PROPERTY|07Sept15|1

G.R. No. L-22621 September 29, 1967

JOSE MARIA RAMIREZ, plaintiff-appellee, vs.JOSE EUGENIO RAMIREZ, RITA D. RAMIREZ, BELEN T. RAMIREZ, DAVID MARGOLIES, MANUEL UY and SONS, INC., BANK OF THE PHILIPPINE ISLANDS, in its capacity as judicial administrator of the Testate Estate of the late Jose Vivencio Ramirez, defendants-appellants, ANGELA M. BUTTE, defendant-appellee.

Sycip, Salazar, Luna and Associates for plaintiff-appellee.Ramirez and Ortigas for defendants-appellants.

CONCEPCION, C.J.:

Appeal by the defendants from a decision of the Court of First Instance of Manila.

Plaintiff, Jose Maria Ramirez, brought this action1 against defendants Jose Eugenio Ramirez, Rita D. Ramirez, Belen T. Ramirez, David Margolies, Manuel Uy & Sons, Inc., the Estate of the late Jose Vivencio Ramirez represented by its judicial administrator, the Bank of the Philippine Islands, and Angela M. Butte — hereinafter referred to collectively as defendants — for the partition of a parcel of land situated at the Northwestern corner of Escolta street and Plaza Sta. Cruz, Manila — otherwise known as Lot 1 of Block 2120 of the Cadastral Survey of Manila and more particularly described in Transfer Certificate of Title No. 53946 of the Register of Deeds for said City — and belonging pro indiviso to both parties, one-sixth (1/6) to the plaintiff and five-sixths (5/6) to the defendants.

Manuel Uy & Sons expressed its conformity to the partition, "if the same can be done without great prejudice to the interests of the parties." Defendant Butte agreed to the partition prayed for. The other defendants objected to the physical partition of the property in question, upon the theory that said partition is "materially and legally" impossible and "would work great harm and prejudice to the co-owners." By agreement of the parties the lower Court referred the matter to a Commission composed of:

(1) Delfin Gawaran, Deputy Clerk of said court, as Chairman,

(2) Artemio U. Valencia, President of the Manila Board of Realtors, as commissioner for plaintiff, and

(3) Ramon F. Cuervo, President of the Perpetual Investment Corporation, Inc., as commissioner for defendants,

to determine whether the property is susceptible of partition, and submit a plan therefor, if feasible, as well as to report thereon. Subsequently, the commissioners submitted their individual reports with their respective plans for the segregation of plaintiff's share.

After due hearing, the Court rendered a decision declaring that plaintiff is entitled to the segregation of his share, and directing that the property be partitioned in accordance with the plan submitted by commissioner Valencia, and that the expenses incident thereto be paid by both parties proportionately. Hence, this appeal by, the defendants, except Mrs. Butte. Appellants maintain that the lower court has erred: 1) in holding that said property is legally susceptible of physical division; 2) in accepting the recommendation of commissioner Valencia, instead of that of commissioner Cuervo, or a proposal made by the very plaintiff; and 3) in not ordering that the incidental expenses be borne exclusively by him.

We find no merit in the appeal.

With respect to the first alleged error, it is urged that a physical division of the property will cause "inestimable damage" to the interest of the co-owners. No evidence, however, has been introduced, or sought to be introduced, in support of this allegation. Moreover, the same is predicated upon the assumption that a real estate suitable for commercial purposes — such as the one herein sought to be partitioned — is likely to suffer a proportionately great diminution in value when its area becomes too small. But, then, if plaintiff's share of 260.26 square meters were segregated from the property in question, there would still remain a lot of 1,301.34 square meters for appellants herein and Mrs. Butte. A real estate of this size, in the very heart of Manila, is not, however, inconsequential, in comparison to that of the present property of the community. In other words, we do not believe that its value would be impaired, on account of the segregation of plaintiff's share, to such an extent as to warrant the conclusion that the property is indivisible.

Appellants argue that, instead of making the aforementioned segregation, plaintiff's share should be sold to them. In support of this pretense, they cite the provision of Article 495 of our Civil Code, to the effect that:

. . . Notwithstanding the provisions of the preceding article, the co-owners cannot demand a physical division of the thing owned in common, when to do so would render it unserviceable for the use for which it is intended. But the co-ownership may be terminated in accordance with article 498.

They apparently assume, once again, that the alleged "inestimable damage" to be suffered by the property, if plaintiff's share were segregated, is equivalent to rendering it "unserviceable for the use for which it is intended." Independently of the fact that the minor premise of this syllogism — the alleged "inestimable damage" — has not been established, the conclusion drawn by appellants does not follow necessarily. Indeed, the record shows that there are two (2) buildings on the land in question, namely: 1) a two-storey commercial building — known as "Sta. Cruz Building" — abutting on the one (1) side, 2 on the Escolta, and, on the other 3 on Plaza Santa Cruz; and 2) a small two-storey residential building, on the Northwestern end of the lot, and behind the first building, adjoining the Estero de la Reina, which constitutes the Southwestern boundary of the property. There is nothing to show that, after segregating plaintiff's share, the buildings left on the remaining 1,301.34 square meters, representing defendants' share, would be unserviceable, either for commercial or for residential purposes. On the contrary, it seems obvious that plaintiff would not insist upon the partition prayed for, if

PROPERTY|07Sept15|2

his share 4 were unserviceable for either — particularly the commercial — purpose. In fact, every one of the aforementioned commissioners, including the one representing defendants herein, recommended the segregation of plaintiff's share. The commissioners merely failed to agree on the precise configuration thereof.

This brings us to the second issue raised by appellants: whether the lower court should have adopted the plan submitted by their own commissioner, or "in not taking into consideration," at least, a proposal made by plaintiff herein. In this connection, it appears that said commissioner 5 recommended that plaintiff's share be given a frontage of 6.14 lineal meters at Plaza Sta. Cruz, whereas the commissioner for the Court 6 favored a frontage of 12.66 square meters at said Plaza; that defendants' main objection to the plan recommended by commissioner Valencia 7 and adopted by the lower court, is that it left behind the portion awarded to plaintiff, a lot of 169 square meters, which would have to be divided among the defendants, should they later wish to have their individual shares segregated; and that, in order to offset this objection, plaintiff expressed — in one of the pre-trials held in the lower court and in order to "facilitate early termination" of the case — the willingness "to buy from the other co-owners the remaining portion of the land behind his lot at P1,000 per square meter."1awphîl.nèt

The record does not show that this offer of the plaintiff had not been "taken into consideration" by the lower court. Moreover, defendants had not accepted it. And neither do they accept it now, for they would want the plaintiff to pay a price higher than that offered by him. Upon the other hand, the disadvantage resulting to the defendants from the existence of said lot of 169 square meters, behind that awarded to the plaintiff, is offset by the fact that the remaining portion of the land in question — representing defendants' collective share — has, in addition to a frontage of around 40 meters on Plaza Santa Cruz, a frontage of 24.13 meters on Escolta Street, which apart from being, admittedly, the most valuable one, is totally denied to the plaintiff. Then, again the Cuervo plan giving plaintiff a 6.14 meters frontage of Plaza Sta. Cruz, goes all the way down to the Western end of the property, the Estero de la Reina, and would require a partition of the residential building, on that part of the property in question, which the very plaintiff says is indivisible, because it would render said building "unserviceable for the purpose for which it is intended." 8

As regards the last alleged error, it is obvious that the segregation of plaintiff's share inures to the benefit not only of the plaintiff, but, also, of the defendants, and that both should, consequently, defray the incidental expenses.

WHEREFORE, the decision appealed from is hereby the costs of this instance against herein defendants-appellants. It is so ordered.

PROPERTY|07Sept15|3

G.R. No. L-13298 November 19, 1918

CORNELIO RAMOS, petitioner-appellant, vs.THE DIRECTOR OF LANDS, objector-appellee.

Basilio Aromin for appellant.Office of the Solicitor-General Paredes for appellee.MALCOLM, J.:

This is an appeal by the applicant and appellant from a judgment of the Court of First Instance of Nueva Ecija, denying the registration of the larger portion of parcel No. 1 (Exhibit A of the petitioner), marked by the letters A, B, and C on the plan, Exhibit 1, of the Government.

One Restituto Romero y Ponce apparently gained possession of a considerable tract of land located in the municipality of San Jose, Province of Nueva Ecija, in the year 1882. He took advantage of the Royal Decree of February 13, 1894, to obtain a possessory information title to the land, registered as such on February 8, 1896. Parcel No. 1, included within the limits of the possessory information title of Restituto Romero, was sold in February, 1907, to Cornelio Ramos, the instant petitioner, and his wife Ambrosia Salamanca.

Ramos instituted appropriate proceedings to have his title registered. Opposition was entered by the Director of Lands on the ground that Ramos had not acquired a good title from the Spanish government and by the Director of Forestry on the ground that the first parcel was forest land. The trial court agreed with the objectors and excluded parcel No. 1 from registration. So much for the facts.

As to the law, the principal argument of the Solicitor-General is based on the provisions of the Spanish Mortgage Law and of the Royal Decree of February 13, 1894, commonly known as the Maura Law. The Solicitor-General would emphasize that for land to come under the protective ægis of the Maura Law, it must have been shown that the land was cultivated for six years previously, and that it was not land which pertained to the "zonas forestales." As proof that the land was, even as long ago as the years 1894 to 1896, forestal and not agricultural in nature is the fact that there are yet found thereon trees from 50 to 80 years of age.

We do not stop to decide this contention, although it might be possible, following the doctrine laid down by the United States Supreme Court with reference to Mexican and Spanish grantes within the United States, where some recital is claimed to be false, to say that the possessory information, apparently having taken cognizance of the requisites for title, should not now be disturbed. (Hancock vs. McKinney [1851], 7 Tex., 192; Hornsby and Roland vs. United States [1869], 10 Wall., 224.) It is sufficient, as will later appear, merely to notice that the predecessor in interest to the petitioner at least held this tract of land under color of title.

Subsection 6 of section 54, of Act No. 926, entitled The Public Land Law, as amended by Act No. 1908, reads as follows:

6. All persons who by themselves or their predecessors and interest have been in the open, continuous, exclusive, and notorious possession and occupation of agricultural public lands, as defined by said Act of Congress of July first, nineteen hundred and two, under a bona fide claim of ownership except as against the Government, for a period of ten years next preceding the twenty-sixth day of July, nineteen hundred and four, except when prevented by war or force majeure, shall be conclusively presumed to have performed all the conditions essential to a government grant and to have received the same, and shall be entitled to a certificate of title to such land under the provisions of this chapter.

There are two parts to the above quoted subsection which must be discussed. The first relates to the open, continuous, exclusive, and notorious possession and occupation of what, for present purposes, can be conceded to be agricultural public land, under a bona fide claim of ownership.

Actual possession of land consists in the manifestation of acts of dominion over it of such a nature as a party would naturally exercise over his own property. Relative to actuality of possession, it is admitted that the petitioner has cultivated only about one fourth of the entire tract. This is graphically portrayed by Exhibit 1 of the Government, following:

The question at once arises: Is that actual occupancy of a part of the land described in the instrument giving color of title sufficient to give title to the entire tract of land?lawphil.net

The doctrine of constructive possession indicates the answer. The general rule is that the possession and cultivation of a portion of a tract under claim of ownership of all is a constructive possession of all, if the remainder is not in the adverse possession of another. (Barr vs. Gratz's Heirs [1819], 4 Wheat., 213; Ellicott vs. Pearl [1836], 10 Pet., 412; Smith vs. Gale [1892], 144 U. S., 509.) Of course, there are a number of qualifications to the rule, one particularly relating to the size of the tract in controversy with reference to the portion actually in possession of the claimant. It is here only necessary to apply the general rule.

The claimant has color of title; he acted in good faith; and he has had open, peaceable, and notorious possession of a portion of the property, sufficient to apprise the community and the world that the land was for his enjoyment. (See arts. 446, 448, Civil Code.) Possession in the eyes of the law does not mean that a man has to have his feet on every square meter of ground before it can be said that he is in possession. Ramos and his predecessor in interest fulfilled the requirements of the law on the supposition that he premises consisted of agricultural public land.

The second division of the law requires consideration of the term "agricultural public land." The law affirms that the phrase is denied by the Act of Congress of July 1st, 1902, known as the Philippine bill. Turning to the Philippine Bill, we find in sections 13 to 18 thereof that three classes of land are mentioned. The first is variously denominated

PROPERTY|07Sept15|4

"public land" or "public domain," the second "mineral land," and the third "timber land." Section 18 of the Act of Congress comes nearest to a precise definition, when it makes the determination of whether the land is more valuable for agricultural or for forest uses the test of its character.

Although these sections of the Philippine Bill have come before the courts on numerous occasions, what was said in the case of Jones vs. Insular Government ([1906], 6 Phil., 122), is still true, namely: "The meaning of these sections is not clear and it is difficult to give to them a construction that will be entirely free from objection." In the case which gave most serious consideration to the subject (Mapa vs. Insular Government [1908], 10 Phil., 175), it was found that there does exist in the Act of Congress a definition of the phrase "agricultural public lands." It was said that the phrase "agricultural public lands" as used in Act No. 926 means "those public lands acquired from Spain which are not timber or mineral lands."

The idea would appear to be to determine, by exclusion, if the land is forestal or mineral in nature and, if not so found, to consider it to be agricultural land. Here, again, Philippine law is not very helpful. For instance, section 1820 of the Administrative Code of 1917 provides: "For the purposes of this chapter, 'public forest' includes, except as otherwise specially indicated, all unreserved public land, including nipa and mangrove swamps, and all forest reserves of whatever character." This definition of "public forest," it will be noted, is merely "for the purposes of this chapter." A little further on, section 1827 provides: "Lands in public forests, not including forest reserves, upon the certification of the Director of Forestry that said lands are better adapted and more valuable for agricultural than for forest purposes and not required by the public interests to be kept under forest, shall be declared by the Department Head to be agricultural lands." With reference to the last section, there is no certification of the Director of Forestry in the record, as to whether this land is better adapted and more valuable for agricultural than for forest purposes.

The lexicographers define "forest" as "a large tract of land covered with a natural growth of trees and underbrush; a large wood." The authorities say that he word "forest" has a significant, not an insignificant meaning, and that it does not embrace land only partly woodland. It is a tract of land covered with trees, usually of considerable extent. (Higgins vs. Long Island R. Co. [1908], 114 N. Y. Supp., 262; People vs. Long Island R. Co. [1908], 110 N. Y. Supp., 512.)

The foresters say that no legal definition of "forest" is practicable or useful. B. H. Baden-Powell, in his work on Forest Law of India, states as follows:

Every definition of a forest that can be framed for legal purposes will be found either to exclude some cases to which the law ought to apply, or on the other hand, to include some with which the law ought not to interfere. It may be necessary, for example, to take under the law a tract of perfectly barren land which at present has neither trees, brushwood, nor grass on it, but which in the course f time it is hoped will be "reboise;" but any definition wide enough to take in all such lands, would also take in much that was not wanted. On the other hand, the definition, if framed with reference to tree-growth, might (and indeed would be almost sure to) include a garden, shrubbery, orchard, or vineyard, which it was not designed to deal with.

B. E. Fernow, in his work on the Economics of Forestry, states as follows:

A forest in the sense in which we use the term, as an economic factor, is by no means a mere collection of trees, but an organic whole in which all parts, although apparently heterogeneous, jumbled together by accident as it were and apparently unrelated, bear a close relation to each other and are as interdependent as any other beings and conditions in nature.

The Director of Forestry of the Philippine Islands has said:

During the time of the passage of the Act of Congress of July 1, 1902, this question of forest and agricultural lands was beginning to receive some attention and it is clearly shown in section 18 of the above mentioned Act; it leaves to the Bureau of Forestry the certification as to what lands are for agricultural or forest uses. Although the Act states timber lands, the Bureau has in its administration since the passage of this act construed this term to mean forest lands in the sense of what was necessary to protect, for the public good; waste lands without a tree have been declared more suitable for forestry in many instances in the past. The term 'timber' as used in England and in the United States in the past has been applied to wood suitable for construction purposes but with the increase in civilization and the application of new methods every plant producing wood has some useful purpose and the term timber lands is generally though of as synonymous with forest lands or lands producing wood, or able to produce wood, if agricultural crops on the same land will not bring the financial return that timber will or if the same land is needed for protection purposes.

x x x x x x x x x

The laws in the United States recognize the necessity of technical advice of duly appointed boards and leave it in the hands of these boards to decide what lands are more valuable for forestry purposes or for agricultural purposes.

In the Philippine Islands this policy is follows to as great an extent as allowable under the law. In many cases, in the opinion of the Bureau of Forestry, lands without a single tree on them are considered as true forest land. For instance, mountain sides which are too steep for cultivation under ordinary practice and which, if cultivated, under ordinary practice would destroy the big natural resource of the soil, by washing, is considered by this bureau as forest land and in time would be reforested. Of course, examples exist in the Mountain Province where steep hillsides have been terraced and intensive cultivation practiced but even then the mountain people are very careful not to destroy forests or other vegetative cover which they from experience have found protect their water supply. Certain chiefs have lodged protests with the Government against other tribes on the opposite side of the mountain cultivated by them, in order to prevent other tribes from cutting timber or destroy cover guarding their source of water for irrigation.

Dr. M. S. Shaler, formerly Dean of the Lawrence Scientific School, remarked that if mankind could not devise and enforce ways dealing with the earth, which will preserve this source of like "we must look forward to the time, remote it may be, yet equally

PROPERTY|07Sept15|5

discernible, when out kin having wasted its great inheritance will fade from the earth because of the ruin it has accomplished."

The method employed by the bureau of Forestry in making inspection of lands, in order to determine whether they are more adapted for agricultural or forest purposes by a technical and duly trained personnel on the different phases of the conservation of natural resources, is based upon a previously prepared set of questions in which the different characters of the land under inspection are discussed, namely:

Slope of land: Level; moderate; steep; very steep.Exposure: North; South; East; West.Soil: Clay; sandy loam; sand; rocky; very rocky.Character of soil cover: Cultivated, grass land, brush land, brush land and timber mixed, dense forest.

If cultivated, state crops being grown and approximate number of hectares under cultivation. (Indicate on sketch.)

For growth of what agricultural products is this land suitable?

State what portion of the tract is wooded, name of important timber species and estimate of stand in cubic meters per hectare, diameter and percentage of each species.

If the land is covered with timber, state whether there is public land suitable for agriculture in vicinity, which is not covered with timber.

Is this land more valuable for agricultural than for forest purposes? (State reasons in full.)

Is this land included or adjoining any proposed or established forest reserve or communal forest? Description and ownership of improvements.

If the land is claimed under private ownership, give the name of the claimant, his place of residence, and state briefly (if necessary on a separate sheet) the grounds upon which he bases his claim.

