient Motors also owned a property adjacent to that of respondent’s. In 1995, Phil. Orient Motors sold
its property to San Benito Realty. After the sale, Engr. Rafael Madrid prepared a relocation survey and
location plan for both contiguous properties of respondent and San Benito Realty. It was only then that
respondent discovered that the aforementioned pathway being occupied by petitioners is part of her
property.6
Through her lawyer, respondent immediately demanded that petitioners demolish the structure
constructed by them on said pathway without her knowledge and consent. As her letter dated 18
February 1995 addressed to petitioners went unheeded, the former referred the matter to
the Barangay for conciliation proceedings, but the parties arrived at no settlement. Hence, respondent
filed this complaint with the RTC in Civil Case No. Q-95-25159, seeking the demolition of the structure
allegedly illegally constructed by petitioners on her property. Respondent asserted in her complaint that
petitioners have an existing right of way to a public highway other than the current one they are using,
which she owns. She prayed for the payment of damages.7
In support of the complaint, respondent presented TCT No. RT-56958 (100547) covering the property
denominated as Lot 1-B in the name of Concepcion de la Peña, mother of petitioner herein Alfredo de
la Cruz. The aforesaid TCT reveals that a portion of Lot 1-B, consisting of 85 square meters and
denominated as Lot 1-B-2, is being occupied by petitioners. To prove that petitioners have an existing
right of way to a public highway other than the pathway which respondent owns, the latter adduced in
evidence a copy of the plan of a subdivision survey for Concepcion de la Peña and Felicidad Manalo
prepared in 1965 and subdivision plan for Concepcion de la Peña prepared in 1990. These documents
establish an existing 1.50-meter wide alley, identified as Lot 1-B-1, on the lot of Concepcion de la Peña,
which serves as passageway from the lot being occupied by petitioners (Lot 1-B-2), to Boni Serrano
Avenue.8
On the other hand, petitioners, in their Answer, admitted having used a 1.10-meter wide by 12.60-meter
long strip of land on the northern side of respondent’s property as their pathway to and from 18th
Avenue, the nearest public highway from their property, but claimed that such use was with the
knowledge of respondent.9
Petitioners alleged in their Answer that in 1976, respondent initiated the construction on her property of
a motor shop known as Phil. Orient Motors and they, as well as the other occupants of the property at
the back of respondent’s land, opposed the construction of the perimeter wall as it would enclose and
render their property without any adequate ingress and egress. They asked respondent to give them a
1.50-meter wide and 40.15-meter long easement on the eastern side of her property, which would be
reciprocated with an equivalent 1.50-meter wide easement by the owner of another adjacent estate.
Respondent did not want to give them the easement on the eastern side of her property, towards Boni
Serrano Avenue but, instead, offered to them the said 1.10-meter wide passageway along the northern
side of her property towards 18th Avenue, which offer they had accepted. 10
Petitioners additionally averred in their Answer that they were made to sign a document stating that
they waived their right to ask for an easement along the eastern side of respondent’s property towards
Boni Serrano Avenue, which document was among those submitted in the application for a building
permit by a certain "Mang Puling,"11 the person in charge of the construction of the motor shop. That
was why, according to petitioners, the perimeter wall on respondent’s property was constructed at a
distance of 1.10-meters offset and away from respondent’s property line to provide a passageway for
them to and from 18th Avenue. They maintained in their Answer that respondent knew all along of the
1.10-meter pathway and had, in fact, tolerated their use thereof.
On 31 July 1997, the RTC handed down a decision,12 giving probative weight to the evidence adduced
by respondent. The decretal portion enunciates:
Plaintiff’s claim for moral damages must be denied as no evidence in support thereof was presented at
all by her. Consequently, plaintiff is not entitled to exemplary damages.13 However, for having been
compelled to file this suit and incur expenses to protect her interest, plaintiff is entitled to an attorney’s
fees in the amount of P10,000.00.
Page 5 of 44
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and ordering
the defendants to demolish the structure built by them along the pathway on the eastern side of
plaintiff’s property towards 18th Avenue, Murphy, Quezon City and to pay [the] plaintiff the amount of
P10,000.00 as and by way of attorney’s fees.
Costs against the defendants.14
The Court of Appeals dismissed the appeal filed by petitioners from the RTC decision for failure to file
brief within the reglementary period. The fallo of the Court of Appeals decision, provides:
WHEREFORE, for failure of the defendants-appellants to file brief within the reglementary period, the
instant appeal is hereby DISMISSED pursuant to Section 1(e), Rule 50 of the 1997 Rules of Civil
Procedure.
The Compliance/Explanation filed by defendants-appellants, submitting the Letter-withdrawal of Atty.
Judito Tadeo addressed to the said defendants-appellants is NOTED.
Let a copy of this Resolution be likewise served on defendants-appellants themselves.15
The motion for reconsideration filed by petitioners met the same fate in the Resolution of the Court of
Appeals dated 05 March 1999.
Petitioners now lay their cause before us through the present petition for review, raising the following
issues:
A. WHETHER OR NOT THE DENIAL OF THE COURT OF APPEALS OF THE PETITIONERS’
MOTION FOR RECONSIDERATION OF ITS RESOLUTION DATED SEPTEMBER 11, 1998 IS
SANCTIONED BY THE RULINGS AND LEGAL PRONOUNCEMENTS OF THE HONORABLE
SUPREME COURT?
B. WHETHER OR NOT THE PETITIONERS ARE NONETHELESS ENTITLED TO A LEGAL
EASEMENT OF RIGHT OF WAY, ASSUMING NO VOLUNTARY RIGHT OF WAY WAS GRANTED
THEM BY THE RESPONDENT?
C. WHETHER OR NOT OPERATIVE EQUITABLE PRINCIPLE OF LACHES TO BAR THE
RESPONDENT FROM DEPRIVING THE PETITIONERS CONTINUED USE OF THE SAID RIGHT OF
WAY?16
The issues rivet on the adjective as well as on the substantive law, specifically: (1) whether or not the
Court Appeals erred in dismissing the appeal filed by petitioners for failure to file appellants’ brief on
time, (2) whether or not petitioners are entitled to a voluntary or legal easement of right of way, and (3)
whether or not respondent is barred by laches from closing the right of way being used by petitioners.
On the first issue, petitioners assert positively that the petition was filed on time on 30 April 1998, which
is well within the 45-day period reckoned from 17 March 1998, when the secretary of their former
counsel received the notice to file appeal.
Petitioners’ arguments fail to persuade us.
Press earnestly as they would, the evidence on record, nevertheless, evinces contrariety to petitioners’
assertion that they have beat the 45-day period to file appellants’ brief before the appellate court. It is
clear from the registry return receipt card17 that the Notice to File Brief was received on 12 March 1998
by one May Tadeo from the Office of Atty. Judito Angelo C. Tadeo, petitioners’ previous counsel. Thus,
on 30 April 1998, when their new counsel entered his appearance and at the same time filed an
appellants’ brief, the 45 days have run out. For failure of petitioners to file brief within the reglementary
period, the Court of Appeals correctly dismissed said appeal pursuant to Section 1(b), Rule 50 of the
1997 Rules of Civil Procedure.18
Neither can the members of this Court lend credence to petitioners’ contention that the written note of
Atty. Tadeo’s office on the face of the Order reads that the said office received it on 17 March 1998. 19
It is a rule generally accepted that when the service is to be made by registered mail, the service is
deemed complete and effective upon actual receipt by the addressee as shown by the registry return
card.20 Thus, between the registry return card and said written note, the former commands more weight.
Not only is the former considered as the official record of the court, but also as such, it is presumed to
be accurate unless proven otherwise, unlike a written note or record of a party, which is often self-
serving and easily fabricated. Further, this error on the part of the secretary of the petitioners’ former
counsel amounts to negligence or incompetence in record-keeping, which is not an excuse for the delay
of filing.
Petitioners’ justification that their former counsel belatedly transmitted said order to them only on 20
March 1998 is not a good reason for departing from the established rule. It was the responsibility of
petitioners and their counsel to devise a system for the receipt of mail intended for them. 21 Rules on
procedure cannot be made to depend on the singular convenience of a party.
Petitioners next take the stand that even assuming the brief was filed late, the Court of Appeals still
erred in dismissing their petition in light of the rulings of this Court allowing delayed appeals on
equitable grounds.22 Indeed, in certain special cases and for compelling causes, the Court has
disregarded similar technical flaws so as to correct an obvious injustice made.23 In this case, petitioners,
however, failed to demonstrate any justifiable reasons or meritorious grounds for a liberal application of
the rules. We must remind petitioners that the right to appeal is not a constitutional, natural or inherent
right - it is a statutory privilege and of statutory origin and, therefore, available only if granted or
provided by statute.24 Thus, it may be exercised only in the manner prescribed by, and in accordance
with, the provisions of the law.25
Anent the second issue, an easement or servitude is a real right, constituted on the corporeal
immovable property of another, by virtue of which the owner has to refrain from doing, or must allow
someone to do, something on his property, for the benefit of another thing or person. 26 The statutory
basis for this right is Article 613, in connection with Article 619, of the Civil Code, which states:
Art. 613. An easement or servitude is an encumbrance imposed upon an immovable for the benefit of
another immovable belonging to a different owner.
The immovable in favor of which the easement is established is called the dominant estate; that which
is subject thereto, the servient estate.
Art. 619. Easements are established either by law or by the will of the owners. The former are called
legal and the latter voluntary easements.
Page 6 of 44
Did respondent voluntarily accord petitioners a right of way?
We rule in the negative. Petitioners herein failed to show by competent evidence other than their bare
claim that they and their tenants, spouses Manuel and Cecilia Bondoc and Carmelino Masangkay,
entered into an agreement with respondent, through her foreman, Mang Puling, to use the pathway to
18th Avenue, which would be reciprocated with an equivalent 1.50-meter wide easement by the owner
of another adjacent estate. The hands of this Court are tied from giving credence to petitioners’ self-
serving claim that such right of way was voluntarily given them by respondent for the following reasons:
First, petitioners were unable to produce any shred of document evidencing such agreement. The Civil
Code is clear that any transaction involving the sale or disposition of real property must be in
writing.27 Thus, the dearth of corroborative evidence opens doubts on the veracity of the naked
assertion of petitioners that indeed the subject easement of right of way was a voluntary grant from
respondent. Second, as admitted by the petitioners, it was only the foreman, Mang Puling, who talked
with them regarding said pathway on the northern side of respondent’s property. Thus, petitioner
Elizabeth de la Cruz testified that she did not talk to respondent regarding the arrangement proposed to
them by Mang Puling despite the fact that she often saw respondent.28 It is, therefore, foolhardy for
petitioners to believe that the alleged foreman of respondent had the authority to bind the respondent
relating to the easement of right of way. Third, their explanation that said Mang Puling submitted said
agreement to the Quezon City Engineer’s Office, in connection with the application for a building permit
but said office could no longer produce a copy thereof, does not inspire belief. As correctly pointed out
by the trial court,29 petitioners should have requested a subpoena duces tecum from said court to
compel the Quezon City Engineer’s Office to produce said document or to prove that such document is
indeed not available.
The fact that the perimeter wall of the building on respondent’s property was constructed at a distance
of 1.10 meters away from the property line, does not by itself bolster the veracity of petitioners’ story
that there was indeed such an agreement. Further, as noted by the trial court, it was Atty. Federico R.
Onandia, counsel of Phil. Orient Motors, who wrote petitioners on 25 August 1994 advising them that
his client would close the pathway along 18th Avenue, thereby implying that it was Phil. Orient Motors,
respondent’s lessee, which tolerated petitioners’ use of said pathway. 30
Likewise futile are petitioners’ attempts to show that they are legally entitled to the aforesaid pathway
under Article 649 of the Civil Code, to wit:
Art. 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable,
which is surrounded by other immovables pertaining to other persons, and without adequate outlet to a
public highway, is entitled to demand a right of way through the neighboring estates, after payment of
the proper indemnity.
The conferment of a legal easement of right of way under Article 649 is subject to proof of the following
requisites: (1) it is surrounded by other immovables and has no adequate outlet to a public highway; (2)
payment of proper indemnity; (3) the isolation is not the result of its own acts; (4) the right of way
claimed is at the point least prejudicial to the servient estate; and (5) to the extent consistent with the
foregoing rule, where the distance from the dominant estate to a public highway may be the
shortest.31 The first three requisites are not obtaining in the instant case.
Contrary to petitioners’ contention, the trial court found from the records that Concepcion de la Peña
had provided petitioners with an adequate ingress and egress towards Boni Serrano Avenue. The trial
court, gave weight to TCT No. RT-56958 (100547) covering the property denominated as Lot 1-B in the
name of Concepcion de la Peña, mother of petitioner herein Alfredo de la Cruz. Said TCT indicates that
a portion of Lot 1-B, consisting of 85 square meters and denominated as Lot 1-B-2, is the one being
occupied by petitioners.32 In this connection, a copy of the plan of a subdivision survey for Concepcion
de la Peña and Felicidad Manalo prepared in 1965 and subdivision plan for Concepcion de la Peña
prepared in 1990 revealed an existing 1.50-meter wide alley, identified as Lot 1-B-1, on the lot of
Concepcion de la Peña, which serves as passageway from the lot being occupied by petitioners (Lot 1-
B-2) to Boni Serrano Avenue.33 During the trial, petitioner Elizabeth de la Cruz herself admitted
knowledge of the existence of the subdivision plan of Lot 1-B prepared for Concepcion de la Peña by
Engr. Julio Cudiamat in 1990. The Subdivision Plan subdivided Lot 1-B into three portions, namely:
(1) Lot 1-B-1, which is an existing alley, consisting of 59.60 square meters, towards Boni Serrano
Avenue;
(2) Lot 1-B-2, consisting of 85.20 square meters, which is being occupied by petitioners; and
(3) Lot 1-B-3, consisting also of 85.20 square meters, which is being occupied by the sister of petitioner
Alfredo dela Cruz.34
From petitioner Elizabeth de la Cruz’s own admission, Lot 1-B-1 was intended by the owner,
Concepcion de la Peña, to serve as an access to a public highway for the occupants of the interior
portion of her property.35 Inasmuch as petitioners have an adequate outlet to a public highway (Boni
Serrano Avenue), they have no right to insist on using a portion of respondent’s property as pathway
towards 18th Avenue and for which no indemnity was being paid by them.
Petitioner Elizabeth de la Cruz claimed before the trial court that although there was indeed a portion of
land allotted by Concepcion de la Peña to serve as their ingress and egress to Boni Serrano Avenue,
petitioners can no longer use the same because de la Peña had constructed houses on it. As found by
the trial court, the isolation of petitioners’ property was due to the acts of Concepcion de la Peña, who is
required by law to grant a right of way to the occupants of her property. In the trial court’s rationale:
…Article 649 of the Civil Code provides that the easement of right of way is not compulsory if the
isolation of the immovable is due to the proprietor’s own acts. To allow defendants access to plaintiff’s
property towards 18th Avenue simply because it is a shorter route to a public highway, despite the fact
that a road right of way, which is even wider, although longer, was in fact provided for them by
Concepcion de la Peña towards Boni Serrano Avenue would ignore what jurisprudence has
consistently maintained through the years regarding an easement of right of way, that "mere
convenience for the dominant estate is not enough to serve as its basis. To justify the imposition of this
servitude, there must be a real, not a fictitious or artificial necessity for it."… In Francisco vs.
Intermediate Appellate Court, 177 SCRA 527, it was likewise held that a person who had been granted
an access to the public highway through an adjacent estate cannot claim a similar easement in an
alternative location if such existing easement was rendered unusable by the owner’s own act of
isolating his property from a public highway, such as what Concepcion de la Peña allegedly did to her
property by constructing houses on the 1.50 meter wide alley leading to Boni Serrano Avenue. And, if it
were true that defendants had already bought Lot 1-B-2, the portion occupied by them, from
Concepcion de la Peña, then the latter is obliged to grant defendants a right of way without indemnity. 36
We hasten to add that under the above-quoted Article 649 of the Civil Code, it is the owner, or any
person who by virtue of a real right may cultivate or use any immovable surrounded by other immovable
pertaining to other persons, who is entitled to demand a right of way through the neighboring estates. In
this case, petitioners fell short of proving that they are the owners of the supposed dominant estate. Nor
were they able to prove that they possess a real right to use such property. The petitioners claim to
have acquired their property, denominated as Lot 1-B-2, from Concepcion de la Peña, mother of
Page 7 of 44
defendant Alfredo de la Cruz, who owns Lot 1-B-3, an adjacent lot. However, as earlier noted, the trial
court found that the title to both lots is still registered in the name of Concepcion de la Peña under TCT
No. RT-56958 (100547).37 Neither were petitioners able to produce the Deed of Sale evidencing their
alleged purchase of the property from de la Peña. Hence, by the bulk of evidence, de la Peña, not
petitioners, is the real party-in-interest to claim a right of way although, as explained earlier, any action
to demand a right of way from de la Peña’s part will not lie inasmuch as by her own acts of building
houses in the area allotted for a pathway in her property, she had caused the isolation of her property
from any access to a public highway.
On the third issue, petitioners cannot find sanctuary in the equitable principle of laches under the
contention that by sleeping on her right to reclaim the pathway after almost twenty years, respondent
has, in effect, waived such right over the same. It is not just the lapse of time or delay that constitutes
laches. The essence of laches is the failure or neglect, for an unreasonable and unexplained length of
time, to do that which, through due diligence, could or should have been done earlier, thus giving rise to
a presumption that the party entitled to assert it had either abandoned or declined to assert it. 38
The essential elements of laches are: (a) conduct on the part of the defendant, or of one under whom
he claims, giving rise to the situation complained of; (b) delay in asserting complainant’s rights after he
had knowledge of defendant’s acts and after he has had the opportunity to sue; (c) lack of knowledge or
notice by defendant that the complainant will assert the right on which he bases his suit; and (d) injury
or prejudice to the defendant in the event the relief is accorded to the complainant. 39
The second and third elements, i.e., knowledge of defendant's acts and delay in the filing of such suit
are certainly lacking here. As borne by the records, it was only in 1995 that respondent found out that
the pathway being used by petitioners was part of her property when a relocation survey and location
plan of her property and the adjacent land bought by San Benito Realty were prepared. 40 She
immediately demanded petitioners to demolish the structure illegally constructed by them on her
property without her knowledge and consent. As her letter dated 18 February 1995 addressed to
petitioners fell on deaf ears, and as no settlement was arrived at by the parties at the Barangaylevel,
respondent seasonably filed her complaint with the RTC in the same year. 41
Respondent, in her Comment,42 brings the Court’s attention to petitioners’ conversion of the pathway,
subject matter of this case, into a canteen and videoke bar, as shown by the pictures43 showing the
property bearing the signage, "FRED’S44 CANTEEN/VIDEOKE KAMBINGAN." Respondent, likewise,
complains in her Comment about the structures installed by petitioners that encroached on
respondent’s property line as a result of the commercial activities by petitioners on the disputed
property. Petitioners have implicitly admitted this conversion of the property’s use by their silence on the
matter in their Reply45 and Memorandum.46 Such conversion is a telltale sign of petitioners’ veiled
pecuniary interest in asserting a right over the litigated property under the pretext of an innocuous claim
for a right of way.
Viewed from all angles, from the facts and the law, the Court finds no redeeming value in petitioners’
asseverations that merit the reversal of the assailed resolutions.
WHEREFORE, the instant petition is DENIED. The Resolutions dated 11 September 1998 and 5 March
1999 of the Court of Appeals in CA-G.R. SP No. 68216 are AFFIRMED. The Decision dated 31 July
1997 of the Regional Trial Court is likewise UPHELD. Costs against petitioners.
SO ORDERED.
[G.R. No. 124699. July 31, 2003]
BOGO-MEDELLIN MILLING CO., INC., petitioner, vs. COURT OF APPEALS AND HEIRS OF
MAGDALENO VALDEZ SR., respondents.
DECISION
CORONA, J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to annul and set aside
the decision[1] dated November 17, 1995 of the Court of Appeals, Tenth Division, which reversed the
decision[2] dated November 27, 1991 of the Regional Trial Court of Cebu City, Branch IX, which ruled in
favor of herein petitioner, Bogo-Medellin Milling Company, Inc. and dismissed herein private
respondents' complaint for payment of compensation and/or recovery of possession of real property
and damages with application for restraining order or preliminary injunction; and its resolution dated
March 2, 1996 denying petitioner's motion for reconsideration.
The antecedent facts follow.
Magdaleno Valdez, Sr., father of herein private respondents Sergio Valdez, Angelina Valdez-
Novabos, Teresita Argawanon-Mangubat and Daylinda Argawanon-Melendres (hereafter the heirs),
purchased from Feliciana Santillan, on December 9, 1935, a parcel of unregistered land covered by Tax
Declaration No. 3935 with an area of one hectare, 34 ares and 16 centares, located in Barrio
Dayhagon, Medellin, Cebu.[3] He took possession of the property and declared it for tax purposes in his
name.[4]
Prior to the sale, however, the entire length of the land from north to south was already traversed
in the middle by railroad tracks owned by petitioner Bogo-Medellin Milling Co., Inc. (hereafter
Bomedco). The tracks were used for hauling sugar cane from the fields to petitioners sugar mill.
When Magdaleno Valdez, Sr. passed away in 1948, herein private respondents inherited the
land. However, unknown to them, Bomedco was able to have the disputed middle lot which was
occupied by the railroad tracks placed in its name in the Cadastral Survey of Medellin, Cebu in 1965.
The entire subject land was divided into three, namely, Cadastral Lot Nos. 953, 954 and 955. Lot Nos.
953 and 955 remained in the name of private respondents. However, Lot No. 954, the narrow lot where
the railroad tracks lay, was claimed by Bomedco as its own and was declared for tax purposes in its
name. [5]
It was not until 1989 when private respondents discovered the aforementioned claim of Bomedco
on inquiry with the Bureau of Lands. Through their lawyer, they immediately demanded the legal basis
for Bomedco's claim over Cadastral Lot No. 954 but their letter of inquiry addressed to petitioner went
unheeded, as was their subsequent demand for payment of compensation for the use of the land.[6]
On June 8, 1989, respondent heirs filed a Complaint for Payment of Compensation and/or
Recovery of Possession of Real Property and Damages with Application for Restraining
Order/Preliminary Injunction against Bomedco before the Regional Trial Court of Cebu. [7] Respondent
heirs alleged that, before she sold the land to Valdez, Sr. in 1935, Santillan granted Bomedco, in 1929,
a railroad right of way for a period of 30 years. When Valdez, Sr. acquired the land, he respected the
grant. The right of way expired sometime in 1959 but respondent heirs allowed Bomedco to continue
using the land because one of them was then an employee of the company.[8]
In support of the complaint, they presented an ancient document ― an original copy of the deed
of sale written in Spanish and dated December 9, 1935 [9] ― to evidence the sale of the land to
Magdaleno Valdez, Sr.; several original real estate tax receipts [10] including Real Property Tax Receipt
No. 3935[11] dated 1922 in the name of Graciano de los Reyes, husband of Feliciana Santillan, and Real
Property Tax Receipt No. 09491[12] dated 1963 in the name of Magdaleno Valdez, Sr. Magdaleno
Valdez, Jr. also testified for the plaintiffs during the trial.
Page 8 of 44
 On the other hand, Bomedcos principal defense was that it was the owner and possessor of
Cadastral Lot No. 954, having allegedly bought the same from Feliciana Santillan in 1929, prior to the
sale of the property by the latter to Magdaleno Valdez, Sr. in 1935. It also contended that plaintiffs claim
was already barred by prescription and laches because of Bomedcos open and continuous possession
of the property for more than 50 years.
Bomedco submitted in evidence a Deed of Sale[13] dated March 18, 1929; seven real estate tax
receipts[14] for the property covering the period from 1930 to 1985; a 1929 Survey Plan of private land
for Bogo-Medellin Milling Company;[15] a Survey Notification Card;[16] Lot Data Computation for Lot No.
954;[17] a Cadastral Map for Medellin Cadastre[18] as well as the testimonies of Vicente Basmayor,
Geodetic Engineer and property custodian for Bomedco, and Rafaela A. Belleza, Geodetic Engineer
and Chief of the Land Management Services of the DENR, Region VIII.
In its decision dated November 27, 1991, the trial court[19] rejected Bomedco's defense of
ownership on the basis of a prior sale, citing that its evidence a xerox copy of the Deed of Sale dated
March 18, 1929 was inadmissible and had no probative value. Not only was it not signed by the parties
but defendant Bomedco also failed to present the original copy without valid reason pursuant to Section
4, Rule 130 of the Rules of Court.[20]
Nonetheless, the trial court held that Bomedco had been in possession of Cadastral Lot No. 954
in good faith for more than 10 years, thus, it had already acquired ownership of the property through
acquisitive prescription under Article 620 of the Civil Code. It explained:
Under Article 620 of the Civil Code, CONTINUOUS and APPARENT easements can be acquired by prescription
after ten (10) years. The apparent characteristic of the questioned property being used by defendant as an
easement is no longer at issue, because plaintiffs themselves had acknowledged that the existence of the railway
tracks of defendant Bomedco was already known by the late Magdaleno Valdez, herein plaintiffs predecessor-in-
interest, before the late Magdaleno Valdez purchased in 1935 from the late Feliciana Santillan the land described
in the Complaint where defendants railway tracks is traversing [sic] (TSN of February 5, 1991, pp. 7-8). As to the
continuity of defendants use of the strip of land as easement is [sic] also manifest from the continuous and
uninterrupted occupation of the questioned property from 1929 up to the date of the filing of the instant
Complaint. In view of the defendants UNINTERRUPTED possession of the strip of land for more than fifity (50)
years, the Supreme Courts ruling in the case of Ronquillo, et al. v. Roco, et al. (103 Phil 84) is not applicable. This
is because in said case the easement in question was a strip of dirt road whose possession by the dominant estate
occurs only everytime said dirt road was being used by the dominant estate. Such fact would necessarily show that
the easements possession by the dominant estate was never continuous. In the instant case however, there is clear
continuity of defendants possession of the strip of land it had been using as railway tracks. Because the railway
tracks which defendant had constructed on the questioned strip of land had been CONTINUOUSLY occupying
said easement. Thus, defendant Bomedcos apparent and continuous possession of said strip of land in good faith
for more than ten (10) years had made defendant owner of said strip of land traversed by its railway
tracks. Because the railway tracks which defendant had constructed on the questioned strip of land had been
continuously occupying said easement [sic].Thus, defendant Bomedcos apparent and continuous possession of
said strip of land in good faith for more than ten (10) years had made defendant owner of said strip of land
traversed by its railway tracks.
Respondent heirs elevated the case to the Court of Appeals which found that Bomedco did not
acquire ownership over the lot. It consequently reversed the trial court. In its decision dated November
17, 1995, the appellate court held that Bomedco only acquired an easement of right of way
by unopposed and continuous use of the land, but not ownership, under Article 620 of the Civil Code.
The appellate court further ruled that Bomedcos claim of a prior sale to it by Feliciana Santillan
was untrue. Its possession being in bad faith, the applicable prescriptive period in order to acquire
ownership over the land was 30 years under Article 1137 of the Civil Code. Adverse possession of the
property started only in 1965 when Bomedco registered its claim in the cadastral survey of Medellin.
Since only 24 years from 1965 had elapsed when the heirs filed a complaint against Bomedco in 1989,
Bomedcos possession of the land had not yet ripened into ownership.
And since there was no showing that respondent heirs or their predecessor-in-interest was ever
paid compensation for the use of the land, the appellate court awarded compensation to them, to be
computed from the time of discovery of the adverse acts of Bomedco.
Its motion for reconsideration having been denied by the appellate court in its resolution dated
March 22, 1996, Bomedco now interposes before us this present appeal by certiorari under Rule 45,
assigning the following errors:
I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT REVERSED AND SET ASIDE
THE TRIAL COURTS DECISION DISMISSING PRIVATE RESPONDENTS COMPLAINT.
II
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT ORDERED THE PETITIONER
TO PAY THE PRIVATE RESPONDENT THE REASONABLE VALUE OF LOT 954 AND THE AMOUNT
OF TEN THOUSAND (P10,000.00) PESOS AS REASONABLE ATTORNEYS FEES.
Petitioner Bomedco reiterates its claim of ownership of the land through extraordinary acquisitive
prescription under Article 1137 of the Civil Code and laches to defeat the claim for compensation or
recovery of possession by respondent heirs. It also submits a third ground originally tendered by the
trial court ― acquisition of the easement of right of way by prescriptionunder Article 620 of the Civil
Code.
Extraordinary Acquisitive Prescription
Under Art. 1137 of the Civil Code
Petitioners claim of ownership through extraordinary acquisitive prescription under Article 1137 of
the Civil Code cannot be sustained.
There is no dispute that the controversial strip of land has been in the continuous possession of
petitioner since 1929. But possession, to constitute the foundation of a prescriptive right, must be
possession under a claim of title, that is, it must be adverse. [21] Unless coupled with the element of
hostility towards the true owner, possession, however long, will not confer title by prescription. [22]
After a careful review of the records, we are inclined to believe the version of respondent heirs
that an easement of right of way was actually granted to petitioner for which reason the latter was able
to occupy Cadastral Lot No. 954. We cannot disregard the fact that, for the years 1930, 1937, 1949,
1962 and 1963, petitioner unequivocally declared the property to be a central railroad right of way or
sugar central railroad right of way in its real estate tax receipts when it could have declared it to be
industrial land as it did for the years 1975 and 1985.[23]Instead of indicating ownership of the lot, these
receipts showed that all petitioner had was possession by virtue of the right of way granted to it. Were it
not so and petitioner really owned the land, petitioner would not have consistently used the phrases
central railroad right of way and sugar central railroad right of way in its tax declarations until 1963.
Certainly an owner would have found no need for these phrases. A person cannot have an easement
on his own land, since all the uses of an easement are fully comprehended in his general right of
ownership.[24]
While it is true that, together with a persons actual and adverse possession of the land, tax
declarations constitute strong evidence of ownership of the land occupied by him, [25] this legal precept
does not apply in cases where the property is declared to be a mere easement of right of way.
Page 9 of 44
 An easement or servitude is a real right, constituted on the corporeal immovable property of
another, by virtue of which the owner has to refrain from doing, or must allow someone to do,
something on his property, for the benefit of another thing or person. It exists only when the servient
and dominant estates belong to two different owners. It gives the holder of the easement an incorporeal
interest on the land but grants no title thereto. Therefore, an acknowledgment of the easement is an
admission that the property belongs to another.[26]
Having held the property by virtue of an easement, petitioner cannot now assert that its
occupancy since 1929 was in the concept of an owner. Neither can it declare that the 30-year period of
extraordinary acquisitive prescription started from that year.
Petitioner, however, maintains that even if a servitude was merely imposed on the property in its
favor, its possession immediately became adverse to the owner in the late 1950s when the grant was
alleged by respondent heirs to have expired. It stresses that, counting from the late 1950s (1959 as
found by the trial court), the 30-year extraordinary acquisitive prescription had already set in by the time
respondent heirs made a claim against it in their letters dated March 1 and April 6, 1989.
We do not think so. The mere expiration of the period of easement in 1959 did not convert
petitioners possession into an adverse one. Mere material possession of land is not adverse
possession as against the owner and is insufficient to vest title, unless such possession is accompanied
by the intent to possess as an owner.[27] There should be a hostile use of such a nature and exercised
under such circumstances as to manifest and give notice that the possession is under a claim of right.
In the absence of an express grant by the owner, or conduct by petitioner sugar mill from which
an adverse claim can be implied, its possession of the lot can only be presumed to have continued in
the same character as when it was acquired (that is, it possessed the land only by virtue of the original
grant of the easement of right of way),[28] or was by mere license or tolerance of the owners (respondent
heirs).[29] It is a fundamental principle of law in this jurisdiction that acts of possessory character
executed by virtue of license or tolerance of the owner, no matter how long, do not start the running of
the period of prescription.[30]
After the grant of easement expired in 1959, petitioner never performed any act incompatible with
the ownership of respondent heirs over Cadastral Lot No. 954. On the contrary, until 1963, petitioner
continued to declare the sugar central railroad right of way in its realty tax receipts, thereby doubtlessly
conceding the ownership of respondent heirs. Respondents themselves were emphatic that they simply
tolerated petitioners continued use of Cadastral Lot No. 954 so as not to jeopardize the employment of
one of their co-heirs in the sugar mill of petitioner.[31]
The only time petitioner assumed a legal position adverse to respondents was when it filed a
claim over the property in 1965 during the cadastral survey of Medellin. Since then (1965) and until the
filing of the complaint for the recovery of the subject land before the RTC of Cebu in 1989, only 24
years had lapsed. Since the required 30-year extraordinary prescriptive period had not yet been
complied with in 1989, petitioner never acquired ownership of the subject land.
Laches
Neither can petitioner find refuge in the principle of laches. It is not just the lapse of time or delay
that constitutes laches. The essence of laches is the failure or neglect, for an unreasonable and
unexplained length of time, to do that which, through due diligence, could or should have been done
earlier, thus giving rise to a presumption that the party entitled to assert it had either abandoned or
declined to assert it.[32]
Its essential elements are: (a) conduct on the part of the defendant, or of one under whom he
claims, giving rise to the situation complained of; (b) delay in asserting complainants rights after he had
knowledge of defendants acts and after he has had the opportunity to sue; (c) lack of knowledge or
notice by defendant that the complainant will assert the right on which he bases his suit; and (d) injury
or prejudice to the defendant in the event the relief is accorded to the complainant.[33]
The second element (which in turn has three aspects) is lacking in the case at bar. These aspects
are: (a) knowledge of defendant's action, (b) opportunity to sue defendant after obtaining such
knowledge and (c) delay in the filing of such suit.[34]
Records show that respondent heirs only learned about petitioners claim on their property when
they discovered the inscription for the cadastral survey in the records of the Bureau of Lands in 1989.
Respondents lost no time in demanding an explanation for said claim in their letters to the petitioner
dated March 1, 1989 and April 6, 1989. When petitioner ignored them, they instituted their complaint
before the Regional Trial Court of Cebu City on June 8, 1989.
Petitioners reliance on Caro vs. Court of Appeals [35] and Vda. de Alberto vs. Court of
Appeals [36] is misplaced. There, laches was applied to bar petitioners from questioning the ownership of
the disputed properties precisely because they had knowledge of the adverse claims on their properties
yet tarried for an extraordinary period of time before taking steps to protect their rights.
Further, there is no absolute rule on what constitutes laches. It is a rule of equity and applied not
to penalize neglect or sleeping on ones rights but rather to avoid recognizing a right when to do so
would result in a clearly unfair situation. The question of laches is addressed to the sound discretion of
the court and each case must be decided according to its particular circumstances.[37] It is the better
rule that courts, under the principle of equity, should not be guided or bound strictly by the statute of
limitations or the doctrine of laches if wrong or injustice will result.
It is clear that petitioner never acquired ownership over Cadastral Lot No. 954 whether by
extraordinary acquisitive prescription or by laches.
Acquisition of Easement of Right of Way By
Prescription Under Art. 620 of the Civil Code
Petitioner contends that, even if it failed to acquire ownership of the subject land, it nevertheless
became legally entitled to the easement of right of way over said land by virtue of prescription under
Article 620 of the Civil Code:
Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years.
The trial court and the Court of Appeals both upheld this view for the reason that the railroad right
of way was, according to them, continuous and apparent in nature. The more or less permanent
railroad tracks were visually apparent and they continuously occupied the subject strip of land from
1959 (the year the easement granted by Feliciana Santillan to petitioner expired). Thus, with the lapse
of the 10-year prescriptive period in 1969, petitioner supposedly acquired the easement of right of way
over the subject land.
Following the logic of the courts a quo, if a road for the use of vehicles or the passage of persons
is permanently cemented or asphalted, then the right of way over it becomes continuous in nature. The
reasoning is erroneous.
Under civil law and its jurisprudence, easements are either continuous or discontinuous according
to the manner they are exercised, not according to the presence of apparent signs or physical
indications of the existence of such easements. Thus, an easement is continuous if its use is, or may
be, incessant without the intervention of any act of man, like the easement of drainage;[38] and it is
discontinuous if it is used at intervals and depends on the act of man, like the easement of right of
way.[39]
Page 10 of 44
 The easement of right of way is considered discontinuous because it is exercised only if a person
passes or sets foot on somebody elses land. Like a road for the passage of vehicles or persons, an
easement of right of way of railroad tracks is discontinuous because the right is exercised only if and
when a train operated by a person passes over another's property. In other words, the very exercise of
the servitude depends upon the act or intervention of man which is the very essence of discontinuous
easements.
The presence of more or less permanent railroad tracks does not in any way convert the nature of
an easement of right of way to one that is continuous. It is not the presence of apparent signs or
physical indications showing the existence of an easement, but rather the manner of exercise thereof,
that categorizes such easement into continuous or discontinuous.The presence of physical or visual
signs only classifies an easement into apparent or non-apparent. Thus, a road (which reveals a right of
way) and a window (which evidences a right to light and view) are apparent easements, while an
easement of not building beyond a certain height is non-apparent.[40]
In Cuba, it has been held that the existence of a permanent railway does not make the right of
way a continuous one; it is only apparent. Therefore, it cannot be acquired by prescription.[41] In
Louisiana, it has also been held that a right of passage over another's land cannot be claimed by
prescription because this easement is discontinuous and can be established only by title.[42]
In this case, the presence of railroad tracks for the passage of petitioners trains denotes the
existence of an apparent but discontinuous easement of right of way. And under Article 622 of the Civil
Code, discontinuous easements, whether apparent or not, may be acquired only by title. Unfortunately,
petitioner Bomedco never acquired any title over the use of the railroad right of way whether by law,
donation, testamentary succession or contract. Its use of the right of way, however long, never resulted
in its acquisition of the easement because, under Article 622, the discontinuous easement of a railroad
right of way can only be acquired by title and not by prescription.
To be sure, beginning 1959 when the original 30-year grant of right of way given to petitioner
Bomedco expired, its occupation and use of Cadastral Lot No. 954 came to be by mere tolerance of the
respondent heirs. Thus, upon demand by said heirs in 1989 for the return of the subject land and the
removal of the railroad tracks, or, in the alternative, payment of compensation for the use thereof,
petitioner Bomedco which had no title to the land should have returned the possession thereof or
should have begun paying compensation for its use.
But when is a party deemed to acquire title over the use of such land (that is, title over the
easement of right of way)? In at least two cases, we held that if: (a) it had subsequently entered into
a contractual right of way with the heirs for the continued use of the land under the principles of
voluntary easements or (b) it had filed a case against the heirs for conferment on it of a legal easement
of right of way under Article 629 of the Civil Code, then title over the use of the land is deemed to exist.
The conferment of a legal easement of right of way under Article 629 is subject to proof of the following:
(1) it is surrounded by other immovables and has no adequate outlet to a public highway;
(2) payment of proper indemnity;
(3) the isolation is not the result of its own acts; and
(4) the right of way claimed is at the point least prejudicial to the servient estate, and, insofar as
consistent with this rule, the distance from the dominant estate to the highway is the
shortest.[43]
None of the above options to acquire title over the railroad right of way was ever pursued by
petitioner despite the fact that simple resourcefulness demanded such initiative, considering the
importance of the railway tracks to its business. No doubt, it is unlawfully occupying and using the
subject strip of land as a railroad right of way without valid title yet it refuses to vacate it even after
demand of the heirs. Furthermore, it tenaciously insists on ownership thereof despite a clear showing to
the contrary.
We thus uphold the grant by the Court of Appeals of attorneys fees in the amount of P10,000
considering the evident bad faith of petitioner in refusing respondents just and lawful claims, compelling
the latter to litigate.[44]
WHEREFORE, the petition is DENIED. The appealed decision dated November 17, 1995 and
resolution dated March 2, 1996 of the Court of Appeals are AFFIRMED with MODIFICATION. Petitioner
Bogo-Medellin Milling Company, Inc. is hereby ordered to vacate the subject strip of land denominated
as Cadastral Lot No. 954, remove its railway tracks thereon and return its possession to the private
respondents, the heirs of Magdaleno Valdez, Sr. It is also hereby ordered to pay private respondents
attorney's fees in the amount of P10,000.
SO ORDERED.
G.R. No. L-14116 June 30, 1960
LAUREANA A. CID, petitioner,
vs.
IRENE P. JAVIER, MANUEL P. JAVIER, JOSEFINA P. JAVIER, FERNANDO P. JAVIER, JOSE P.
JAVIER, GUILLERMO P. JAVIER, ISIDORA P. JAVIER, BENJAMIN P. JAVIER, and LEONOR
CRISOLOGO, respondents.
BARRERA, J.:
The legal issue presented in this petition to review by certiorari a decision of the Court of appeals, is
whether the respondents Irene P. Javier, et al., owners of a building standing on their lot with windows
overlooking the adjacent lot, had acquired by prescription an enforceable easement of light and view
arising from a verbal prohibition to obstruct such view and light, alleged to have been made upon
petitioner's
predecessor-in-interest as owner of the adjoining lot, both of which lots being covered by Torrens titles.
Both the trial court and the Court of Appeals are of the view and so declared that respondents Javier et
al., did acquire such easement and gave judgment accordingly. Hence, petitioner has come to us
seeking review, alleging that both courts are in error.
The windows in question are admittedly in respondents' own building erected on their own lot. The
easement, if there is any, is therefore a negative one.1 The alleged prohibition having been avowedly
made in 1913 or 1914, before the present Civil Code took effect, the applicable legal provision is Article
538 of the Spanish Civil Code which provides:
Art. 538. In order to acquire by prescription the easements referred to in the next preceding
article, the time of the possession shall be computed, ... in negative easements, from the day
on which the owner of the dominant estate has, by a formal act, forbidden the owner of the
servient estate to perform any act which would be lawful without the easement. (Emphasis
supplied.)
Page 11 of 44
As may be seen, the only question hinges on the interpretation of the phrase "a formal act". The lower
court and the Court of Appeals considered any prohibition made by the owner of the dominant estate,
be it oral or written, sufficient compliance with the law. The Court of Appeals declared:
In the light of the foregoing decisions, (Cortes vs. Yu Tibo, 2 Phil., 26 and the decisions of the
Supreme Court of Spain therein cited), we agree with the trial court that the "formal act" of
prohibition contemplated by Art. 538 of the old Civil Code may be either a written or verbal
act. The decisions of the Supreme Court of Spain above-quoted do not at all mention written
but merely some act of prohibition. . . . .
We are inclined to take the contrary view. The law is explicit. It requires not any form of prohibition, but
exacts, in a parenthetical expression, for emphasis, the doing not only of a specific, particular act, but
a formal act. The following definitions are pertinent:
Formal—or pertaining to form, characterized by one due form or order, done in due form with
a solemnity regular; relating to matters of form. (C. J. S. vol. 37, p. 115.)
Act—In civil law, a writing which states in legal form that a thing has been done, said or
agreed. (1 Bouvier's Law Dictionary, p. 150, citing Marlin Report.)
From these definitions, it would appear that the phrase "formal act" would require not merely any
writing, but one executed in due form and/or with solemnity. That this is the intendment of the law
although not expressed in exact language is the reason for the clarification2 made in Article 621 of the
new Civil Code which specifically requires the prohibition to be in "an instrument acknowledged before
a notary public". This is as it should be. Easements are in the nature of an encumbrance on the servient
estate. They constitute a limitation of the dominical right of the owner of the subjected property. Hence,
they can be acquired only by title and by prescription, in the case of positive easement, only as a result
of some sort of invasion, apparent and continuous, of the servient estate. By the same token, negative
easements can not be acquired by less formal means. Hence, the requirement that the prohibition (the
equivalent of the act of invasion) should be by "a formal act", "an instrument acknowledged before a
notary public."
The Court of Appeals found as undisputed the fact 'that plaintiffs' lot (dominant) as well as defendant's
lot (servient) are covered by Original Certificates of Title Nos. 7225 and 7545, respectively", both issued
by the Register of Deeds of Ilocos Norte, in pursuance of the decrees of registration issued on
December 27, 1937, in Cadastral Case No. 51, G.L.R.O. Cadastral Record No. 1212 of Laoag, Ilocos
Norte. Certified copies of these certificates of title are found as Annexes "A" and "B", pages 77 to 80
inclusive of the Record on Appeal. In both of them, it does not appear any annotation in respect to the
easement supposedly acquired by prescription which, counting the twenty (20) years from 1913 or
1914, would have already ripened by 1937, date of the decrees of registration. Consequently, even
conceding arguendo that such an easement has been acquired, it had been cut off or extinguished by
the registration of the servient estate under the Torrens System without the easement being annotated
on the corresponding certificate of title, pursuant to Section 39 of the Land Registration Act. 3
Wherefore, the decision of the Court of Appeals appealed from is hereby reversed; the injunction issued
herein dissolved; and the case remanded to the court of origin for adjudication of the damages, if any,
occasioned by the issuance of the injunction. Without pronouncement as to costs. So ordered.
Paras, C. J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., and
Gutierrez David, JJ., concur.
RESOLUTION
January 20, 1961
BARRERA, J.:
The Decision in this case, promulgated on June 30, 1960, provided, among others, for the lifting of the
preliminary injunction issued by the lower court directed against petitioner's construction of a building
allegedly being made in violation of Municipal Ordinance No. 3, series of 1909 of the municipality of
Laoag, and in disregard of respondents' right to light and view.
In their motion for reconsideration timely presented, respondents claim that the findings of the lower
court, affirmed by the Court of Appeals, that the building under construction violated the aforementioned
ordinance (from which no appeal was interposed) having become final, justify the issuance of and
making permanent the injunction already issued.
There is no question that respondents' house, as well as that of petitioner, are within their respective
properties; that respondents' wall stands only 50 centimeters from the boundary of the 2 lots, whereas,
the wall of the petitioner's building was constructed 1 meter from the boundary or 1 meter and 50
centimeters from the wall of the house of respondents. As a result, the lower court found that the eaves
of the two houses overlap each other by 24 centimeters. This, the Court of Appeals declared to be
violative of Ordinance No. 3, series of 1903, amending Sections 1, 5, 6, and 13 of the Municipal
Ordinance of June 3, 1903, which requires a distance of 2 meters, measured from eaves to eaves of
adjoining buildings of strong materials.
It must be noted, however, that the Ordinance in question was adopted since 1909 and was, therefore,
already in force at the time the house of respondents was reconstructed in 1946 after the building
originally erected thereon was burned in 1942. If respondents constructed their house at least one
meter from the boundary line, as petitioner has constructed hers, there would be no overlapping of the
eaves and there would not be any violation of the ordinance. As things now stand, in view of such
construction by the respondents, the overlapping of the eaves and the consequential violation of the
ordinance can not entirely be attributed to petitioner, as to require her alone to make the adjustments
necessary for the observance of the 2-meter eaves-to-eaves distance from her neighbors. If any
compliance with the ordinance would be made not only by petitioner, but also by the respondents.
There is, therefore, no reason for the continuation of the injunction.
In view of the foregoing, and as the other grounds respondents' motion for reconsideration had been