When the inspection is made on a parcel of public land which has been applied for, the corresponding certificate is forwarded to the Director of Lands; if it is made on a privately claimed parcel for which the issuance of a title is requested from the Court of Land Registration, and the inspection shows the land to be more adapted for forest purposes, then the Director of Forestry requests the Attorney-General to file an opposition, sending him all data collected during the inspection and offering him the forest officer as a witness.

It should be kept in mind that the lack of personnel of this Bureau, the limited time intervening between the notice for the trial on an expediente of land and the day of the trial, and the difficulties in communications as well as the distance of the land in question greatly hinder the handling of this work.

In the case of lands claimed as private property, the Director of Forestry, by means of his delegate the examining officer, submits before the court all evidence referring to the present forest condition of the land, so that the court may compare them with the alleged right by the claimant. Undoubtedly, when the claimant presents a title issued by the proper authority or evidence of his right to the land showing that he complied with the requirements of the law, the forest certificate does not affect him in the least as such land should not be considered as a part of the public domain; but when the alleged right is merely that of possession, then the public or private character of the parcel is open to discussion and this character should be established not simply on the alleged right of the claimant but on the sylvical condition and soil characteristics of the land, and by comparison between this area, or different previously occupied areas, and those areas which still preserve their primitive character.

Either way we look at this question we encounter difficulty. Indubitably, there should be conservation of the natural resources of the Philippines. The prodigality of the spendthrift who squanders his substance for the pleasure of the fleeting moment must be restrained for the less spectacular but surer policy which protects Nature's wealth for future generations. Such is the wise stand of our Government as represented by the Director of Forestry who, with the Forester for the Government of the United States, believes in "the control of nature's powers by man for his own good." On the other hand, the presumption should be, in lieu of contrary proof, that land is agricultural in nature. One very apparent reason is that it is for the good of the Philippine Islands to have the large public domain come under private ownership. Such is the natural attitude of the sagacious citizen.

If in this instance, we give judicial sanction to a private claim, let it be noted that the Government, in the long run of cases, has its remedy. Forest reserves of public land can be established as provided by law. When the claim of the citizen and the claim of the Government as to a particular piece of property collide, if the Government desires to demonstrate that the land is in reality a forest, the Director of Forestry should submit to the court convincing proof that the land is not more valuable for agricultural than for forest purposes. Great consideration, it may be stated, should, and undoubtedly will be, paid by the courts to the opinion of the technical expert who speaks with authority on forestry matters. But a mere formal opposition on the part of the Attorney-General for the Director of Forestry, unsupported by satisfactory evidence will not stop the courts from giving title to the claimant.

We hold that the petitioner and appellant has proved a title to the entire tract of land for which he asked registration, under the provisions of subsection 6, of section 54, of Act No. 926, as amended by Act No. 1908, with reference to the Philippine Bill and the Royal Decree of February 13, 1894, and his possessory information.

Judgment is reversed and the lower court shall register in the name of the applicant the entire tract in parcel No. 1, as described in plan Exhibit A, without special finding as to costs. So ordered.

PROPERTY|07Sept15|6

G.R. No. L-25723June 29, 1984

THE DIRECTOR OF LANDS and HEIRS OF THE DECEASED HOMESTEADERS, namely, IGNACIO BANGUG, PASCUAL BANGUG, EUSEBIO GUMIRAN, SANTIAGO AGGABAO and ANTONIO DERAY, petitioners-appellants,vs.COURT OF APPEALS and HEIRS OF BRUNO CABAUATAN, respondents-appellees.

AQUINO, J.:

This is a land registration case involving 128 hectares of land located in Cabagan, Isabela. On page 125 of the Gaceta de Manila dated January 30, 1884, it was published that the land applied Or by Bruno Cabanatan (sic) "en la jurisdiction de Cabagan de la de Isabela de Luzon" was declared "enagenables" (Exh. P).

On page 142 of the Gaceta de Manila dated August 2, 1885, this entry was published: "Adjudicando a ... D. Bruno Cabanatan (sic) la extension de 138 hectareas, 91 areas y 50 centiareas de terreno situado en el pueblo de Cabagan, en Isabela de Luzon, en la cantidad de pfs. 188'71 6/81" (Exh. Q. The name is "Cabauatan" in Exh. M).

"Bruno Cabanatan "of Cabagan, Isabela appears as No. 322 in a handwritten list of "Expedientes Remitidos A Terrenos Publicos" (terminated cases) dated November 30, 1901 in the files the Division of Archives (Exh. L and O).

However, the applicants have not produced in evidence any composition title, the basis of their application. It was allegedly burned in the house of Pepe Buraga during the war (34 tsn June 26, 1956). So, we do not know the boundaries of the 138 hectares land allegedly adjudicated to Bruno Cabanatan, granting that he was the same as Bruno Cabauatan, the ancestor of the applicants; in what barrio or sitio of Cabagan it is located; why in 1932 the 138 hectares had been increased to 154 hectares. and why in 1921 the same land was declared for tax purposes in the name of Honofre Cabauatan, Bruno's nephew, and not in the names of Bruno s heirs.

As correctly contended by the Solicitor General, the land applied for must be Identified. The claim of possession or having a composition title is inutile if the land is not Identified.

Bruno died during the Spanish regime. The year when he died is not known. He is survived by seven children with the following descendants:

1. Candida, survived by Lucio Guingab and Jose Buraga.

2. Paulina, survived by Maria, Jose Gregorio and Epifania, surnamed Samus (children of the first marriage) and by Eugenia and Vicente Uanan children of her second marriage.

3. Francisco, survived by Manuel, Faustina, Juan and Remedios.

4. Bruno 2nd, survived by Purisima, Francisco, Cristeta, Benjamin and Respicio.

5. Salvador, survived by Paz, Lucio, Lourdes and Pilar, who is dead and is in turn survived by her children Celso Mesa and Ruben, Mesa.

6. Heculina, survived by Faustino, Maria, Alejandra, Genoveva, Amada and Francisco, all surnamed Cauan. Genoveva Cauan is dead and is survived by her child, Josefina Balmaceda.

7. Guillermo, survived by his son, Pedro Cabauatan.

Bruno had a brother named Leon, who had a son named Honofre (Onofre) who, curiously enough, obtained in 1921 a tax declaration for the 138 hectares at P5,200. In that tax declaration, it was stated that the land is located at Malasi, Cabagan, bounded on the north, east and south by public land (P.D.) and on the west by a mountain. How Onofre came to have a tax declaration for that land has not been adequately explained.

Emilio Cabauatan, a son of Onofre, in his opposition and testimony claimed that lawyer Miguel Binag, in behalf of Bruno's heirs, in 1937 proposed to use the said declaration in the land registration proceeding. He promised to give the heirs of Onofre Cabauatan one-third of the land. However, lawyer Binag denied that he ever made such a proposition.

Emilio also claimed that the land of Bruno is in Sitio Malini, three kilometers from Sitio Malasi. The trial court and Binag denied that there was a sitio in Cabagan called Malini. It was not found in the list of sitios in the governor's office.

On March 5,1934 Judge Mariano Rosauro issued Decree No. 536561 for the registration of a parcel of land, plan 95520, with an area of 25 hectares located at the "sitio of Malisi, Barrio of Aggub," Cabagan. It was registered in the names of the following heirs of Bruno as proindiviso co-owners without regard to the right of representation (Exh. J)

1. Candida Cabauatan

16. Rufina Cabauatan

2. Maria Samus

17. Paz Cabauatan

3. Jose Samus

18. Lucio Cabauatan

4. Gregorio Samus

19. Lourdes Cabauatan

PROPERTY|07Sept15|7

5. Epifanio Samus

20. Cervex Mesa

6. Eugenia Uanan

21. Ruben Mesa

7. Vicente Uanan

22. Faustino Cauan

8. Manuel Cabauatan

23. Maria Cauan

9. Faustino Cabauatan

24. Alejandra Cauan

10. Juan Cabauatan

25. Genoveva Cauan

11. Remedios Cabauatan

26. Amada Cauan

12. Purisima Cabauatan

27. Francisco Cauan

13. Francisco Cabauatan

28. Josefina Balmaceda

14. Cristeta Cabauatan

and

15. Benjamin Cabauatan

29. Pedro Cabauatan

The 25 hectares land already registered has as boundaries parts of the land under controversy. Thus, the decree states that the 25 hectares are bounded on the northeast and south by public lands; on the east by property of Tomas Vinarao vs. heirs of Bruno Cabauatan; on the west by property of Lucas Pagulayan vs. heirs of Bruno Cabauatan and on the northwest by the Lagoon Malasi Grande and public land.

It may be asked: why did not that 1934 registration case embrace the whole 138 hectares allegedly covered by Bruno's composition title and why did Bruno's heirs have to resort to a second or another registration case in 1937? The applicants have not offered any satisfactory explanation.

In 1934, the year the 25 hectares of land located at Malasi, Cabagan, was registered in the names of Bruno's heirs, they produced a survey plan Psu-95458, for his land which had an area of 154 hectares, much larger than the 138 hectares adjudicated to Bruno in 1885. Clearly, the area was inflated by 16 hectares. The land consisted of seven contiguous lots located in Barrio Aggub, Cabagan. It included the 25 hectares of plan Psu-95520 which was already registered and which was designated as Lot No. 6.

The plan was based on a 1932 survey. The surveyor in 1934 indicated in the plan Psu-95458 the following claimants of the seven lots (Exh. F)

Lot No. 1 — Claimed by Pascual Bangug. Lot No. 2 — Claimed by Heirs of Antonio Deray.Lot No. 3 — Claimed by Heirs of Ignacio Bangug. Lot No. 4 — Claimed by Eusebio Gumiran. Lot No. 5 — Uncultivated.Lot No. 6 — Claimed by Ramon Guingab (already registered,). Lot No. 7 — Claimed by Vicente Ramos and Casiano Magbayad.

The provincial fiscal, in representation of the Director of Lands, alleged in his opposition that the land claimed by Bruno's heirs was covered by the approved and subsisting homestead applications of (1) Santiago Aggabao, deceased, now heirs represented by Simplicio Aggabao; (2) Ignacio Bangug, deceased, now his heirs represented by Anacleto Bangug; (3) Eusebio Gumiran, deceased, now his heirs represented by Luis Gumiran; (4) Antonio Deray, deceased, now his heirs represented by Pablo Deray; (5) Casiano Magbayad, transferor, now Rodolfo Albano, transferee, and (6) Gaudencio Flores (p. 23, RA).

As already stated, the instant second registration case was filed in 1937 based on an expanded survey. The applicants are the very same heirs of Bruno who were the applicants in the first registration case.

They claim the land without taking into account the rule on representation. The record does not disclose why the case was not finished before liberation. The trial commenced in 1956 or almost twenty years after the application was filed. That is an unusual feature of the case.

Evidence for the applicants, Bruno's heirs. — From the testimonies of Candida Cabauatan, Jose Buraga, Gabriel Zipagan and Placido Angoluan, the trial court found that the land in question (128.8 plus 25.4 or 154 hectares) was administered by Bruno's son, Salvador. There were allegedly forty tenants during the Spanish regime working in the middle portion of the land.

PROPERTY|07Sept15|8

Some of the tenants were still on the land during the American regime. They have been cultivating the land under the overseers, Zipagan and Angoluan. During the Spanish regime, Bruno's children received 1/3 of the products, such as corn and palay, as the owner's share. The tenants also planted kapok, acacia trees and some oranges.

They allegedly constructed rice paddies and built dwelling houses. Bruno's heirs have possessed the land openly, peacefully, continuously and in the concept of owner since the Spanish regime up to the present time.

In 1916, about 50 hectares of the land were under cultivation, the greater portion of which is included in Lot No. 6, which, as already mentioned, was registered in 1934 in the names of Bruno's heirs, the same applicants in this 1937 case. The land taxes were paid since 1921 in the name of Honofre, not an heir of Bruno.

Evidence for the Director of Lands and homesteaders. — As oppositor, the Director of Lands presented the following documentary evidence:

(1) The 1924 homestead application of Eusebio Gumiran and his intention to make final proof dated July 22, 1930 for 24 hectares of land located at Sitio Malasi, Barrio Aggub, Cabagan (Exh- 1-3).

(2) The order dated August 28, 1931 for the issuance of a patent to Pascual Bangug for 24 hectares covered by his 1911 application (Exh. 5 and 6-DL).

(3) The approval dated November 23, 1931 of Ignacio Bangug's homestead application for 10 hectares (Exh. 7 and 8-DL).

(4) The approval dated March 23, 1932 of Casiano Mabbayad's homestead application for 24 hectares (Exh. 10 and 11-DL)

(5) The approval dated August 12, 1950 of Gaudencio Flores' homestead application for 24 hectares (Exh. 12 and 13-DL).

(6) The approval dated August 24, 1932 of Santiago Agabao's 1926 homestead application for 24 hectares (Exh. 14 and 16-DL).

(7) The approval dated May 15, 1928 of Antonio Deray's homestead application for 24 hectares (Exh. 17-DL).

As noted by the Solicitor General, the Court of Appeals failed to mention in its decision the evidence for the homesteaders. The following is a summary of that evidence by the Solicitor General and the trial court.

Ignacio Bangug in 1917 occupied about ten hectares of the land in Sitio Malasi. He planted it to rice, corn, tobacco and beans. He applied in 1926 for a homestead over that parcel of land (Exh. 11). He paid the land taxes as early as 1922 (Exh. 1 to 10). His application was approved in 1931. After his death in 1931, his son Jose continued to occupy the homestead. Jose Bangug did not know that the land was included in the survey made for Bruno's heirs.

Pascual Bangug, who died in 1950, had cultivated a portion of the disputed land since 1910 and in 1911 he filed his homestead application (Exh. F). He declared it for tax purposes and paid the land taxes since 1916 (Exh. 2 to 24). The homestead patent was issued in 1931 (Exh. 25). He built his house on the land. His heirs continued his possession after his death. Pascual planted the land to rice, corn, mongo, peanuts, oranges, lemon, acacia and bamboos.

Eusebio Gumiran occupied in 1924 a portion of Lots Nos. 4 and 5 (Exh. K). He filed his homestead application in that same year. He planted the land to rice and other staple crops. He made a final proof in 1930. After his death in 1942, his children and widow continued to possess the homestead.

Santiago Aggabao started occupying the land in Sitio Malasi in 1927. It has an area of 24 hectares. His homestead application was approved in 1932 (Exh. 16). His children have possessed the homestead after his death. They planted it to rice, corn and vegetables.

Antonio Deray filed in 1924 his homestead application for 24 hectares in what is now Lot No. 2 of the survey plan. It was approved in 1928 (Exh. 17 and 18-DL). His heirs have been in possession of the homestead.

Gaudencio Flores and the heirs of Honofre Cabauatan also presented evidence as oppositors but they did not appeal to this Court.

Ruling. — The trial court granted the application for registration of the six lots with an area of 128 hectares, in addition to the often mentioned 25 hectares already registered. It reasoned out that if Bruno's heirs had possession of the said 25 hectares, they could be deemed to have "constructive possession" of the remaining part of the land provided that the same is not in the adverse possession of another person (Ramos vs. Director of Lands, 39 Phil. 175).lwphl@itç

We hold that the rule on constructive possession does not apply to this case because the major portion of the disputed 128 hectares has been in the adverse possession of homesteaders and their heirs and is still part of the public domain until the patents are issued.

The area claimed is in excess of that mentioned in the committed position title. The alleged lost composition title cannot be given any probative value. Its contents were not proven by secondary evidence. The precise location of the land and the possession thereof were not proven by the applicants. The alleged possession of Bruno's heirs may refer to the 25 hectares already registered in their names. Inexplicably, the registration of the 154 hectares was made in two installments.

WHEREFORE, the decisions of the Court of Appeals and the trial court are reversed and set aside. The application for registration is dismissed. The Director of Lands should issue to appellant heirs of the deceased homesteaders their patents in accordance with the Public Land Law. Costs against the applicants.SO ORDERED.

PROPERTY|07Sept15|9

G.R. No. 57092 January 21, 1993

EDGARDO DE JESUS, REMEDIOS DE JESUS, JUANITO DE JESUS, JULIANA DE JESUS, JOSE DE JESUS, FLORDELIZA DE JESUS, REYNALDO DE JESUS, ERNESTO DE JESUS, PRISCILO DE JESUS, CORAZON DE JESUS, petitioners, vs.COURT OF APPEALS and PRIMITIVA FELIPE DE JESUS, respondents.

MELO, J.:

This has reference to a petition for review on certiorari seeking the reversal of the decision of the Court of Appeals in CA-G.R. No. 59613 (December 24, 1980, Sison, P.V., Cenzon. Asuncion [P], JJ) which reversed the decision dated September 7, 1975 of the then Court of First Instance of Bulacan. In consequence, the appellate court dismissed herein petitioners' complaint and declared private respondent Primitive Felipe de Jesus to be the absolute owner entitled to the possession of the land in question to the exclusion of petitioners.

The property in dispute is a parcel of residential land situated in Dampol 2nd, Pulilan, Bulacan, bounded on the North by a Vereda: on the South, by the Provincial Road; on the East, by Catalino Tayag (Tayao); on the West, by Macario de Leon, containing an area of 2565 square meters (Brief for the Petitioners, p. 3), and covered by Tax Declaration No. 2383 of the Office of the Provincial Assessor of Bulacan, in the name of Victoriano Felipe (Exh. "5-C").

Respondent appellate court found the above-described parcel of land to be the same parcel of land which was —

. . . the subject of the Kasulatang-Biling-Mabibiling-Muli (Exh. 1) executed on November 25, 1932, by Emilia Camacho (surviving widow of Catalino Esguerra), Jose C. Esguerra and Socorro Esguerra, conveying or selling this land to the spouses, Victoriano Felipe and Guillerma de la Cruz, with right to repurchase the same within a period of five years, but that the vendors-a-retro failed to repurchase the land. The vendors-a-retro were the heirs of the deceased Catalino Esguerra. Since the date of the sale the spouses Victoriano Felipe and Guillerma de la Cruz, possessed and lived on this land. The appellant [herein private respondent] was living with her parents on the land, and upon their deaths, she continued to live on and possess the same. (pp. 33-34, Rollo.)

On November 29, 1961 private respondent executed a sworn statement declaring herself the only heir of the deceased Victoriano Felipe and adjudicating to herself the ownership of the land in question (Exh. "4").

More than twelve years later or on April 27, 1973, petitioners herein filed in the Court of First Instance of Bulacan, an action for recovery of ownership and possession and quieting of title to the abovementioned piece of land covered by Tax Declaration No. 2383, alleging among others: "that their grandfather, Santiago de Jesus during his lifetime owned the residential lot; that Santiago de Jesus died before the outbreak of World War II, leaving three (3) sons, namely: Mariano, Exequiel, and Jose, all surnamed de Jesus; that Mariano de Jesus died on September 3, 1956 leaving eight (8) surviving

children, namely: Edgardo, Remedios, Juanita, Juliano, Jose, Flordeliza, Reynaldo, and Ernesto, all surnamed de Jesus and all of them plaintiffs; that Exequiel de Jesus died on April 3, 1948, survived by two (2) children — Priscilo and Corazon, both surnamed de Jesus, also plaintiffs in this case; while Jose de Jesus died before the outbreak of World War II without any issue . . . "(p. 35, Record on Appeal).