already duly considered in the Decision, the said motion is hereby denied, for lack of merit. So ordered.
G.R. No. L-33507 July 20, 1981
FE P. VELASCO, represented by ALFREDO GONZALES, petitioner,
vs.
HON. VICENTE N. CUSI, JR. and THE CITY OF DAVAO, respondents.
DE CASTRO, J.:
Page 12 of 44
Petitioner filed in the Court of First Instance of Davao an action against Davao City to quiet title to her
lot known as Lot 77-B-2, a portion of which she claims to having been occupied illegally as part of
Bolton Street, Davao City. On a motion to dismiss filed by the defendant, on the ground that the
complaint states no cause of action, the Court, presided over by respondent Judge Hon. Vicente Cusi
Jr., dismissed the case. Hence, this petition for certiorari seeking a review of the Order of dismissal
dated July 11, 1970 (Annex D to tile Petition). 1
The dismissal being on the ground that the complaint does not state a cause of action, the allegations
of the complaint have to be closely examined, as the court a quo did in its Order aforecited which
quoted the material allegations of the complaint as follows:
The action is to quiet title and damages. But the complaint does not allege any
cloud or doubt on the title, 'Transfer Certificate of Title No. T-7000 of the Register
of Deeds of the City of Davao, of the plaintiff to Lot No. 77-B-2, subdivision plan
Psd-22295. According to the complaint, ' . . . when plaintiff bought the said lot 77-B-
2 from the original owner in 1956, the Bolton Street was already existing; that
without ascertaining the monuments along Bolton Street, she had her house
constructed on her said lot and built fence along said Bolton Street which she
believed to be the boundary between her lot and said street and in line with other
offences already existing when she bought said lot; 6. That plaintiff has just
discovered, after a relocation of the monuments of her lot, Lot No. 77-B-2, that the
Bolton Street of the defendant has encroached at least TWENTY-FIVE (25)
SQUARE METERS with dimension of 2.5 meters by 10 meters, making her actual
occupation of her lot 10 meters by 47.5 meters, as indicated in the plan Annex "A"
hereon enclosed thereon by red pencil lines; 7. That plaintiff has just discovered
also that the width of the Bolton Street is only NINE (9) METERS and since the
defendant is now asphalting the said Bolton Street, plaintiff has filed this complaint
in order to quiet her title to the said portion of 2.5 meters by 10 meters as shown in
the plan enclosed in red pencil oil Annex "A" hereon because the continued
occupation of said portion by the defendant has cast a cloud of doubt on the title of
the plaintiff over the portion of plaintiff's Lot No. 77-B-2 now being occupied by
Bolton Street, valued at four hundred pesos per square meters.
After quoting the material allegations of the complaint as above set forth, the court a quo analyzed them
carefully and scrutinizingly, and came up with the conclusion that the allegations of the complaint state
no cause of action. Thus —
The allegations in the complaint that the Bolton Street encroached on the lot of the
plaintiff and that the defendant had continuously occupied the portion so
encroached upon do not, contrary to the conclusion of the plaintiff found in the
complaint, cast ' . . a cloud of doubt on the title of the plaintiff over said portion
which would justify this action.
In her present petition, petitioner assigned as error of the court a quo the following:
1. THE LOWER COURT ERRED IN DECLARING THAT THE BOLTON STREET
AS AN EASEMENT MUST REMAIN A BURDEN ON LOT 77-B-2 (LOT IN
QUESTION) PURSUANT TO SECTION 39 OF ACT 496 ON THE GROUND THAT
IT IS SUBJECT TO EASEMENT OF PUBLIC HIGHWAY.
2. THE LOWER COURT ERRED IN DECLARING THAT THE PORTION OF THE
LAND OF PETITIONER ENCROACHED UPON BY THE RESPONDENT CITY OF
DAVAO'S BOLTON STREET DOES NOT CAST A CLOUD OF DOUBT IN THE
TITLE OF PETITIONER.
3. THE LOWER COURT ERRED IN DECLARING THAT ASSUMING THE FACTS
ALLEGED IN THE COMPLAINT TO BE TRUE, A JUDGMENT UPON THE SAME
IN ACCORDANCE WITH THE PRAYER COULD NOT BE RENDERED.
4. THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT FOR LACK
OF CAUSE OF ACTION.
As alleged by petitioner, the lot in question, Lot No. 77-B-2, which she bought in 1956, was part of Lot
No. 77-B, which was in turn originally a portion of Lot No. 77, covered by O.C.T. No. 683, issued on
July 21, 1911. For the lot she bought, she received Transfer Certificate of Title No. T-7000.
In 1970, petitioner discovered that the Bolton Street of the City of Davao had encroached upon her a lot
of portion of 2.5 meters wide and 10 meters long, along said Street, or an area of 25 Square meters.
She also discovered that Bolton Street was delimited to nine (9) meters wide, but the proposed width
was 15 meters, and in that same year 1970, the Bolton Street had already encroached on her lot, on
the northwestern part thereof, to the extent as above stated (par. 7, Complaint, Annex A. to Petition).
From The allegations of the complaint as set forth above, as well as inhe questioned Order quoted
earlier, We agree with respondent judge that the complaint states no cause of action upon which to
render judgment in favor of petitioner, even assuming S the said allegations to be true, indeed, in a
motion to dismiss for lack of cause of action, the allegations of the complaint must be hypothetically
admitted. 2
It appears on the face of the complaint that Bolton Street has been where it is from time immemorial.
When the mother title of petitioner's Transfer Certificate of Title No. T- 7000, which is O.C.T. No. 638,
was issued in 1911, it was issued subject to the provisions of Section 39 of Act 496 which reads:
Section 39. Every person receiving a certificate of title in pursuance of a decree or
registration, and every subsequent purchasers of registered land who takes a
certificate of title for value in good faith shall hold the same free of all
encumbrances, except those noted on said certificate, and any of the following
encumbrances which may be subsisting namely:
xxx xxx xxx
Third. Any public highway, way, private way, ... or any government irrigation, canal,
or lateral thereof ...
From the foregoing provision, Bolton Street which is a public highway, already subsisting when O.C.T.
No. 638 was issued, as this fact is apparent too from the face of the complaint itself, is deemed to have
attached as a legal encumbrance to the lot originally registered lot No. 77, notwithstanding the lack of
an annotation thereof on O.C.T. No. 638. petitioner, therefore, cannot rely, as she almost entirely does
for the relief she seeks, on the aforequoted provision, which she had repeatedly cited but without
making mention, perhaps conveniently, of the exception as expressly provided in the later part of the
legal provision invoked (Sec. 39, Act 496).
Page 13 of 44
If from the undisputed fact Chat when Lot -77 was registered, Bolton Street had already been a legal
encumbrance on said lot, pursuant to Section 39 of Act 496, contrary to petitioner's theory based on the
same legal provision but o committing the portion pertinent to the instant case, there can be no
gainsaying the fact that petitioner's lot, Lot No. 77-B-2, which admittedly was originally a part of Lot No.
77, must have to remain subject to the same legal encumbrance of a public highway.
From her own allegations in her complaint, Bolton Street cannot be a discontinuous easement as she
claims it to be, which may not be acquired by prescription. Nonetheless, whether the mode of
acquisition of the easement that Bolton Street is, would be only by virtue of title, as petitioner contends,
this is not material or of any consequence, in the present proceedings, once it indubitably appears as it
does, from the allegations of the complaint itself, that Bolton Street constituted an easement of public
highway on Lot No. 77, from which petitioner's lot was taken, when the said bigger lot was original
registered. It remained as such legal encumbrance, as effectively as if it had been duly noted on the
certificate of title, by virtue of the clear and express provision of Section 39 of Act 496, it being admitted
that at the time of the registration of Lot 77, the public highway was already in existence or subsisting.
This fact erases whatever cause of action petitioner may have to bring the complaint she filed in the
court a quo for quieting of title on a portion of the street which she claims to be part of her lot, free from
encumbrance of any kind. The Order complained of has only this legal postulate as its basis. Nothing
has been mentioned therein on the acquisition by the City of Davao of the lot in question by
prescription, and a discussion of this matter as is found in petitioner's brief 3 would be entirely irrelevant.
WHEREFORE, no reversible error having been found in the Order complained of, the same is hereby
affirmed, and the instant petition, dismissed. Costs against petitioner.
SO ORDERED.
NUISANCE
G.R. No. 148339 February 23, 2005
LUCENA GRAND CENTRAL TERMINAL, INC., petitioner,
vs.
JAC LINER, INC., Respondent.
DECISION
CARPIO MORALES, J.:
Respondent, JAC Liner, Inc., a common carrier operating buses which ply various routes to and from
Lucena City, assailed, via a petition for prohibition and injunction1 against the City of Lucena, its Mayor,
and the Sangguniang Panlungsod of Lucena before the Regional Trial Court (RTC) of Lucena City, City
Ordinance Nos. 1631 and 1778 as unconstitutional on the ground that, inter alia, the same constituted
an invalid exercise of police power, an undue taking of private property, and a violation of the
constitutional prohibition against monopolies. The salient provisions of the ordinances are:
Ordinance No. 16312
AN ORDINANCE GRANTING THE LUCENA GRAND CENTRAL TERMINAL, INC., A FRANCHISE TO
CONSTRUCT, FINANCE, ESTABLISH, OPERATE AND MAINTAIN A COMMON BUS-JEEPNEY
TERMINAL FACILITY IN THE CITY OF LUCENA
xxx
SECTION 1. – There is hereby granted to the Lucena Grand Central Terminal, Inc., its successors or
assigns, hereinafter referred to as the "grantee", a franchise to construct, finance, establish, operate,
and maintain a common bus-jeepney terminal facility in the City of Lucena.
SECTION 2. – This franchise shall continue for a period of twenty-five years, counted from the approval
of this Ordinance, and renewable at the option of the grantee for another period of twenty-five (25)
years upon such expiration.
xxx
SECTION 4. – Responsibilities and Obligations of the City Government of Lucena. – During the
existence of the franchise, the City Government of Lucena shall have the following responsibilities and
obligations:
xxx
(c) It shall not grant any third party any privilege and/or concession to operate a bus, mini-bus and/or
jeepney terminal.
xxx
Ordinance No. 17783
AN ORDINANCE REGULATING THE ENTRANCE TO THE CITY OF LUCENA OF ALL BUSES, MINI-
BUSES AND OUT-OF-TOWN PASSENGER JEEPNEYS AND FOR THIS PURPOSE, AMENDING
ORDINACE NO. 1420, SERIES OF 1993, AND ORDINANCE NO. 1557, SERIES OF 1995
xxx
SECTION 1. – The entrance to the City of Lucena of all buses, mini-buses and out-of-town passenger
jeepneys is hereby regulated as follows:
(a) All buses, mini-buses and out-of-town passenger jeepneys shall be prohibited from
entering the cityand are hereby directed to proceed to the common terminal, for picking-up
and/or dropping of their passengers.
(b) All temporary terminals in the City of Lucena are hereby declared inoperable starting
from the effectivity of this ordinance.
Page 14 of 44
xxx
SECTION 3. – a) Section 1 of Ordinance No. 1557, Series of 1995, is hereby amended to read as
follows:
Buses, mini-buses, and jeepney type mini-buses from other municipalities and/or local government
units going to Lucena City are directed to proceed to the Common Terminal located at Diversion Road,
Brgy. Ilayang Dupay, to unload and load passengers.
xxx
c) Section 3 of Ordinance No. 1557, Series of 1995, is hereby amended to read as follows:
Passenger buses, mini-buses, and jeepney type mini-buses coming from other municipalities
and/or local government units shall utilize the facilities of the Lucena Grand Central Terminal
at Diversion Road, Brgy. Ilayang Dupay, this City, and no other terminals shall be situated
inside or within the City of Lucena;
d) Section 4 of Ordinance No. 1557, Series of 1995, is hereby amended to read as follows:
Passenger buses, mini-buses, and jeepney type mini-buses coming from other municipalities
and/or local government units shall avail of the facilities of the Lucena Grand Central
Terminal which is hereby designated as the officially sanctioned common terminal for the City
of Lucena;
e) Section 5 of Ordinance No. 1557, Series of 1995, is hereby amended to read as follows:
The Lucena Grand Central Terminal is the permanent common terminal as this is the entity whic
h was giventhe exclusive franchise by the Sangguniang Panglungsod under Ordinance No. 1631
; (Emphasis and underscoring supplied)
These ordinances, by granting an exclusive franchise for twenty five years, renewable for another
twenty five years, to one entity for the construction and operation of one common bus and jeepney
terminal facility in Lucena City, to be located outside the city proper, were professedly aimed towards
alleviating the traffic congestion alleged to have been caused by the existence of various bus and
jeepney terminals within the city, as the "Explanatory Note"-Whereas Clause adopting Ordinance No.
1778 states:
WHEREAS, in line with the worsening traffic condition of the City of Lucena, and with the purpose of
easing and regulating the flow of the same, it is imperative that the Buses, Mini-Buses and out-of-town
jeepneys be prohibited from maintaining terminals within the City, but instead directing to proceed to the
Lucena Grand Central Terminal for purposes of picking-up and/or dropping off their passengers;4
Respondent, who had maintained a terminal within the city, was one of those affected by the
ordinances.
Petitioner, Lucena Grand Central Terminal, Inc., claiming legal interest as the grantee of the exclusive
franchise for the operation of the common terminal, 5 was allowed to intervene in the petition before the
trial court.
In the hearing conducted on November 25, 1998, all the parties agreed to dispense with the
presentation of evidence and to submit the case for resolution solely on the basis of the pleadings filed. 6
By Order of March 31, 1999,7 Branch 54 of the Lucena RTC rendered judgment, the dispositive portion
of which reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered, as follows:
1. Declaring City Ordinance No. 1631 as valid, having been issued in the exercise of the
police power of the City Government of Lucena insofar as the grant of franchise to the
Lucena Grand Central Terminal, Inc., to construct, finance, establish, operate and maintain
common bus-jeepney terminal facility in the City of Lucena;
2. But however, declaring the provision of Sec. 4(c) of Ordinance No. 1631 to the effect that
the City Government shall not grant any third party any privilege and/or concession to
operate a bus, mini-bus and/or jeepney terminal, as illegal and ultra vires because it
contravenes the provisions of Republic Act No. 7160, otherwise known as "The Local
Government Code";
3. Declaring City Ordinance No. 1778 as null and void, the same being also an ultra vires act
of the City Government of Lucena arising from an invalid, oppressive and unreasonable
exercise of the police power, more specifically, declaring illegal [sections 1(b), 3(c) and 3(e)];
4. Ordering the issuance of a Writ of Prohibition and/or Injunction directing the respondents
public officials, the City Mayor and the Sangguniang Panglungsod of Lucena, to cease and
desist from implementing Ordinance No. 1778 insofar as said ordinance prohibits or
curtails petitioner from maintaining and operating its own bus terminal subject to the
conditions provided for in Ordinance No. 1557, Sec. 3, which authorizes the construction of
terminal outside the poblacion of Lucena City; and likewise, insofar as said ordinance
directs and compels the petitioner to use the Lucena Grand Central Terminal Inc., and
furthermore, insofar as it declares that no other terminals shall be situated,
constructed, maintained or established inside or within the City of Lucena; and
furthermore,
5. The Motion to Dismiss filed by the Intervenor, Lucena Grand Central Terminal Inc., dated
October 19, 1998, is hereby DENIED for lack of merit.
SO ORDERED. (Emphasis and underscoring supplied)8
Petitioner’s Motion for Reconsideration9 of the trial court’s order having been denied by Order of August
6, 1999,10 it elevated it via petition for review under Rule 45 before this Court. 11 This Court, by
Resolution of November 24, 1999,12 referred the petition to the Court of Appeals with which it has
concurrent jurisdiction, no special and important reason having been cited for it to take cognizance
thereof in the first instance.
Page 15 of 44
By Decision of December 15, 2000,13 the appellate court dismissed the petition and affirmed the
challenged orders of the trial court. Its motion for reconsideration14 having been denied by the appellate
court by Resolution dated June 5, 2001,15 petitioner once again comes to this Court via petition for
review,16 this time assailing the Decision and Resolution of the Court of Appeals.
Decision on the petition hinges on two issues, to wit: (1) whether the trial court has jurisdiction over the
case, it not having furnished the Office of the Solicitor General copy of the orders it issued therein, and
(2) whether the City of Lucena properly exercised its police power when it enacted the subject
ordinances.
Petitioner argues that since the trial court failed to serve a copy of its assailed orders upon the Office of
the Solicitor General, it never acquired jurisdiction over the case, it citing Section 22, Rule 3 of the
Rules which provides:
SEC. 22. Notice to the Solicitor General.—In any action involving the validity of any treaty,
law, ordinance, executive order, presidential decree, rules or regulations, the court in its discretion,
may require the appearance of the Solicitor General who may be heard in person or through
representative duly designated by him. (Emphasis and underscoring supplied)
Furthermore, petitioner invokes Sections 3 and 4 of Rule 63 which respectively provide:
SEC. 3. Notice on Solicitor General. – In any action which involves the validity of a statute, executive
order or regulation, or any other governmental regulation, the Solicitor General shall be notified by the
party assailing the same and shall be entitled to be heard upon such question.
SEC. 4. Local government ordinances. – In any action involving the validity of a local government
ordinance, the corresponding prosecutor or attorney of the local government unit involved shall be
similarly notified and entitled to be heard. If such ordinance is alleged to be unconstitutional, the
Solicitor General shall also be notified and entitled to be heard. (Emphasis and underscoring supplied)
Nowhere, however, is it stated in the above-quoted rules that failure to notify the Solicitor General about
the action is a jurisdictional defect.
In fact, Rule 3, Section 22 gives the courts in any action involving the "validity" of any ordinance, inter
alia, "discretion" to notify the Solicitor General.
Section 4 of Rule 63, which more specifically deals with cases assailing the constitutionality, not just the
validity, of a local government ordinance, directs that the Solicitor General "shall also be notified and
entitled to be heard." Who will notify him, Sec. 3 of the same rule provides — it is the party which is
assailing the local government’s ordinance.
More importantly, however, this Court finds that no procedural defect, fatal or otherwise, attended the
disposition of the case. For respondent actually served a copy of its petition upon the Office of the
Solicitor General on October 1, 1998, two days after it was filed. The Solicitor General has issued a
Certification to that effect.17 There was thus compliance with above-quoted rules.
Respecting the issue of whether police power was properly exercised when the subject ordinances
were enacted: As with the State, the local government may be considered as having properly exercised
its police power only if the following requisites are met: (1) the interests of the public generally, as
distinguished from those of a particular class, require the interference of the State, and (2) the means
employed are reasonably necessary for the attainment of the object sought to be accomplished and not
unduly oppressive upon individuals. Otherwise stated, there must be a concurrence of a lawful
subject and lawful method.18
That traffic congestion is a public, not merely a private, concern, cannot be gainsaid. In Calalang v.
Williams19 which involved a statute authorizing the Director of Public Works to promulgate rules and
regulations to regulate and control traffic on national roads, this Court held:
In enacting said law, therefore, the National Assembly was prompted by considerations of public
convenience and welfare. It was inspired by a desire to relieve congestion of traffic, which is, to say
the least, a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said
law, and the state in order to promote the general welfare may interfere with personal liberty, with
property, and with business and occupations.20 (Emphasis supplied)
The questioned ordinances having been enacted with the objective of relieving traffic congestion in the
City of Lucena, they involve public interest warranting the interference of the State. The first requisite
for the proper exercise of police power is thus present.
Respondent’s suggestion to have this Court look behind the explicit objective of the ordinances which,
to it, was actually to benefit the private interest of petitioner by coercing all bus operators to patronize its
terminal does not lie.21 Lim v. Pacquing22 instructs:
. . . [T]his Court cannot look into allegations that PD No. 771 was enacted to benefit a select group
which was later given authority to operate the jai-alai under PD No. 810. The examination of legislative
motivation is generally prohibited. (Palmer v. Thompson, 403 U.S. 217, 29 L. Ed. 2d 438 [1971] per
Black, J.) There is, in the first place, absolute lack of evidence to support ADC’s allegation of improper
motivation in the issuance of PD No. 771. In the second place, as already averred, this Court cannot go
behind the expressed and proclaimed purposes of PD No. 771, which are reasonable and even
laudable. (Underscoring supplied)23
This leaves for determination the issue of whether the means employed by the Lucena Sangguniang
Panlungsod to attain its professed objective were reasonably necessary and not unduly oppressive
upon individuals.
With the aim of localizing the source of traffic congestion in the city to a single location, 24 the subject
ordinances prohibit the operation of all bus and jeepney terminals within Lucena, including those
already existing, and allow the operation of only one common terminal located outside the city proper,
the franchise for which was granted to petitioner. The common carriers plying routes to and from
Lucena City are thus compelled to close down their existing terminals and use the facilities of petitioner.
In De la Cruz v. Paras,25 this Court declared unconstitutional an ordinance characterized by
overbreadth. In that case, the Municipality of Bocaue, Bulacan prohibited the operation of all night
clubs, cabarets and dance halls within its jurisdiction for the protection of public morals. Held the Court:
It cannot be said that such a sweeping exercise of a lawmaking power by Bocaue could qualify under th
e termreasonable. The objective of fostering public morals, a worthy and desirable end can be attained
by a measure thatdoes not encompass too wide a field. Certainly the ordinance on its face is characteri
zed by overbreadth. Thepurpose sought to be achieved could have been attained by reasonable restrict
ions rather than by an absoluteprohibition. The admonition in Salaveria should be heeded: "The
Page 16 of 44
Judiciary should not lightly set aside legislative action when there is not a clear invasion of personal or
property rights under the guise of police regulation." It is clear that in the guise of a police regulation,
there was in this instance a clear invasion of personal or property rights, personal in the case of those
individuals desirous of patronizing those night clubs and property in terms of the investments made and
salaries to be earned by those therein employed. (Underscoring supplied)26
In Lupangco v. Court of Appeals,27 this Court, in declaring unconstitutional the resolution subject
thereof, advanced a similar consideration. That case involved a resolution issued by the Professional
Regulation Commission which prohibited examinees from attending review classes and receiving
handout materials, tips, and the like three days before the date of examination in order to preserve the
integrity and purity of the licensure examinations in accountancy. Besides being unreasonable on its
face and violative of academic freedom, the measure was found to be more sweeping than what was
necessary, viz:
Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in
the licensure examinations will be eradicated or at least minimized. Making the examinees suffer by
depriving them of legitimate means of review or preparation on those last three precious days when
they should be refreshing themselves with all that they have learned in the review classes and
preparing their mental and psychological make-up for the examination day itself — would be like
uprooting the tree to get rid of a rotten branch. What is needed to be done by the respondent is
to find out the source of such leakages and stop it right there. If corrupt officials or personnel
should be terminated from their loss, then so be it. Fixers or swindlers should be flushed out. Strict
guidelines to be observed by examiners should be set up and if violations are committed, then licenses
should be suspended or revoked. x x x (Emphasis and underscoring supplied)28
As in De la Cruz29 and Lupangco,30 the ordinances assailed herein are characterized by overbreadth.
They go beyond what is reasonably necessary to solve the traffic problem. Additionally, since the
compulsory use of the terminal operated by petitioner would subject the users thereof to fees, rentals
and charges, such measure is unduly oppressive, as correctly found by the appellate court. 31 What
should have been done was to determine exactly where the problem lies and then to stop it right there.
The true role of Constitutional Law is to effect an equilibrium between authority and liberty so that rights
are exercised within the framework of the law and the laws are enacted with due deference to rights.
(Underscoring supplied)32
A due deference to the rights of the individual thus requires a more careful formulation of solutions to
societal problems.
From the memorandum33 filed before this Court by petitioner, it is gathered that the Sangguniang
Panlungsod had identified the cause of traffic congestion to be the indiscriminate loading and unloading
of passengers by buses on the streets of the city proper, hence, the conclusion that the terminals
contributed to the proliferation of buses obstructing traffic on the city streets.
Bus terminals per se do not, however, impede or help impede the flow of traffic. How the outright
proscription against the existence of all terminals, apart from that franchised to petitioner, can be
considered as reasonably necessary to solve the traffic problem, this Court has not been enlightened. If
terminals lack adequate space such that bus drivers are compelled to load and unload passengers on
the streets instead of inside the terminals, then reasonable specifications for the size of terminals could
be instituted, with permits to operate the same denied those which are unable to meet the
specifications.
In the subject ordinances, however, the scope of the proscription against the maintenance of terminals
is so broad that even entities which might be able to provide facilities better than the franchised terminal
are barred from operating at all.
Petitioner argues, however, that other solutions for the traffic problem have already been tried but
proven ineffective. But the grant of an exclusive franchise to petitioner has not been shown to be the
only solution to the problem.
While the Sangguniang Panlungsod, via Ordinance No. 1557,34 previously directed bus owners and
operators to put up their terminals "outside the poblacion of Lucena City," petitioner informs that said
ordinance only resulted in the relocation of terminals to other well-populated barangays, thereby giving
rise to traffic congestion in those areas.35Assuming that information to be true, the Sangguniang
Panlungsod was not without remedy. It could have defined, among other considerations, in a more
precise manner, the area of relocation to avoid such consequences.
As for petitioner’s argument that the challenged ordinances were enacted pursuant to the power of the
Sangguniang Panlungsod to "[r]egulate traffic on all streets and bridges; prohibit encroachments or
obstacles thereon and, when necessary in the interest of public welfare, authorize the removal of
encroachments and illegal constructions in public places":36 Absent any showing, nay allegation, that
the terminals are encroaching upon public roads, they are not obstacles. The buses which
indiscriminately load and unload passengers on the city streets are. The power then of the
Sangguniang Panlungsod to prohibit encroachments and obstacles does not extend to
terminals.1a\^/phi1.net
Neither are terminals public nuisances as petitioner argues. For their operation is a legitimate business
which, by itself, cannot be said to be injurious to the rights of property, health, or comfort of the
community.
But even assuming that terminals are nuisances due to their alleged indirect effects upon the flow of
traffic, at most they are nuisance per accidens, not per se.
Unless a thing is nuisance per se, however, it may not be abated via an ordinance, without judicial
proceedings, as was done in the case at bar.
In Estate of Gregoria Francisco v. Court of Appeals,37 this Court held:
Respondents can not seek cover under the general welfare clause authorizing the abatement of
nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one which affects
the immediate safety of persons and property and may be summarily abated under the undefined law of
necessity (Monteverde v. Generoso, 52 Phil. 123 [1982]). The storage of copra in the quonset building
is a legitimate business. By its nature, it can not be said to be injurious to rights of property, of health or
of comfort of the community. If it be a nuisance per accidens it may be so proven in a hearing
conducted for that purpose. It is not per se a nuisance warranting its summary abatement without
judicial intervention.l^vvphi1.net (Underscoring supplied)38 1awphi1.nét
In Pampanga Bus Co., Inc. v. Municipality of Tarlac39 where the appellant-municipality similarly argued
that the terminal involved therein is a nuisance that may be abated by the Municipal Council via an
ordinance, this Court held: "Suffice it to say that in the abatement of nuisances the provisions of the
Civil Code (Articles 694-707) must be observed and followed. This appellant failed to do."
Page 17 of 44
As for petitioner’s claim that the challenged ordinances have actually been proven effective in easing
traffic congestion: Whether an ordinance is effective is an issue different from whether it is reasonably
necessary. It is its reasonableness, not its effectiveness, which bears upon its constitutionality. If the
constitutionality of a law were measured by its effectiveness, then even tyrannical laws may be justified
whenever they happen to be effective.
The Court is not unaware of the resolutions of various barangays in Lucena City supporting the
establishment of a common terminal, and similar expressions of support from the private sector, copies
of which were submitted to this Court by petitioner. The weight of popular opinion, however, must be
balanced with that of an individual’s rights.
There is no question that not even the strongest moral conviction or the most urgent public need,
subject only to a few notable exceptions, will excuse the bypassing of an individual's rights. It is no
exaggeration to say that a person invoking a right guaranteed under Article III of the Constitution is a
majority of one even as against the rest of the nation who would deny him that right. 40
WHEREFORE, the petition is hereby DENIED. SO ORDERED.
Donations
G.R. No. 120721 February 23, 2005
MANUEL G. ABELLO, JOSE C. CONCEPCION, TEODORO D. REGALA, AVELINO V.
CRUZ, petitioners,
vs.
COMMISSIONER OF INTERNAL REVENUE and COURT OF APPEALS, respondents.
DECISION
AZCUNA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure, assailing the
decision of the Court of Appeals in CA –G.R. SP No. 27134, entitled "Comissioner of Internal Revenue
v. Manuel G. Abello, Jose C. Concepcion, Teodoro D. Regala, Avelino V. Cruz and Court of Tax
Appeals," which reversed and set aside the decision of the Court of Tax Appeals (CTA), ordering the
Commissioner of Internal Revenue (Commissioner) to withdraw his letters dated April 21, 1988 and
August 4, 1988 assessing donor’s taxes and to desist from collecting donor’s taxes from petitioners.
During the 1987 national elections, petitioners, who are partners in the Angara, Abello, Concepcion,
Regala and Cruz (ACCRA) law firm, contributed ₱882,661.31 each to the campaign funds of Senator
Edgardo Angara, then running for the Senate. In letters dated April 21, 1988, the Bureau of Internal
Revenue (BIR) assessed each of the petitioners ₱263,032.66 for their contributions. On August 2,
1988, petitioners questioned the assessment through a letter to the BIR. They claimed that political or
electoral contributions are not considered gifts under the National Internal Revenue Code (NIRC), and
that, therefore, they are not liable for donor’s tax. The claim for exemption was denied by the
Commissioner.1 1ªvvphi1.nét
On September 12, 1988, petitioners filed a petition for review with the CTA, which was decided on
October 7, 1991 in favor of the petitioners. As aforestated, the CTA ordered the Commissioner to desist
from collecting donor’s taxes from the petitioners.2
On appeal, the Court of Appeals reversed and set aside the CTA decision on April 20, 1994. 3 The
appellate Court ordered the petitioners to pay donor’s tax amounting to ₱263,032.66 each, reasoning
as follows:
The National Internal Revenue Code, as amended, provides:
Sec. 91. Imposition of Tax. (a) There shall be levied, assessed, collected, and paid upon the transfer by
any person, resident, or non-resident, of the property by gift, a tax, computed as provided in Section 92.
(b) The tax shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect,
and whether the property is real or personal, tangible or intangible.
Pursuant to the above-quoted provisions of law, the transfer of property by gift, whether the transfer is
in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal,
tangible or intangible, is subject to donor’s or gift tax.
A gift is generally defined as a voluntary transfer of property by one to another without any
consideration or compensation therefor (28 C.J. 620; Santos vs. Robledo, 28 Phil. 250).
In the instant case, the contributions are voluntary transfers of property in the form of money from
private respondents to Sen. Angara, without considerations therefor. Hence, they squarely fall under
the definition of donation or gift.
As correctly pointed out by the Solicitor General:
The fact that the contributions were given to be used as campaign funds of Sen. Angara does not affect
the character of the fund transfers as donation or gift. There was thereby no retention of control over
the disposition of the contributions. There was simply an indication of the purpose for which they were
to be used. For as long as the contributions were used for the purpose for which they were intended,
Sen. Angara had complete and absolute power to dispose of the contributions. He was fully entitled to
the economic benefits of the contributions.
Section 91 of the Tax Code is very clear. A donor’s or gift tax is imposed on the transfer of property by
gift.1awphi1.nét
The Bureau of Internal Revenue issued Ruling No. 344 on July 20, 1988, which reads:
Political Contributions. – For internal revenue purposes, political contributions in the Philippines are
considered taxable gift rather than taxable income. This is so, because a political contribution is
Page 18 of 44
indubitably not intended by the giver or contributor as a return of value or made because of any intent to
repay another what is his due, but bestowed only because of motives of philanthropy or charity. His
purpose is to give and to bolster the morals, the winning chance of the candidate and/or his party, and
not to employ or buy. On the other hand, the recipient-donee does not regard himself as exchanging his
services or his product for the money contributed. But more importantly he receives financial
advantages gratuitously.
When the U.S. gift tax law was adopted in the Philippines (before May 7, 1974), the taxability of political
contributions was, admittedly, an unsettled issue; hence, it cannot be presumed that the Philippine
Congress then had intended to consider or treat political contributions as non-taxable gifts when it
adopted the said gift tax law. Moreover, well-settled is the rule that the Philippines need not necessarily
adopt the present rule or construction in the United States on the matter. Generally, statutes of different
states relating to the same class of persons or things or having the same purposes are not considered
to be in pari materia because it cannot be justifiably presumed that the legislature had them in mind
when enacting the provision being construed. (5206, Sutherland, Statutory Construction, p.
546.) Accordingly, in the absence of an express exempting provision of law, political contributions in the
Philippines are subject to the donor’s gift tax. (cited in National Internal Revenue Code Annotated by
Hector S. de Leon, 1991 ed., p. 290).
In the light of the above BIR Ruling, it is clear that the political contributions of the private respondents
to Sen. Edgardo Angara are taxable gifts. The vagueness of the law as to what comprise the gift
subject to tax was made concrete by the above-quoted BIR ruling. Hence, there is no doubt that
political contributions are taxable gifts.4
Petitioners filed a motion for reconsideration, which the Court of Appeals denied in its resolution of June
16, 1995.5
Petitioners thereupon filed the instant petition on July 26, 1995. Raised are the following issues:
1. DID THE HONORABLE COURT OF APPEALS ERR WHEN IT FAILED TO CONSIDER IN
ITS DECISION THE PURPOSE BEHIND THE ENACTMENT OF OUR GIFT TAX LAW?
2. DID THE HONORABLE COURT OF APPEALS ERR IN NOT CONSIDERING THE
INTENTION OF THE GIVERS IN DETERMINING WHETHER OR NOT THE PETITIONERS’
POLITICAL CONTRIBUTIONS WERE GIFTS SUBJECT TO DONORS TAX?
3. DID THE HONORABLE COURT OF APPEALS ERR WHEN IT FAILED TO CONSIDER
THE DEFINITION OF AN "ELECTORAL CONTRIBUTION" UNDER THE OMNIBUS
ELECTION CODE IN DETERMINING WHETHER OR NOT POLITICAL CONTRIBUTIONS
ARE TAXABLE?
4. DID THE HONORABLE COURT OF APPEALS ERR IN NOT CONSIDERING THE
ADMINISTRATIVE PRACTICE OF CLOSE TO HALF A CENTURY OF NOT SUBJECTING
POLITICAL CONTRIBUTIONS TO DONORS TAX?
5. DID THE HONORABLE COURT OF APPEALS ERR IN NOT CONSIDERING THE
AMERICAN JURISPRUDENCE RELIED UPON BY THE COURT OF TAX APPEALS AND
BY THE PETITIONERS TO THE EFFECT THAT POLITICAL CONTRIBUTIONS ARE NOT
TAXABLE GIFTS?
6. DID THE HONORABLE COURT OF APPEALS ERR IN NOT APPLYING AMERICAN
JURISPRUDENCE ON THE GROUND THAT THIS WAS NOT KNOWN AT THE TIME THE
PHILIPPINES GIFT TAX LAW WAS ADOPTED IN 1939?
7. DID THE HONORABLE COURT OF APPEALS ERR IN RESOLVING THE CASE MAINLY
ON THE BASIS OF A RULING ISSUED BY THE RESPONDENT ONLY AFTER THE
ASSESSMENTS HAD ALREADY BEEN MADE?
8. DID THE HONORABLE COURT OF APPEALS ERR WHEN IT DID NOT CONSTRUE
THE GIFT TAX LAW LIBERALLY IN FAVOR OF THE TAXPAYER AND STRICLTY
AGAINST THE GOVERNMENT IN ACCORDANCE WITH APPLICABLE PRINCIPLES OF
STATUTORY CONSTRUCTION?6
First, Fifth and Sixth Issues
Section 91 of the National Internal Revenue Code (NIRC) reads:
(A) There shall be levied, assessed, collected and paid upon the transfer by any person,
resident or nonresident, of the property by gift, a tax, computed as provided in Section 92
(B) The tax shall apply whether the transfer is in trust or otherwise, whether the gift is direct
or indirect, and whether the property is real or personal, tangible or intangible.
The NIRC does not define transfer of property by gift. However, Article 18 of the Civil Code, states:
In matters which are governed by the Code of Commerce and special laws, their deficiency shall be
supplied by the provisions of this Code.
Thus, reference may be made to the definition of a donation in the Civil Code. Article 725 of said Code
defines donation as:
. . . an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who
accepts it.
Donation has the following elements: (a) the reduction of the patrimony of the donor; (b) the increase in
the patrimony of the donee; and, (c) the intent to do an act of liberality or animus donandi.7
The present case falls squarely within the definition of a donation. Petitioners, the late Manuel G.
Abello8 , Jose C. Concepcion, Teodoro D. Regala and Avelino V. Cruz, each gave ₱882,661.31 to the
campaign funds of Senator Edgardo Angara, without any material consideration. All three elements of a
donation are present. The patrimony of the four petitioners were reduced by ₱882,661.31 each.
Senator Edgardo Angara’s patrimony correspondingly increased by ₱3,530,645.249 . There was intent
to do an act of liberality or animus donandi was present since each of the petitioners gave their
contributions without any consideration.
Taken together with the Civil Code definition of donation, Section 91 of the NIRC is clear and
unambiguous, thereby leaving no room for construction. In Rizal Commercial Banking Corporation v.
Intermediate Appellate Court10 the Court enunciated:
Page 19 of 44
It bears stressing that the first and fundamental duty of the Court is to apply the law. When the law is
clear and free from any doubt or ambiguity, there is no room for construction or interpretation. As has
been our consistent ruling, where the law speaks in clear and categorical language, there is no
occasion for interpretation; there is only room for application (Cebu Portland Cement Co. v. Municipality
of Naga, 24 SCRA 708 [1968])
Where the law is clear and unambiguous, it must be taken to mean exactly what it says and the court
has no choice but to see to it that its mandate is obeyed (Chartered Bank Employees Association v.
Ople, 138 SCRA 273 [1985]; Luzon Surety Co., Inc. v. De Garcia, 30 SCRA 111 [1969]; Quijano v.
Development Bank of the Philippines, 35 SCRA 270 [1970]).
Only when the law is ambiguous or of doubtful meaning may the court interpret or construe its true
intent.l^vvphi1.netAmbiguity is a condition of admitting two or more meanings, of being understood in
more than one way, or of referring to two or more things at the same time. A statute is ambiguous if it is
admissible of two or more possible meanings, in which case, the Court is called upon to exercise one of
its judicial functions, which is to interpret the law according to its true intent.
Second Issue
Since animus donandi or the intention to do an act of liberality is an essential element of a donation,
petitioners argue that it is important to look into the intention of the giver to determine if a political
contribution is a gift. Petitioners’ argument is not tenable. First of all, donative intent is a creature of the
mind. It cannot be perceived except by the material and tangible acts which manifest its presence. This
being the case, donative intent is presumed present when one gives a part of ones patrimony to
another without consideration. Second, donative intent is not negated when the person donating has
other intentions, motives or purposes which do not contradict donative intent. This Court is not
convinced that since the purpose of the contribution was to help elect a candidate, there was no
donative intent. Petitioners’ contribution of money without any material consideration evinces animus
donandi. The fact that their purpose for donating was to aid in the election of the donee does not negate
the presence of donative intent.
Third Issue
Petitioners maintain that the definition of an "electoral contribution" under the Omnibus Election Code is
essential to appreciate how a political contribution differs from a taxable gift. 11 Section 94(a) of the said
Code defines electoral contribution as follows:
The term "contribution" includes a gift, donation, subscription, loan, advance or deposit of money or
anything of value, or a contract, promise or agreement to contribute, whether or not legally enforceable,
made for the purpose of influencing the results of the elections but shall not include services rendered
without compensation by individuals volunteering a portion or all of their time in behalf of a candidate or
political party. It shall also include the use of facilities voluntarily donated by other persons, the money
value of which can be assessed based on the rates prevailing in the area.
Since the purpose of an electoral contribution is to influence the results of the election, petitioners again
claim that donative intent is not present. Petitioners attempt to place the barrier of mutual exclusivity
between donative intent and the purpose of political contributions. This Court reiterates that donative
intent is not negated by the presence of other intentions, motives or purposes which do not contradict
donative intent.
Petitioners would distinguish a gift from a political donation by saying that the consideration for a gift is
the liberality of the donor, while the consideration for a political contribution is the desire of the giver to
influence the result of an election by supporting candidates who, in the perception of the giver, would
influence the shaping of government policies that would promote the general welfare and economic
well-being of the electorate, including the giver himself.
Petitioners’ attempt is strained. The fact that petitioners will somehow in the future benefit from the
election of the candidate to whom they contribute, in no way amounts to a valuable material
consideration so as to remove political contributions from the purview of a donation. Senator Angara
was under no obligation to benefit the petitioners. The proper performance of his duties as a legislator
is his obligation as an elected public servant of the Filipino people and not a consideration for the
political contributions he received. In fact, as a public servant, he may even be called to enact laws that
are contrary to the interests of his benefactors, for the benefit of the greater good.
In fine, the purpose for which the sums of money were given, which was to fund the campaign of
Senator Angara in his bid for a senatorial seat, cannot be considered as a material consideration so as
to negate a donation.
Fourth Issue
Petitioners raise the fact that since 1939 when the first Tax Code was enacted, up to 1988 the BIR
never attempted to subject political contributions to donor’s tax. They argue that:
. . . It is a familiar principle of law that prolonged practice by the government agency charged with the
execution of a statute, acquiesced in and relied upon by all concerned over an appreciable period of
time, is an authoritative interpretation thereof, entitled to great weight and the highest respect. . . .12
This Court holds that the BIR is not precluded from making a new interpretation of the law, especially
when the old interpretation was flawed. It is a well-entrenched rule that
. . . erroneous application and enforcement of the law by public officers do not block subsequent correct
application of the statute (PLDT v. Collector of Internal Revenue, 90 Phil. 676), and that the
Government is never estopped by mistake or error on the part of its agents (Pineda v. Court of First
Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining Co. v. Pineda, 98 Phil. 711,
724).13
Seventh Issue
Petitioners question the fact that the Court of Appeals decision is based on a BIR ruling, namely BIR
Ruling No. 88-344, which was issued after the petitioners were assessed for donor’s tax. This Court
does not need to delve into this issue. It is immaterial whether or not the Court of Appeals based its
decision on the BIR ruling because it is not pivotal in deciding this case. As discussed above, Section
91 (now Section 98) of the NIRC as supplemented by the definition of a donation found in Article 725 of
the Civil Code, is clear and unambiguous, and needs no further elucidation.
Eighth Issue
Page 20 of 44
Petitioners next contend that tax laws are construed liberally in favor of the taxpayer and strictly against
the government. This rule of construction, however, does not benefit petitioners because, as stated,
there is here no room for construction since the law is clear and unambiguous.
Finally, this Court takes note of the fact that subsequent to the donations involved in this case,
Congress approved Republic Act No. 7166 on November 25, 1991, providing in Section 13 thereof that
political/electoral contributions, duly reported to the Commission on Elections, are not subject to the
payment of any gift tax. This all the more shows that the political contributions herein made are subject
to the payment of gift taxes, since the same were made prior to the exempting legislation, and Republic
Act No. 7166 provides no retroactive effect on this point.
WHEREFORE, the petition is DENIED and the assailed Decision and Resolution of the Court of
Appeals are AFFIRMED.
No costs.
SO ORDERED.
G.R. No. 112796 March 5, 1998
TITO R. LAGAZO, petitioner,
vs.
COURT OF APPEALS and ALFREDO CABANLIT, respondents.
PANGANIBAN, J.:
Where the acceptance of a donation was made in a separate instrument but not formally communicated
to the donor, may the donation be nonetheless considered complete, valid and subsisting? Where, the
deed of donation did not expressly impose any burden — the expressed consideration being purely one
of liberality and generosity — a separate but the recipient actually paid charges imposed on the
property like land taxes and installment arrearages, may the donation be deemed onerous and thus
governed by the law on ordinary contracts?
The Case
The Court answers these questions in the negative as it resolves this petition for review under Rule 45
of the Rules of Court seeking to set aside the Decision1 of the Court of Appeals2 in CA-GR CV No.
38050 promulgated on November 29, 1993. The assailed Decision reversed the Regional Trial Court,
Branch 30, Manila, in Civil Case No. 87-39133 which had disposed3 of the controversy in favor of herein
petitioner in the following manner:4
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendant as follows:
1. Ordering the defendant, or any person claiming rights under him, to surrender to
plaintiff possession of the premises known as Lot 8w, Block 6, Psd-135534 of the
Monserrat Estate, and the improvement standing thereon, located at 3320 2nd St.,
V. Mapa, Old Sta. Mesa, Manila;
2. Ordering the defendant to pay plaintiff the sum of Five Thousand (P5,000.00)
Pesos, as and for attorney's fees; and
3. Costs against the defendant.
The defendant's counterclaims are hereby dismissed.
The Facts
Although the legal conclusions and dispositions of the trial and the appellate courts are conflicting, the
factual antecedents of the case are not substantially disputed. 5 We reproduce their narration from the
assailed Decision:
Civil Case No. 83-39133 involves an action filed by plaintiff-appellee [herein
petitioner] on January 22, 1987 seeking to recover from defendant-appellant [a]
parcel of land which the former claims to have acquired from his grandmother by
donation. Defendant-appellant [herein private respondent], on the other hand, put
up the defense that when the alleged donation was executed, he had already
acquired the property by a Deed of Assignment from a transferee of plaintiff-
appellee's grandmother.
The evidence for plaintiff-appellee [herein petitioner] is summarized as follows:
Catalina Jacob Vda. de Reyes, a widow and grandmother of plaintiff-appellee, was
awarded in July 1975 a 60.10-square meter lot which is a portion of the Monserrat
Estate, more particularly described as Lot 8W, Block 6 of Psd-135834, located at
3320 2nd St., V. Mapa, Old Sta. Mesa, Manila. The Monserrat Estate is a public
land owned by the City of Manila and distributed for sale to bona fidetenants under
its land-for-the-landless program. Catalina Jacob constructed a house on the lot.
On October 3, 1977, or shortly before she left for Canada where she is now a
permanent resident, Catalina Jacob executed a special power of attorney (Exh.
"A") in favor of her son-in-law Eduardo B. Español authorizing him to execute all
documents necessary for the final adjudication of her claim as awardee of the lot.
Due to the failure of Eduardo B. Español to accomplish the purpose of the power of
attorney granted to him, Catalina Jacob revoked said authority in an instrument
executed in Canada on April 16, 1984 (Exh. "D"). Simultaneous with the revocation,
Catalina Jacob executed another power of attorney of the same tenor in favor
plaintiff-appellee.
On January 30, 1985, Catalina Jacob executed in Canada a Deed of Donation over
a Lot 8W in favor of plaintiff-appellee (Exh. "E"). Following the donation, plaintiff-
appellee checked with the Register of Deeds and found out that the property was in
the delinquent list, so that he paid the installments in arrears and the remaining
Page 21 of 44
balance on the lot (Exhs. "F", "F-1" and "F-2") and declared the said property in the
name of Catalina Jacob (Exhs. "G", "G-1", "G-2" and "G-3").
On January 29, 1986, plaintiff-appellee sent a demand letter to defendant-appellant
asking him to vacate the premises (Exh. "H"). A similar letter was sent by plaintiff-
appellee's counsel to defendant on September 11, 1986 (Exh. "I"). However,
defendant-appellant refused to vacate the premises claiming ownership thereof.
Hence, plaintiff-appellee instituted the complaint for recovery of possession and
damages against defendant-appellant.
Opposing plaintiff-appellee's version, defendant-appellant claimed that the house
and lot in controversy were his by virtue of the following documents:
1. Deed of Absolute Sale executed by Catalina Jacob dated October 7, 1977 in
favor of Eduardo B. Español covering the residential house located at the premises
(Exh. "4").
buyer/owner of a property, in stark contrast of [sic] the interest
shown by the plaintiff who saw to it that the lot was removed
from the delinquent list for non-payment of installments and
taxes due thereto [sic].6
Ruling of the Appellate Court
In reversing the trial court's decision,7 Respondent Court of Appeals anchored its ruling upon the
absence of any showing that petitioner accepted his grandmother's donation of the subject land. Citing
jurisprudence that the donee's failure to accept a donation whether in the same deed of donation or in a
separate instrument renders the donation null and void, Respondent Court denied petitioner's claim of
ownership over the disputed land. The appellate court also struck down petitioner's contention that the
formalities for a donation of real property should not apply to his case since it was an onerous one —
he paid for the amortizations due on the land before and after the execution of the deed of donation —
reasoning that the deed showed no burden, charge or condition imposed upon the donee; thus, the
payments made by petitioner were his voluntary acts.

Dissatisfied with the foregoing ruling, petitioner now seeks a favorable disposition from this Court. 8
2. Deed of Assignment over Lot 8W executed by Catalina Jacob in favor of
Eduardo Español dated September 30, 1980 (Exh. "5"); and
Issues
3. Deed of Assignment executed by Eduardo B. Español over Lot 8W and a
residential house thereon in favor of defendant-appellant dated October 2, 1982 Petitioner anchors his petition on the following grounds: 9
(Exh. "6").
[I.] In reversing the decision of the trial court, the Court of Appeals decided a
After trial, the lower court decided in favor of plaintiff-appellee and against question of substance in a way not in accord with the law and applicable decisions
defendant-appellant, rationalizing that the version of the former is more credible of this Honorable Court.
than that of the latter. According to the lower court:
[II.] Even granting the correctness of the decision of the Court of Appeals, certain
From the oral and documentary evidence adduced by the fact and circumstances transpired in the meantime which would render said
parties[,] it appears that the plaintiff- has a better right over the decision manifestly unjust, unfair and inequitable to petitioner.
property, subject matter of the case. The version of the plaintiff
is more credible than that of the defendant. The theory of the
We believe that the resolution of this case hinges on the issue of whether the donation was simple or
plaintiff is that the house and lot belong to him by virtue of the
onerous.
Deed of Donation in his favor executed by his grandmother
Mrs. Jacob Vda. de Reyes, the real awardee of the lot in
question. The defendant's theory is that he is the owner The Court's Ruling
thereof because he bought the house and lot from Eduardo
Español, after the latter had shown and given to him Exhibits
1, 4 and 5. He admitted that he signed the Deed of The petition lacks merit.
Assignment in favor of Eduardo Español on September 30,
1980, but did not see awardee Catalina Jacob Vda. de Reyes Main Issue:
signed [sic] it. In fact, the acknowledgement in Exhibit "5" Simple or Onerous Donation?
shows that the assignor/awardee did not appear before the
notary public. It may be noted that on said date, the original
awardee of the lot was no longer in the Philippines, as both At the outset, let us differentiate between a simple donation and an onerous one. A simple or pure
parties admitted that she had not come back to the Philippines donation is one whose cause is pure liberality (no strings attached), while an onerous donation is one
since 1977. (Exhs. K, K-1). Defendant, claiming to be the which is subject to burdens, charges or future services equal to or more in value than the thing
owner of the lot, unbelievably did not take any action to have donated. 10 Under Article 733 of the Civil Code, donations with an onerous cause shall be governed by
the said house and lot be registered or had them declared in the rules on contracts; hence, the formalities required for a valid simple donation are not applicable.
his own name. Even his Exhibit 7 was not mailed or served to
the addressee. Such attitude and laxity is very unnatural for a