The trial court found for the plaintiffs, petitioners herein. The dispositive portion of the decision dated September 7, 1975 reads:

FOR ALL OF THE FOREGOING, judgment is hereby rendered:

(1) Declaring the plaintiffs as having the better right to ownership and possession of the residential lot in question by virtue of hereditary succession;

(2) Ordering the defendant to surrender the ownership and possession of the said property to the herein plaintiffs;

(3) Ordering the defendant to pay to the plaintiffs the sum of P500.00 for and as attorney's fees, and the costs of suit.

SO ORDERED. (pp. 56-57, Record, on Appeal.)

As earlier intimated, on appeal, the Court of Appeals set aside the judgment of the trial court in a decision promulgated on December 24, 1980(pp. 32-38, Rollo), the dispositive portion of which reads:

IN VIEW OF THE FOREGOING CONSIDERATION, finding serious errors to have been committed by the trial court in its judgment, the same is hereby set aside and another one entered, dismissing the complaint, and declaring the appellant to be the absolute owner, and entitled to the possession of this land in question, to the exclusion of plaintiffs-appellees. (p. 38, Rollo.)

Thus, the instant petition for review on certiorari which was filed with this Court on August 13, 1981 (p. 9, Rollo) with the following assigned errors:

I

THE COURT OF APPEALS ERRED IN SETTING ASIDE THE JUDGMENT OF THE TRIAL COURT WHICH AWARDED THE RESIDENTIAL LOT IN QUESTION TO THE PETITIONERS BY VIRTUE OF HEREDITARY SUCCESSION AND ORDERED THE PRIVATE RESPONDENT TO SURRENDER THE OWNERSHIP AND POSSESSION OF THE SAME TO THEM.

II

THE COURT OF APPEALS ERRED IN RULING THAT THE LAND DESCRIBED IN THE PETITIONERS' COMPLAINT IS THE SAME LAND WHICH IS THE SUBJECT OF THE SALE WITH RIGHT TO REPURCHASE (Exh. 1) EXECUTED ON NOVEMBER 5,

PROPERTY|07Sept15|10

1932 BY THE ESGUERRAS IN FAVOR OF THE PARENTS OF THE PRIVATE RESPONDENT.

III

THE COURT OF APPEALS ERRED IN DECLARING THE PRIVATE RESPONDENT TO BE THE ABSOLUTE OWNER AND ENTITLED TO THE POSSESSION OF THE LAND IN QUESTION TO THE EXCLUSION OF THE PETITIONERS.

IV

THE COURT OF APPEALS ERRED IN HOLDING THAT THIS LAND WAS PURCHASED BY THE PARENTS OF THE PRIVATE RESPONDENT FROM THE HEIRS OF THE LATE CATALINO ESGUERRA ON NOVEMBER 5, 1932 AND THE PRIVATE RESPONDENT AND HER PARENTS HAD BEEN IN OPEN, CONTINUOUS, ADVERSE, PUBLIC AND NOTORIOUS POSSESSION OF THE SAME SINCE 1932 UP TO THE PRESENT, IN THE CONCEPT OF OWNER.

In effect, the sole issue in this petition boils down to this question: Who has the right to the ownership and possession of the residential lot subject matter of the case, petitioners by virtue of hereditary succession, or private respondent who claims ownership through purchase of the property by her parents?

According to the trial court, petitioners have the better right but according to the appellate court, the property rightly belongs to private respondent. In view of the fact that the findings of the trial court and the appellate court are contrary to each other, this Court shall exercise its authority of reviewing the evidence in order to arrive at the correct facts based on the record (Director of Lands vs. Court of Appeals, 117 SCRA 346 [1982]; Quality Tobacco Corporation vs. Intermediate Appellate Court, 187 SCRA 210 [1990]; Valenzuela vs. Court of Appeals, 191 SCRA 1 [1990]; Shauf vs. Court of Appeals, 191 SCRA 713 [1990] ; Bustamante vs. Court of Appeals, 194 SCRA 645 [1991).

It is not disputed that petitioners are the heirs of their late grandfather, Santiago de Jesus; what is in dispute is their claim that the residential lot in question belonged to their grandfather and therefore theirs by hereditary succession (Brief for the Respondent, pp. 8-9). Neither is it contradicted that Santiago de Jesus was married to Maria Reyes, a widow with three children by a prior marriage, namely: Basilio, Violeta, and Guillerma, the last having been the mother of herein private respondent (tsn, August 15, 1974, pp. 14-15; September 16, 1974, pp. 14-15, 39-41).

The only documentary evidence of Santiago de Jesus' alleged ownership of the residential lot in question is Tax Declaration No. 2384 (Exh. "A") in the name of Victoriano Felipe. Therein, Felipe claimed ownership for tax purposes of a house of mixed materials and a nipa roof, valued at P190.00 and constructed on the lot or "solar" belonging to Santiago de Jesus. The statement therein regarding Santiago de Jesus' ownership of the lot is supported by the testimony of petitioners Edgardo de Jesus and Corazon de Jesus-Masiglat, and three other witnesses. They asserted personal knowledge of said fact which, they swore, was also common knowledge in Dampol 2nd,

Pulilan, Bulacan (tsn, August 15, 1974, p. 16; September 16, 1974, pp. 18, 39). As a child, for instance, witness Antonio Roxas was frequently in the house of his aunt, Maria Reyes, a sister of his mother. When his aunt was still alive, she told him and his mother, in the presence of Victoriano Felipe, that she had no right at all over the property, including the old house, as it really belonged to Santiago de Jesus (tsn, September 16, 1974, pp. 39, 46-49).

On the other hand, private respondent presented a contract of sale with right of repurchase, "Kasulatang-Biling-Mabibiling-Muli" (Exh. "1"), entered into in 1932 between her parents, Victoriano Felipe and Guillerma de la Cruz, and the vendors-a-retro Emilia Camacho, Socorro Esguerra, and Jose Esguerra; a "Sinumpaang Salaysay"; or an affidavit of adjudication which private respondent executed in 1961 (Exh. "4"); and tax declarations and official receipts.

On the evidentiary value of these documents, it should be recalled that the notarization of a private document converts it into a public one and renders it admissible in court without further proof of its authenticity (Joson vs. Baltazar, 194 SCRA 114 [1991]). This is so because a public document duly executed and entered in the proper registry is presumed to be Valid and genuine until the contrary is shown by clear and convincing proof (Asido vs. Guzman, 37 Phil. 652 [1918]; U.S. vs. Enriquez, 1 Phil. 241 [1902]; Favor vs. Court of Appeals, 194 SCRA 308 [1991]). As such, the party challenging the recital of the document must prove his claim with clear and convincing evidence (Diaz vs. Court of Appeals, 145 SCRA 346 [1986]).

There is no doubt that the pacto de retro deed of sale has assumed the character of a public document, having been notarized by then Justice of the Peace Francisco Makapugay, Jr. in his capacity as Notary Public Ex-Oficio. Hence, it is presumed valid and authentic until proven otherwise. Petitioners, however, challenge this presumption of validity and authenticity. They contend that private respondent's non-production of Tax Declaration No. 5096, specifically mentioned in Exh. "1" as containing the description of the piece of land subject of the "Kasulatang-Biling-Mabibiling-Muli" shattered such presumption and rendered suspect the latter document (Brief for the Petitioners, pp. 9, 19-22).

While both Socorro Olarte, a signatory to the "Kasulatang-Biling-Mabibiling-Muli" as one of the vendors-a-retro, and private respondent testified that the land subject of the sale was covered by Tax Declaration No. 5096 in the name of the original owner Catalino Esguerra (tsn, October 21, 1974, p. 6 and December 18, 1974, pp. 3-5), they could not produce a copy of said tax declaration. Capitalizing on said omission, petitioners presented a certified true copy of said Tax Declaration No. 5096 (Exh. "G") covering the year 1948 and which, however, concerns a piece of lot owned by a certain Teodoro Sinson. Further, petitioners also produced certified true copies of Tax Declarations Nos. 2214 (Exh. "H"), 2215 (Exh "I") and 2216 (Exh. "J"), all in the name of Catalino Esguerra as owner, and all for the year 1967.

Pablo H. Domingo, Senior Deputy Assessor, who was subpoenaed to present in court Tax Declaration No. 5096 in the name of Catalino Esguerra identified the above-mentioned certified true copies of tax declarations as having been issued by the Office of the Provincial Assessor of Bulacan (tsn, March 12, 1975, pp. 13-14). However, he

PROPERTY|07Sept15|11

said he could not bring with him a copy of Tax Declaration No. 5096 in the name of Catalino Esguerra as the records of the Office of the Provincial Assessor only started with the year 1948 because the old Assessor's Office was burned down during the early part of the liberation (Transcript, March 12, 1975, pp. 5-6, 12).

It is significant to note that the land covered by Tax Declaration No. 5096 (Exh. "G") described therein as bamboo land, was previously covered by Tax Declaration No. 233 for the same owner, while Tax Declaration No. 2383 (Exh. "5-C") beginning with the year 1948 and covering the residential lot in question declared in the name of Victoriano Felipe, cancelled Tax Declaration No. 5326 (Exh. "5-C-1"). An uncertified copy of said Tax Declaration No. 5326 for Victoriano Felipe purporting to commence with the year 1939 allegedly superseded Tax Declaration No. 252 in the name of Catalino Esguerra(Exh. "3").

In other words, the piece of residential lot covered by Tax Declaration No. 2383 (Exh. "5"), or by Tax Declaration No. 252 (Exh. "3") at around the time of the alleged sale, until superseded by Tax Declaration No. 5326 (Exh. "5-C-1") beginning with the year 1939, is not the piece of land covered by Tax Declaration No. 5096 specifically referred to in Exh. "1" as the subject of the "Kasulatang-Biling-Mabibiling-Muli". Thus, the fact that Guillerma de la Cruz, mother of private respondent, made real property tax payments purportedly on Tax Declaration No. 5096 for the years 1935 (Exh. "2-d" and "2-e") and 1936 (Exh. "2-b") and probably for the years 1933, 1934, 1937 and 1938, in the name of Catalino Esguerra neither alters the fact that the piece of land covered by Tax Declaration No. 2383 (Exh. "5") is not the subject of the "Kasulatang-Biling-Mabibiling-Muli" (Exh. "1") nor demonstrates that the payments were made for the residential lot under litigation.

It is, therefore, evident that Tax Declaration No. 5096 was inexistent at the time of the alleged sale. By a simply analysis of the different tax declarations presented as evidence in this case, it is likewise clear that when by virtue of the alleged sale, a new tax declaration numbered 5326, was made in 1938 in the name of Victoriano Felipe (Exh. "5-C-1"), what was cancelled was Tax Declaration No. 252 (Exh. "3"), not Tax Declaration No. 5096 which supposedly covered the property subject of the "Kasulatang-Biling-Mabibiling-Muli". It should be noted that the property under Tax Declaration No. 5326 bears an identical description to the property under litigation. Thus, the inevitable conclusion is that, without any legal basis, Victoriano Felipe had declared himself the owner of the disputed property for tax purposes. Tax Declaration No. 5326 thereafter became the basis for Tax DeclarationNo. 2383 in 1948 (Exh. "5-C") until it was cancelled and new tax declarations were made in the name of private respondent, viz., Tax Declaration No. 9453 in 1962 (Exh. "5-b"), then Tax Declaration No. 2657 in 1967 (Exh. "5") and finally Tax Declaration No. 2962 in 1974 (Exh. "5-A").

As earlier stated, Guillerma de la Cruz had also been paying real property tax on the house described as located in Dampol 2nd in the name of Victoriano Felipe under Tax Declaration No. 14984 since 1933 (Exh. "2-C"), and then under Tax Declaration No. 3975 since 1941 (Exh. "2-4") until 1947, and under Tax Declaration No. 2384 in 1948. By a twist of fate, however, Tax Declaration No. 2384 describes the house, among others, as located in the residential lot belonging to Santiago de Jesus or "solar de

Santiago de Jesus" (Exh. "A-1"). While real property tax continued to be paid under the latter declaration until 1958 (Exh. "2-y"), by stating in said tax declaration that his house was located in the land of Santiago de Jesus. Victoriano Felipe recognized and admitted the ownership of Santiago de Jesus over the residential lot involved herein. Such admission puts to naught the claim of private respondent for when one derives title to property from another, the act, declaration or omission of the latter in relation to the property is evidence against the former (Rolleza vs. Court of Appeals, 174 SCRA 354 (1989]).

The authenticity of the signature of Victoriano Felipe in the deed of sale with right to repurchase is also in question. Both Moises de Jesus and Antonio Roxas testified that Victoriano Felipe could not even vote as he did not know how to read and write (tsn, September 16, 1974, pp. 30, 42). Although Socorro Esguerra Olarte identified the signature of Victoriano Felipe on the "Kasulatang-Biling-Mabibiling-Muli" as his (tsn, October 21, 1974, p. 13), she also testified that Victoriano Felipe has a brother who looked exactly like Victoriano (tsn, October 21, 1974, p. 36). On the issue, all that private respondent could say was that her father studied the cartilla (tsn, January 24, 1975, p. 8).

Under the circumstances, there is strong, convincing, and conclusive proof of the nullity and falsity of Exhibit "1". Its evidentiary nature cannot, therefore, be sustained (Legaspi vs. Court of Appeals, 142 SCRA 82 [1986]). Even if the document were to be considered simply as a private document, it would still need evidence of its due execution and authenticity even if it is already more than 30 years old as it cannot be considered unblemished by any circumstance of suspicion (Heirs of Demetria Lacsa vs. Court of Appeals, 197 SCRA 234 [1991]).

Consequently, the affidavit of adjudication executed by private respondent on May 21, 1961 (Exh. "4"), has no evidentiary value as it has become baseless. Furthermore, private respondent falsely stated therein that she is the only heir of Victoriano Felipe for, at the time of its execution, her mother, Guillerma de la Cruz, was still living. Guillerma de la Cruz died on April 23, 1964 (Exh. "B"), three years after the "Sinumpaang Salaysay" (Exh. "4") was executed. Moreover, the tax receipts and declarations of ownership for tax purposes upon which private respondent basically anchors her claim, are not incontrovertible evidence of ownership; they only become evidence of ownership acquired by prescription when accompanied by proof of actual possession of the property (Tabuena vs. Court of Appeals, 196 SCRA 650 [1991]; Rojas vs. Court of Appeals, 192 SCRA 709 [1992]).

On the issue of ownership by acquisitive prescription, private respondent contends: "Granting that it was formerly owned by their late grandfather, they (petitioners) have lost whatever right they may have over the land by extinctive prescription" for the reason that she, private respondent has acquired the same by acquisitive prescription (Brief for the Respondents, p. 9), citing Section 41 of the old Code of Civil Procedure which states:

Sec. 41. Title to Land by Prescription. — Ten years of actual adverse possession by any person claiming to be the owner for that time of any land or interest in land, uninterruptedly, continuously for ten years by occupancy, descent, grants, or otherwise,

PROPERTY|07Sept15|12

in whatever way such occupancy may have commenced or continued, shall vest in every actual possessor of such land, a full and complete title . . . .

Corazon de Jesus Masiglat testified that from 1930 to 1952, the period of time she was living in the house her grandfather erected on the contested property, her grandmother, Victoriano Felipe, Guillerma de la Cruz, and private respondent also lived there (tsn, July 16, 1974, p. 23). She was corroborated by petitioner Edgardo de Jesus who also testified that in 1932 up to the time of his death in 1948, Exequiel de Jesus was taking charge of the property and that while the parents of private respondent were the ones paying the real property taxes the money therefor came from Exequiel (tsn, July 16, 1974, pp. 11-14). Witness Salvador Esguerra testified that Victoriano Felipe began to reside in the house when he married Guillerma de la Cruz and that Corazon and her father, Exequiel, also resided there after the death of Santiago de Jesus (tsn, August 15, 1974, pp. 14, 21, 22). Moises de Jesus, for his part, testified that while Victoriano Felipe started staying in the property only when the children of Santiago de Jesus had died, Corazon de Jesus continued to reside there (tsn, September 16, 1974, p. 27).

In her own defense private respondent first testified that Corazon de Jesus never lived with them and that Exequiel de Jesus never went to their place (tsn., October 11, 1974, pp. 35-36). She did not contradict, however, the testimony of Edgardo de Jesus on rebuttal that he himself at the age of 12 used to stay in the house and was witness to the occasion when Corazon fell in a ditch going towards their place, that as a result of such accident, Corazon sustained a permanent deformity on one hand; and that Corazon left the place only in 1952 when she got married (tsn, April 23, 1975, pp. 23-24). Neither did private respondent or her witnesses traverse the testimony of Corazon deJesus-Masiglat, also on rebuttal, that since childhood she had been residing in the house owned by her grandfather Santiago de Jesus, together with private respondent and the latter's parents, and actually left the place only in 1952: that her parents as well as her child died in that house; and that private respondent was, in fact, the one who caused the registration of her child's death (tsn, April 23, 1975, p. 25). Even Socorro Esguerra Olarte, witness for private respondent, testified that she remembers Exequiel de Jesus as he was always around whenever she visited the place and he was the one who got santol fruits for her sometimes (tsn, September 23, 1974, p. 17).

It thus appears that Victoriano Felipe was residing in the house of Santiago de Jesus simply because he was married to Guillerma de la Cruz, daughter of Maria Reyes by a first marriage, who, obviously, was living with her mother who had taken Santiago de Jesus for her second husband. In effect, their possession of the contested lot was neither exclusive nor in the concept of owner. Possession, to constitute the foundation of a prescriptive right, must be possession under a claim of title or it must be adverse or in the concept of owner or concepto de dueño (Ordoñez vs. Court of Appeals, 188 SCRA 109 [1990]; Coronado vs. Court of Appeals, 191 SCRA 814 [1990]; Manila Electric Company vs. Intermediate Appelate Court, 174 SCRA 313 [1989]).

In this case, Victoriano Felipe and his family were residing in the land by mere tolerance. There is no way of knowing how the house on the lot was described in Tax Declaration Nos. 14984 and 3975, but, to repeat, in Tax Declaration No. 2384 which commenced with the year 1948 (Exh. "A"), the house was described as constructed on

the lot or solar of Santiago de Jesus up to the year 1961 when private respondent was still paying property tax (Exh."2-x").

Significantly, the "Kasulatang-Biling-Mabibiling-Muli" was not even given to private respondent by her parents; she admitted having found it in the house although they mentioned its existence to her when they were still alive (tsn, December 18, 1974, pp. 18-19). Under the circumstances, the prescriptive period cannot be considered to have accrued during the lifetime of Victoriano Felipe.

It is interesting to note that when private respondent executed her "Sinumpaang Salaysay" (Exh. "4") adjudicating the disputed lot to herself on the basis of the contract of sale as no repurchase had been made by the vendors of retro, Exequiel de Jesus was already dead and Corazon de Jesus-Masiglat was no longer residing in the property in question. As she was in possession of the property, private respondent then had it declared in her name for real property tax purposes under Tax Declaration No. 9453 (Exh. "5-b") thereby cancelling Tax Declaration No. 2383 (Exh. "5-b-1") which was in the name of Victoriano Felipe.

As to Tax Declaration No. 2384, the last vestige of Santiago de Jesus' ownership of the property in question, there is no evidence on record as to whether private respondent had it cancelled, had a new declaration made on the property in her name, or whether she continued paying tax after her payment for the year 1961. It was established, however, through the testimony of Salvador Esguerra, that the old house was demolished and a new bungalow was constructed on the lot (tsn, August 15, 1974, pp. 23-24).

To create a fundamental basis for her claim of ownership by acquisitive prescription, private respondent mortgaged the questioned property to the Rural Bank of Pulilan (Exh. "5-b") not as a mere possessor but as an owner thereof. She also registered both the mortgage and the "Sinumpaang Salaysay" (tsn, December 18, 1974, p. 23). However, she never attempted to obtain a certificate of title over the property. This omission indicates, to say the least, that private respondent realizes her lack of any lawful claim of ownership over the property for while registration is not a mode of acquiring ownership, it is evidence of such title over the particular property (Avila v. Tapucar, 201 SCRA 148 [1991]).

Private respondent's pretensions to acquisitive prescription may not succeed even under Act No. 190, the Code of Civil Procedure. Under Section 41 thereof, good faith and just title are not required for purposes of acquisitive prescription; adverse possession in either character ripens into ownership after the lapse of ten years (Cruz vs. Court of Appeals, 93 SCRA 619 [1979]; Quilisado vs, Court of Appeals, 182 SCRA 401 [1990]; Ongsiaco vs. Dallo, 27 SCRA 161 [1969]; Miraflor vs. Court of Appeals, 142 SCRA 18 [1986]). The just title required for acquisitive prescription to set in is not "titulo verdadero y valido" — such title which by itself is sufficient to transfer ownership without the necessity of letting the prescriptive period elapse, but only "titulocolorado" — or such title where, although there was a mode of transferring ownership, still something is wrong because the grantor is not the owner (Doliendo vs. Biannesa, 7 Phil. 232 [1906] cited in Solis vs. Court of Appeals, 176 SCRA 678 [1989]), and

PROPERTY|07Sept15|13

incidentally, it may perhaps be mentioned that prescription running even after the effectivity of the New Civil Code on August 30, 1950, continued to be governed by Section 41 of the Old Civil Code (Solis vs. Court of Appeals, supra).

Under the present Civil Code, the prescriptive period required for acquisition of immovable property is ten years if the possession is in good faith, and thirty years if in bad faith (South City Homes, Inc. vs. Republic, 185 SCRA 693 [1990]). Such open, continuous, exclusive and notorious occupation of the disputed property for thirty years must be conclusively established (San Miguel Corporation vs. Court of Appeals, 185 SCRA 722 [1990]).

Reckoned from the time she executed the affidavit of adjudication in 1961, eleven years after the New Civil Code had taken effect, private respondent's possession of the contested lot is far too short of the prescriptive period of thirty years considering that her possession is in bad faith. The filing of the petition for recovery of ownership and possession and quieting of title by petitioners on April 27, 1973 was well below the acquisitive prescriptive period for private respondent, which is thirty years under Article 1141 of the present Civil Code. In this case, the statutory period of prescription is deemed to have commenced when petitioners were made aware of a claim adverse to them (Coronel vs. Intermediate Appellate Court, 155 SCRA 270 [1987]), that is, when the affidavit of adjudication was duly registered with the Registry of Deeds which, at the earliest may be considered to be in 1974, when private respondent was able to secure a tax declaration in her name.

WHEREFORE, the decision of the Court of Appeals under review is hereby SET ASIDE and the decision of the trial court, dated September 7, 1975, REINSTATED.

SO ORDERED.

PROPERTY|07Sept15|14

G.R. No. 79688 February 1, 1996PLEASANTVILLE DEVELOPMENT CORPORATION, petitioner, vs.COURT OF APPEALS, WILSON KEE, C.T. TORRES ENTERPRISES, INC. and ELDRED JARDINICO, respondents.

D E C I S I O N

PANGANIBAN, J.:

Is a lot buyer who constructs improvements on the wrong property erroneously delivered by the owner's agent, a builder in good faith? This is the main issue resolved in this petition for review on certiorari to reverse the Decision1 of the Court of Appeals2 in CA-G.R. No. 11040, promulgated on August 20, 1987.

By resolution dated November 13, 1995, the First Division of this Court resolved to transfer this case (along with several others) to the Third Division. After due deliberation and consultation, the Court assigned the writing of this Decision to the undersigned ponente.

The facts, as found by respondent Court, are as follows:

Edith Robillo purchased from petitioner a parcel of land designated as Lot 9, Phase II and located at Taculing Road, Pleasantville Subdivision, Bacolod City. In 1975, respondent Eldred Jardinico bought the rights to the lot from Robillo. At that time, Lot 9 was vacant.

Upon completing all payments, Jardinico secured from the Register of Deeds of Bacolod City on December 19, 1978 Transfer Certificate of Title No. 106367 in his name. It was then that he discovered that improvements had been introduced on Lot 9 by respondent Wilson Kee, who had taken possession thereof.

It appears that on March 26, 1974, Kee bought on installment Lot 8 of the same subdivision from C.T. Torres Enterprises, Inc. (CTTEI), the exclusive real estate agent of petitioner. Under the Contract to Sell on Installment, Kee could possess the lot even before the completion of all installment payments. On January 20, 1975, Kee paid CTTEI the relocation fee of P50.00 and another P50.00 on January 27, 1975, for the preparation of the lot plan. These amounts were paid prior to Kee's taking actual possession of Lot 8. After the preparation of the lot plan and a copy thereof given to Kee, CTTEI through its employee, Zenaida Octaviano, accompanied Kee's wife, Donabelle Kee, to inspect Lot 8. Unfortunately, the parcel of land pointed by Octaviano was Lot 9. Thereafter, Kee proceeded to construct his residence, a store, an auto repair shop and other improvements on the lot.

After discovering that Lot 9 was occupied by Kee, Jardinico confronted him. The parties tried to reach an amicable settlement, but failed.

On January 30, 1981, Jardinico's lawyer wrote Kee, demanding that the latter remove all improvements and vacate Lot 9. When Kee refused to vacate Lot 9, Jardinico filed with

the Municipal Trial Court in Cities, Branch 3, Bacolod City (MTCC), a complaint for ejectment with damages against Kee.

Kee, in turn, filed a third-party complaint against petitioner and CTTEI.

The MTCC held that the erroneous delivery of Lot 9 to Kee was attributable to CTTEI. It further ruled that petitioner and CTTEI could not successfully invoke as a defense the failure of Kee to give notice of his intention to begin construction required under paragraph 22 of the Contract to Sell on Installment and his having built a sari-sari store without the prior approval of petitioner required under paragraph 26 of said contract, saying that the purpose of these requirements was merely to regulate the type of improvements to be constructed on the Lot.3

However, the MTCC found that petitioner had already rescinded its contract with Kee over Lot 8 for the latter's failure to pay the installments due, and that Kee had not contested the rescission. The rescission was effected in 1979, before the complaint was instituted. The MTCC concluded that Kee no longer had any right over the lot subject of the contract between him and petitioner. Consequently, Kee must pay reasonable rentals for the use of Lot 9, and, furthermore, he cannot claim reimbursement for the improvements he introduced on said lot.

The MTCC thus disposed:

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered as follows:

1. Defendant Wilson Kee is ordered to vacate the premises of Lot 9, covered by TCT No. 106367 and to remove all structures and improvements he introduced thereon;

2. Defendant Wilson Kee is ordered to pay to the plaintiff rentals at the rate of P15.00 a day computed from the time this suit was filed on March 12, 1981 until he actually vacates the premises. This amount shall bear interests (sic) at the rate of 12 per cent (sic) per annum.

3. Third-Party Defendant C.T. Torres Enterprises, Inc. and Pleasantville Subdivision are ordered to pay the plaintiff jointly and severally the sum of P3,000.00 as attorney's fees and P700.00 as cost and litigation expenses.4

On appeal, the Regional Trial Court, Branch 48, Bacolod City (RTC) ruled that petitioner and CTTEI were not at fault or were not negligent, there being no preponderant evidence to show that they directly participated in the delivery of Lot 9 to Kee5. It found Kee a builder in bad faith. It further ruled that even assuming arguendo that Kee was acting in good faith, he was, nonetheless, guilty of unlawfully usurping the possessory right of Jardinico over Lot 9 from the time he was served with notice to vacate said lot, and thus was liable for rental.

The RTC thus disposed:

WHEREFORE, the decision appealed from is affirmed with respect to the order against the defendant to vacate the premises of Lot No. 9 covered by Transfer Certificate of

PROPERTY|07Sept15|15

Title No. T-106367 of the land records of Bacolod City; the removal of all structures and improvements introduced thereon at his expense and the payment to plaintiff (sic) the sum of Fifteen (P15.00) Pesos a day as reasonable rental to be computed from January 30, 1981, the date of the demand, and not from the date of the filing of the complaint, until he had vacated (sic) the premises, with interest thereon at 12% per annum. This Court further renders judgment against the defendant to pay the plaintiff the sum of Three Thousand (P3,000.00) Pesos as attorney's fees, plus costs of litigation.

The third-party complaint against Third-Party Defendants Pleasantville Development Corporation and C.T. Torres Enterprises, Inc. is dismissed. The order against Third-Party Defendants to pay attorney's fees to plaintiff and costs of litigation is reversed.6

Following the denial of his motion for reconsideration on October 20, 1986, Kee appealed directly to the Supreme Court, which referred the matter to the Court of Appeals.

The appellate court ruled that Kee was a builder in good faith, as he was unaware of the "mix-up" when he began construction of the improvements on Lot 8. It further ruled that the erroneous delivery was due to the negligence of CTTEI, and that such wrong delivery was likewise imputable to its principal, petitioner herein. The appellate court also ruled that the award of rentals was without basis.

Thus, the Court of Appeals disposed:

WHEREFORE, the petition is GRANTED, the appealed decision is REVERSED, and judgment is rendered as follows:

1. Wilson Kee is declared a builder in good faith with respect to the improvements he introduced on Lot 9, and is entitled to the rights granted him under Articles 448, 546 and 548 of the New Civil Code.

2. Third-party defendants C.T. Torres Enterprises, Inc. and Pleasantville Development Corporation are solidarily liable under the following circumstances:

A. If Eldred Jardinico decides to appropriate the improvements and, thereafter, remove these structures, the third-party defendants shall answer for all demolition expenses and the value of the improvements thus destroyed or rendered useless;

b. If Jardinico prefers that Kee buy the land, the third-party defendants shall answer for the amount representing the value of Lot 9 that Kee should pay to Jardinico.

3. Third-party defendants C.T. Torres Enterprises, Inc. and Pleasantville Development Corporation are ordered to pay in solidum the amount of P3,000.00 to Jardinico as attorney's fees, as well as litigation expenses.

4. The award of rentals to Jardinico is dispensed with.

Furthermore, the case is REMANDED to the court of origin for the determination of the actual value of the improvements and the property (Lot 9), as well as for further proceedings in conformity with Article 448 of the New Civil Code.7

Petitioner then filed the instant petition against Kee, Jardinico and CTTEI.

The Issues

The petition submitted the following grounds to justify a review of the respondent Court's Decision, as follows:

1. The Court of Appeals has decided the case in a way probably not in accord with law or the the (sic) applicable decisions of the Supreme Court on third-party complaints, by ordering third-party defendants to pay the demolition expenses and/or price of the land;

2. The Court of Appeals has so far departed from the accepted course of judicial proceedings, by granting to private respondent-Kee the rights of a builder in good faith in excess of what the law provides, thus enriching private respondent Kee at the expense of the petitioner;

3. In the light of the subsequent events or circumstances which changed the rights of the parties, it becomes imperative to set aside or at least modify the judgment of the Court of Appeals to harmonize with justice and the facts;

4. Private respondent-Kee in accordance with the findings of facts of the lower court is clearly a builder in bad faith, having violated several provisions of the contract to sell on installments;

5. The decision of the Court of Appeals, holding the principal, Pleasantville Development Corporation (liable) for the acts made by the agent in excess of its authority is clearly in violation of the provision of the law;

6. The award of attorney's fees is clearly without basis and is equivalent to putting a premium in (sic) court litigation.

From these grounds, the issues could be re-stated as follows:

(1) Was Kee a builder in good faith?

(2) What is the liability, if any, of petitioner and its agent, C.T. Torres Enterprises, Inc.? and

(3) Is the award of attorney's fees proper?

The First Issue: Good Faith

Petitioner contends that the Court of Appeals erred in reversing the RTC's ruling that Kee was a builder in bad faith.

PROPERTY|07Sept15|16

Petitioner fails to persuade this Court to abandon the findings and conclusions of the Court of Appeals that Kee was a builder in good faith. We agree with the following observation of the Court of Appeals:

The roots of the controversy can be traced directly to the errors committed by CTTEI, when it pointed the wrong property to Wilson Kee and his wife. It is highly improbable that a purchaser of a lot would knowingly and willingly build his residence on a lot owned by another, deliberately exposing himself and his family to the risk of being ejected from the land and losing all improvements thereon, not to mention the social humiliation that would follow.

Under the circumstances, Kee had acted in the manner of a prudent man in ascertaining the identity of his property. Lot 8 is covered by Transfer Certificate of Title No. T-69561, while Lot 9 is identified in Transfer Certificate of Title No. T-106367. Hence, under the Torrens system of land registration, Kee is presumed to have knowledge of the metes and bounds of the property with which he is dealing. . . .

xxx xxx xxx

But as Kee is a layman not versed in the technical description of his property, he had to find a way to ascertain that what was described in TCT No. 69561 matched Lot 8. Thus, he went to the subdivision developer's agent and applied and paid for the relocation of the lot, as well as for the production of a lot plan by CTTEI's geodetic engineer. Upon Kee's receipt of the map, his wife went to the subdivision site accompanied by CTTEI's employee, Octaviano, who authoritatively declared that the land she was pointing to was indeed Lot 8. Having full faith and confidence in the reputation of CTTEI, and because of the company's positive identification of the property, Kee saw no reason to suspect that there had been a misdelivery. The steps Kee had taken to protect his interests were reasonable. There was no need for him to have acted ex-abundantia cautela, such as being present during the geodetic engineer's relocation survey or hiring an independent geodetic engineer to countercheck for errors, for the final delivery of subdivision lots to their owners is part of the regular course of everyday business of CTTEI. Because of CTTEI's blunder, what Kee had hoped to forestall did in fact transpire. Kee's efforts all went to naught.8

Good faith consists in the belief of the builder that the land he is building on is his and his ignorance of any defect or flaw in his title 9. And as good faith is presumed, petitioner has the burden of proving bad faith on the part of Kee 10.

At the time he built improvements on Lot 8, Kee believed that said lot was what he bought from petitioner. He was not aware that the lot delivered to him was not Lot 8. Thus, Kee's good faith. Petitioner failed to prove otherwise.

To demonstrate Kee's bad faith, petitioner points to Kee's violation of paragraphs 22 and 26 of the Contract of Sale on Installment.

We disagree. Such violations have no bearing whatsoever on whether Kee was a builder in good faith, that is, on his state of mind at the time he built the improvements

on Lot 9. These alleged violations may give rise to petitioner's cause of action against Kee under the said contract (contractual breach), but may not be bases to negate the presumption that Kee was a builder in good faith.

Petitioner also points out that, as found by the trial court, the Contract of Sale on Installment covering Lot 8 between it and Kee was rescinded long before the present action was instituted. This has no relevance on the liability of petitioner, as such fact does not negate the negligence of its agent in pointing out the wrong lot. to Kee. Such circumstance is relevant only as it gives Jardinico a cause of action for unlawful detainer against Kee.

Petitioner next contends that Kee cannot "claim that another lot was erroneously pointed out to him" because the latter agreed to the following provision in the Contract of Sale on installment, to wit:

13. The Vendee hereby declares that prior to the execution of his contract he/she has personally examined or inspected the property made subject-matter hereof, as to its location, contours, as well as the natural condition of the lots and from the date hereof whatever consequential change therein made due to erosion, the said Vendee shall bear the expenses of the necessary fillings, when the same is so desired by him/her. 11

The subject matter of this provision of the contract is the change of the location, contour and condition of the lot due to erosion. It merely provides that the vendee, having examined the property prior to the execution of the contract, agrees to shoulder the expenses resulting from such change.

We do not agree with the interpretation of petitioner that Kee contracted away his right to recover damages resulting from petitioner's negligence. Such waiver would be contrary to public policy and cannot be allowed. "Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals, or good customs, or prejudicial to a third person with a right recognized by law." 12

The Second Issue: Petitioner's Liability

Kee filed a third-party complaint against petitioner and CTTEI, which was dismissed by the RTC after ruling that there was no evidence from which fault or negligence on the part of petitioner and CTTEI can be inferred. The Court of Appeals disagreed and found CTTEI negligent for the erroneous delivery of the lot by Octaviano, its employee.

Petitioner does not dispute the fact that CTTEI was its agent. But it contends that the erroneous delivery of Lot 9 to Kee was an act which was clearly outside the scope of its authority, and consequently, CTTEI I alone should be liable. It asserts that "while [CTTEI] was authorized to sell the lot belonging to the herein petitioner, it was never authorized to deliver the wrong lot to Kee" 13.

Petitioner's contention is without merit.

PROPERTY|07Sept15|17

The rule is that the principal is responsible for the acts of the agent, done within the scope of his authority, and should bear the damage caused to third persons 14. On the other hand, the agent who exceeds his authority is personally liable for the damage 15

CTTEI was acting within its authority as the sole real estate representative of petitioner when it made the delivery to Kee. In acting within its scope of authority, it was, however, negligent. It is this negligence that is the basis of petitioner's liability, as principal of CTTEI, per Articles 1909 and 1910 of the Civil Code.

Pending resolution of the case before the Court of Appeals, Jardinico and Kee on July 24, 1987 entered into a deed of sale, wherein the former sold Lot 9 to Kee. Jardinico and Kee did not inform the Court of Appeals of such deal.