Page 22 of 44
Petitioner contends that the burdens, charges or conditions imposed upon a donation need not be q What did you do then when you found out that the lot was
stated on the deed of donation itself. Thus, although the deed did not categorically impose any charge, includ[ed] in the dilinquent [sic] list?
burden or condition to be satisfied by him, the donation was onerous since he in fact and in reality paid
for the installments in arrears and for the remaining balance of the lot in question. Being an onerous
a I talked to the person in charged [sic] in the office and I
donation, his acceptance thereof may be express or implied, as provided under Art. 1320 of the Civil
asked him what to do so that the lot should not [be] included in
Code, and need not comply with the formalities required by Art. 749 of the same code. His payment of
the dilinquent [sic] list.
the arrearages and balance and his assertion of his right of possession against private respondent
clearly indicate his acceptance of the donation.
ATTY. FORONDA:
We rule that the donation was simple, not onerous. Even conceding that petitioner's full payment of the
purchase price of the lot might have been a burden to him, such payment was not however imposed by q And what was the anwer [sic] given to you to the inquiry
the donor as a condition for the donation. Rather, the deed explicitly stated: which you made?

That for and in consideration of the love and affection which the DONEE inspires in WITNESS:
the DONOR, and as an act of liberality and generosity and considering further that
the DONEE is a grandson of the DONOR, the DONOR hereby voluntarily and
a According to the person in the office, that I would pay the at
freely gives, transfer[s] and conveys, by way of donation unto said DONEE, his
heirs, executors, administrators and assigns, all the right, title and interest which least [sic] one half of the installment in order to take [out] the
the said DONOR has in the above described real property, together with all the document [from] the delinquent list.
buildings and improvements found therein, free from all lines [sic] and
encumbrances and charges whatsoever; 11[emphasis supplied] q And [were] you able to pay?

It is clear that the donor did not have any intention to burden or charge petitioner as the donee. The a I was able to pay, sir.
words in the deed are in fact typical of a pure donation. We agree with Respondent Court that the
payments made by petitioner were merely his voluntary acts. This much can be gathered from his
testimony in court, in which he never even claimed that a burden or charge had been imposed by his q What were you able to pay, one half of the balance or the
grandmother. entire amounts [sic]?

ATTY FORONDA: a First, I paid the [sic] one half of the balance since the time
the lot was awarded to us.

q After you have received this [sic] documents, the . . .

revocation of power of attorney and the Special Power of
Attorney in your favor, what did you do?
WITNESS:
a I went here in City Hall and verif[ied] the status of the award
of my grandmother.
q When you say the award, are you referring to the award in
particular [of the] lot in favor of your grandmother?
a Yes, Sir.
q What about the remaining balance, were you able to pay it?
a I was able to pay that, sir.
q So, as of now, the amount in the City of Manila of the lot has
already been duly paid, is it not?
a Yes, sir. 12
The payments even seem to have been made pursuant to the power of attorney 13 executed
by Catalina Reyes in favor of petitioner, her grandson, authorizing him to execute acts
necessary for the fulfillment of her obligations. Nothing in the records shows that such acts
were meant to be a burden in the donation.

q What was the result of your verification?

As a pure or simple donation, the following provisions of the Civil Code are applicable:

a According to the person in the office, the papers of my

grandmother is [sic] includ[ed] in the dilinquent [sic] list. Art. 734. The donation is perfected from the moment the donor knows of the
acceptance by the donee.