The deed of sale contained the following provision:

1. That Civil Case No. 3815 entitled "Jardinico vs. Kee" which is now pending appeal with the Court of Appeals, regardless of the outcome of the decision shall be mutually disregarded and shall not be pursued by the parties herein and shall be considered dismissed and without effect whatso-ever; 16

Kee asserts though that the "terms and conditions in said deed of sale are strictly for the parties thereto" and that "(t)here is no waiver made by either of the parties in said deed of whatever favorable judgment or award the honorable respondent Court of Appeals may make in their favor against herein petitioner Pleasantville Development Corporation and/or private respondent C.T. Torres Enterprises; Inc." 17

Obviously, the deed of sale can have no effect on the liability of petitioner. As we have earlier stated, petitioner's liability is grounded on the negligence of its agent. On the other hand, what the deed of sale regulates are the reciprocal rights of Kee and Jardinico; it stressed that they had reached an agreement independent of the outcome of the case.

Petitioner further assails the following holding of the Court of Appeals:

2. Third-party defendants C.T. Torres Enterprises, Inc. and Pleasantville Development Corporation are solidarily liable under the following circumstances:

a. If Eldred Jardinico decides to appropriate the improvements and, thereafter, remove these structures, the third-party defendants shall answer for all demolition expenses and the value of the improvements thus destroyed or rendered useless;

b. If Jardinico prefers that Kee buy the land, the third-party defendants shall answer for the amount representing the value of Lot 9 that Kee should pay to Jardinico. 18

Petitioner contends that if the above holding would be carried out, Kee would be unjustly enriched at its expense. In other words, Kee would be able to own the lot, as buyer, without having to pay anything on it, because the aforequoted portion of respondent

Court's Decision would require petitioner and CTTEI jointly and solidarily to "answer" or reimburse Kee therefor.

We agree with petitioner.

Petitioner' s liability lies in the negligence of its agent CTTEI. For such negligence, the petitioner should be held liable for damages. Now, the extent and/or amount of damages to be awarded is a factual issue which should be determined after evidence is adduced. However, there is no showing that such evidence was actually presented in the trial court; hence no damages could flow be awarded.

The rights of Kee and Jardinico vis-a-vis each other, as builder in good faith and owner in good faith, respectively, are regulated by law (i.e., Arts. 448, 546 and 548 of the Civil Code). It was error for the Court of Appeals to make a "slight modification" in the application of such law, on the ground of "equity". At any rate, as it stands now, Kee and Jardinico have amicably settled through their deed of sale their rights and obligations with regards to Lot 9. Thus, we delete items 2 (a) and (b) of the dispositive portion of the Court of Appeals' Decision [as reproduced above] holding petitioner and CTTEI solidarily liable.

The Third Issue: Attorney's Fees

The MTCC awarded Jardinico attorney's fees and costs in the amount of P3,000.00 and P700.00, respectively, as prayed for in his complaint. The RTC deleted the award, consistent with its ruling that petitioner was without fault or negligence. The Court of Appeals, however, reinstated the award of attorney's fees after ruling that petitioner was liable for its agent's negligence.

The award of attorney's fees lies within the discretion of the court and depends upon the circumstances of each case 19. We shall not interfere with the discretion of the Court of Appeals. Jardinico was compelled to litigate for the protection of his interests and for the recovery of damages sustained as a result of the negligence of petitioner's agent 20.

In sum, we rule that Kee is a builder in good faith. The disposition of the Court of Appeals that Kee "is entitled to the rights granted him under Articles 448, 546 and 548 of the New Civil Code" is deleted, in view of the deed of sale entered into by Kee and Jardinico, which deed now governs the rights of Jardinico and Kee as to each other. There is also no further need, as ruled by the appellate Court, to remand the case to the court of origin "for determination of the actual value of the improvements and the property (Lot 9), as well as for further proceedings in conformity with Article 448 of the New Civil Code."

WHEREFORE , the petition is partially GRANTED. The Decision of the Court of Appeals is hereby MODIFIED as follows:

(1) Wilson Kee is declared a builder in good faith;

(2) Petitioner Pleasantville Development Corporation and respondent C.T. Torres Enterprises, Inc. are declared solidarily liable for damages due to negligence; however,

PROPERTY|07Sept15|18

since the amount and/or extent of such damages was not proven during the trial, the same cannot now be quantified and awarded;

(3) Petitioner Pleasantville Development Corporation and respondent C.T. Torres Enterprises, Inc. are ordered to pay in solidum the amount of P3,000.00 to Jardinico as attorney's fees, as well as litigation expenses; and

(4) The award of rentals to Jardinico is dispensed with.

SO ORDERED.

PROPERTY|07Sept15|19

G.R. No. 3088 February 6, 1907

EL BANCO ESPAÑOL-FILIPINO, plaintiff-appellant, vs.JAMES PETERSON, sheriff of the city of Manila, ET AL., defendants-appellees.

Del-Pan, Ortigas & Fisher for appellant. Hartigan, Marple, Rohde, & Gutierrez for appellees.

TORRES, J.:

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

executed on the 4th of March was modified so as to provide that the goods then (September 29) in possession the depositary should only be liable for the sum of P40,000, Philippine currency, the said contract of the 4th of March remaining in all other respects in full force and effect, Luis M.a Sierra having been subsequently appointed by agreement between the bank and the debtor as depositary of the goods thus pledged in substitution for the said Ramon Garcia y Planas.

On the 19th of October, 1905, in an action brought in the Court of First Instance of the city of Manila by Juan Garcia y Planas against Francisco Reyes and Ramon Agtarat, judgment was rendered against the last-mentioned two for the sum of P15,000, Philippine currency, to be paid by them severally or jointly, upon which judgment execution was issued against the property of the defendants, Reyes and Agtarap. On the aforesaid 19th day of October, for the purpose of levying upon the property of the defendants, the sheriff at the request of Garcia, the plaintiff in that case, entered the warehouse where the goods pledged to the plaintiff bank were stored under the custody of the depositary, Sierra, and levied upon them as per list attached to the complaint marked "Exhibit A." The sheriff seized the goods which had been pledged to the bank, depriving the latter of the possession of the same, to which said contract executed on the 4th of March, 1905. Without the authority of the bank, Reyes could not dispose of the said goods. The value of the goods seized by the sheriff was P30,000, Philippine currency, the said sheriff, having refused, and still refusing, to return to the same to the bank, notwithstanding repeated demands made upon him to this effect, and it being alleged in the complaint that unless prohibited by the court the sheriff would proceed to sell the said goods at public auction and apply the proceeds to the satisfaction of the judgment rendered in favor of the Juan Garcia y Planas, while the other debtor Reyes had not paid to the bank the P40,000, Philippine currency, to secure the payment of which the goods mentioned in Exhibit A had been pledged to the bank, that is, to secure the payment of a sum in excess of the actual value of the goods in the hands of the sheriff.

The defendant sheriff, James J. Peterson, and Juan Garcia, his codefendant, through their attorneys, Hartigan, Marple, Rohde and Gutierrez, answering the complaint, stated that they admitted the allegations contained in paragraphs 1, 2, 3, 4, 5, 12, and 17 of the complaint, but denied the allegations contained in paragraphs 6, 7, 8, 9, 10, 11, 14, 16, and 18. They further denied the allegations contained in paragraph 12, with the exception that the defendant sheriff levied upon the goods mentioned in Exhibit A attached to the complaint for the purpose of satisfying the judgment referred to therein; and also the allegations contained in paragraph 13 of the complaint, with the exception that the sheriff seized the property mentioned in Exhibit A under the execution referred to therein; and finally defendants denied the allegation contained in paragraph 15 of the complaint, with the exception of the allegation that the value of the property seized is P30,000. They accordingly asked that the action be dismissed and that it be adjudged that the plaintiff had no interest whatever in the property described in the complaint, and that the plaintiff be taxed with the costs of these proceedings.

The testimony introduced by the parties having been received, and the exhibits having been attached to the record, the court below entered judgment on the 4th of January, 1906, dismissing plaintiff's action and directing that the defendant recover from the Spanish-Filipino Bank the costs of this action, for which execution was duly issued. To

PROPERTY|07Sept15|20

this judgment counsel for plaintiff excepted and announced his intention of prosecuting a bill of exceptions, and further made a motion for a new trial on the ground that the judgment of the court below was contrary to law and that the findings of fact were plainly and manifestly contrary to the weight of the evidence.

The decision of this case depends mainly upon the question as to whether the contract of pledge entered into by and between the Spanish-Filipino Bank and Francisco Reyes to secure a loan made by the former to the latter was valid, all the requisites prescribed by the Civil Code having been complied with.

If so, the bank's claim had preference over the claim of a third person not secured, as was the bank's, by a pledge, with reference to the property pledged to the extent of its value, and therefore such property could not have been legally levied upon by the sheriff at the request of the defendant, Juan Garcia. (Arts. 1921, 1922, Civil Code.)

The contract in question complies with all the requisites provided in article 1857 of the Civil Code, such as that the property was pledged to secure a debt, the date of the execution, the terms of the pledge, and the property pledged, all of which appears in a public document, and the property pledged was placed in the hands of a third person by common consent of the debtor and creditor, under the supervision of an agent of the bank. (Arts. 1863, 1865, 1866, 1869, 1871, Civil Code.) The defect alleged to exist in the said contract is that the debtor, Reyes, continued in possession of the property pledged; that he never parted with the said property, and that neither the creditor nor the depositary appointed by common consent of the parties were ever in possession of the property pledged, and for this reason, and upon the further ground that the contract was fraudulent, the court below dismissed the complaint with the costs against the plaintiff.

In the motion for a new trial it was alleged by the plaintiff that the judgment of the court below was contrary to law, and that the findings of fact contained therein were plainly and manifestly against the weight of the evidence. If plaintiffs contention is correct, then the judgment of the court below should be reversed.

From the evidence introduced at the trial, both oral and documentary, it appears that a third person, appointed by the common consent of the debtor and creditor, was in possession of the goods pledged in favor of the bank under the direct supervision of an agent of the bank expressly appointed for this purpose, and it has not been shown that the said Reyes continued in the possession of the goods after they had been pledged to the plaintiff bank.

Exhibit C and the testimony of Francisco Reyes, Luis M.a Sierra, and Mariano Rodriguez corroborate the existence and authenticity of the contract of pledge recorded in a public instrument and conclusively and satisfactorily show that the debtor, after the pledge of the property, parted with the possession of the same, and that it was delivered to a third person designated by common consent of the parties. For the purpose of giving this possession greater effect, the pledgee appointed a person to examine daily the property in the warehouse where the same was kept.

The witness Matias Garcia also testified as to the status of these goods, and informed Juan Garcia of such status before the same were levied upon.

The sheriff's testimony supports the allegation that the depositary, Sierra, was present at the place where the goods were kept, as well as the representative of the bank, Rodriguez, when he, the sheriff, went there for the purpose of levying upon the said property. He further testified that Rodriguez, the representative of the bank, then protested and notified him that the property in question was pledged to the Spanish-Filipino Bank.

The contract in question was, therefore, a perfect contract of pledge under articles 1857 and 1863 of the Civil Code, it having been conclusively shown that the pledgee took charge and possession of the goods pledged through a depository and a special agent appointed by it, each of whom had a duplicate key to the warehouse wherein the said goods were stored, and that the pledgee, itself, received and collected the proceeds of the goods as they were sold.

The fact that the said goods continued in the warehouse which was formerly rented by the pledgor, Reyes, does not affect the validity and legality of the pledge, it having been demonstrated that after the pledge had been agreed upon, and after the depository appointed with the common consent of the parties had taken possession of the said property, the owner, the pledgor, could no longer dispose of the same, the pledgee being the only one authorized to do so through the depositary and special agent who represented it, the symbolical transfer of the goods by means of the delivery of the keys to the warehouse where the goods were stored being sufficient to show that the depositary appointed by the common consent of the parties was legally placed in possession of the goods. (Articles 438, 1463, Civil Code.)

The fact that the debtor, Reyes, procured purchasers and made arrangements for the sale of the goods pledged and that the bills for the goods thus sold were signed by him does not affect the validity of the contract, for the pledgor, Reyes, continued to be the owner of the goods, (art. 1869, Civil Code), he being the one principally interested in the sale of the property on the best possible terms.

As to the reservation stipulated in paragraph 13 of the contract executed on the 4th of March, 1905, it could not affect the contract in question for the reason that reservation referred to the rent from the property mortgaged, to the bank and the dividends from the shares of stock also pledged to the bank, and not the merchandise so pledged, and such reservation could not have rendered the contract of pledge null.

If the case is to be decided in accordance with the facts alleged and established, the defendant not having introduced any evidence to show that the said contract of pledge was fraudulent as to other creditors, there was no legal ground upon which the court below could have held that the contract evidenced by the instrument in question was entered into to defraud other creditors of the pledgor.

For the reason hereinbefore set out, and the judgment of the court below being contrary to the evidence, the said judgment is hereby reversed, and it is hereby adjudged that the plaintiff corporation, under and by virtue of the contract of pledge in question, had a preferential right over that of the defendant, Juan Garcia, to the goods pledged or the value thereof, the value to be applied to the payment of the debt of P40,000, Philippine

PROPERTY|07Sept15|21

currency, for the security of which the said property was pledged, and the defendants are accordingly hereby ordered to return to the plaintiff corporation the property improperly levied upon, or to pay its value, amounting to P30,000, Philippine currency, without special provision as to costs. After the expiration of twenty days let judgment be entered in accordance herewith, and ten days thereafter the case be remanded to the court below for execution. So ordered.

PROPERTY|07Sept15|22

G.R. No. L-9989 March 13, 1918

EDUARDO CUAYCONG, ET AL., plaintiffs-appellees, vs.RAMONA BENEDICTO, ET AL., defendants-appellants.

FISHER, J.:

The issues in this case relate to the right of plaintiffs to make use of two roads existing on the Hacienda Toreno, a tract of land in the municipality of Victorias, Negros Occidental, the property of the defendants, Blasa Benedicto and Ramona Benedicto. One of these roads is referred to in the proceedings as the Nanca-Victorias road and the other as the Dacuman — Toreno road. The Court of First Instance held that those of the plaintiffs who claimed to be entitled to make use of the Dacuman — Toreno road had failed to establish the asserted right, and dismissed the action as to them. From this decision they appealed to this court but, their brief not having been filed within the time prescribed by the rules, their appeal was dismissed, on motion of defendants, by resolution dated February 14, 1916. Consequently, the issues presented on this appeal are limited to those which relate to the rights of the parties with respect to the Nanca-Victorias road, and the determination of the correctness of the decision of the court concerning that part of the controversy submitted to its decision.

The allegations in the complaint with respect to the Nanca-Victorias road are that the appellees, Eduardo Cuaycong, Lino Cuaycong, and Eulalio Dolor, are the owners of a group of haciendas situated between the southern boundary of the Hacienda Toreno and the barrio of Nanca, of the municipality of Seravia, and that the appellees Silverio Ginoo, Gervasio Ascalon, and Juan Ledesma, are the lessees of part of said haciendas; that more than twenty years the appellees and their predecessors in interest have made use of the Nanca-Victorias road, which crosses the Hacienda Toreno, openly, publicly, and continiously, with the knowledge of the owners of the said hacienda, for the purpose of conveying the products of their haciendas to the town of Victorias and to the landing place there situated, and for the purpose of transporting supplies from those points to their haciendas, making use of the said road by means of carts, carabaos, and other usual means of transportation; that there is no outlet to a public road from the hacienda occupied by these plaintiffs, the only road and way by which the products of the plaintiffs' property can be taken to the town of Victorias and to the landing place there being across the Hacienda Toreno by the road marked on the plan attached to the complaint; that on the fifteenth day of November, 1912, the defendants closed the road in question at the point at which it crosses the Hacienda Toreno, and refused to permit plaintiffs to continue using it; that plaintiffs were about to commence to grind their crop of sugar cane, and that, if prevented from transporting their sugar across the Hacienda Toreno to their point of embarkation, would suffer damages difficult to estimate. Upon these averments of fact the plaintiffs prayed for a judgment that they are entitled to use the road in question as they have been using it in the past, and that a perpetual injunction be issued against plaintiffs restraining them from impending such use. Upon the filing of the complaint, plaintiffs moved the court to issue a preliminary injunction restraining defendants from interfering with the use of the road during the pendency of the suit, which motion was granted by the court.

Defendants in their answer put in issue all the special averments of the complaint, as above set forth, and by way of counterclaim and special defense, averred that the road crossing the Hacienda Toreno, over which plaintiffs claim the right of passage, is the private property of defendants; and, further, that they have not refused plaintiffs permission to pass over this road but have required them to pay toll for the privilege of doing so. Defendants also claimed damages for the use of the road by plaintiffs during the pendency of the suit, alleging that the preliminary injunction had been improvidently issued upon false statements contained in the verified complaint filed by plaintiffs.

The case was tried in July, 1913. The court on December 8, 1913, rendered judgment, dismissing the complaint with respect to the plaintiffs Felix Suarez, Probo Jereza, Enrique Azcona, and Melecio Pido, these being the plaintiffs who claimed the right to use the Dacuman — Toreno road. With respect to the Nanca-Victorias road, the court held that it was a public highway over which the public had acquired a right of use by immemorial prescription, and ordered the issuance of a perpetual injunction against plaintiffs, restraining them from interfering in any manner with the use of the said road.

The conclusion of the court with respect to the facts affecting the Nanca-Victorias road are as follows:

Turning to a consideration of the evidence relative to the Nanca-Victorias road we find incontestable proof that it has been in existence for at least forty years. That the hacenderos located in the southwestern section of Victorias and the public generally passed over it freely and that it was used for all purposes of transportation of farm produce, animals, etc. and by pedestrians as well as carromatas and other conveyances without break or interruption until two or three years ago when the defendants announced that the road was private and that those who wished to pass over it with sugar carts would be obliged to pay a toll of ten centavos — all other vehicles, it appears, were permitted to pass free charge. This arrangement seems to have existed during the years of 1911 and 1912 and part of 1913, the money being collected apparently from some hacenderos and not from others. There is some reason to believe from the evidence presented by defendants themselves that the practice of making these payments to hacienda 'Toreno' originated in an attempt to raise a fund for the repair of the road. There is no evidence that any other hacenderos between Nanca and Victorias or any other person made any attempt to close the road or to collect toll. On the contrary the road appears to have been repaired by the hacenderos when it needed repairing and everyone used it on equal terms until the defendants in 1910 or 1911 interposed the objection that the road in dispute was private. This we think is a fair deduction from the evidence and although it is asserted that toll was collected at an earlier date by the late Leon Montinola, brother of the defendant Ruperto Montinola, there is no tangible evidence that this was so and that toll has been paid only during the years of 1911, 1912, and part of 1913.

The question presented by the assignment of error are in effect:

(a) Is the Nanca-Victorias road at the point at which it traverses the Hacienda Toreno a public highway or not?

PROPERTY|07Sept15|23

(b) If it be held that the road in question is not a public highway, have plaintiffs proven their acquisition of an easement of way over the Hacienda Toreno at the point traversed by the road in question?