Page 23 of 44
 Art. 746. Acceptance must be made during the lifetime of the donor and the donee.
Art. 749. In order that the donation of an immovable may be valid, it must be made
in a public instrument, specifying therein the property donated and the value of the
charges which the donee must satisfy.
The acceptance may be made in the same deed of donation and in a separate
public document, but it shall not take effect unless it is done during the lifetime of
the donor.
If the acceptance is made in a separate instrument, the donor shall be notified
thereof in authentic form, and this step shall be noted in both instruments.
In the words of the esteemed Mr. Justice Jose C. Vitug, 14 "Like any other contract, an agreement of the
parties is essential. The donation, following the theory of cognition (Article 1319, Civil Code), is
perfected only upon the moment the donor knows of the acceptance by the donee." Furthermore, "[i]f
the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic
form, and this step shall be noted in both instruments." 15
Acceptance of the donation by the donee is, therefore, indispensable; its absence makes the donation
null and void. 16 The perfection and the validity of a donation are well explained by former Sen. Arturo
M. Tolentino in this wise:
. . . Title to immovable property does not pass from the donor to the donee by
virtue of a deed of donation until and unless it has been accepted in a public
instrument and the donor duly notified thereof. The acceptance may be made in the
very same instrument of donation. If the acceptance does not appear in the same
document, it must be made in another. Solemn words are not necessary; it is
sufficient if it shows the intention to accept. But in this case it is necessary that
formal notice thereof be given to the donor, and the fact that due notice has been
given must be noted in both instruments (that containing the offer to donate and
that showing the acceptance). Then and only then is the donation perfected. If the
instrument of donation has been recorded in the registry of property, the instrument
that shows the acceptance should also be recorded. Where the deed of donation
fails to show the acceptance, or where the formal notice of the acceptance, made
in a separate instrument, is either not given to the donor or else not noted in the
deed of donation and in the separate acceptance, the donation is null and void. 17
Exhibit E (the deed of donation) does not show any indication that petitioner-donee accepted the gift.
During the trial, he did not present any instrument evidencing such acceptance despite the fact that
private respondent already raised this allegation in his supplemental pleading 18 to which petitioner
raised no objection. It was only after the Court of Appeals had rendered its decision, when petitioner
came before this Court, that he submitted an affidavit 19dated August 28, 1990, manifesting that he
"wholeheartedly accepted" the lot given to him by his grandmother, Catalina Reyes. This is too late,
because arguments, evidence, causes of action and matters not raised in the trial court may no longer
be raised on appeal. 20
True, the acceptance of a donation may be made at any time during the lifetime of the donor. And
granting arguendothat such acceptance may still be admitted in evidence on appeal, there is still need
for proof that a formal notice of such acceptance was received by the donor and noted in both the deed
of donation and the separate instrument embodying the acceptance. At the very least, this last legal
requisite of annotation in both instruments of donation and acceptance was not fulfilled by petitioner.
For this reason, the subject lot cannot be adjudicated to him.
Secondary Issue:
Supervening Events
Petitioner also contends that certain supervening events have transpired which render the assailed
Decision "manifestly unjust, unfair and inequitable" to him. The City of Manila has granted his request
for the transfer to his name of the lot originally awarded in favor of Catalina Reyes. A deed of
sale 21 covering the subject lot has in fact been executed between the City of Manila, as the vendor; and
petitioner, as the vendee. The corresponding certificate of title 22 has also been issued in petitioner's
name.
A close perusal of the city government's resolution 23 granting petitioner's request reveals that the
request for and the grant of the transfer of the award were premised on the validity and perfection of the
deed of donation executed by the original awardee, petitioner's grandmother. This is the same
document upon which petitioner, as against private respondent, asserts his right over the lot. But, as
earlier discussed and ruled, this document has no force and effect and, therefore, passes no title, right
or interest.
Furthermore, the same resolution states:
WHEREAS, in a report submitted by Ms. [Menchu C.] Bello [, Special Investigator,]
on February 7, 1990, it is stated that . . . constructed on the lot is a make-shift
structure used for residential purposes by the proposed transferee Tito Lagazo and
his family; . . . and that constructed at Lot 8, Block 6, former Monserrat Estate is a
make-shift structure used as a dwelling place by Lagazo and family because the
front portion of their house which was constructed on a road lot was demolished,
and the structure was extended backward covering a portion of the old temporary
road lot. . . .
The above findings of the investigator are, however, directly contradictory to the testimonies
in court of petitioner himself and of private respondent. Petitioner claimed the following: that
the house constructed on the subject lot was owned by his grandmother Catalina Jacob; that
before the latter left for Canada in 1977, Eduardo Español had already been living in the
same house and continued to do so until 1982; and that private respondent occupied the
premises after Español left. 24 On the other hand, private respondent testified that he bought
the subject house and lot from Eduardo Español in 1982, after which he and his family
occupied the same; but sometime in 1985, they had to leave the place due to a road-
widening project which reduced the house to "about three meters [in] length and one arm[']s
width." 25
Between the testimonies under oath of the contending parties and the report — not subjected to cross-
examination — which was prepared by the investigator who recommended the approval of petitioner's
request for transfer, it is the former to which the Court is inclined to give more credence. The
investigator's report must have been based on the misrepresentations of petitioner who arrogated unto
himself the prerogatives of both Español and private respondent. Further, it is on record that petitioner
had required private respondent to vacate the subject premises before he instituted this complaint. This
shows he was not in actual possession of the property, contrary to the report of the investigator.
Cabanlit's Claim of Ownership
Page 24 of 44
Petitioner also assails Respondent Court's conclusion that it is unnecessary to pass upon private
respondent's claim over the property. Petitioner insists that the principal issue in the case, as agreed
upon by the parties during pretrial, is "who between the parties is the owner of the house and lot in
question."
In disposing of the principal issue of the right of petitioner over the subject property under the deed of
donation, we arrive at one definite conclusion: on the basis of the alleged donation, petitioner cannot be
considered the lawful owner of the subject property. This does not necessarily mean, however, that
private respondent is automatically the rightful owner.
In resolving private respondent's claim of ownership, the examination of the genuineness of the
documents (deeds of assignment over the lot between Catalina Reyes and Eduardo Español and
between Español and private respondent) upon which he asserts his right is necessary, especially in
light of petitioner's allegations of forgery. However, the respective assignors in both documents are not
parties to the instant case. Not having been impleaded in the trial court, they had no participation
whatsoever in the proceedings at bar. Elementary norms of fair play and due process bar us from
making any disposition which may affect their rights. Verily, there can be no valid judgment for or
against them. 26
Anyhow, since petitioner, who was the plaintiff below, failed to prove with clear and convincing evidence
his ownership claim over the subject property, the parties thus resume their status quo ante. The trial
court should have dismissed his complaint for his failure to prove a right superior to that of private
respondent, but without prejudice to any action that Catalina Reyes or Eduardo Español or both may
have against said private respondent. Stating this point otherwise, we are not ruling in this case on the
rights and obligations between, on the one hand, Catalina Reyes, her assigns and/or representatives;
and, on the other, Private Respondent Cabanlit.
Not having proven any right to a valid, just and demandable claim that compelled him to litigate or to
incur expenses in order to protect his interests by reason of an unjustified act or omission of private
respondent, petitioner cannot be awarded attorney's fees. 27
WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED.
SO ORDERED.
G.R. No. 123968 April 24, 2003
URSULINA GANUELAS, METODIO GANUELAS and ANTONIO GANUELAS, petitioners,
vs.
HON. ROBERT T. CAWED, Judge of the Regional Trial Court of San Fernando, La Union (Branch
29), LEOCADIA G. FLORES, FELICITACION G. AGTARAP, CORAZON G. SIPALAY and ESTATE
OF ROMANA GANUELAS DE LA ROSA, represented by GREGORIO DELA ROSA,
Administrator, respondents.
CARPIO MORALES, J.:
The present petition for review under Rule 45 of the Rules of Court assails, on a question of law, the
February 22, 1996 decision 1 of the Regional Trial Court of San Fernando, La Union, Branch 29, in Civil
Case No. 3947, an action for declaration of nullity of a deed of donation.
The facts, as culled from the records of the case, are as follows:
On April 11, 1958, Celestina Ganuelas Vda. de Valin (Celestina) executed a Deed of Donation of Real
Property 2 covering seven parcels of land in favor of her niece Ursulina Ganuelas (Ursulina), one of
herein petitioners.
The pertinent provision of the deed of donation reads, quoted verbatim:
xxx xxx xxx
That, for and in consideration of the love and affection which the DONOR has for the
DONEE, and of the faithful services the latter has rendered in the past to the former, the said
DONOR does by these presents transfer and convey, by way of DONATION, unto the
DONEE the property above, described, to become effective upon the death of the DONOR;
but in the event that the DONEE should die before the DONOR, the present donation shall be
deemed rescinded and of no further force and effect.
xxx xxx xxx.3
On June 10, 1967, Celestina executed a document denominated as Revocation of Donation4 purporting
to set aside the deed of donation. More than a month later or on August 18, 1967, Celestina died
without issue and any surviving ascendants and siblings.
After Celestina's death, Ursulina had been sharing the produce of the donated properties with private
respondents Leocadia G. Flores, et al., nieces of Celestina.
In 1982, or twenty-four years after the execution of the Deed of Donation, Ursulina secured the
corresponding tax declarations, in her name, over the donated properties, to wit: Tax Declarations Nos.
18108, 18109, 18110, 18111, 18112, 18113 and 18114, and since then, she refused to give private
respondents any share in the produce of the properties despite repeated demands.
Private respondents were thus prompted to file on May 26, 1986 with the RTC of San Fernando, La
Union a complaint5 against Ursulina, along with Metodio Ganuelas and Antonio Ganuelas who were
alleged to be unwilling plaintiffs. The complaint alleged that the Deed of Donation executed by
Celestina in favor of Ursulina was void for lack of acknowledgment by the attesting witnesses thereto
before notary public Atty. Henry Valmonte, and the donation was a disposition mortis causa which failed
to comply with the provisions of the Civil Code regarding formalities of wills and testaments, hence, it
was void. The plaintiffs-herein private respondents thus prayed that judgment be rendered ordering
Ursulina to return to them as intestate heirs the possession and ownership of the properties. They
likewise prayed for the cancellation of the tax declarations secured in the name of Ursulina, the partition
of the properties among the intestate heirs of Celestina, and the rendering by Ursulina of an accounting
of all the fruits of the properties since 1982 and for her to return or pay the value of their shares.
The defendants-herein petitioners alleged in their Answer6 that the donation in favor of Ursulina
was inter vivos as contemplated under Article 729 of the Civil Code, 7 hence, the deed did not have to
comply with the requirements for the execution of a valid will; the Revocation of Donation is null and
void as the ground mentioned therein is not among those provided by law to be the basis thereof; and
at any rate, the revocation could only be legally enforced upon filing of the appropriate complaint in
court within the prescriptive period provided by law, which period had, at the time the complaint was
filed, already lapsed.
Page 25 of 44
By Decision of February 22, 1996, the trial court, holding that the provision in the Deed of Donation that
in the event that the DONEE should predecease the DONOR, the "donation shall be deemed rescinded
and of no further force and effect" is an explicit indication that the deed is a donation mortis
causa,8 found for the plaintiffs-herein private respondents, thus:
WHEREFORE the Court renders judgment declaring null and void the Deed of Donation of
Real Property executed by Celestina Ganuelas, and orders the partition of the estate of
Celestina among the intestate heirs.
rights" they have over the properties subject of the donation. Petitioners, who were required to
comment on the letter, by Comment of October 28, 1998, 21 welcome private respondents' gesture but
pray that "for the sake of enriching jurisprudence, their [p]etition be given due course and resolved."
The issue is thus whether the donation is inter vivos or mortis causa.
Crucial in the resolution of the issue is the determination of whether the donor intended to transfer the
ownership over the properties upon the execution of the deed. 22

SO ORDERED.9
Donation inter vivos differs from donation mortis causa in that in the former, the act is immediately
operative even if the actual execution may be deferred until the death of the donor, while in the latter,
The trial court also held that the absence of a reservation clause in the deed implied that Celestina nothing is conveyed to or acquired by the donee until the death of the donor-testator.23 The following
retained complete dominion over her properties, thus supporting the conclusion that the donation ruling of this Court in Alejandro v. Geraldez is illuminating:24
is mortis causa,10 and that while the deed contained an attestation clause and an acknowledgment
showing the intent of the donor to effect a postmortem disposition, the acknowledgment was defective
If the donation is made in contemplation of the donor's death, meaning that the full or naked
as only the donor and donee appear to have acknowledged the deed before the notary public, thereby
ownership of the donated properties will pass to the donee only because of the donor's death,
rendering the entire document void.11
then it is at that time that the donation takes effect, and it is a donation mortis causa which
should be embodied in a last will and testament.
Lastly, the trial court held that the subsequent execution by Celestina of the Revocation of Donation
showed that the donor intended the revocability of the donation ad nutum, thus sustaining its finding
But if the donation takes effect during the donor's lifetime or independently of the donor's
that the conveyance was mortis causa.12
death, meaning that the full or naked ownership (nuda proprietas) of the donated properties
passes to the donee during the donor's lifetime, not by reason of his death but because of the
On herein petitioners' argument that the Revocation of Donation was void as the ground mentioned deed of donation, then the donation is inter vivos.
therein is not one of those allowed by law to be a basis for revocation, the trial court held that the legal
grounds for such revocation as provided under the Civil Code arise only in cases of donations inter
The distinction between a transfer inter vivos and mortis causa is important as the validity or revocation
vivos, but not in donations mortis causa which are revocable at will during the lifetime of the donor. The
of the donation depends upon its nature. If the donation is inter vivos, it must be executed and accepted
trial court held, in any event, that given the nullity of the disposition mortis causa in view of a failure to
with the formalities prescribed by Articles 74825 and 74926 of the Civil Code, except when it is onerous in
comply with the formalities required therefor, the Deed of Revocation was a superfluity.13
which case the rules on contracts will apply. If it is mortis causa, the donation must be in the form of a
will, with all the formalities for the validity of wills, otherwise it is void and cannot transfer ownership. 27
Hence, the instant petition for review, petitioners contending that the trial court erred:
The distinguishing characteristics of a donation mortis causa are the following:
I. . . . WHEN IT DECLARED NULL AND VOID THE DONATION EXECUTED BY CELESTINA
GANUELAS;
1. It conveys no title or ownership to the transferee before the death of the transferor; or,
what amounts to the same thing, that the transferor should retain the ownership (full or
II. . . . WHEN IT UPHELD THE REVOCATION OF DONATION; naked) and control of the property while alive;

III. . . . IN RENDERING ITS DECISION ADVERSE TO PETITIONER URSULINA 2. That before his death, the transfer should be revocable by the transferor at will, ad nutum;
GANUELAS.14 but revocability may be provided for indirectly by means of a reserved power in the donor to
dispose of the properties conveyed;
Petitioners argue that the donation contained in the deed is inter vivos as the main consideration for its
execution was the donor's affection for the donee rather than the donor's death; 15 that the provision on 3. That the transfer should be void if the transferor should survive the transferee.28
the effectivity of the donation — after the donor's death — simply meant that absolute ownership would
pertain to the donee on the donor's death;16 and that since the donation is inter vivos, it may be revoked
In the donation subject of the present case, there is nothing therein which indicates that any right, title
only for the reasons provided in Articles 760,17 76418 and 76519 of the Civil Code.
or interest in the donated properties was to be transferred to Ursulina prior to the death of Celestina.

In a letter of March 16, 1998,20 private respondent Corazon Sipalay, reacting to this Court's January 28,
The phrase "to become effective upon the death of the DONOR" admits of no other interpretation but
1998 Resolution requiring private respondents "to SHOW CAUSE why they should not be disciplinarily
that Celestina intended to transfer the ownership of the properties to Ursulina on her death, not during
dealt with or held in contempt" for failure to submit the name and address of their new counsel, explains
her lifetime.29
that they are no longer interested in pursuing the case and are "willing and ready to waive whatever

Page 26 of 44
More importantly, the provision in the deed stating that if the donee should die before the donor, the The trial court did not thus commit any reversible error in declaring the Deed of Donation to be mortis
donation shall be deemed rescinded and of no further force and effect shows that the donation is a causa.
postmortem disposition.
WHEREFORE, the petition is hereby DENIED for lack of merit.
As stated in a long line of cases, one of the decisive characteristics of a donation mortis causa is that
the transfer should be considered void if the donor should survive the donee. 30
SO ORDERED.

More. The deed contains an attestation clause expressly confirming the donation as mortis causa:
G.R. No. 150179 April 30, 2003

SIGNED by the above-named donor, Celestina Ganuelas, at the foot of this deed of donation
HEIRS OF WILLIAM SEVILLA, NAMELY: WILFREDO SEVILLA, WILSON SEVILLA, WILMA
mortis causa, consisting of two (2) pages and on the left margin of each and every page
SEVILLA, WILLINGTON SEVILLA, AND WILLIAM SEVILLA, JR., HEIRS OF MARIA SEVILLA,
thereof in the joint presence of all of us who at her request and in her presence and that of
NAMELY: AMADOR SEVILLA, JENO CORTES, VICTOR CORTES, MARICEL CORTES,
each other have in like manner subscribed our names as witnesses.31 (Emphasis supplied)
ALELEI* CORTES AND ANJEI** CORTES,petitioners,
vs.
To classify the donation as inter vivos simply because it is founded on considerations of love and LEOPOLDO SEVILLA, PETER SEVILLA, AND LUZVILLA SEVILLA, respondents.
affection is erroneous. That the donation was prompted by the affection of the donor for the donee and
the services rendered by the latter is of no particular significance in determining whether the deed
YNARES-SANTIAGO, J.:
constitutes a transfer inter vivos or not, because a legacy may have an identical motivation. 32 In other
words, love and affection may also underline transfers mortis causa.33
One who alleges defect or lack of valid consent to a contract by reason of fraud or undue influence
must establish by full, clear and convincing evidence such specific acts that vitiated a party's consent,
In Maglasang v. Heirs of Cabatingan,34 the deeds of donation contained provisions almost identical to
otherwise, the latter's presumed consent to the contract prevails.1
those found in the deed subject of the present case:

The instant petition for review seeks to set aside the September 26, 2000 Decision 2 of the Court of
That for and in consideration of the love and affection of the DONOR for the DONEE, x x x.
Appeals in CA-G.R. CV No. 48956, affirming in toto the Decision3 of the Regional Trial Court of Dipolog
the DONOR does hereby, by these presents, transfer, convey, by way of donation, unto the
City, Branch 6, in Civil Case No. 4240 which declared, inter alia, the questioned Deed of Donation Inter
DONEE the above-described property, together with the buildings and all improvements
Vivos valid and binding on the parties.
existing thereon, to become effective upon the death of the DONOR; PROVIDED,
HOWEVER, that in the event that the DONEE should die before the DONOR, the present
donation shall be deemed automatically rescinded and of no further force and effect. The undisputed facts reveal that on December 10, 1973, Filomena Almirol de Sevilla died intestate
(Emphasis supplied) leaving 8 children, namely: William, Peter, Leopoldo, Felipe, Rosa, Maria, Luzvilla, and Jimmy, all
surnamed Sevilla. William, Jimmy and Maria are now deceased and are survived by their respective
spouses and children.4 Filomena Almirol de Sevilla left the following properties:
In that case, this Court held that the donations were mortis causa, for the above-quoted provision
conclusively establishes the donor's intention to transfer the ownership and possession of the donated
property to the donee only after the former's death. Like in the present case, the deeds therein did not PARCEL I:
contain any clear provision that purports to pass proprietary rights to the donee prior to the donor's
death.
A parcel of land known as Lot No. 653 situated at General Luna St., Dipolog City, with an
area of about 804 square meters, more or less, duly covered by Transfer Certificate of Title
As the subject deed then is in the nature of a mortis causa disposition, the formalities of a will under No. (T-6671)-1448 [in the name of Filomena Almirol de Sevilla, Honorata Almirol and Felisa
Article 728 of the Civil Code should have been complied with, failing which the donation is void and Almirol] and assessed at P31,360.00 according to Tax Dec. No. 018-947;
produces no effect.35
PARCEL II:
As noted by the trial court, the attesting witnesses failed to acknowledge the deed before the notary
public, thus violating Article 806 of the Civil Code which provides:
A parcel of land known as Lot No. 3805-B situated at Olingan, Dipolog City, with an area of
about 18,934 square meters, more or less, duly covered by Transfer Certificate of Title No. T-
Art. 806. Every will must be acknowledged before a notary public by the testator and the 6672 and assessed at P5,890 according to Tax Dec. No. 009-761;
witnesses. The notary public shall not be required to retain a copy of the will, or file another
with the office of the Clerk of Court. (Emphasis supplied)
PARCEL III:

Page 27 of 44
 A parcel of land known as Lot No. 837-1/4 situated at Magsaysay Street, Dipolog City, with
an area of about 880 square meters more or less, duly covered by Original Certificate of Title
No. 0-6064 and assessed at P12,870.00 according to Tax Dec. No. 020-1078;
PARCEL IV:
A parcel of residential land known as Lot No. 1106-B-3 situated at Sta. Filomena, Dipolog
City, with an area of 300 square meters, more or less, assessed at P3,150.00 according to
Tax Dec. No. 006-317;
Commercial building erected on Parcel I above-described; and residential building erected
just at the back of the commercial building above-described and erected on Parcel I above-
described;5
Parcel I, Lot No. 653, is the paraphernal property of Filomena Almirol de Sevilla which she co-owned
with her sisters, Honorata Almirol and Felisa Almirol, 6 who were both single and without issue. Parcels
II, III and IV are conjugal properties of Filomena Almirol de Sevilla and her late husband Andres
Sevilla.7 When Honorata died in 1982, her 1/3 undivided share in Lot No. 653 was transmitted to her
heirs, Felisa Almirol and the heirs of Filomena Almirol de Sevilla, who thereby acquired the property in
the proportion of one-half share each.
During the lifetime of Felisa and Honorata Almirol, they lived in the house of Filomena Almirol de
Sevilla, together with their nephew, respondent Leopoldo Sevilla and his family. Leopoldo attended to
the needs of his mother, Filomena, and his two aunts, Honorata and Felisa. 8
Felisa died on July 6, 1988.9 Previous thereto, on November 25, 1985, she executed a last will and
testament devising her 1/2 share in Lot No. 653 to the spouses Leopoldo Sevilla and Belen
Leyson.10 On August 8, 1986, Felisa executed another document denominated as "Donation Inter
Vivos" ceding to Leopoldo Sevilla her 1/2 undivided share in Lot No. 653, which was accepted by
Leopoldo in the same document.11
On September 3, 1986, Felisa Almirol and Peter Sevilla, in his own behalf and in behalf of the heirs of
Filomena Almirol de Sevilla, executed a Deed of Extra-judicial Partition, identifying and adjudicating the
1/3 share of Honorata Almirol to the heirs of Filomena Almirol de Sevilla and to Felisa Almirol.12
Thereafter, respondents Leopoldo, Peter and Luzvilla Sevilla obtained the cancellation of Transfer
Certificate of Title No. (T-6671)-1448, over Lot No. 653, and the issuance of the corresponding titles to
Felisa Almirol and the heirs of Filomena Almirol de Sevilla. However, the requested titles for Lot Nos.
653-A and 653-B, were left unsigned by the Register of Deeds of Dipolog City, pending submission by
Peter Sevilla of a Special Power of Attorney authorizing him to represent the other heirs of Filomena
Almirol de Sevilla.13
On June 21, 1990, Felipe Sevilla, Rosa Sevilla, and the heirs of William, Jimmy and Maria, all
surnamed Sevilla, filed the instant case against respondents Leopoldo Sevilla, Peter Sevilla and
Luzvilla Sevilla, for annulment of the Deed of Donation and the Deed of Extrajudicial Partition,
Accounting, Damages, with prayer for Receivership and for Partition of the properties of the late
Filomena Almirol de Sevilla.14 They alleged that the Deed of Donation is tainted with fraud because
Felisa Almirol, who was then 81 years of age, was seriously ill and of unsound mind at the time of the
execution thereof; and that the Deed of Extra-judicial Partition is void because it was executed without
their knowledge and consent.15
In their answer,16 respondents denied that there was fraud or undue pressure in the execution of the
questioned documents. They alleged that Felisa was of sound mind at the time of the execution of the
assailed deeds and that she freely and voluntarily ceded her undivided share in Lot No. 653 in
consideration of Leopoldo's and his family's love, affection, and services rendered in the past.
Respondents further prayed that Parcels II, III, and IV be partitioned among the heirs of Filomena
Almirol de Sevilla in accordance with the law on intestate succession.
On December 16, 1994, a decision was rendered by the Regional Trial Court of Dipolog City,
Zamboanga del Norte, Branch 6, upholding the validity of the Deed of Donation and declaring the Deed
of Extra-judicial Partition unenforceable. The dispositive portion thereof, reads:
WHEREFORE, IN VIEW OF THE FOREGOING, summing up the evidence for both the
plaintiffs and the defendants, the Court hereby renders judgment:
1) Declaring the questioned Deed of Donation Inter Vivos valid and binding, and, therefore,
has the full force and effect of law;
2) Declaring the questioned Deed of Extra-Judicial Partition as unenforceable as yet as
against the other heirs, as it lacks the legal requisites of Special Power of Attorney or any
other appropriate instrument to be executed by the other heirs who were not made parties
thereto;
3) Finding the parties herein entitled to the partition of Parcel II, III, IV as designated in the
Complaint, in equal shares, and, as to Lot No. 653 designated as Parcel I, it shall be divided
equally into two, between defendant Leopoldo Sevilla on one hand, and, collectively, the
Heirs of William Sevilla, Heirs of Jimmy Sevilla, Heirs of Maria Sevilla, Felipe Sevilla,
Leopoldo Sevilla, Peter Sevilla, Luzvilla Sevilla-Tan, on the other hand, as well as the two
buildings thereon in proportionate values;
4) Directing the parties, if they can agree, to submit herewith a project of partition, which shall
designate the share which pertains to the heirs entitled thereto, that is, the particular and
specific portions of the properties subject of the partition;
5) Directing defendant Peter Sevilla to pay and/or collect from the parties the amounts
corresponding to each one entitled or liable thereto, as recorded in the Statement of
Accounts, except for defendant Leopoldo Sevilla who is found by the Court to have incurred
only an overdraft of P5,742.98 and not P33,204.33 as earlier computed therein.
6) Dismissing the plaintiffs' claim for damages, which is not proved with sufficient evidence,
and defendants' counterclaim, on the same ground.
7) With costs de officio.
IT IS SO ORDERED.17
Both parties appealed to the Court of Appeals. Petitioners contended that the Deed of Donation should
be declared void and that Lot No. 653 should be divided equally among them. Respondents, on the
other hand, posited that the trial court erred in declaring the Deed of Extra-judicial Partition
unenforceable against the other heirs of Filomena Almirol de Sevilla who were not parties to said Deed.
Page 28 of 44
On September 26, 2000, the Court of Appeals affirmed in toto the assailed decision of the trial
court.18 Petitioners filed a motion for reconsideration but the same was denied on August 30, 2001. 19
Hence, the instant petition based on the following assignment of errors:
THAT THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING AS VOID AB INITIO THE
DEED OF DONATION EXECUTED BY FELISA ALMIROL IN FAVOR OF RESPONDENT LEOPOLDO
SEVILLA CEDING TO HIM ONE HALF PORTION OF LOT 653, DIPOLOG CADASTRE, IT HAVING
BEEN EXECUTED WITH FRAUD, UNDUE PRESSURE AND INFLUENCE;
THAT THE APPELLATE COURT GREATLY ERRED IN NOT ORDERING THE PARTITION OF LOT
653, DIPOLOG CADASTRE EQUALLY AMONG THE EIGHT (8) HEIRS OF FILOMENA, HONORATA
AND FELISA, ALL SURNAMED ALMIROL.20
To resolve the issue raised in the instant petition for review, the validity of the donation inter
vivos executed by Felisa Almirol in favor of Leopoldo Sevilla must first be determined.
Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of
another who accepts it.21 Under Article 737 of the Civil Code, the donor's capacity shall be determined
as of the time of the making of the donation. Like any other contract, an agreement of the parties is
essential,22 and the attendance of a vice of consent renders the donation voidable. 23
In the case at bar, there is no question that at the time Felisa Almirol executed the deed of donation she
was already the owner of 1/2 undivided portion of Lot No. 653. Her 1/3 undivided share therein was
increased by 1/2 when she and Filomena inherited the 1/3 share of their sister Honorata after the
latter's death. Hence, the 1/2 undivided share of Felisa in Lot No. 653 is considered a present property
which she can validly dispose of at the time of the execution of the deed of donation. 24
Petitioners, however, insist that respondent Leopoldo Sevilla employed fraud and undue influence on
the person of the donor. This argument involves appreciation of the evidence. 25 The settled rule is that
factual findings of the trial court, if affirmed by the Court of Appeals, are entitled to great
respect.26 There are exceptional circumstances when findings of fact of lower courts may be set
aside27 but none is present in the case at bar. Indeed, neither fraud nor undue influence can be inferred
from the following circumstance alleged by the petitioners, to wit —
A. That Felisa Almirol lived with respondent Leopoldo Sevilla in the residential house owned
by petitioners and respondents;
B. That the old woman Felisa Almirol was being supported out of the rentals derived from the
building constructed on the land which was a common fund. . . .
C. That when Felisa Almirol was already 82 years old, he [Leopoldo Sevilla] accompanied her
in the Office of Atty. Vic T. Lacaya, Sr., for the purpose of executing her last will and
testament . . .
D. That in the last will and testament executed by Felisa Almirol, she had devised in favor of
respondent Leopoldo Sevilla one-half of the land in question;
E. That respondent Leopoldo Sevilla not contented with the execution by Felisa Almirol of her
last will and testament, had consulted a lawyer as to how he will be able to own the land
immediately;
F. That upon the advice of Atty. Helen Angeles, Clerk of Court of the Regional Trial Court of
Zamboanga del Norte, Dipolog City, Felisa Almirol executed a Deed of Donation, hence, the
questioned Deed of Donation executed in his favor;
G. That the subject matter of the Deed of Donation was the one-half portion of Lot 653,
Dipolog Cadastre, which was willed by Felisa Almirol, in favor of respondent Leopoldo Sevilla
in her last will and testament;
H. That at the time of the execution of the Deed of Donation, Lot No. 653, Dipolog Cadastre,
was not yet partitioned between petitioners and respondents they being heirs of the late
Filomena and Honorata, all surnamed Almirol;
I. That after the execution of the Deed of Donation, respondent Peter Sevilla and the late
Felisa Almirol were the only ones who executed the Deed of Extra-judicial Partition over Lot
653, Dipolog Cadastre, the petitioners were not made parties in the said Deed of Extrajudicial
Partition;
J. That on the basis of the Deed of Extrajudicial Partition and Deed of Donation, respondent
Leopoldo Sevilla caused the subdivision survey of Lot 653, Dipolog Cadastre, dividing the
same into two (2) lots, adjudicating one-half of the lot in his favor and the other half in favor of
respondents Peter Sevilla and Luzvilla Sevilla, and to respondent Leopoldo Sevilla himself;
K. That only two persons knew the actual survey of the land, petitioner Felipe Sevilla and
respondent Leopoldo Sevilla himself, the rest of the co-owners were not even notified;
L. That on the basis of the Extrajudicial Partition, Deed of Donation, the approved subdivision
plan, respondent Leopoldo Sevilla filed a petition for issuance of the corresponding titles for
the two lots, but the Register of Deeds of Dipolog City refused to issue the corresponding
titles for the two lots to respondent Leopoldo Sevilla so that up to this moment . . . the two
titles were left unsigned by the Register of Deeds.28
There is fraud when, through the insidious words or machinations of one of the contracting parties, the
other is induced to enter into a contract which, without them, he would not have agreed to. 29 There is
undue influence when a person takes improper advantage of his power over the will of another,
depriving the latter of a reasonable freedom of choice. The following circumstances shall be
considered: the confidential, family, spiritual and other relations between the parties, or the fact that the
person alleged to have been unduly influenced was suffering from mental weakness, or was ignorant or
in financial distress.30
Ei incumbit probatio qui dicit, non qui negat. He who asserts, not he who denies, must prove. We have
consistently applied the ancient rule that if the plaintiff, upon whom rests the burden of proving his
cause of action, fails to show in a satisfactory manner facts on which he bases his claim, the defendant
is under no obligation to prove his exception or defense. 31 In the instant case, the self-serving testimony
of the petitioners are vague on what acts of Leopoldo Sevilla constituted fraud and undue influence and
on how these acts vitiated the consent of Felisa Almirol. Fraud and undue influence that vitiated a
party's consent must be established by full, clear and convincing evidence, otherwise, the latter's
Page 29 of 44
presumed consent to the contract prevails. 32 Neither does the fact that the donation preceded the
partition constitute fraud. It is not necessary that partition should first be had because what was
donated to Leopoldo was the 1/2 undivided share of Felisa in Lot No. 653.
Moreover, petitioners failed to show proof why Felisa should be held incapable of exercising sufficient
judgment in ceding her share to respondent Leopoldo. 33 As testified by the notary public who notarized
the Deed of Donation, Felisa confirmed to him her intention to donate her share in Lot No. 653 to
Leopoldo. He stressed that though the donor was old, she was of sound mind and could talk sensibly.
Significantly, there is nothing in the record that discloses even an attempt by petitioners to rebut said
declaration of the notary public.
Clearly, therefore, the courts below did not err in sustaining the validity of the deed of donation.
Anent the Deed of Extra-judicial Partition, we find that the same is void ab initio and not merely
unenforceable. In Delos Reyes v. Court of Appeals,34 which is a case involving the sale of a lot by a
person who is neither the owner nor the legal representative, we declared the contract void ab initio. It
was held that one of the requisites of a valid contract under Article 1318 of the Civil Code is the consent
and the capacity to give consent of the parties to the contract. The legal capacity of the parties is an
essential element for the existence of the contract because it is an indispensable condition for the
existence of consent. There is no effective consent in law without the capacity to give such consent. In
other words, legal consent presupposes capacity. Thus, there is said to be no consent, and
consequently, no contract when the agreement is entered into by one in behalf of another who has
never given him authorization therefor unless he has by law a right to represent the latter. 35
In the case at bar, at the time Felisa executed the deed of extra-judicial partition dividing the share of
her deceased sister Honorata between her and the heirs of Filomena Almirol de Sevilla, she was no
longer the owner of the 1/2 undivided portion of Lot No. 653, having previously donated the same to
respondent Leopoldo Sevilla who accepted the donation in the same deed. A donation inter vivos, as in
the instant case, is immediately operative and final. 36As a mode of acquiring ownership, it results in an
effective transfer of title over the property from the donor to the donee and the donation is perfected
from the moment the donor knows of the acceptance by the donee. And once a donation is accepted,
the donee becomes the absolute owner of the property donated.
Evidently, Felisa did not possess the capacity to give consent to or execute the deed of partition
inasmuch as she was neither the owner nor the authorized representative of respondent Leopoldo to
whom she previously transmitted ownership of her undivided share in Lot No. 653. Considering that she
had no legal capacity to give consent to the deed of partition, it follows that there is no consent given to
the execution of the deed, and therefore, there is no contract to speak of. As such, the deed of partition
is void ab initio, hence, not susceptible of ratification.
Nevertheless, the nullity of the deed of extra-judicial partition will not affect the validity of the
donation inter vivosceding to respondent Leopoldo Sevilla the 1/2 undivided share of Felisa Almirol in
Lot No. 653. Said lot should therefore be divided as follows: 1/2 shall go to respondent Leopoldo Sevilla
by virtue of the deed of donation, while the other half shall be divided equally among the heirs of
Filomena Almirol de Sevilla including Leopoldo Sevilla, following the rules on intestate succession.
Finally, we note that the name of Rosa Sevilla, daughter of Filomena Almirol de Sevilla, and one of the
plaintiffs herein, was omitted in the dispositive portion of the trial court's decision. 37 Her name should
therefore be included in the dispositive portion as one of the heirs entitled to share in the properties of
the late Filomena Almirol de Sevilla.
WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals in CA-G.R. CV No.
48956, affirming in toto the Decision of the Regional Trial Court of Dipolog City, Branch 6, in Civil Case
No. 4240, is AFFIRMED with MODIFICATION. The Deed of Extra-judicial Partition dated September 3,
1986 is declared void, and the name of Rosa Sevilla is ordered included in the dispositive portion of the
trial court's judgment.
SO ORDERED.
G.R. No. 152317 November 10, 2004
VICTORIA MOREÑO-LENTFER,* GUNTER LENTFER and JOHN CRAIGIE YOUNG
CROSS, petitioners,
vs.
HANS JURGEN WOLFF, respondent.
DECISION
QUISUMBING, J.:
For review on certiorari are the Decision1 dated June 14, 2001, and Resolution2 dated February 22,
2002, of the Court of Appeals in CA-G.R. CV No. 48272. The decision reversed the judgment3 of the
Regional Trial Court of Calapan City, Oriental Mindoro, Branch 39, in Civil Case No. R-4219.
The facts are as follows:
The petitioners are Gunter Lentfer, a German citizen; his Filipina wife, Victoria Moreño-Lentfer; and
John Craigie Young Cross, an Australian citizen, all residing in Sabang, Puerto Galera, Oriental
Mindoro. Respondent Hans Jurgen Wolff is a German citizen, residing in San Lorenzo Village, Makati
City.
Petitioners alleged that with respondent, on March 6, 1992, they engaged the notarial services of Atty.
Rodrigo C. Dimayacyac for: (1) the sale of a beach house owned by petitioner Cross in Sabang, Puerto
Galera, Oriental Mindoro, and (2) the assignment of Cross' contract of lease on the land where the
house stood. The sale of the beach house and the assignment of the lease right would be in the name
of petitioner Victoria Moreño-Lentfer, but the total consideration of 220,000 Deutschmarks (DM) would
be paid by respondent Hans Jurgen Wolff. A promissory note was executed by said respondent in favor
of petitioner Cross.
According to respondent, however, the Lentfer spouses were his confidants who held in trust for him, a
time deposit account in the amount of DM 200,0004 at Solid Bank Corporation. Apprised of his interest
to own a house along a beach, the Lentfer couple urged him to buy petitioner Cross' beach house and
lease rights in Puerto Galera. Respondent agreed and through a bank-to-bank transaction, he paid
Cross the amount of DM 221,7005 as total consideration for the sale and assignment of the lease rights.
Page 30 of 44
However, Cross, Moreño-Lentfer and Atty. Dimayacyac surreptitiously executed a deed of sale whereby
the beach house was made to appear as sold to Moreño-Lentfer for only P100,000.6 The assignment of
the lease right was likewise made in favor of Moreño-Lentfer.7 Upon learning of this, respondent filed a
Complaint docketed as Civil Case No. R-4219 with the lower court for annulment of sale and
reconveyance of property with damages and prayer for a writ of attachment.
After trial, the court a quo dismissed the complaint for failure to establish a cause of action, thus:
ACCORDINGLY, judgment is hereby rendered in favor of the defendants and against the
plaintiff, dismissing the complaint for the reason that plaintiff has not established a cause of
action against the defendants with costs against the plaintiff.
SO ORDERED.8
Aggrieved, respondent appealed to the Court of Appeals.9
But in its Decision10 dated June 14, 2001, the appellate court reversed the decision of the trial court,
thus:
WHEREFORE, the judgment appealed from is hereby REVERSED and a new one is hereby rendered,
as follows:
1. Defendants-appellees spouses Genter11 and Victoria Moreno-Lentfer and John
Craigie Young Cross are jointly and severally held liable to pay plaintiff-appellant
the amount of 220,000.00 DM German Currency or its present peso equivalent
plus legal interest starting from March 8, 1993, the date of the last final demand
letter;
2. The above defendants-appellees are jointly and severally held liable to pay
plaintiff-appellant the amount of P200,000.00 Philippine Currency, representing the
amount of expenses incurred in the repairs and maintenance of the property plus
legal interest starting from October 28, 1992, the date the amount was received by
defendant-appellee Victoria Moreno-Lentfer; and
3. The case against defendant-appellee Rodrigo Dimayacyac is dismissed.
SO ORDERED.12
Hence, the instant petition raising the following issues:
1) DOES ARTICLE 1238 OF THE NEW CIVIL CODE APPLY IN THE CASE AT BAR?13
2) DOES THE PRINCIPLE OF SOLUTIO INDEBITI UNDER ARTICLE 2154 OF THE NEW
CIVIL CODE, THE PRINCIPLE OF JUSTICE AND EQUITY, APPLY IN THE CASE AT
BAR?14
Article 1238 of the New Civil Code provides:
ART. 1238. Payment made by a third person who does not intend to be reimbursed by the
debtor is deemed to be a donation, which requires the debtor's consent. But the payment is in
any case valid as to the creditor who has accepted it.
Petitioners posit that in a contract of sale, the seller is the creditor, who in this case is Cross, and the
buyer is the debtor, namely Moreño-Lentfer in this case. Respondent is the third person who paid the
consideration on behalf of Moreño-Lentfer, the debtor. Petitioners insist that respondent did not intend
to be reimbursed for said payment and debtor Moreño-Lentfer consented to it. Thus, by virtue of Article
1238, payment by respondent is considered a donation.
Respondent counters that Article 1238 bears no relevance to the case since it applies only to contracts
of loan where payment is made by a third person to a creditor in favor of a debtor of a previously
incurred obligation. The instant case, in contrast, involves a contract of sale where no real creditor-
debtor relationship exists between the parties. Further, respondent argues his conduct never at any
time intimated any intention to donate in favor of petitioner Moreño-Lentfer.
Moreover, respondent contends that the alleged donation is void for non-compliance with the formal
requirements set by law. Citing Article 74815 of the New Civil Code, respondent avers that since the
amount involved exceeds P5,000, both the donation and its acceptance must be in writing for the
donation to be valid. Respondent further says there was no simultaneous delivery of the money as
required by Art. 748 for instances of oral donation. Respondent also calls our attention to the sudden
change in petitioners' theory. Previously, before the Court of Appeals, the petitioners claimed that what
was donated were the subject properties. But before this Court, they insist that what was actually
donated was the money used in the purchase of subject properties.
On this point, we find petitioners' stance without merit. Article 1238 of the New Civil Code is not
applicable in this case.
Trying to apply Art. 1238 to the instant case is like forcing a square peg into a round hole. The absence
of intention to be reimbursed, the qualifying circumstance in Art. 1238, is negated by the facts of this
case. Respondent's acts contradict any intention to donate the properties to petitioner Moreño-Lentfer.
When respondent learned that the sale of the beach house and assignment of the lease right were in
favor of Victoria Moreño-Lentfer, he immediately filed a complaint for annulment of the sale and
reconveyance of the property with damages and prayer for a writ of attachment. Respondent Moreño-
Lentfer at that time claimed the beach house, together with the lease right, was donated to her.
Noteworthy, she had changed her theory, to say that it was only the money used in the purchase that
was donated to her. But in any event, respondent actually stayed in the beach house in the concept of
an owner and shouldered the expenses for its maintenance and repair amounting to P200,000 for the
entire period of his stay for ten weeks. Moreover, the appellate court found that respondent is not
related or even close to the Lentfer spouses. Obviously, respondent had trusted the Lentfer spouses to
keep a time deposit account for him with Solid Bank for the purpose of making the purchase of the cited
properties.
Petitioner Moreño-Lentfer's claim of either cash or property donation rings hollow. A donation is a
simple act of liberality where a person gives freely of a thing or right in favor of another, who accepts
it.16 But when a large amount of money is involved, equivalent to P3,297,800, based on the exchange
rate in the year 1992, we are constrained to take the petitioners' claim of liberality of the donor with
more than a grain of salt.
Petitioners could not brush aside the fact that a donation must comply with the mandatory formal
requirements set forth by law for its validity. Since the subject of donation is the purchase money, Art.
Page 31 of 44
748 of the New Civil Code is applicable. Accordingly, the donation of money equivalent to P3,297,800
as well as its acceptance should have been in writing. It was not. Hence, the donation is invalid for non-
compliance with the formal requisites prescribed by law.
Anent the second issue, petitioners insist that since the deed of sale in favor of Moreño-Lentfer was
neither identified or marked nor formally offered in evidence, the same cannot be given any evidentiary
value. They add that since it was not annulled, it remains valid and binding. Hence, petitioners argue,
the principle of solutio indebiti under Article 215417 of the New Civil Code should be the applicable
provision in the resolution of this controversy. If so, the parties unjustly enriched would be liable to the
other party who suffered thereby by being correspondingly injured or damaged.
The quasi-contract of solutio indebiti harks back to the ancient principle that no one shall enrich himself
unjustly at the expense of another.18 It applies where (1) a payment is made when there exists no
binding relation between the payor, who has no duty to pay, and the person who received the payment,
and (2) the payment is made through mistake, and not through liberality or some other cause.19
In the instant case, records show that a bank-to-bank payment was made by respondent Wolff to
petitioner Cross in favor of co-petitioner Moreño-Lentfer. Respondent was under no duty to make such
payment for the benefit of Moreño-Lentfer. There was no binding relation between respondent and the
beneficiary, Moreño-Lentfer. The payment was clearly a mistake. Since Moreño-Lentfer received
something when there was no right to demand it, she had an obligation to return it. 20
Following Article 2221 of the New Civil Code, two conditions must concur to declare that a person has
unjustly enriched himself or herself, namely: (a) a person is unjustly benefited, and (b) such benefit is
derived at the expense of or to the damage of another.22
We are convinced petitioner Moreño-Lentfer had been unjustly enriched at the expense of respondent.
She acquired the properties through deceit, fraud and abuse of confidence. The principle of justice and
equity does not work in her favor but in favor of respondent Wolff. Whatever she may have received by
mistake from and at the expense of respondent should thus be returned to the latter, if the demands of
justice are to be served.
The Court of Appeals held that respondent was not entitled to the reconveyance of the properties
because, inter alia, of the express prohibition under the Constitution 23 that non-Filipino citizens cannot
acquire land in the Philippines. We note, however, that subject properties consist of a beach house and
the lease right over the land where the beach house stands. The constitutional prohibition against
aliens from owning land in the Philippines has no actual bearing in this case. A clear distinction exists
between the ownership of a piece of land and the mere lease of the land where the foreigner's house
stands. Thus, we see no legal reason why reconveyance could not be allowed.
Since reconveyance is the proper remedy, respondent's expenses for the maintenance and repair of
the beach house is for his own account as owner thereof. It need not be an issue for now.
However, we deem it just and equitable under the circumstances to award respondent nominal
damages in the amount of P50,000,24 pursuant to Articles 222125 and 222226 of the New Civil Code,
since respondent's property right has been invaded through defraudation and abuse of confidence
committed by petitioners.
WHEREFORE, the petition is hereby DENIED. The assailed Decision, dated June 14, 2001 and
Resolution dated February 22, 2002, of the Court of Appeals in CA-G.R. CV No. 48272 reversing the
lower court's judgment are AFFIRMED with MODIFICATION. Petitioners--particularly the spouses
Gunter Lentfer and Victoria Moreño-Lentfer--are hereby ORDERED to:
1. RECONVEY to respondent Hans Jurgen Wolff the beach house and the lease right over
the land on which it is situated; and
2. PAY respondent Wolff nominal damages in the amount of P50,000.00.
Costs against petitioners.
SO ORDERED.
G.R. No. 132681 December 3, 2001
RICKY Q. QUILALA, petitioner,
vs.
GLICERIA ALCANTARA, LEONORA ALCANTARA, INES REYES and JOSE REYES, respondent.
YNARES-SANTIAGO, J.:
On February 20, 1981, Catalina Quilala executed a "Donation of Real Property Inter Vivos" in favor of
Violeta Quilala over a parcel of land located in Sta. Cruz, Manila, containing an area of 94 square
meters, and registered in her name under Transfer Certificate of Title No. 17214 of the Register of
Deeds for Manila.
The "Donation of Real Property Inter Vivos" consists of two pages. The first page contains the deed of
donation itself, and is signed on the bottom portion by Catalina Quilala as donor, Violeta Quilala as
donee, and two instrumental witnesses.1 The second page contains the Acknowledgment, which states
merely that Catalina Quilala personally appeared before the notary public and acknowledged that the
donation was her free and voluntary act and deed. There appear on the left-hand margin of the second
page the signatures of Catalina Quilala and one of the witnesses, and on the right-hand margin the
signatures of Violeta Quilala and the other witness.2 The Acknowledgment reads:
REPUBLIC OF THE PHILIPPINES )
QUEZON CITY ) S.S.
Before Me, a Notary Public, for and in the City of Quezon, Philippines, this 20th day of Feb.
1981, personally appeared CATALINA QUILALA, with Residence Certificate No. 19055265
issued at Quezon City on February 4, 1981, known to me and to me known to be the same
person who executed the foregoing instruments and acknowledged to me that the same is
her own free and voluntary act and deed.
I hereby certify that this instrument consisting of two (2) pages, including the page on which
this acknowledgment is written, has been signed by CATALINA QUILALA and her
instrumental witnesses at the end thereof and on the left-hand margin of page 2 and both
pages have been sealed with my notarial seal.
Page 32 of 44
 In witness whereof, I have hereunto set my hand, in the City of Quezon, Philippines, this 20th
day of Feb., 1981.
(SGD.) NOTARY PUBLIC
Until December 31, 1981
(illegible)
DOC NO. 22;
PAGE NO. 6;
BOOK NO. XV;
SERIES OF 1981.
The deed of donation was registered with the Register of Deeds and, in due course, TCT No. 17214
was cancelled and TCT No. 143015 was issued in the name of Violeta Quilala.
On November 7, 1983, Catalina Quilala died. Violeta Quilala likewise died on May 22, 1984. Petitioner
Ricky Quilala alleges that he is the surviving son of Violeta Quilala.
Meanwhile, respondents Gliceria Alcantara, Leonora Alcantara, Ines Reyes and Juan Reyes, claiming
to be Catalina's only surviving relatives within the fourth civil degree of consanguinity, executed a deed
of extrajudicial settlement of estate, dividing and adjudicating unto themselves the above-described
property.
On September 13, 1984, respondents instituted against petitioner and Guillermo T. San Pedro, the
Registrar of Deeds of Manila, an action for the declaration of nullity of the donation inter vivos, and for
the cancellation of TCT No. 143015 in the name of Violeta Quilala. The case was docketed as Civil
Case No. 84-26603 of the Regional Trial Court of Manila, Branch 17. Subsequently, respondents
withdrew their complaint as against Guillermo T. San Pedro and he was dropped as a party-defendant.
The trial court found that the deed of donation, although signed by both Catalina and Violeta, was
acknowledged before a notary public only by the donor, Catalina. Consequently, there was no
acceptance by Violeta of the donation in a public instrument, thus rendering the donation null and void.
Furthermore, the trial court held that nowhere in Catalina's SSS records does it appear that Violeta was
Catalina's daughter. Rather, Violeta was referred to therein as an adopted child, but there was no
positive evidence that the adoption was legal. On the other hand, the trial court found that respondents
were first cousins of Catalina Quilala. However, since it appeared that Catalina died leaving a will, the
trial court ruled that respondents' deed of extrajudicial settlement can not be registered. The trial court
rendered judgment as follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs Gliceria Alcantara, Leonarda
Alcantara, Ines Reyes and Juan Reyes and against defendant Ricky A. Quilala, as follows:
1. Declaring null and void the deed of donation of real property inter vivos executed on
February 20, 1981 by Catalina Quilala in favor of Violeta Quilala (Exhs. A as well as 11 and
11-A.);
2. Ordering the Register of Deeds of Manila to cancel Transfer Certificate of Title No. 143015
in the name of Violeta Quilala and to issue a transfer certificate of title in the name of the
Estate of Catalina Quilala;.
3. Dismissing the complaint insofar as it seeks the registration of the deed of extrajudicial
settlement (Exhs. B and B-1,) and the issuance by the Register of Deeds of Manila of a
transfer certificate of title in the names of the plaintiffs; and
4. Dismissing the counterclaim of defendant Ricky A. Quilala.
No costs.
SO ORDERED.3
Petitioner appealed the aforesaid decision. On July 30, 1997, the Court of Appeals rendered a decision
affirming with modification the decision of the trial court by dismissing the complaint for lack of cause of
action without prejudice to the filing of probate proceedings of Catalina's alleged last will and
testament.4
WHEREFORE, the appealed decision is hereby AFFIRMED with the following
MODIFICATION:
(3) DISMISSING the complaint for lack of cause of action without prejudice to the filing of the
necessary probate proceedings by the interested parties so as not to render nugatory the
right of the lawful heirs.
Petitioner filed a motion for reconsideration, which the Court of Appeals denied on February 11,
1998.5 Hence, this petition for review, raising the following assignment of errors:
A. THE COURT OF APPEALS ERRED IN RULING THAT THE DEED OF DONATION OF
REAL PROPERTY INTER-VIVOS IS NOT REGISTRABLE.
B. THE COURT OF APPEALS ERRED ON UPHOLDING THE LOWER COURT'S RULING
THAT VIOLETA QUILALA IS NOT THE DAUGHTER OF CATALINA QUILALA.6
The principal issue raised is the validity of the donation executed by Catalina in favor of Violeta. Under
Article 749 of the Civil Code, the donation of an immovable must be made in a public instrument in
order to be valid,7 specifying therein the property donated and the value of the charges which the donee
must satisfy. As a mode of acquiring ownership, donation results in an effective transfer of title over the
property from the donor to the donee,8 and is perfected from the moment the donor knows of the
acceptance by the donee,9 provided the donee is not disqualified or prohibited by law from accepting
the donation. Once the donation is accepted, it is generally considered irrevocable, 10 and the donee
becomes the absolute owner of the property.11 The acceptance, to be valid, must be made during the
lifetime of both the donor and the donee.12 It may be made in the same deed or in a separate public
document,13 and the donor must know the acceptance by the donee.14
Page 33 of 44
In the case at bar, the deed of donation contained the number of the certificate of title as well as the authenticating the page is served, and the requirement in the above-quoted provision is deemed
technical description of the real property donated. It stipulated that the donation was made for and in substantially complied with.
consideration of the "love and affection which the DONEE inspires in the DONOR, and as an act of
liberality and generosity."15 This was sufficient cause for a donation. Indeed, donation is legally defined
In the same vein, the lack of an acknowledgment by the donee before the notary public does not also
as "an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who
render the donation null and void. The instrument should be treated in its entirety. It cannot be
accepts it."16
considered a private document in part and a public document in another part. The fact that it was
acknowledged before a notary public converts the deed of donation in its entirety a public instrument.
The donee's acceptance of the donation was explicitly manifested in the penultimate paragraph of the The fact that the donee was not mentioned by the notary public in the acknowledgment is of no
deed, which reads: moment. To be sure, it is the conveyance that should be acknowledged as a free and voluntary act. In
any event, the donee signed on the second page, which contains the Acknowledgment only. Her
acceptance, which is explicitly set forth on the first page of the notarized deed of donation, was made in
That the DONEE hereby receives and accepts the gift and donation made in her favor by the
a public instrument.
DONOR and she hereby expresses her appreciation and gratefulness for the kindness and
generosity of the DONOR.17
It should be stressed that this Court, not being a trier of facts, can not make a determination of whether
Violeta was the daughter of Catalina, or whether petitioner is the son of Violeta. These issues should be
Below the terms and stipulations of the donation, the donor, donee and their witnesses affixed their
ventilated in the appropriate probate or settlement proceedings affecting the respective estates of
signature. However, the Acknowledgment appearing on the second page mentioned only the donor,
Catalina and Violeta. Suffice it to state that the donation, which we declare herein to be valid, will still be
Catalina Quilala. Thus, the trial court ruled that for Violeta's failure to acknowledge her acceptance
subjected to a test on its inofficiousness under Article 771, 18 in relation to Articles 752, 911 and 912 of
before the notary public, the same was set forth merely on a private instrument, i.e., the first page of the
the Civil Code. Moreover, property donated inter vivosis subject to collation after the donor's
instrument. We disagree.
death,19 whether the donation was made to a compulsory heir or a stranger,20 unless there is an
express prohibition if that had been the donor's intention. 21
The pertinent provision is Section 112, paragraph 2 of Presidential Decree No. 1529, which states:
WHEREFORE, in view of the foregoing, the petition is GRANTED. The appealed decision of the Court
Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary of Appeals , is REVERSED and SET ASIDE, and a new judgment is rendered dismissing Civil Case
instruments, whether affecting registered or unregistered land, executed in accordance with No. 84-26603.
law in the form of public instruments shall be registrable: Provided, that, every such
instrument shall be signed by person or persons executing the same in the presence of at
SO ORDERED.
least two witnesses who shall likewise sign thereon, and shall be acknowledged to be the
free act and deed of the person or persons executing the same before a notary public or
other public officer authorized by law to take acknowledgment. Where the instrument so G.R. No. 140487 April 2, 2001
acknowledged consists of two or more pages including the page whereon acknowledgment is
written, each page of the copy which is to be registered in the office of the Register of Deeds,
REPUBLIC OF THE PHILIPPINES, petitioner,
or if registration is not contemplated, each page of the copy to be kept by the notary public,
vs.
except the page where the signatures already appear at the foot of the instrument shall be
LEON SILIM and ILDEFONSA MANGUBAT, respondents.
signed on the left margin thereof by the person or persons executing the instrument and their
witnesses, and all the pages sealed with the notarial seal, and this fact as well as the number
of pages shall be stated in the acknowledgment. Where the instrument acknowledged relates KAPUNAN, J.:
to a sale, transfer, mortgage or encumbrance of two or more parcels of land, the number
thereof shall likewise be set forth in said acknowledgment." (italics supplied).
Before the Court is a petition for review under Rule 45 seeking the reversal of the Decision of the Court
of Appeals in CA-G.R. No. 43840, entitled Leon Silim, et al. vs. Wilfredo Palma, et al., which declared
As stated above, the second page of the deed of donation, on which the Acknowledgment appears, null and void the donation made by respondents of a parcel of land in favor of the Bureau of Public
was signed by the donor and one witness on the left-hand margin, and by the donee and the other Schools, Municipality of Malangas, Zamboanga del Sur.
witness on the right hand margin. Surely, the requirement that the contracting parties and their
witnesses should sign on the left-hand margin of the instrument is not absolute. The intendment of the
law merely is to ensure that each and every page of the instrument is authenticated by the parties. The The antecedents of this case are as follows:
requirement is designed to avoid the falsification of the contract after the same has already been duly
executed by the parties. Hence, a contracting party affixes his signature on each page of the instrument On 17 December 1971, respondents, the Spouses Leon Silim and Ildefonsa Mangubat, donated a
to certify that he is agreeing to everything that is written thereon at the time of signing. 5,600 square meter parcel of land in favor of the Bureau of Public Schools, Municipality of Malangas,
Zamboanga del Sur (BPS). In the Deed of Donation, respondents imposed the condition that the said
property should "be used exclusively and forever for school purposes only." 1 This donation was
Simply put, the specification of the location of the signature is merely directory. The fact that one of the
parties signs on the wrong side of the page does not invalidate the document. The purpose of accepted by Gregorio Buendia, the District Supervisor of BPS, through an Affidavit of Acceptance
and/or Confirmation of Donation.

Page 34 of 44
Through a fund raising campaign spearheaded by the Parent-Teachers Association of Barangay
Kauswagan, a school building was constructed on the donated land. However, the Bagong Lipunan
school building that was supposed to be allocated for the donated parcel of land in Barangay
Kauswagan could not be released since the government required that it be built upon a one (1) hectare
parcel of land. To remedy this predicament, Assistant School Division Superintendent of the Province of
Zamboanga del Sur, Sabdani Hadjirol, authorized District Supervisor Buendia to officially transact for
the exchange of the one-half (1/2) hectare old school site of Kauswagan Elementary School to a new
and suitable location which would fit the specifications of the government. Pursuant to this, District
Supervisor Buendia and Teresita Palma entered into a Deed of Exchange whereby the donated lot was
exchanged with the bigger lot owned by the latter. Consequently, the Bagong Lipunan school buildings
were constructed on the new school site and the school building previously erected on the donated lot
was dismantled and transferred to the new location.
When respondent Leon Silim saw, to his surprise, that Vice-Mayor Wilfredo Palma was constructing a
house on the donated land, he asked the latter why he was building a house on the property he
donated to BPS. Vice Mayor Wilfredo Palma replied that he is already the owner of the said property.
Respondent Leon Silim endeavored to stop the construction of the house on the donated property but
Vice-Mayor Wilfredo Palma advised him to just file a case in court.
On February 10, 1982, respondents filed a Complaint for Revocation and Cancellation of Conditional
Donation, Annulment of Deed of Exchange and Recovery of Possession and Ownership of Real
Property with damages against Vice Mayor Wilfredo Palma, Teresita Palma, District Supervisor
Buendia and the BPS before the Regional Trial Court of Pagadian City, Branch 21. In its Decision dated
20 August 1993, the trial court dismissed the complaint for lack of merit. 2 The pertinent portion of the
decision reads:
Thus, it is the considered view of this Court that there was no breach or violation of the
condition imposed in the subject Deed of Donation by the donee. The exchange is proper
since it is still for the exclusive use for school purposes and for the expansion and
improvement of the school facilities within the community. The Deed of Exchange is but a
continuity of the desired purpose of the donation made by plaintiff Leon Silim.
In sum, it may be safely stated that the aforesaid transaction of exchange is a (sic) exception
to the law invoked by the plaintiffs (Art. 764, Civil Code). The donee, being the State had the
greater reciprocity of interest in the gratuitous and onerous contract of donation. It would be
illogical and selfish for the donor to technically preclude the donee from expanding its school
site and improvement of its school facilities, a paramount objective of the donee in promoting
the general welfare and interests of the people of Barangay Kauswagan. But it is a well-
settled rule that if the contract is onerous, such as the Deed of Donation in question, the
doubt shall be settled in favor of the greatest reciprocity of interests, which in the instant
case, is the donee.
x x x this regard, Article 733 of the New Civil Code provides:
WHEREFORE, in view of all the foregoing, judgement is hereby rendered:
1. Dismissing the complaint for lack of merit;
2. Dismissing the counterclaim for the sake of harmony and reconciliation between
the parties;
3. With costs against plaintiffs.
SO ORDERED.3
Not satisfied with the decision of the trial court, respondents elevated the case to the Court of Appeals.
In its Decision dated 22 October 1999, the Court of Appeals reversed the decision of the trial court and
declared the donation null and void on the grounds that the donation was not properly accepted and the
condition imposed on the donation was violated.4
Hence, the present case where petitioner raises the following issues:
I. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULL
AND VOID DUE TO AN INVALID ACCEPTANCE BY THE DONEE.
II. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULL
AND VOID DUE TO AN ALLEGED VIOLATION OF A CONDITION IN THE DONATION.5
The Court gives DUE COURSE to the petition.
Petitioner contends that the Court of Appeals erred in declaring the donation null and void for the
reason that the acceptance was not allegedly done in accordance with Articles 7456 and 7497 of the
New Civil Code.
We agree.
Donations, according to its purpose or cause, may be categorized as: (1) pure or simple; (2)
remuneratory or compensatory; (3) conditional or modal; and (4) onerous. A pure or simple donation is
one where the underlying cause is plain gratuity. 8 This is donation in its truest form. On the other hand,
a remuneratory or compensatory donation is one made for the purpose of rewarding the donee for past
services, which services do not amount to a demandable debt.9 A conditional or modal donation is one
where the donation is made in consideration of future services or where the donor imposes certain
conditions, limitations or charges upon the donee, the value of which is inferior than that of the donation
given.10 Finally, an onerous donation is that which imposes upon the donee a reciprocal obligation or, to
be more precise, this is the kind of donation made for a valuable consideration, the cost of which is
equal to or more than the thing donated.11
Of all the foregoing classifications, donations of the onerous type are the most distinct. This is because,
unlike the other forms of donation, the validity of and the rights and obligations of the parties involved in
an onerous donation is completely governed not by the law on donations but by the law on contracts. In
Art. 733. Donations with an onerous cause shall be governed by the rules on contracts, and
remuneratory donations by the provisions of the present Title as regards that portion which
exceeds the value of the burden imposed.
The donation involved in the present controversy is one which is onerous since there is a burden
imposed upon the donee to build a school on the donated property. 12
Page 35 of 44
The Court of Appeals held that there was no valid acceptance of the donation because: The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.
x x x
If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments.
Under the law the donation is void if there is no acceptance. The acceptance may either be in
the same document as the deed of donation or in a separate public instrument. If the
acceptance is in a separate instrument, "the donor shall be notified thereof in an authentic Private respondents, as shown above, admit that in the offer of exhibits by the defendants in the trial
form, and his step shall be noted in both instruments. court, an affidavit of acceptance and/or confirmation of the donation, marked as Exhibit "8," was offered
in evidence. However, private respondents now question this exhibit because, according to them "there
is nothing in the record that the exhibits offered by the defendants have been admitted nor such exhibit
"Title to immovable property does not pass from the donor to the donee by virtue of
appear on record."
a deed of donation until and unless it has been accepted in a public instrument and
the donor duly noticed thereof. (Abellera vs. Balanag, 37 Phils. 85; Alejandro vs.
Geraldez, 78 SCRA 245). If the acceptance does not appear in the same Respondents' stance does not persuade. The written acceptance of the donation having been
document, it must be made in another. Solemn words are not necessary; it is considered by the trial court in arriving at its decision, there is the presumption that this exhibit was
sufficient if it shows the intention to accept, But in this case, it is necessary that properly offered and admitted by the court.
formal notice thereof be given to the donor and the fact that due notice has been
given it must be noted in both instruments (that containing the offer to donate and
Moreover, this issue was never raised in the Court of Appeals. Nowhere in their brief did respondents
that showing acceptance). Then and only then is the donation perfected. (11
question the validity of the donation on the basis of the alleged defect in the acceptance thereof. If there
Manresa 155-11, cited in Vol. II, Civil Code of the Philippines by Tolentino.)."
was such a defect, why did it take respondents more than ten (10) years from the date of the donation
to question its validity? In the very least, they are guilty of estoppel. 14
This Court perused carefully the Deed of Donation marked as exhibit "A" and "1" to determine
whether there was acceptance of the donation. This Court found none. We further examined
Respondents further argue that assuming there was a valid acceptance of the donation, the acceptance
the record if there is another document which embodies the acceptance, we found one.
was not noted in the Deed of Donation as required in Article 749 of the Civil Code, hence, the donation
Although the Court found that in the offer of exhibits of the defendants, a supposed affidavit
is void.
of acceptance and/or confirmation of the donation, marked as exhibit "8" appears to have
been offered.
The purpose of the formal requirement for acceptance of a donation is to ensure that such acceptance
is duly communicated to the donor. Thus, in Pajarillo vs. Intermediate Appellate Court,15 the Court held:
However, there is nothing in the record that the exhibits offered by the defendants have been
admitted nor such exhibits appear on record.
There is no question that the donation was accepted in a separate public instrument and that
it was duly communicated to the donors. Even the petitioners cannot deny this. But what they
Assuming that there was such an exhibit, the said supposed acceptance was not noted in the
do contend is that such acceptance was not "noted in both instruments," meaning the
Deed of Donation as required under Art. 749 of the Civil Code. And according to
extrajudicial partition itself and the instrument of acceptance, as required by the Civil Code.
Manresa, supra, a noted civilist, the notation is one of the requirements of perfecting a
donation. In other words, without such a notation, the contract is not perfected contract. Since
the donation is not perfected, the contract is therefore not valid.13 That is perfectly true. There is nothing in either of the two instruments showing that "authentic
notice" of the acceptance was made by Salud to Juana and Felipe. And while the first
instrument contains the statement that "the donee does hereby accept this donation and does
x x x
hereby express her gratitude for the kindness and liberality of the donor," the only signatories
thereof were Felipe Balane and Juana Balane de Suterio. That was in fact the reason for the
We hold that there was a valid acceptance of the donation. separate instrument of acceptance signed by Salud a month later.

Sections 745 and 749 of the New Civil Code provide:
ART. 745. The donee must accept the donation personally, or through an authorized person
with a special power for the purpose, or with a general and sufficient power; otherwise the
donation shall be void.
A strict interpretation of Article 633 can lead to no other conclusion that the annulment of the
donation for being defective in form as urged by the petitioners. This would be in keeping with
the unmistakable language of the above-quoted provision. However, we find that under the
circumstances of the present case, a literal adherence to the requirement of the law might
result not in justice to the parties but conversely a distortion of their intentions. It is also a
policy of the Court to avoid such as interpretation.

ART. 749. In order that the donation of an immovable may be laid, it must be made in a
The purpose of the formal requirement is to insure that the acceptance of the donation is duly
public document, specifying therein the property donated and the value of the charge which
communicated to the donor. In the case at bar, it is not even suggested that Juana was
the donee must satisfy.
unaware of the acceptance for she in fact confirmed it later and requested that the donated
Page 36 of 44
 land be not registered during her lifetime by Salud. Given this significant evidence, the Court
cannot in conscience declare the donation ineffective because there is no notation in the
extrajudicial settlement of the donee's acceptance. That would be placing too much stress on
mere form over substance. It would also disregard the clear reality of the acceptance of the
donation as manifested in the separate instrument dated June 20, 1946, and as later
acknowledged by Juan.
In the case at bar, a school building was immediately constructed after the donation was executed.
Respondents had knowledge of the existence of the school building put up on the donated lot through
the efforts of the Parents-Teachers Association of Barangay Kauswagan. It was when the school
building was being dismantled and transferred to the new site and when Vice-Mayor Wilfredo Palma
was constructing a house on the donated property that respondents came to know of the Deed of
Exchange. The actual knowledge by respondents of the construction and existence of the school
building fulfilled the legal requirement that the acceptance of the donation by the donee be
communicated to the donor.
On respondents' claim, which was upheld by the Court of Appeals, that the acceptance by BPS District
Supervisor Gregorio Buendia of the donation was ineffective because of the absence of a special power
of attorney from the Republic of the Philippines, it is undisputed that the donation was made in favor of
the Bureau of Public Schools. Such being the case, his acceptance was authorized under Section 47 of
the 1987 Administrative Code which states:
SEC. 47. Contracts and Conveyances. - Contracts or conveyances may be executed for and
in behalf of the Government or of any of its branches, subdivisions, agencies, or
instrumentalities, whenever demanded by the exigency or exigencies of the service and as
long as the same are not prohibited by law.
Finally, it is respondents' submission that the donee, in exchanging the donated lot with a bigger lot,
violated the condition in the donation that the lot be exclusively used for school purposes only.
What does the phrase "exclusively used for school purposes" convey? "School" is simply an institution
or place of education.16 "Purpose" is defined as "that which one sets before him to accomplish or attain;
an end, intention, or aim, object, plan, project. Term is synonymous with the ends sought, an object to
be attained, an intention, etc."17"Exclusive" means "excluding or having power to exclude (as by
preventing entrance or debarring from possession, participation, or use); limiting or limited to
possession, control or use.18
Without the slightest doubt, the condition for the donation was not in any way violated when the lot
donated was exchanged with another one. The purpose for the donation remains the same, which is for
the establishment of a school. The exclusivity of the purpose was not altered or affected. In fact, the
exchange of the lot for a much bigger one was in furtherance and enhancement of the purpose of the
donation. The acquisition of the bigger lot paved the way for the release of funds for the construction of
Bagong Lipunan school building which could not be accommodated by the limited area of the donated
lot.
WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and SET ASIDE and the
decision of the Regional Trial Court is REINSTATED.
SO ORDERED.
G.R. No. 155080 February 5, 2004
SOLEDAD CALICDAN, represented by her guardian GUADALUPE CASTILLO, petitioner
vs.
SILVERiO CENDAÑA, substituted by his legal heir CELSA CENDAÑA-ALARAS, respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review seeks the reversal of the April 4, 2002 decision of the Court of Appeals in CA-
G.R. CV No. 67266,1 which set aside the November 12, 1996 decision of the Regional Trial Court of
Dagupan City, Branch 44 in Civil Case No. D-10270.2
The instant controversy involves a 760 square meter parcel of unregistered land located in Poblacion,
Mangaldan, Pangasinan. The land was formerly owned by Sixto Calicdan, who died intestate on
November 4, 1941. He was survived by his wife, Fermina, and three children, namely, petitioner
Soledad, Jose and Benigno, all surnamed Calicdan.3
On August 25, 1947, Fermina executed a deed of donation inter vivos whereby she conveyed the land
to respondent Silverio Cendaña,4 who immediately entered into possession of the land, built a fence
around the land and constructed a two-storey residential house thereon sometime in 1949, where he
resided until his death in 1998.5
On June 29, 1992, petitioner, through her legal guardian Guadalupe Castillo, filed a complaint for
"Recovery of Ownership, Possession and Damages" against the respondent, alleging that the donation
was void; that respondent took advantage of her incompetence in acquiring the land; and that she
merely tolerated respondent’s possession of the land as well as the construction of his house thereon. 6
In his "Answer with Motion to Dismiss", respondent alleged, by way of affirmative defenses, that the
land was donated to him by Fermina in 1947; and that he had been publicly, peacefully, continuously,
and adversely in possession of the land for a period of 45 years. Moreover, he argued that the
complaint was barred by prior judgment in the special proceedings for the "Inventory of Properties of
Incompetent Soledad Calicdan", where the court decreed the exclusion of the land from the inventory of
properties of the petitioner.7
On November 12, 1996, the trial court rendered a decision in favor of the petitioner, the dispositive
portion of which reads as follows:
WHEREFORE, judgment is rendered in favor of plaintiff and against the defendant as follows:
1. Ordering defendant Silverio Cendaña to vacate the land in question and surrender
ownership and possession of the same to plaintiff; and
2. Ordering defendant to pay plaintiff P20,000.00 as moral damages, P20,000.00 as
exemplary damages, P10,000.00 by way of attorney’s fees and other litigation expenses, plus
cost of suit.
Page 37 of 44
SO ORDERED.8
On appeal by the respondent, the Court of Appeals reversed the trial court’s decision and declared that
the donation was valid. Furthermore, it held that petitioner lost her ownership of the property by
prescription.
Hence, the instant petition for review on the following issues:
the deceased spouse. Consequently, respondent, who derived his rights from Fermina, only acquired
the right of usufruct as it was the only right which the latter could convey.
After a review of the evidence on record, we find that the Court of Appeals’ ruling that the donation was
valid was not supported by convincing proof. Respondent himself admitted during the cross
examination that he had no personal knowledge of whether Sixto Calicdan in fact purchased the subject
land from Felomino Bautista. Pertinent portions of his testimony read:

Q. And Sixto Calicdan inherited this property from his parents?

(1) whether or not the donation inter vivos is valid; and

A. No, sir.
(2) whether or not petitioner lost ownership of the land by prescription.

Q. What do you mean by no?

As a rule, our jurisdiction in cases brought from the Court of Appeals is limited to the review and
revision of errors of law allegedly committed by the appellate court. This is because its findings of fact
are deemed conclusive and we are not duty-bound to analyze and weigh all over again the evidence A. To my knowledge and information, Sixto Calicdan bought the property from his cousin, I
already considered in the proceedings below.9 think Flaviano or Felomino Bautista.

The rule, however, admits of the following exceptions: Q. So, in other words, you have no personal knowledge about how Sixto Calicdan acquired
this property?
(1) when the findings are grounded on speculation, surmises or conjectures;
A. I think it was by purchase.
(2) when the inference made is manifestly mistaken, absurd or impossible;
Q. According to information, so you have no actual personal knowledge how Sixto Calicadan
acquired this property?
(3) when there is grave abuse of discretion in the appreciation of facts;

A. Yes, because when the property was bought by my uncle, I was not yet born, so
(4) when the factual findings of the trial and appellate courts are conflicting;
information only.

(5) when the Court of Appeals, in making its findings, has gone beyond the issues of the case
Q. So when you were born, you came to know already that Sixto Calicdan is the owner of this
and such findings are contrary to the admissions of both appellant and appellee;
property?