The trial judge, in holding that the road in question is public, bases in conclusion upon the fact, which he deems to have been proven, that the road has been in existence "from time immemorial," and had been "continiously used as a public road . . . and open to public as such for thirty or forty years . . . until . . . the defendants undertook to claim it as private and to collect toll for the passage of carts." (Bill of Exceptions, p. 56.) There is no doubt that for the past thirty or forty years a road has existed between the former site of the town of Victorias and the barrio of Nanca, of the municipality of Seravia, and that this road crosses defendants' hacienda. It is also true that during this period the plaintiffs and their predecessors in the ownership of the hacienda now held by them have made use of this road for the purpose of going and coming from their haciendas to the town of Victorias; but the question is whether this use was limited to the plaintiffs, and their tenants and employees, or whether it was, as held by the lower court, a use enjoyed by the public in general. Plaintiffs produced only two witnesses, Segundo de Leon (stet. notes, pp. 21-22) and Eduardo Cuaycong, (stet. notes, pp. 27-33) to testify as regards the use of the Nanca-Victorias road. Several other witnesses testified on behalf of plaintiffs, but their testimony relates to the Dacuman — Toreno road, which is not involved in this appeal. We have carefully read the testimony of the witnesses Leon and Cuaycong, given upon their direct and cross examination, but we have been unable to find that either of them has testified that the road in question was ever used by the public in general. These witnesses testified with regard to the use of the road by the present and former owners and occupants of the estates of Bacayan, Esperanza, Alcaigan, Pusot, and Dolores for the transportation of the products of these estates to the town of Victorias, and of supplies and agricultural implements from Victorias to the haciendas, but neither of them testified expressly that any other use had been made of said road. Nevertheless, it may be reasonably inferred from the testimony of these witnesses that all persons having occasion to travel between Victorias and the haciendas of Bacayan, Esperanza, Alacaigan, Pusot, and Dolores, whether or not they were owners, tenants, or employees of said estates, made use of the road now in dispute, crossing the Hacienda Toreno, and to this limited extent it may be said that the public made use of the road, but there is nothing in the evidence to indicate that the so — called public use extended beyond this.

Apart from the fact that there is no direct evidence to support the finding of the court concerning the general public use of the road in dispute, the record contains data strongly tending to show that when the complaint was filed plaintiffs did not contend that the road was a public highway, but merely contended that they had acquired by prescription an easement of way across the Hacienda Toreno. For example, the action is entitled an "action concerning a right of away." (Bill of Exceptions, pp. 64 and 65.) It is not averred in the complaint that the road in question was used by the public. On the contrary, it is averred that it was used by the plaintiffs and their predecessors. The averment in paragraph 8 of the complaint that the plaintiffs have no other "outlet to a public road" than that which they have been accustomed to used by going across the defendants' hacienda for the purpose of going to the town of Victorias also shows that when they commenced this action they had in mind the provisions of articles 564, et seq. of the Civil Code, which relate to the method of establishing the compulsory

easement of way. The owners of an existing easement, as well as those whose properties are adjacent with a public road, have no occasion to invoke these provisions of the Code, which relate to the creation of new rights, and not the enforcement of rights already in existence.

It is true in the opening statement made to the court, counsel for plaintiffs, who was not the same attorney by whom the complaint was signed, stated that plaintiffs contend that the road in question is public, but as no evidence was introduced tending to establish this contention concerning the Nanca — Victorias road, counsel for defendants had no occasion to object upon the ground that such testimony was not relevant to the averments of the complaint. No evidence was taken to indicate that at any time since the road in question has been in existence any part of the expense of its upkeep has been defrayed by the general government, the province, or the municipality. The trial judge said upon this subject:

It is true that whatever repairs were made on the road were made irregularly. The municipality of Victorias had no funds to devote to the construction and repair of roads, and the upkeep of the road depending entirely therefore on the initiative of the persons who used it, was attended to only at such times as repairs were absolutely necessary. (Bill of Exceptions, p. 49.)

The court also held that it appears from the government grant issued in 1885 to the original owner of the hacienda adjacent to the Hacienda Toreno on its western boundary, that the Nanca-Victorias road at that time separated that estate from the Jalbuena Hacienda, and that these facts constitute "circumstantial evidence that the road was in existence in 1885." We have examined the document to which the court refers, and we agree that the road in question existed in 1885; but we do not believe that the document in question proves that the road was public highway.

Another circumstance established by the evidence, and which is some importance in the determination of this issue, is that although the defendants closed the Nanca-Victorias road in the month of February, 1911, and since that time have collected toll from persons passing over it with carts loaded with sugar, including those belonging to several of the plaintiffs, nothing was done by them to prevent the continuation of this restriction until December, 1912, when this action was commenced. It is natural to assume that if plaintiffs had considered that the road in question was public, they would have protested immediately against the action of the defendants, and would have either commenced a civil action, as they subsequently did, or would have brought about a prosecution under section 16 of Act No. 1511.

Upon the evidence taken and admissions contained in the pleadings and those made during the course of the trial we consider that the following findings are warranted:

1. The town of Victorias has always been the shipping point of the products of the Hacienda Toreno, and of the haciendas of appellees, as well as the place from which supplies were brought to those properties.

2. For thirty or forty years before the commencement of the suit a wagon road, herein called the Nanca-Victorias road, has been in existence, connecting the

PROPERTY|07Sept15|24

haciendas of appellees with the town of Victorias, and this road traverses the property of defendants. Since the removal of the town of Victorias to a new site the Nanca-Victorias road has been used by appellees in travelling between their properties and the provincial road which crosses the Hacienda Toreno from east to west.

3. No public funds have at any time been expended on the construction or upkeep of the Nanca-Victorias road, but from time to time work has been done on it by the laborers employed by the present and former owners of the Hacienda Toreno and the haciendas owned by the appellees and their predecessors in title.

4. The Nanca-Victorias wagon road, including that part of it which crosses the Hacienda Toreno, has for thirty-five or forty years been used by the appellees and their predecessors in title for the transportation, by the usual means, of the products of their estates to their shipping points in or near the town of Victorias, and the transportation to their estates of all supplies required by them, and has been used by all persons having occasion to travel to and from all or any of the estates now owned by the appellees.

5. The use of the Nanca-Victorias road in the manner and by the person above mentioned was permitted without objection by the owners of the Hacienda Toreno until the year 1911, when they closed it, and began charging a toll of 5 centavos for each cart which passed over the road, including carts belonging to the appellants, until restrained from continuing to do so by the preliminary injunction granted in this case.

6. The Nanca-Victorias road constitutes the only outlet from the estates of appellants to the nearest public road which is the provincial road which crosses the Hacienda Toreno from east to west.

Upon these facts the questions of law to be decided are:

(a) Is the Nanca-Victorias road a public highway?

(b) If the Nanca-Victoria road, or that part of it which crosses the Hacienda Toreno, is not a public highway, is it subject to a private easement of way in favor of the appellees?

The defendants are the owners of the Hacienda Toreno under a Torrens title issued in accordance with the Land Registration Act, conferring to them its absolute ownership, subject only to the limitations of paragraph four of section 39 of said Act. It is admitted that there is no annotation on the certificate of title regarding the road here in question, either as a "public road" or as a "private way established by law," and, therefore, the questions presented by this appeal are to be determined precisely as they would be had the Hacienda Toreno not been brought under the operation of the Land Registration Act. The plaintiffs being the owners of the property in question, the presumption of law is that it is free from any lien or encumbrance whatever, and the burden therefore rests upon plaintiffs to establish the contrary. As this court said in case of Fabie vs. Lichauco and the children of Francisco L. Roxas (11 Phil. Rep., 14):

It is settled of law that a property is assumed to be free from all encumbrance unless the contrary is proved.

There is admittedly no evidence to show that the land occupied by the road here in question was any time conveyed to the general government or any of its political subdivisions by the present or any of the former owners of the Hacienda Toreno. There is no evidence, even remotely, tending to show that the road existed prior to the time when the property now known as the Hacienda Toreno passed from the State into private ownership. The record fails to disclose any evidence whatever tending to show that the Government has at any time asserted any right or title in or to the land occupied by the road, or that it has incurred any expense whatever in its upkeep or construction. The Civil Code defines as public roads those which are constructed by the State (art. 339), and as provincial and town roads those "the expense of which is borne by such towns or provinces." (Civil Code, art. 344.) While it is not contended that this definition is exclusive, it does show that during the Spanish regime, under normal conditions, roads which were public were maintained at the public expense, and that the fact that at no time was any expense incurred by the Government with respect to the road here in question tends strongly to support the contention of the defendants that it is private way.

During the Spanish regime the law required each able to bodied citizen not within one of the exempted classes to work a certain number of days in each year, his labor to be devoted to "services of general utility" to the municipality of his residence. (Royal Decree of July 11, 1883, art. 5.) Under this Decree and the Regulations for its enforcement (Berriz, vol. 11, 258) the greater part of the work on the public road of the Islands was accomplished. Had the road here in question been a public way, it is reasonable to assume that the polistas of the town of Victorias would have been employed in maintaining it. It is most significant that no mention is made in the testimony of the plaintiffs' witnesses of any work of this character having been done on the road at any time, particularly in view of the fact that their attention was drawn to this point. (Stet. note, pp. 8, 10, 11, 12, 13 and 14.)

The evidence shows that the repairs were made by the owners of the estates benefited by the road, and by their laborers, as a pure voluntary act for their own convenience and interest. There being no evidence of a direct grant to the government of the land occupied by the road in question or that any Government funds or labor were expended upon it, the question presents itself whether the use to which the road has been put was such as to justify the conclusion of the lower court that it has become public property. There being no evidence that the original use of the road by plaintiffs' predecessors was based upon any grant of the fee to the road or of an easement of way, or that it began under the assertion of a right on their part, the presumption must be that the origin of the use was the mere tolerance or license of the owners of the estates affected.

This being so, has that merely permissive use been converted into a title vested in the public at large, or in the plaintiffs by reason of their ownership of the land beneficially affected by the use?

Had it been shown that the road had been maintained at the public expense, with the acquiescence of the owners of the estates crossed by it, this would indicate such adverse possession by the government as in course of time would ripen into title or warrant the presumption of a grant or of a dedication. But in this case there is no such evidence, and the claims of plaintiffs, whether regarded as members of the public

PROPERTY|07Sept15|25

asserting a right to use the road as such, or as persons claiming a private easement of way over the land of another must be regarded as resting upon the mere fact of user.

If the owner of a tract of land, to accommodate his neighbors or the public in general, permits them to cross his property, it is reasonable to suppose that it is not his intention, in so doing, to divest himself of the ownership of the land so used, or to establish an easement upon it and that the persons to whom such permission, tacit or express, is granted, do not regard their privilege of use as being based upon an essentially revocable license. If the use continues for a long period of time, no change being made in the relations of the parties by any express or implied agreement, does the owner of the property affected lose his right of revocation? Or, putting the same question in another form, does the mere permissive use ripen into title by prescription?

It is a fundamental principle of the law in this jurisdiction concerning the possession of real property that such possession is not affected by acts of a possessory character which are "merely tolerated" by the possessor, or which are due to his license (Civil Code, arts. 444 and 1942). This principle is applicable not only with respect to the prescription of the dominium as a whole, but to the prescription of right in rem. In the case of Cortes vs. Palanca Yu Tibo (2 Phil. Rep., 24, 38), the Court said:

The provision of article 1942 of the Civil Code to the effect that acts which are merely tolerated produce no effect with respect to possession is applicable as much to the prescription of real rights as to the prescription of the fee, it being a glaring and self-evident error to affirm the contrary, as does the appellant in his motion papers. Possession is the fundamental basis of the prescription. Without it no kind of prescription is possible, not even the extraordinary. Consequently, if acts of mere tolerance produce no effect with respect to possession, as that article provides, in conformity with article 444 of the same Code, it is evident that they can produce no effect with respect to prescription, whether ordinary or extraordinary. This is true whether the prescriptive acquisition be of a fee or of real rights, for the same reason holds in one and the other case; that is, that there has been no true possession in the legal sense of the word. (See also Ayala de Roxas vs. Maglonso, 8 Phil Rep., 745; Municipality of Nueva Caceres vs. Director of Lands and Roman Catholic Bishop of Nueva Caceres, 24 Phil. Rep., 485.)

Possession, under the Civil Code, to constitute the foundation of a prescriptive right, must be possession under claim of title (en concepto de dueno), or use the common law equivalent of the term, it must be adverse. Acts of a possessory character performed by one who holds by mere tolerance of the owner are clearly not en concepto de dueño, and such possessory acts, no matter how long so continued, do not start the running of the period of prescription.

A similar question was presented in the case of the Roman Catholic Archbishop of Manila vs. Roxas (22 Phil. Rep., 450), in which case it appeared that Roxas, the owner of the Hacienda de San Pedro Macati, claimed a right of way across the property of the church to Calle Tejeron, a public street of the town of San Pedro Macati. The proof showed that the road in question had been used by the tenants of the Hacienda de San Pedro Macati for the passage of carts in coming and leaving the hacienda "from time immemorial," and further that the road had been used for time out of mind, not only by

the tenants of the hacienda but by many other people in going and coming from a church half-way between the boundary line of the hacienda and Calle Tejeron. The court held that the facts did not give rise to a prescriptive right of easement in favor of the owner of the hacienda, upon the ground that such use "is to be regarded as permissive and under an implied license, and not adverse. Such a use is not inconsistent with the only use which the proprietor thought fit to make of the land, and until the appellee thinks proper to inclose it, such use is not adverse and will not preclude it from enclosing the land when other views of its interest render it proper to do so. And though an adjacent proprietor may make such use of the open land more frequently than another, yet the same rule will apply unless there be some decisive act indicating a separate and exclusive use under a claim of right. A different doctrine would have a tendency to destroy all neighborhood accommodations in the way of travel; for if it were once understood that a man, by allowing his neighbor to pass through his farm without objection over the pass-way which he used himself, would thereby, after the lapse of time, confer a right on such neighbor to require the pass-way to be kept open for his benefit and enjoyment, a prohibition against all such travel would immediately ensue."

The decisions of the supreme court of Louisiana, a State whose jurisdiction is based, as is our own, upon the Roman Law, and whose Civil Code is taken, as is our own,. very largely from the Code of Napoleon, are particularly persuasive in matters of this character. In the case of Torres vs. Fargoust (37 La. Ann., 497), cited by appellants in their brief, in which the issues were very similar to those of the present case, the court held that—

The mere fact that for thirty or forty years the public was permitted to pass over this ground would not of itself constitute the place a locus publicus . . . dedication must be shown by evidence so conclusive as to exclude all idea of private ownership; . . . such dedication cannot be inferred from ere user alone; . . . no one is presumed to give away his property. The burden is on him who avers a divestiture of ownership to prove it clearly.

We are, therefore, of the opinion, and so hold, that upon the facts established by the evidence it does not appear that the road in question is a public road or way. We are also of the opinion that plaintiffs have failed to show that they have acquired by prescription a private right of passage over the lands of defendants. The supreme court of Spain has decided that under the law in force before the enactment of the Civil Code, the easement of way was discontinous, and that while such an easement might be acquired by prescription, it must be used in good faith, in the belief of the existence of the right, and such user must have been continuous from time immemorial. (Judgment of December 15, 1882.) In the appealed decision the court below says that the plaintiffs and their predecessors made use of the road in question "from time immemorial," but there is no evidence whatever in the record to sup[port this finding, although it is true that the evidence shows the existence of the road and its use by the plaintiffs and their predecessors for thirty-five or forty years. Speaking of the evidence required under the present Code of Civil Procedure to show immemorial use of an easement, this court said in the case of Ayal de Roxas vs. Case (8 Phil. Rep., 197, 198):

PROPERTY|07Sept15|26

Third Partida in title 31, law 15 . . . says that discontinues servitudes . . . must be proved by usage or a term so long that men can not remember its commencement. . . . In many judgments the supreme court of Spain has refused to accept proof of any definite number of years as a satisfaction of this requirement of the law. . . . We are of the opinion that in order to establish a right of prescription [title of prescription based upon use from time immemorial] something more required than memory of living witnesses. Whether this something should be the declaration of persons long dead, repeated by those who testify, as exacted by the Spanish law, or should be the common reputation of ownership recognized by the Code of Procedure, it is unnecessary for us to decide. On either theory the appellant has failed in his proof . . . .

The same thing may be said in this case. Witnesses have testified that they have known the road for a certain period of years, beginning at a time prior to the enactment of the Civil Code, but no evidence has been made to prove immemorial use by either of the means of proof mentioned in this decision cited, nor is immemorial user averred in the complaint as the basis of the right. It is evident, therefore, that no vested right by user from time immemorial had been acquired by plaintiffs at the time the Civil Code took effect. Under that Code (art 539) no discontinuous easement could be acquired by prescription in any event. Assuming, without deciding, that this rule has been changed by the provisions of the present Code of Civil Procedure relating to prescription, and that since its enactment discontinuous easement may be required by prescription, it is clear that this would not avail plaintiffs. The Code of Civil Procedure went into effect on October 1, 1901. The term of prescription for the acquisition of rights in real estate is fixed by the Code (sec. 41) at ten years. The evidence shows that in February, 1911, before the expiration of the term of ten years since the time the Code of Civil Procedure took effect, the defendants interrupted the use of the road by the plaintiffs by constructing and maintaining a toll gate on it and collecting toll from persons making use of it with carts and continued to do so until they were enjoined by the granting of the preliminary injunction by the trial court in December, 1912. Our conclusion is, therefore, that the plaintiffs have not acquired by prescription a right to an easement of way over the defendant's property; that their use of the Nanca-Victorias road across the Hacienda Toreno was due merely to the tacit license and tolerance of the defendants and their predecessors in title; that license was essentially revokable; and that, therefore, the defendants were within their rights when they closed the road in 1911.

While in the allegations from the plaintiffs' complaint it might be inferred that it was their purpose to seek to impose upon the defendants the easement to which arts. 564 et seq. of the Civil Code relate, that purpose was evidently abandoned, and the case was tried upon a wholly different theory. Proof was offered to show that the right of passage across defendants' land is necessary to enable plaintiffs to get their products to market, but there was no offer on their part to pay defendants the indemnity required by section 564.

For the reasons stated the judgment of the court below is reversed, the injunction issued against defendants is allowed on this appeal. So ordered.

PROPERTY|07Sept15|27

G.R. No. L-28066September 22, 1976

PEREGRINA ASTUDILLO, petitioner-appellant, vs.THE BOARD OF DIRECTORS OF PEOPLE'S HOMESITE AND HOUSING CORPORATION, RAMON P. MITRA, SALUD O. MITRA, and REGISTER OF DEEDS, QUEZON CITY, respondents-appellees.

AQUlNO, J.:

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

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

His application was approved on January 3, 1958. He made a downpayment of P840, an amount equivalent to ten percent of the price of the lot. On September 9, 1961 the PHHC and Mitra executed a contract of conditional sale. After Mitra had paid in full the price, which totalled more than nine thousand pesos, a final deed of sale was executed in his favor on February 18, 1965. Transfer Certificate of Title No. 89875 was issued to him on March 1, 1965.

The lot in question is acqually in the possession of Peregrina Astudillo. She constructed thereon a residential house (a shanty, according to Mitra). She admits that she has been squatting on the said lot "uninterruptedly since 1957 up to the present" (p. 52, Record). She filed with the administrative investigating committee of the PHHC a request dated February 24, 1963, praying for the cancellation of the award of Lot 16 to Congressman Mitra and asking the committee to recommend that it be re-awarded to her. No action was taken on that request.

On May 3, 1965 Peregrina filed in the lower court her aforementioned petition against the PHHC board of directors, the register of deeds of Quezon City and the spouses Ramon P. Mitra and Salud O. Mitra. She questioned the legality of the award of Lot 16 to Mitra. She asked that Lot 16 be sold to her.

After the respondents had filed their answers, the Mitra spouses filed a verified motion for summary judgment. They assumed that there was no genuine issue as to any material fact. Peregrina Astudillo opposed the motion. The parties submitted memoranda.

The lower court treated the motion for summary judgment as a motion to dismiss. It dismissed Peregrina's petition on the grounds that she is a mala fide squatter and that the sale of Lot 16 to Mitra cannot be assailed by means of certiorari and mandamus. Peregrina appealed to this Court.

Her four assignments of error raise questions of law. She contends that the lower court erred in holding that certiorari and mandamus do not lie in this case and that she has no right to question the award to Mitra, and in not holding that the award of Lot 16 to him was in contravention of the Anti-Graft and Corrupt Practice Law and of the constitutional provision that a Senator or Representative should not directly or indirectly be financially interested in any contract with the government of any subdivision or instrumentality thereof during his term of office.

In the ultimate analysis the issue is whether Peregrina Astudillo has a cause of action to annul the sale of Lot 16 to Mitra and to compel the PHHC board to award that lot to her.

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

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

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

Peregrina invokes the PHHC charter (erroneously referred to as section 11 of Commonwealth Act No. 648) which provides that the PHHC should acquire buildings so as to provide "decent housing for those who may be unable otherwise to provide themselves therewith" and that it should acquire large estates for their resale to bona fide occupants.

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

The State is committed to promote social justice and to maintain adequate social services in the field of housing (Secs. 6 and 7, Art. II, New Constitution). But the State's solicitude for the destitute and the have-nots does not mean that it should tolerate usurpations of property, public or private.

"In carrying out its social readjustment policies, the government could not simply lay aside moral standards, and aim to favor usurpers, squatters, and intruders, unmindful of the lawful and unlawful origin and character of their occupancy. Such a Policy would

PROPERTY|07Sept15|28

perpetuate conflicts instead of attaining their just solution" (Bernardo vs. Bernards, 96 Phil. 202, 206).

Indeed, the government has enunciated a militant policy against squatters. Thus, Letter of Instruction No. 19 dated October 2, 1972 orders city and district engineers "to remove all illegal constructions, including buildings ... and those built without permits on public or private property" and provides for the relocation of squatters (68 O.G. 7962. See Letter of Instruction No. 19-A). As noted by Justice Sanchez, "since the last global war, squatting on another's property in this country has become a widespread vice" (City of Manila vs. Garcia, L-26053, February 21, 1967, 19 SCRA 413, 418).

The lower court did not err in holding that Peregrina Astudillo cannot use the special civil actions of certiorari and mandamus to secure a judicial review of the award of Lot 16 to Mitra. Rule 65 of the Rules of Court provides: ñé+.£ªwph!1

SECTION 1. Petition for certiorari. — When any tribunal, board, or officer exercising judicial functions, has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings, as the law requires, of such tribunal, board or officer.

The petition shall be accompanied by a certified true copy of the judgment or order subject thereof, together with copies of all pleadings and documents relevant and pertinent thereto.

SEC. 3. Petition for mandamus. — When any tribunal, corporation, board, or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person agrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant, immediately or at some other specified time, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant.

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

Nor is the relief sought by Peregrina Astudillo, which is to compel the PHHC board to cancel the award of Lot 16 to Mitra and to resell it to her, a right that can be enforced by mandamus. What she wants is to force the PHHC to execute a contract of sale in her favor. That is not within the purview of the writ of mandamus.

Thus, it was held that "the writ of mandamus is not an appropriate or even admissible remedy to enforce, the performance of a private contract which has not been fully performed by either party" (Quiogue vs. Romualdez, 46 Phil. 337). In Jacinto vs. Director of Lands, 49 Phil. 853, a petition for a writ of mandamus to compel the Director of Lands to execute a deed of conveyance for certain lots in favor of the petitioner was denied. Generally, title to property cannot be litigated in a mandamus proceeding (City of Manila vs. Posadas, 48 Phil. 309, 337).

It is not a ministerial duty of the PHHC board to award Lot 16 to Peregrina. Anyway, it has already been shown that as a squatter she is not clothed with any right to Lot 16 that may be enforced in a court of justice.

The PHHC board completely ignored the alleged demands of Peregrina for the purchase of Lot 16. It did not render any decision against her. Its inaction cannot be assailed by certiorari or mandamus.

Peregrina's other assignment of error is that the award of Lot 16 to Congressman Mitra was a violation of section 3(h) of the Anti-Graft and Corrupt Practices Law and of section 17, Article VI of the 1935 Constitution, now section 11, Article VIII of the new Constitution.

On the other hand, Mitra contends that the PHHC performs proprietary functions. He observed that the following high-ranking officials were awarded PHHC lots: Felixberto Serrano, Dominador Antonio, Manuel Lim, Fernando Lopez, Pacita M. Gonzales, Genaro Magsaysay, Daniel Romualdez, Felipe A. Abrigo, Bartolome Cabangbang, Juan Duran, Manuel Enverga, Angel Fernandez, Jose Nuguid, Antonio de Pio, Lorenzo Teves, Faustino Tobia, Pedro Trono, Marcelino Veloso and Valeriano Yancha.

We are of the opinion that that assignment of error need not be resolved in this case. Having shown that Peregrina has no cause of action to assail the award of Lot 16 to Mitra, it follows that in this particular case she cannot assail that award by invoking the provisions of the Anti-Graft and Corrupt Practices Law and the Constitution. This is not the proper forum for the ventilation of that question. (See Commonwealth Act No. 626; Hernandez vs. Albano, 112 Phil. 506; Solidum and Concepcion, Jr. vs. Hernandez, 117 Phil. 335).

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

SO ORDERED.

PROPERTY|07Sept15|29

G.R. No. L-57259October 13, 1983

ANGEL P. PERAN, petitioner, vs.THE HONORABLE PRESIDING JUDGE, BRANCH II, COURT OF FIRST INSTANCE OF SORSOGON, 10th JUDICIAL DISTRICT, RAMON ESPERA and ENCARNACION EVASCO, as private-respondents, respondents.

MELENCIO-HERRERA, J.:

The decision of the then Court of First Instance of Sorsogon, Branch II, Gubat, Sorsogon, rendered in the exercise of its appellate jurisdiction, dismissing Civil Case No. 1277, entitled "Angel P. Peran vs. Encarnacion Evasco, et al.", for Forcible Entry and Illegal Detainer, is being assailed in this Petition for Review on certiorari on a question of law. Said Decision reversed the judgment of the 2nd Municipal Circuit Court of Bulusan-Barcelona, Sorsogon, for Forcible Entry & Illegal Detainer.

The antecedent facts follow:

The property in question, an unregistered residential land, with an area of 1,225 square meters more or less, situated at Tagdon Barcelona, Sorsogon, was originally owned by Jose Evasco. On December 29, 1950, Jose Evasco executed a "Reparticion Ex-trajudicial" whereby he partitioned his properties among his five heirs. 1 Subject property was one of those alloted to his son, Alejandro Evasco, who had it surveyed in 1956 (Exhibits "I" and "I-1") who had it declared in his name under Tax Declaration No. 1900. The other heirs received their own shares, one of them, the deceased Anacleto Evasco, one of whose children was listed as Encarnacion, possibly, the principal private respondent herein.

Alejandro Evasco sold his property to Jose E. Torella on December 31, 1972, 2 who declared it for taxation purposes under Tax Declaration No. 5157. 3 On July 10, 1977, Jose E. Torella, in turn, sold the land to Jose Enriquez Sabater, 4 and the latter also declared the property in his name under Tax Declaration No. 7127. 5 Petitioner Angel P. Peran acquired the land by purchase from Jose Enriquez Sabater on December 27, 1978, 6 and subsequently declared it, too, in his name under Tax Declaration No. 7310. 7 The sale was duly recorded in the Register of Deeds' Office of the province of Sorsogon on January 3, 1979 in accordance with the provisions of Sec. 194 of the Revised Administrative Code as amended by Act No. 3344.

Sometime in January 1979, petitioner personally asked private respondents, Encarnacion Evasco and her common-law husband Ramon Espera, whose house is erected on a 440 square meter portion (44 sq, ms. according to petitioner) of the lot in question, to remove the same and vacate the premises. Respondents refused, and consequently, a confrontation between the parties was had before the, Municipal Mayor of Barcelona and later before the Municipal Judge of Bulusan-Barcelona to settle the dispute, but to no avail.

On February 8, 1979, petitioner filed a complaint for Forcible Entry and Illegal Detainer against private respondents before the 2nd Municipal Circuit Court of Bulusan-

Barcelona, seeking the ejectment of the latter from the portion in question contending that respondents are mere squatters thereon; that they had prevented plaintiff from entering the property and deprived him of possession; and that they were tolerating persons in getting soil and bringing about a gradual erosion of the land to his extreme prejudice.

Private respondents answered denying the material allegations of the Complaint, and alleging that they are the lawful possessors for more than twenty (20) years of the said portion, which formerly belonged to Jose Evasco, grandfather of Encarnacion Evasco and that petitioner has no right to eject them therefrom.

On September 1, 1979, the 2nd Municipal Circuit Court of Bulusan-Barcelona rendered its Decision ordering private respondents to vacate the lot in question, return its possession to petitioner, reimburse him attorney's fees of P300.00 and litigation expenses, and to pay the costs. Reconsideration of the said decision filed by private respondents was denied by said Court on November 12, 1979. Private respondents appealed to respondent Court of First Instance of Sorsogon, Branch II.

Respondent Court reversed the Municipal Circuit Court and dismissed the case on March 28, 1980, ruling that said Court had no jurisdiction over the case as the same was filed only on February 4, (8), 1979, which was well beyond the one-year-period of limitation, the cause of action having accrued from the sale of the property by Alejandro Evasco to Jose E. Torella on December 31, 1972; and that since the only issue in an illegal detainer case is physical possession, "whoever has prior possession, no matter in what character, is protected by law."

Reconsideration of the said Decision sought by petitioner was denied by respondent Court.

Petitioner appealed said judgment directly to this Tribunal on a question of law, raising as the lone issue:

... whether the respondent court was in error when for purposes of determining the jurisdiction of the 2nd Municipal Circuit Court of Bulusan-Barcelona, to try Civil Case No. 1227, for Illegal Detainer:

(a) it reckoned the counting of one-year period within which to file the action from the sale of the property in question by Alejandro Evasco to Jose Torella on December 31, 1972 and not from the date of demand made by the petitioner upon the respondents; and

(b) by assuming that "prior possession in whatever character is protected by law.

We rule for petitioner.

Private respondents admit that the land in question was originally owned by Jose Evasco. The tax declarations covering their house clearly state "house built on land owned by Jose Evasco under Tax No. 1599". 8 Since the land had been partitioned to Alejandro Evasco by his father, Jose Evasco, respondent Encarnacion can lay no claim

PROPERTY|07Sept15|30

to the property even as a grand-daughter of Jose Evasco. Respondents may have been in possession of the portion they occupy prior to petitioner but they have not proved their title thereto, nor their right to possess the same. As the 2nd Municipal Circuit Court of Bulusan-Barcelona found, no concrete evidence was introduced by respondents on this point. Moreover, it is noteworthy that the validity of the "Reparticion Extrajudicial" whereby said lot was adjudicated to Alejandro Evasco by his father Jose Evasco, predecessors-in-interest of petitioner, had never been challenged.

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

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

WHEREFORE, the assailed Decision of respondent Court of First Instance of Sorsogon, Branch II, in Civil Case No.1227, is SET ASIDE, and the Decision of the 2nd Municipal Circuit Court of Bulusan-Barcelona is hereby reinstated,

Costs against private respondents.

SO ORDERED.

PROPERTY|07Sept15|31

[G.R. No. L-35833. June 29, 1984.]SUSANA DE LA CERNA LAINGO, TEODORO DACUYAN, ELENA DACUYAN and SAMSON DACUYAN, Petitioners,v. DAMIAN CAMILO and/or JUAN MAGALLANES, Respondents.

GUTIERREZ, JR., J.:

The issue raised in this petition is whether or not the execution ordered by the respondent court conforms to the final judgment embodied in the decision of the Court of Appeals in CA-G.R. No. 43920-R.

The petitioners filed a complaint as plaintiffs in Civil Case No. 5438 of the Court of First Instance of Davao to recover a seven hectare portion of a twenty-two hectare parcel of land in Malita, Davao.

The disputed property is part of a homestead applied for by Gaudencio Dacuyan married to Susana de la Cerna and awarded in 1934 to the "heirs of Gaudencio Dacuyan" because the applicant had died in the meantime. The title was registered in October, 1934. In 1942, the widow Susana de la Cerna describing herself as "half owner of the conjugal property" sold seven (7) hectares of the land to Damian Camilo, respondent in this case. Camilo, in turn, sold the land in 1966 to the other respondent, Juan Magallanes.

The dispositive portion of the decision in the reivindicacion case states:

"WHEREFORE, judgment is hereby rendered: "1. Dismissing the Complaint;

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

"3. Directing the plaintiffs to allow Juan Magallanes to have the aforesaid land surveyed; and,

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

Upon appeal by the petitioners, however, the Court of Appeals modified the lower court’s decision. The dispositive portion of the appellate decision reads: "IN VIEW WHEREOF, this Court is constrained to modify as it now modifies the judgment appealed from: the sale to appellees is held to be valid only as to an undivided seven (7) hectares not of the specific portion now litigated; appellants are entitled to co-possession thereof with appellees until the undivided seven (7) hectares to which

appellees are entitled are definitely segregated thru partition; the adjudication of attorney’s fee is set aside; no more pronouncement as to cost."

After the judgment of the Court of Appeals had become final and executory, the petitioners filed the necessary motion with the Court of First Instance of Davao to issue a writ of execution placing them in co-possession with the private respondents of the seven (7) hectares being litigated.

The private respondents filed a counter motion for the issuance of a writ of execution praying that the petitioners be ordered to execute a project of partition among the heirs and while doing so, segregate the seven (7) hectares purchased and possessed by them from the date of the document of sale. The petitioners, however, opposed the counter motion emphasizing that the execution of judgment referred to an action for recovery of possession of a specific seven (7) hectares of land and not to an action for partition of property.

The respondents countered with a rejoinder which admitted that the judgment, while ambiguous, confirmed their rights over seven (7) hectares of land sold to them. Since they have been in possession of a specific seven (7) hectares of land on which they planted coconuts already bearing fruits, the most equitable execution according to them was for those seven (7) hectares to be the seven hectares adjudged in the decision.

The Court of First Instance decided the matter by issuing a writ of execution allowing the respondents to enjoy possession over the entire twenty-two (22) hectares with the petitioners. The questioned order, the second paragraph of which is assailed in this petition reads:

"On motion of the plaintiffs, through Atty. Ampig, and without objection of Atty. Latorilla, counsel for the defendant, let a writ of possession issue with respect to the seven (7) hectares, subject matter of the suit, by allowing the plaintiffs to enjoy with the defendants possession of the same.

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

SO ORDERED." Two motions for reconsideration having been denied, the petitioners raised the case to us directly on a pure legal issue which they state as follows:

THE COURT A QUO OR THE RESPONDENT JUDGE ERRED IN ORDERING THE ISSUANCE OF A WRIT OF POSSESSION WITH RESPECT TO THE REMAINDER OF THE TWENTY TWO (22) HECTARES BY ALLOWING THE DEFENDANTS TO ENJOY WITH THE PLAINTIFFS POSSESSION OF THE REST OF THE TWENTY TWO (22) HECTARES AND IN DENYING THE TWO ((2) MOTIONS FOR RECONSIDERATION OF THE SAID ORDER.

PROPERTY|07Sept15|32

The reasons given by the Court of Appeals for not granting undisputed ownership of the seven (7) hectares already possessed by the respondents are: x x x

"3. CONSIDERING: Now, as to this that while it is true that the Land Tax Declaration in the name of the heirs of Gaudencio Dacuyan Exh. 3 was afterwards cancelled and reduced from its area of 22 hectares to 15 hectares under Exh. 3-A the remaining seven (7) hectares coming to be declared in the name of the buyer Camilo Damian under Exh. 5-A, 5-B, 5-C and 5-D, yet a scrutiny of these documents would not show any participation of the other children of Gaudencio and Susana namely Teodoro, Elena and Samson the co-plaintiffs in this case not even any proof that they were informed of the sale; neither is there any evidence present in the record positive in character that they had ever consented to a physical segregation of the seven (7) hectare portion sold by Susana unto Camilo so that the point of laches is without any basis; it is true that Camilo and afterwards in 1966 his successor-in-interest Juan Magallanes had been in possession apparently exclusive since the sale to Camilo in 1942 under Exh. 1 but the trouble is that exclusive possession by a co-owner cannot give rise to prescription; the law has always been to the effect that between co-owners prescription cannot run, Cortez v. Oliva, 33 Phil. 480 and in order for prescription to run between themselves the repudiation of co-ownership must be clearly manifested which is not at all the case here bearing in mind the undisputed fact that Camilo Damian did not even attempt to register Exh. 1 nor notify said other children of Gaudencio Dacuyan and tell them he was claiming the seven (7) hectare portion as solely his own; and neither should it be overlooked that the title being a Torrens title it cannot be the subject matter of prescription; this will mean that notwithstanding the possession apparently exclusive of Camilo Damian for more than twenty (20) years over the seven (7) hectare portion, he cannot under the law be permitted to claim absolute ownership therein; and as a corollary neither can his successor-in-interest Juan Magallanes but since Susana was entitled to at least 11 hectares; therefore her sale of seven (7) hectares if undivided would have been valid, but a sale by her of this specific portion litigated could not bind her co-plaintiffs; and this being the final result the adjudication of attorney’s fees must have to be discarded;

"x x x

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

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

We stated in Phil-American Accident Insurance Co., Inc. (97 SCRA 811) —"The questioned Order cannot be sustained. The judgment which was sought to be executed ordered the payment of simple `legal interest’ only. It said nothing about the payment of compound interest. Accordingly, when the respondent judge ordered the payment of compound interest he went beyond the confines of his own judgment which had been affirmed by the Court of Appeals and which had become final. Fundamental is the rule that execution must conform to that ordained or decreed in the dispositive part

of the decision. Likewise, a court can not, except for clerical errors or omissions, amend & judgment that has become final. (Jaob, Et. Al. v. Alo, et al, 91 Phil. 750 [1952]; Robles v. Timario, Et Al., 107 Phil. 809 [1960]; Collector of Internal Revenue v. Gutierrez, Et Al., 108 Phil. 215 [1960]; Ablaza v. Sycip, Et Al., 110 Phil. 4 [1960].) (Emphasis supplied).