(6) when the judgment of the appellate court is premised on a misapprehension of facts or
A. Yes, thru the son of Felomino Bautista who is now, I think, in Baguio.
when it has failed to consider certain relevant facts which, if properly taken into account, will
justify a different conclusion;
Q. You have not seen any document to show that Sixto Calicdan purchased the property
from one Felomino Bautista?
(7) when the findings of fact are conclusions without citation of specific evidence upon which
they are based; and
A. None, sir.11
(8) when findings of fact of the Court of Appeals are premised on the absence of evidence
but are contradicted by the evidence on record.10 In People v. Guittap,12 we held that:

In the case at bar, the factual findings of the trial court and the Court of Appeals are conflicting; thus, we
are constrained to review the findings of facts.
The trial court found the donation of the land void because Fermina was not the owner thereof,
considering that it was inherited by Sixto from his parents. Thus, the land was not part of the conjugal
property of the spouses Sixto and Fermina Calicdan, because under the Spanish Civil Code, the law
applicable when Sixto died in 1941, the surviving spouse had a right of usufruct only over the estate of
Under Rule 130, Section 36 of the Rules of Court, a witness can testify only to those facts which he
knows of his own personal knowledge, i.e., which are derived from his own perception; otherwise, such
testimony would be hearsay. Hearsay evidence is defined as "evidence not of what the witness knows
himself but of what he has heard from others." The hearsay rule bars the testimony of a witness who
merely recites what someone else has told him, whether orally or in writing. In Sanvicente v. People, we
held that when evidence is based on what was supposedly told the witness, the same is without any
Page 38 of 44
evidentiary weight for being patently hearsay. Familiar and fundamental is the rule that hearsay
testimony is inadmissible as evidence.
The Court of Appeals thus erred in ruling based on respondent’s bare hearsay testimony as evidence of
the donation made by Fermina.
Notwithstanding the invalidity of the donation, we find that respondent has become the rightful owner of
the land by extraordinary acquisitive prescription.
Prescription is another mode of acquiring ownership and other real rights over immovable property. It is
concerned with lapse of time in the manner and under conditions laid down by law, namely, that the
possession should be in the concept of an owner, public, peaceful, uninterrupted and adverse.
Acquisitive prescription is either ordinary or extraordinary. Ordinary acquisitive prescription requires
possession in good faith and with just title for ten years. In extraordinary prescription ownership and
other real rights over immovable property are acquired through uninterrupted adverse possession
thereof for thirty years without need of title or of good faith.13
The good faith of the possessor consists in the reasonable belief that the person from whom he
received the thing was the owner thereof, and could transmit his ownership. 14 For purposes of
prescription, there is just title when the adverse claimant came into possession of the property through
one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor
was not the owner or could not transmit any right.15
Assuming arguendo that ordinary acquisitive prescription is unavailing in the case at bar as it demands
that the possession be "in good faith and with just title," 16 and there is no evidence on record to prove
respondent’s "good faith", nevertheless, his adverse possession of the land for more than 45 years
aptly shows that he has met the requirements for extraordinary acquisitive prescription to set in.
The records show that the subject land is an unregistered land. When the petitioner filed the instant
case on June 29, 1992, respondent was in possession of the land for 45 years counted from the time of
the donation in 1947. This is more than the required 30 years of uninterrupted adverse possession
without just title and good faith. Such possession was public, adverse and in the concept of an owner.
Respondent fenced the land and built his house in 1949, with the help of Guadalupe’s father as his
contractor. His act of cultivating and reaping the fruits of the land was manifest and visible to all. He
declared the land for taxation purposes and religiously paid the realty taxes thereon. 17 Together with his
actual possession of the land, these tax declarations constitute strong evidence of ownership of the
land occupied by him. As we said in the case of Heirs of Simplicio Santiago v. Heirs of Mariano
Santiago:18
Although tax declarations or realty tax payment of property are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in the concept of owner, for no one in his right mind
would be paying taxes for a property that is not in his actual or constructive possession. They constitute
at least proof that the holder has a claim of title over the property. The voluntary declaration of a piece
of property for taxation purposes manifests not only one’s sincere and honest desire to obtain title to the
property and announces his adverse claim against the State and all other interested parties, but also
the intention to contribute needed revenues to the Government. Such an act strengthens one’s bona
fide claim of acquisition of ownership.
Moreover, the deed of donation inter vivos, albeit void for having been executed by one who was not
the owner of the property donated, may still be used to show the exclusive and adverse character of
respondent’s possession. Thus, in Heirs of Segunda Maningding v. Court of Appeals,19 we held:
Even assuming that the donation propter nuptias is void for failure to comply with formal requisites, it
could still constitute a legal basis for adverse possession. With clear and convincing evidence of
possession, a private document of donation may serve as basis for a claim of ownership. In Pensader
v. Pensader we ruled that while the verbal donation under which the defendant and his predecessors-
in-interest have been in possession of the lands in question is not effective as a transfer of title, still it is
a circumstance which may explain the adverse and exclusive character of the
possession. (Underscoring ours)
In sum, the Court of Appeals correctly ordered the dismissal of Civil Case No. D-10270 before the
Regional Trial Court of Dagupan City, Branch 44, and declared respondent the rightful owner of the
subject property, not on the basis of the Deed of Donation Inter Vivos, which is hereby declared void,
but on extraordinary acquisitive prescription.
WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of Appeals
dated April 4, 2002 in CA-G.R. CV No. 67266, which ordered the dismissal of Civil Case No. D-10270
before the Regional Trial Court of Dagupan City, Branch 44, is AFFIRMED.
SO ORDERED.
G.R. No. L-58671 November 22, 1985
EDUVIGIS J. CRUZ, petitioner,
vs.
COURT OF APPEALS, ET AL., respondents.
PLANA, J.:
This a petition for review of the decision of the defunct Court of Appeals dated August 20, 1981 in CA-
G.R. No. 65338-H reversing that of the Court of First Instance of Rizal. and dismissing petitioner's
complaint for revocation of donation against herein private respondents Teresita, Lydia and all
surnamed De Leon.
In Eduvigis J. Cruz, a childless widow, donated a 235.5 sq.m residential lot in San Isidro, Taytay Rizal
together with the two-door apartment erected thereon to her grandnieces private respondents herein, in
a deed of donation entitled "Kasulatan Sa Kaloobpala". The property was accordingly transferred to the
names of private respondents.
In 1974, Eduvigis Cruz judicially adopted Cresencia Ocreto, a minor, after which she extrajudicially tried
to revoke the donation, but the donees resisted, alleging that—
(a) the property in question was co-owned by Eduvigis Cruz and her brother. the
late Maximo Cruz, grandfather of the donees, hence the latter own 1/2 of the
property by inheritance; and
(b) Eduvigis Cruz owns another property, an agricultural land of more than two
hectares situated in Barrio Dolores, Taytay, Rizal, hence the donation did not
impair the presumptive legitime of the adopted child.
Page 39 of 44
In 1975, petitioner filed a complaint against the donees for revocation of donation in the Court of First
Instance of Rizal (Civil Case No. 21049) invoking Article 760, paragraph 3 of the New Civil Code, which
reads:
Art. 760, Ever donation inter vivos made by a person having no children or descendants, legitimate or
legitimated by subsequent marriage, or illegitimate, may be revoked or reduced as provided in the next
article, by the happening of any of these events:
xxx xxx xxx
(3) If the donor should subsequently adopt a minor child.
After trial, the trial court rendered a decision revoking the donation. It did not find merit in defendants'
claim that the lot, by donor and her deceased brother, Maximo Cruz, because the donor's ownership
was deemed admitted by the donees by accepting the deed of donation. It also rejected defendants'
argument that the donation did not impair the legitime, saying that claim was "beside the point" and did
not limit plaintiff's right under Art. 760 of the Civil Code.
requirements prescribed by law, on the basis of which annulment or reduction of the donation can be
adjudged.
Unfortunately, in the case at bar, the complaint for annulment does not allege that the subject donation
impairs the legitime of the adopted child. Indeed it contains no indication at all of the total assets of the
donor.
Nor is there proof of impairment of legitime. On the contrary, there is unrebutted evidence that the
donor has another piece of land (27,342 sq. m.) situated in Dolores, Taytay, Rizal worth P273,420.00 in
1977, although then subject to litigation.
The legal situation of petitioner-donor, as plaintiff, is made worse by the factual finding of the Court of
Appeals that the grandfather of the donees was the owner pro indiviso of one-half of the donated land,
the effect of which is to reduce the value of the donation which can then more easily be taken from the
portion of the estate within the free disposal of petitioner.
WHEREFORE, the decision under review is affirmed.

On appeal, the Court of Appeals reversed the trial court and dismissed the complaint. It found that.— SO ORDERED.

a) the trial court took into consideration only Article 760 of the Civil Code and ignored Article 761 which G.R. No. 105944 February 9, 1996
states: " In the cases referred to in the preceding article, the donation shall be revoked or reduced
insofar as it exceeds the portion that may be freely disposed of by will, taking into account the whole
SPOUSES ROMULO AND SALLY EDUARTE, petitioners,
estate of the donor of by will, taking into account the whole estate of the donor at the time of the birth,
vs.
appearance or adoption of a child.
THE HONORABLE COURT OF APPEALS and PEDRO CALAPINE (substituted by ALEXANDER
CALAPINE and ARTEMIS CALAPINE), respondents.
(b) Eduvigis Cruz owns another lot in Dolores Taytay Rizal, although the subject of a pending litigation
valued at P273,420.00 in 1977.
DECISION

(c) The donated lot did not belong entirely to Eduvigis as ½ thereof belonged to her brother Maximo
FRANCISCO, J.:
Cruz, grandfather of defendants. 1974 it had a total market value of P17,000. One-half thereof was
P8,500. Adding thereto a P50,000 value of the apartment house constructed thereon, the total value of
the donation would still be within the free portion of donor's estate and therefore would not impair the A donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of
legitime of the adopted child. another, who accepts it.1 On the part of the donor, it is an exercise of one's generosity. However, on
several occasions, instead of being accorded recognition and appreciation for this act of beneficence,
the donor ends up as a victim of greed and ingratitude. This was the fate that befell Pedro Calapine
(d) In an action for revocation of donation, the donor has the burden to show that the donation has
(herein original plaintiff) constraining him to cause the revocation of the donation that he made to his
impaired the legitime of the subsequent child; but in this case, Eduvigis did not even allege it in her
niece in 1984. The instant petition for certiorari is interposed by the spouses Romulo and Sally Eduarte,
complaint.
assailing the decision of the Court of Appeals in CA-G.R. CV No. 29175 which affirmed the revocation
of the donation made by Pedro Calapine to his niece, Helen Doria, and at the same time declared
In the instant petition for review, petitioner imputes to the appellate court alleged errors which boil down petitioners as purchasers in bad faith of the property donated.
to the question as to whether under the facts as established and the law, the decision under review
correctly dismissed the complaint to annul the subject donation. We hold that it did.
As set out in the appealed decision, the undisputed facts are as follows:

In the case of the subsequent adoption of a minor by one who had previously donated some or all of his
Pedro Calapine was the registered owner of a parcel of land located in San Cristobal, San
properties to another, the donor may sue for the annulment or reduction of the donation within four
Pablo City, with an area of 12,199 square meters, as evidenced by Original Certificate of Title
years from the date of adoption, if the donation impairs the legitime of the adopted, taking into account
No. P-2129 (Exhibits A and 1). On April 26, 1984, he executed a deed entitled "Pagbibigay-
the whole estate of the donor at the time of the adoption of the child. (Civil Code, Articles 760, 761 and
Pala (Donacion InterVivos)" ceding one-half portion thereof to his niece Helen S. Doria
763). Of course, the burden of proof is on the plaintiff-donor, who must allege and establish the
(Exhibit B).

Page 40 of 44
On July 26, 1984, another deed identically entitled was purportedly executed by Pedro
Calapine ceding unto Helen S. Doria the whole of the parcel of land covered by OCT No. P-
2129 (Exhibits C and D), on the basis of which said original certificate was cancelled and in
lieu thereof Transfer Certificate of Title No. T-23205 was issued in her name, (Exhibits G and
2).
On February 26, 1986, Helen S. Doria donated a portion of 157 square meters of the parcel
of land covered by TCT No. T-23205 to the Calauan Christian Reformed Church, Inc. (Exhibit
H), on the basis of which said transfer certificate of title was cancelled and TCT No. T-24444
was issued in its name covering 157 square meters (Exhibit 2-A) and TCT No. T-24445, in
the name of Helen S. Doria covering the remaining portion of 12,042 square meters (Exhibit
3).
On March 25, 1988, Helen S. Doria sold, transferred and conveyed unto the spouses Romulo
and Sally Eduarte the parcel of land covered by TCT No. T-24445, save the portion of 700
square meters on which the vendor's house had been erected (Exhibits 1 and 3-F), on the
basis of which TCT No. 24445 was cancelled and in lieu thereof TCT No. T-27434, issued in
the name of the vendees (Exhibit 4).
Claiming that his signature to the deed of donation (Exhibits C and D) was a forgery and that
she was unworthy of his liberality, Pedro Calapine brought suit against Helen S. Doria, the
Calauan Christian Reformed Church, Inc. and the Spouses Romulo and Sally Eduarte to
revoke the donation made in favor of Helen S. Doria (Exhibit B), to declare null and void the
deeds of donation and sale that she had executed in favor of the Calauan Christian Reformed
Church, Inc. and the spouses Romulo and Sally Eduarte (Exhibits H, I and 3-F) and to cancel
TCT Nos. T-24444, 24445 and T-27434.
Answering the complaint, the defendants spouses denied knowledge of the first deed of
donation and alleged that after a part of the property was donated to the defendant Calauan
Christian Reformed Church, Inc., the remaining portion thereof was sold to them by the
defendant Helen S. Doria; and that the plaintiff's purported signature in the second deed of
donation was his own, hence genuine. They prayed that the complaint against them be
dismissed; that upon their counterclaim, the plaintiff be ordered to pay them moral and
exemplary damages and attorney's fees; and that upon their cross-claim the defendant Helen
S. Doria be ordered to reimburse them the purchase price of P110,000 and to pay them
moral and exemplary damages and attorney's fees (pp. 23-31, rec.).
The defendant Calauan Christian Reformed Church, Inc. manifested in its answer the
willingness to reconvey to the plaintiff that part of the property donated to it by Helen S. Doria
(pp. 36-38, rec.). And having executed the corresponding deed of reconveyance, the case as
against it was dismissed (pp. 81-83; 84, rec.).
The defendants Helen S. Doria and the City Assessor and the Registrar of Deeds of San
Pablo City did not file answers to the plaintiffs complaint.
After the plaintiffs death on August 27, 1989, on motion he was substituted by his nephews
Alexander and Artemis Calapine upon order of the Court (pp. 147-152; 250, rec.)
After trial, the Regional Trial Court, Fourth Judicial Region, Branch 30, San Pablo City
rendered judgment, the dispositive part of which provides:
WHEREFORE, premises considered, judgment is hereby rendered by the Court in
the instant case in favor of plaintiff and against defendant Eduartes to wit:
1. DECLARING as it is hereby declared, the revocation of the Deed of Donation
dated April 26, 1984;
2. ANNULLING, voiding, setting aside and declaring of no force and effect the
Deed of Donation dated July 26, 1984, the deed of absolute sale executed on
March 25, 1988 by and between spouses Eduartes and Helen Doria, and the
Transfer Certificate of Title No. T-27434 issued under the name of spouses
Romulo and Sally Eduarte;
3. ORDERING the office of the Register of Deeds, San Pablo City, to cancel TCT
No. T-27434 or any other adverse title emanating from OCT No. P-2129 and in lieu
thereof, to issue a new transfer certificate of title covering the subject property
under the names of the substitute-plaintiffs Alexander and Artemis both surnamed
Calapine, after payment of the corresponding fees and taxes therefor; and
4. ORDERING defendant Helen Doria to pay substitute-plaintiffs the sum of
P20,000.00 as and for attorney's fees.
Judgment on the cross-claim of defendant Eduartes against Helen Doria is further
rendered by ordering the latter to pay the former the sum of P110,000.00 with legal
interest thereon starting from March 25, 1988 until full payment, and the further
sum of P20,000.00 as and for attorney's fees.
The counterclaim of defendant Eduartes against plaintiff is hereby dismissed for
lack of merit.
Costs against defendant Helen Doria in both the complaint and the cross-claim (pp.
11-12, decision, pp. 264-265, rec.).
Only the defendants Eduarte spouses took an appeal (p. 266, rec.), claiming that the trial
court erred -
1. In annulling, voiding, setting aside, and declaring of no force and effect -
(a) the deed of donation (Exhibit C and 1-A), dated July 26, 1984;
(b) the deed of absolute sale (Exhibit 1 and 3-E) executed on March 25,
1988 by and between Spouses Eduartes and Helen Doria;
(c) TCT No. T-27434 (Exhibit 4) issued in the name of spouses Romulo
Eduarte and Sally Eduarte; and
in revoking the deed of donation (Exhibit B) dated April 26, 1984;
2. In declaring the appellants Eduartes buyers in bad faith;
Page 41 of 44
 3. In not finding the plaintiffs guilty of estoppel by silence and/or guilty of suppression of
evidence instead of finding the appellants Eduartes guilty of suppression of evidence; and
4. In finding that the signature of Pedro Calapine in the deed of donation (Exhibits C and 1-A)
dated July 26, 1984 a forgery based on the opposite findings of the handwriting experts
presented by each party and in the absence of the testimony of Pedro Calapine who was
then still alive. (pp. 1-2, appellants' brief.)2
In its decision dated April 22, 1992,3 respondent Court of Appeals dismissed petitioners' appeal and
affirmed the decision of the trial court. Respondent court was in complete accord with the trial court in
giving more credence to the testimony of private respondents' expert witness, NBI document examiner
Bienvenido Albacea, who found Pedro Calapine's signature in the second deed of donation to be a
forgery. It also ruled that by falsifying Pedro Calapine's signature, Helen Doria committed an act of
ingratitude which is a valid ground for revocation of the donation made in her favor in accordance with
Article 765 of the Civil Code. Furthermore, respondent court upheld the trial court's finding that
petitioners are not buyers in good faith of the donated property as they failed to exercise due diligence
in verifying the true ownership of the property despite the existence of circumstances that should have
aroused their suspicions.
Petitioners are now before us taking exception to the foregoing findings of respondent Court of Appeals
and contending that the same are not in accord with the law and evidence on record.
Anent the revocation of the first deed of donation, petitioners submit that paragraph (1) of Article 765 of
the Civil Code does not apply in this case because the acts of ingratitude referred to therein pertain to
offenses committed by the donee against the person or property of the donor. Petitioners argue that as
the offense imputed to herein donee Helen Doria - falsification of a public document - is neither a crime
against the person nor property of the donor but is a crime against public interest under the Revised
Penal Code, the same is not a ground for revocation.
In support of this contention, petitioners cite the following portions found in Tolentino's Commentaries
and Jurisprudence on the Civil Code:
Offense against Donor - . . . The crimes against the person of the donor would include not
only homicide and physical injuries, but also illegal detention, threats and coercion; and those
against honor include offenses against chastity and those against the property, include
robbery, theft, usurpation, swindling, arson, damages, etc. (5 Manresa 175-176).4
This assertion, however, deserves scant consideration. The full text of the very same commentary cited
by petitioners belies their claim that falsification of the deed of donation is not an act of ingratitude, to
wit:
Offense Against Donor. - All crimes which offend the donor show ingratitude and are causes
for revocation. There is no doubt, therefore, that the donee who commits adultery with the
wife of the donor, gives cause for revocation by reason of ingratitude. The crimes against the
person of the donor would include not only homicide and physical injuries, but also illegal
detention, threats, and coercion; those against honor include offenses against chastity; and
those against the property, include robbery, theft, usurpation, swindling, arson, damages, etc.
[Manresa 175-176].5 (Emphasis supplied).
Obviously, the first sentence was deleted by petitioners because it totally controverts their contention.
As noted in the aforecited opinion "all crimes which offend the donor show ingratitude and are causes
for revocation." Petitioners' attempt to categorize the offenses according to their classification under the
Revised Penal Code is therefore unwarranted considering that illegal detention, threats and coercion
are considered as crimes against the person of the donor despite the fact that they are classified as
crimes against personal liberty and security under the Revised Penal Code.6
Petitioners also impute grave error to respondent Court of Appeals in finding that "the second deed of
donation dated July 26, 1984 was falsified. Petitioners deplore the fact that more credence was given to
the testimony of the NBI handwriting expert who found Pedro Calapine's signature in the second deed
of donation to be a forgery despite the existence of controverting testimony by PC-INP Crime
Laboratory (PCCL) Chief Document Examiner which petitioners adduced as evidence on their part.
We are not persuaded. Respondent Court of Appeals and the trial court cannot be faulted for giving
more weight and credence to the testimony of the NBI handwriting expert considering that the
examination of the said witness proved to be complete, thorough and scientific.
In gauging the relative weight to be given to the opinion of handwriting experts, we adhere to the
following standards:
We have held that the value of the opinion of a handwriting expert depends not upon his
mere statements of whether a writing is genuine or false, but upon the assistance he may
afford in pointing out distinguishing marks, characteristics and discrepancies in and between
genuine and false specimens of writing which would ordinarily escape notice or detection
from an unpracticed observer. The test of genuineness ought to be the resemblance, not the
formation of letters in some other specimens but to the general character of writing, which is
impressed on it as the involuntary and unconscious result of constitution, habit or other
permanent course, and is, therefore itself permanent. 7
Confronted with contradicting testimonies from two handwriting experts, the trial court and respondent
Court of Appeals were convinced by the opinion of the NBI handwriting expert as it was more
exhaustive, in contrast with the testimony of petitioners' witness from the PCCL which was discarded on
account of the following flaws:
The Court is not convinced with Cruz's explanations. Apart from the visual
inconsistencies, i.e., the strokes with which some letters were made, the variety in the sizes
of the letters, the depth, the difference in the slant which the Court itself observed in its own
examination of both the questioned signatures and those standard specimen signatures,
there is evidence showing that Cruz did not make a thorough examination of all the
signatures involved in this particular issue. Thus even in the report submitted by the PCCL it
was admitted that they omitted or overlooked the examination of at least three (3) standard
specimen signatures of Pedro Calapine which were previously subject of the NBI examination
marked as Exhibits "S-9", "S-10" and "S-11". When questioned regarding this oversight, Cruz
testified that in his opinion, the inclusion or non-inclusion of said exhibits in their examination
will not affect the same and they would have arrived at the same conclusion anyway. Again,
when asked why they did not bother to have the original copies of the documents being
questioned (Exhs. "Q-1" through "Q-3") for their examination, Cruz replied that they are using
a special film so it will not matter whether the documents being examined are the original or a
mere photocopy (TSN 8, 10, 12 and 26, Hearing of Nov. 23, 1989).
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 The Court will not attempt to make its own conclusion or resolution on such a technical issue
as the matter at hand in the light of the cavalier attitude of Cruz. In fine, between the
examinations made by the two witnesses, that of Albacea's proved to be complete, thorough
and scientific and is worthy of credence and belief.8
The afore-quoted findings confirm beyond doubt the failure of petitioners' expert witness to satisfy the
above-mentioned criteria for evaluating the opinion of handwriting experts. At the same time,
petitioners' witness failed to rebut the convincing testimony of the NBI handwriting expert presented by
private respondents. We therefore find no reason to deviate from the assailed conclusions as the same
are amply supported by the evidence on record.
Finally, proceeding to the crucial issue that directly affects herein petitioners, it is reiterated that
petitioners are buyers in good faith of the donated property, and therefore, it was grave error to annul
and set aside the deed of sale executed between petitioners and donee Helen Doria.
In adjudging petitioners as buyers in bad faith, respondent Court of Appeals affirmed the trial court's
finding that the attendant circumstances, that is, the presence of other occupants as well as houses
built of strong materials and fruit bearing trees in the subject land, should have aroused the suspicion of
petitioners and impelled them to exercise due diligence in verifying the true ownership of the property
being sold. Petitioners dispute the lower court's conclusion and argue that although there were other
occupants in the subject property, no adverse claim was made by the latter as they were mere tenants
therein, thus, petitioners were not obliged to make any further inquiry because the property being sold
was covered by a certificate of title under Helen Doria's name.
We agree with petitioners. The rule is well-settled that mere possession cannot defeat the title of a
holder of a registered torrens title to real property.9 Moreover, reliance on the doctrine that a forged
deed can legally be the root of a valid title is squarely in point in this case:
Although generally a forged or fraudulent deed is a nullity and conveys no title, however there
are instances when such a fraudulent document may become the root of a valid title. One
such instance is where the certificate of title was already transferred from the name of the
true owner to the forger, and while it remained that way, the land was subsequently sold to an
innocent purchaser. For then, the vendee had the right to rely upon what appeared in the
certificate.
Where there was nothing in the certificate of title to indicate any cloud or vice in the
ownership of the property, or any encumbrance thereon, the purchaser is not required to
explore further than what the Torrens Title upon its face indicates in quest for any hidden
defect or inchoate right that may subsequently defeat his right thereto. If the rule were
otherwise, the efficacy and conclusiveness of the certificate of title which the Torrens System
seeks to insure would entirely be futile and nugatory.10
When herein petitioners purchased the subject property from Helen Doria, the same was already
covered by TCT No. T-23205 under the latter's name. And although Helen Doria's title was fraudulently
secured, such fact cannot prejudice the rights of herein petitioners absent any showing that they had
any knowledge or participation in such irregularity. Thus, they cannot be obliged to look beyond the
certificate of title which appeared to be valid on its fade and sans any annotation or notice of private
respondents' adverse claim. Contrary therefore to the conclusion of respondent Court, petitioners are
purchasers in good faith and for value as they bought the disputed property without notice that some
other person has a right or interest in such property, and paid a full price for the same at the time of the
purchase or before they had notice of the claim or interest of some other person in the property. 11
Respondent Court therefore committed a reversible error when it affirmed the ruling of the trial court
annulling and setting aside the deed of absolute sale dated March 25, 1988 between petitioners and
Helen Doria, as well as the Transfer Certificate of Title No. T-27434 issued under petitioners' name, the
established rule being that the rights of an innocent purchaser for value must be respected and
protected notwithstanding the fraud employed by the seller in securing his title. 12
In this regard, it has been held that the proper recourse of the true owner of the property who was
prejudiced and fraudulently dispossessed of the same is to bring an action for damages against those
who caused or employed the fraud, and if the latter are insolvent, an action against the Treasurer of the
Philippines may be filed for recovery of damages against the Assurance Fund. 13
Conformably with the foregoing, having established beyond doubt that Helen Doria fraudulently secured
her title over the disputed property which she subsequently sold to petitioners, Helen Doria should
instead be adjudged liable to private respondents, and not to petitioners as declared by the trial court
and respondent Court of Appeals, for the resulting damages to the true owner and original plaintiff,
Pedro Calapine.
ACCORDINGLY, the petition is GRANTED and the appealed decision is hereby MODIFIED. The
portions of the decision of the Regional Trial Court of San Pablo City, Branch 30, as affirmed by the
Court of Appeals in CA-G.R. CV No. 29175 which ordered the following:
xxx xxx xxx
2. ANNULLING, voiding, setting aside and declaring of no force and effect . . . , the deed of
absolute sale executed on March 25, 1988 by and between spouses Eduartes and Helen
Doria, and the Transfer Certificate of Title No T-27434 issued under the name of spouses
Romulo and Sally Eduarte;
3. ORDERING the office of the Register of Deeds, San Pablo City, to cancel TCT No. T-
27434 or any other adverse title emanating from OCT No. P-2129 and in lieu thereof, to issue
a new transfer certificate of title covering the subject property under the names of the
substitute-plaintiff Alexander and Artemis both surnamed Calapine, after payment of the
corresponding fees and taxes therefor; and
xxx xxx xxx
Judgment on the cross-claim of defendant Eduartes against Helen Doria is further rendered
by ordering the latter to pay the former the sum of P110,000.00 with legal interest thereon
starting from March 25, 1988 until full payment, . . . .
are hereby REVERSED and SET ASIDE.
Instead, Helen Doria is hereby ordered to pay herein private respondents the sum of P110,000.00 with
legal interest counted from March 25, 1988 until full payment, as damages for the resulting loss to
original plaintiff Pedro Calapine.
In all other respects, the appealed decision is hereby affirmed. SO ORDERED.
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