At the same time, the mode of execution desired by the petitioners would be unfair to the respondents and not in keeping with the disposition really ordained by the Court of Appeals. As stated in Macabuhay v. Manuel (101 SCRA 835) where we cited Padua v. Robles (66 SCRA 485):

". . . that the meaning, operation and consequences of a judgment must be ascertained like any other written instrument and that a judgment rests on the intention of the Court as gathered from every part thereof including the situation to which it applies and the attendant circumstances." A reading of the decision and its background facts shows that the controversy litigated and passed upon by the Court of Appeals was confined to the ownership of seven (7) hectares of land which forms part of the twenty two (22) hectares parcel of land covered by a torrens title in the name of the petitioners.

The Court of Appeals ruled that the respondents are entitled to seven (7) hectares of the property but not necessarily the seven (7) hectares possessed by them. They are entitled to co-possession with appellees until the undivided seven (7) hectares are definitely segregated through partition.

For us to now rule that the respondents will enjoy co-possession with the petitioners over seven (7) hectares which belongs to the former would be inequitous even as actual co-possession over twenty two (22) hectares would not conform to the final judgment. There is the other consideration that segregation of the definite seven (7) hectares must await the partition among the heirs, a procedure outside the control of the respondents.

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

WHEREFORE, the petition is hereby GRANTED. The second paragraph of the questioned order is DELETED. The respondents shall continue to exclusively possess and enjoy the seven (7) hectares actually held by them in accordance with the terms of this decision until a partition is effected and their share is definitely segregated. SO ORDERED.

PROPERTY|07Sept15|33

G.R. No. 77976 November 24, 1988

MAXIMO GABRITO, ROGER LIBUT, CARMELITA UY, LIZA DE VERA, thru her Attorney-in-Fact, JESUS DE LOS SANTOS, petitioners, vs.THE HON. NINTH DIVISION, COURT OF APPEALS, THE HON. NICIAS O. MENDOZA, Presiding Judge Branch 74, Regional Trial Court, Olongapo City, ET AL., respondents.

BIDIN, J.:

This is a petition for review on certiorari with preliminary injunction and restraining order of the decision of the Court of Appeals * dated March 4, 1987 in CA-G.R. No. SP No. 08710, "Maximo Gabrito et al. vs. Hon. Nicias O. Mendoza and Roberto Tan et al.," affirming the April 2, 1986 decision of the Regional Trial Court of Olongapo City ** which also affirmed the decision of MTCC, Branch V, Olongapo City, and the Resolution of respondent court dated March 30, 1987 denying herein petitioners' motion for reconsideration.

The appeal originated as an unlawful detainer complaint filed by herein private respondents with the Municipal Trial Court, Branch V, Olongapo City.

The antecedent facts as summarized by the Court of Appeals are as follows:

The spouses Roberto Tan and Benita Ching-Tan filed a complaint in the Municipal Trial Court against defendants Maximo Gabrito, et al., alleging that they are the possessors and legal owners of the property situated at No. 107 Gordon Ave., New Kalalake, Olongapo City as evidenced by Tax Declaration No. 4-2046. The defendants are leasing portions of this parcel of land, each paying the corresponding monthly rentals due thereon.

On the leased portion, the defendants constructed buildings and have allowed other persons to sublease the same for commercial purposes.

As the spouses Tan have no other property where they could construct their residential house, the spouses Tan notified the defendants (in January 1984) that they intend to personally use the land to build their house thereon and gave defendants three (3) months to vacate the premises and remove the structures and improvements which defendants had constructed thereon.

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

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

In answer to the complaint, defendants Gabrito, et al. denied the material allegations of the complaint and alleged that: they are builders in good faith over the land as provided in Article 448 of the Civil Code; the land where the houses of defendants were built is a public land, not yet awarded nor titled to anybody; plaintiffs's alleged predecessor-in-interest not being the owner thereof could not have passed nor transferred ownership thereof to them (plaintiffs) considering that Gloria Carillo's Miscellaneous Sales Application No. (X-4-4320) has not yet been acted upon by the Bureau of Lands; plaintiffs and their predessors-in-interest are absentee applicants over the land, hence, are disqualified to own the same; plaintiffs have never been in possession of the land while the defendants are in actual physical possession thereof; the sale of plaintiffs' alleged predecessor-in-interest in favor of plaintiffs is null and void for being in violation of P.D. No. 1517 as defendants being lessees of the land have the right of first refusal thereof.

Defendants brought a counterclaim for damages against the plaintiffs. (Rollo, Annex "C", pp. 39-40).

Respondent Municipal Trial Judge applied the rule on summary procedure in this case, rendered its decision dated November 22, 1985, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered for all the defendants to vacate the parcel of land described in par. 3 of the complaint, removing therefrom the buildings and any other improvements respectively owned by them; and to pay plaintiffs the following as reasonable compensation for the use of the premises:

Maximo Gabrito—atP250.00 per month from April 1984 until he vacates the premises;Roger Libut—atP150.00 per month from May 1984 until he vacates the premises;Liza de Vera—at:P150.00 per month from April 1984, until she vacates the premises; Carmelita Uy—atPl 70.00 per month from April 1984, until she vacates the premises.

for all defendants to pay, in equal shares, damages by way of attorney's fees in the amount of ONE THOUSAND PESOS ( P1,000.00 ) as well as costs.

SO ORDERED. (Rollo, p. 35).

On appeal to the Regional Trial Court (Civil Case No. 450-08-5), the decision of the Municipal Trial Court was affirmed in its decision dated April 2, 1986, the dispositive portion of which reads:

WHEREFORE, premised on all the foregoing consideration and finding no prejudicial and reversible error was ever committed by the lower Court, the Court affirms in toto the decision being appealed, with costs against the defendants-appellants.

SO ORDERED. (Rollo, Annex 'B' p. 38).

PROPERTY|07Sept15|34

On review, herein respondent Court of Appeals sustained the decision rendered by the Regional Trial Court Branch LXXIV, and ruled;

WHEREFORE, the Petition for Review herein is DISMISSED for lack of merit. (Rollo, Annex "C", p. 44).

On March 16, 1987, the petitioner filed their "Motion for Reconsideration and Opposition to the Motion for Immediate Execution Pending Further Proceedings" which was denied by the Ninth Division of respondent Court of Appeals in its Resolution dated March 30, 1987 and granted the Motion for Immediate Issuance of a Writ of Execution filed by private respondents (Annex "F", Rollo, pp. 57-58).

Hence, this petition for review on certiorari filed on April 13, 1987.

On April 21, 1987, Acting Chief Justice Andres Narvasa, authorized the grant of Temporary Restraining Order in this case which was confirmed by the Second Division of this Court in its Resolution dated April 27, 1987 (Rollo, pp. 86, 87, 88).

In a Resolution dated June 8, 1987, petitioners were required to comment on the motion dated April 26, 1987 (Rollo, p. 94) of counsel for respondents, praying to set aside the temporary restraining order issued on April 21, 1987 and to issue a writ of execution pending appeal or to allow the Court of Appeals to proceed with the execution of the decision pending appeal (Rollo, p. 115), which was complied with by petitioners on July 22, 1987 (Rollo, p. 143).

In the resolution of October 5, 1987 (Rollo, p. 187) the petition was given due course and the parties were required to submit their respective memoranda within twenty (20) days from notice. Petitioners' memorandum was submitted on December 3, 1987 (Rollo, p. 196). Respondents submitted their memorandum on April 12, 1988 (Rollo, p. 235). Petitioners raised the following issues:

1. That a Municipal Trial Court has no jurisdiction to take cognizance of a case for Unlawful Detainer under Sec. 1 of Rule 70 of the Rules of Court, where the plaintiffs are merely the legal possessors and recent transferees of a public land, and the defendants are the absolute owners of the building existing on the same land, for a number of years already.

2. That the respondent Regional Trial Court, Branch LXXIV, Olongapo City, ought to have dismissed the action for Unlawful Detainer and as the same was also heard on appeal by the said Court on this jurisdictional challenge.

3. The market value of the residential houses or buildings of the defendants on the said land is approximately P170,000.00, and it was with plaintiffs' predecessor-in-interest, one Gloria Carillo-Potente that defendants caused said structures to be erected on said land plaintiffs having only acquired from said predecessor, by means of a Deed of Sale of such rights sometime on January 5, 1984.

4. Upon this frame of facts which are admitted in the Decision of both Courts, only a Court of General Jurisdiction, a Regional Trial Court, can have the competence to try

and decide the same: the Court of Special Limited Jurisdiction, cannot take cognizance of such facts as an action for Unlawful Detainer.

5. Arguendo, that the Court of Origin has jurisdiction to take cognizance of the cause of action for Unlawful Detainer, it should have not heard the case in accordance with the Rules of Summary Proceedings, and based its Decision on an Affidavit hearing, as the question of ownership was being contested between plaintiffs and defendants, with respect to whom was the preferred grantee to the same land, and which falls under the complete administration and control of the Bureau of Lands.

6. In fact, the Court of Origin, Branch V, Municipal Trial Court in Cities, Olongapo, should have suspended the proceedings, as there was an Administrative Protest being heard by the District Land Office of Olongapo City.

7. On the question of suspension of proceedings denied by the Court of Origin, Municipal Trial Court in Cities, Branch V, Olongapo City, an action for certiorari was filed before Branch LXXIII of Regional Trial Court, Olongapo City, Civil Case No. 399-0-85, and although a Restraining Order against Municipal Trial Court in Cities, Branch V, City of Olongapo, was issued, the same was already academic as by that time said Municipal Trial Court, Branch V, Olongapo City, has already rendered its Decision in favor of private respondent hereat, plaintiff therein.

8. Branch LXXIV, Regional Trial Court, Olongapo, in its Decision rendered on appeal, did not pass upon such matters, specified supra, so as to reverse the Decision of the Court of Origin: the subject Decisions, have not considered the due process rights of petitioners toward their residences and structures, the same are facing the risk of condemnation and destruction without fair hearing, and such improvements have an aggregate value of Pl70,000.00, more or less.

9. Respondent Honorable Judge Mendoza of Branch LXXIV, Regional Trial Court, Olongapo, may have been misled by the citation of authority, case of Vda. de Bocaling vs. Laguna, et al., 54 SCRA, 243, relied upon by appellees, said case being totally inapplicable to the facts of this case.

10. Respondent Deputy Sheriff Rogelio Lumanlan, without regard to the fif'teen (15) days period finality of the Order and/or Writ of Demolition, harrassed herein petitioners, notwithstanding the pendency of matters involved to their extreme discomfort and anxiety.

11. The Decision of the Honorable Court of Appeals, Annex "C", sustained the Decision of the Regional Trial Court and ignored the vital issues posed for resolution: A Motion For Reconsideration, copy is hereto attached as Annex "D", was presented, precisely to stress the same but, a pointed or precise ruling upon such issues was avoided in the Resolution dated 30th of March, 1987, true copy attached herein as Annex "E".

12. On the other (sic) upon Motion of private respondents, the Tans, despite Opposition thereto, Writ of Execution pending appeal was issued and respondent Deputy Sheriff Lumanlan enforced the same, copy of which is hereto attached as Annex

PROPERTY|07Sept15|35

"F": true copy of Notice to Vacate served by said respondent Deputy Sheriff to petitioners is attached as Annex "G" herein.

13. Per Annex "D" Motion For Reconsideration a constitutional point, was reared forth, on first impression, per proviso of Sec. 10, Art. XIII-new, 1986 Constitution, relevant to demolition and resettlement, and, Resolution, dated 30th March, 1987, Annex "E", of the Honorable Appellate Authority, avoided said constitutional question, without passing upon the same.

14. Of Jurisdictional matters: Decision dated March 4, 1987, of the Honorable Court of Appeals was, received on March 6, 1987, Motion For Reconsideration was filed on March 16, 1987, and Resolution dated 30th of March, 1987, denying Motion for Reconsideration was received on April 1, 1987: thus, this Petition is filed within the 15 day period. (Rollo, pp. 4-8).

All of which boil down to the main issue of whether or not an action for unlawful detainer is the proper action to oust petitioners from their occupation of the land in dispute.

There is no question as to the ownership of the land in litigation as both petitioners and private respondents admit that the same is a public land and owned by the government. The bone of contention is, who has a better right to possess the land which definitely falls under the jurisdiction of the Municipal Trial Court and the rule of summary procedure may properly be applied.

In a preliminary conference held pursuant to Section 6 of the Rule on Summary Procedure, defendants admitted that they entered the premises as lessees and had been paying rentals for the use of the land to Gloria Carillo, private respondents' predecessor-in-interest (Order dated May 15, 1985 in Civil Case No. 2511, MTC, Olongapo City, Branch V; Rollo, pp. 72-73).<äre||anº•1àw> When requested to vacate the premises, petitioners asked for an extension of time which request was granted. However, petitioners failed to vacate the premises and also stopped paying rentals. In view of said admissions, petitioners had unquestionably recognized private respondents' prior right of possession over the questioned property.

Petitioners' allegation in their answer that they are builders in good faith over the land as provided for in Article 448 of the Civil Code is untenable. As ruled by this Court, Article 448 of the Civil Code, applies only where one builds on land in the belief that he is the owner of the land, but does not apply where one's interest in the land is that of a lessee under a rental contract (Balucanag v. Francisco, 122 SCRA 498 [1983]). More than that, it has been settled that the mere fact that, in his answer, defendant claims to be the exclusive owner of the property from which plaintiff seeks to eject him is not sufficient to divest the Municipal Trial Court of jurisdiction (Vivar v. Vivar, 8 SCRA 847, 849 [1963]; De Santa vs. Court of Appeals, 140 SCRA 52 [1985]).

In addition, this Court held in Bocaling v. Laguna, et al (54 SCRA 243, 250 [1973]) that:

The rule is well-settled that lessees, like petitioner, are not possessors in good faith because he knew that their occupancy of the premises continues only during the life of the lease, and they cannot as a matter of right, recover the value of their improvements

from the lessor, much less retain the premises until they are reimbursed. Their rights are governed by Article 1678 of the Civil Code which allows reimbursement of lessees up to one-half of the value of their improvements if the lessor so elects.

Petitioners contend that the above cited case is "completely inapplicable to the case at bar, because the genesis case of Ejectment therein was subjected to a compromise Agreement" (Rollo, p. 18). Such contention is, however, untenable. One of the issues raised in the above-cited case was whether or not lessees are builders and/or possessors in good faith entitled to reimbursement for the value of their improvements. The Court categorically resolved the issue in the negative without qualification nor even a reference to the compromise agreement alluded to by the petitioner.

In a later development, petitioners filed a supplemental memorandum submitting the decision of the Bureau of Lands dated June 7, 1987, the dispositive portion of which reads:

IN VIEW OF ALL THE FOREGOING, the Miscellaneous Sales Application No. 4320 of Benita Ching Tan should be, as hereby as it is rejected forfeiting to the government whatever amount had been paid on account thereof. The miscellaneous sales application of Maximo Gabrito, Carmelita Uy, Roger Libut and Liza de Vera shall continue to be given due course after a subdivision survey of the portion occupied by them shall have been made at their pro-rata expense.

SO ORDERED.

In view thereof, petitioners maintain that they are the lawful owners of the buildings and the legal possessors of subject land and that the records of the court proceedings show the pendency of the administrative protest before the Bureau of Lands between the same litigating parties (Rollo, pp. 166-167).

Respondents countered that the decision of the Bureau of Lands granting preferential right to the petitioners to apply for the subject parcel of land is still on appeal before the Department of Natural Resources. 1 Hence, said decision which is not yet final, cannot affect the outcome of this case because the authority given to the land department over the disposition of public land does not exclude the courts from their jurisdiction over possessory actions, the character of the land notwithstanding (Rollo, pp. 246-247).

The contention of private respondents is well taken.

This issue has long been laid to rest by this Court. As early as the case of Pitarque v. Sorilla (92 Phil. 55 [1952]), this Court ruled that:

The vesting of the Lands Department with authority to administer, dispose of, and alienate public lands must not be understood as depriving the other branches of the Government of the exercise of their respective functions of powers thereon, such as the authority to stop disorders and quell breaches of peace by the police and the authority on the part of the courts to take jurisdiction over possessory actions arising therefrom not involving, directly or indirectly, alienation and disposition.

PROPERTY|07Sept15|36

Said ruling was reiterated in Bahayang v. Maceren, 96 Phil 390 (1955); in Molina v. De Bacud, 19 SCRA 56 (1967) and in Rallon v. Ruiz, Jr., 28 SCRA 331 (1969). In the latter case, the Court specifically ruled on the jurisdictional question, as follows:

Courts have jurisdiction over possessory actions involving public lands to determine the issue of physical possession (in forcible entry cases before the inferior court) on the better right of possession (in accion publiciana cases before court of first instance). And this is because the issue of physical possession raised before the courts is independent of the question of disposition and alienation of public lands which should be threshed out in the Bureau of Lands.

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

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

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

In the same case, the application of the principle of exhaustion of administrative remedies with reference to public lands, was further clarified by this Court as follows:

On the other hand, the application of the principle of exhaustion of administrative remedies as a condition precedent to the filing of a juridical action is confined to controversies arising out of the disposition of public lands (Geukoko vs. Araneta, 102 Phil. 706 (1957); Marukot vs. Jacinto, 98 Phil. 128 (1957), alienation of public lands (Rallos vs. Ruiz, Jr., supra) or to the determination of the respective rights of rival claimants to public lands (Pitarque vs. Sorilla, supra) and not to possessory actions involving public lands which are limited to the determination of who has the actual, physical possession or occupation of the land in question (Rallos vs. Ruiz, Jr., supra).<äre||anº•1àw>

In fact, the Bureau of Lands in its decision of June 7, 1987, admitted the jurisdiction of the courts to decide the case on the question of physical possession, although not on the question of ownership (Rollo, p. 179).

Under the circumstances, a careful study of the records failed to show any cogent reason to disturb the findings of the Municipal Trial Court in Cities and of the Regional Trial Court, both of Olongapo City, and finally of the Court of Appeals.

WHEREFORE, the decision of respondent Court of Appeals is AFFIRMED and the temporary restraining order is lifted. Costs against petitioners.

SO ORDERED.