G.R. No. 107132 October 8, 1999 MAXIMA HEMEDES, petitioner, vs.

THE HONORABLE COURT OF APPEALS, DOMINIUM REALTY AND CONSTRUCTION CORPORATION, ENRIQUE D. HEMEDES and R & B INSURANCE CORPORATION, respondents. G.R. No. 108472 October 8, 1999 R & B INSURANCE CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS, DOMINIUM REALTY AND CONSTRUCTION CORPORATION, ENRIQUE D. HEMEDES and MAXIMA HEMEDES, respondents. GONZAGA-REYES, J.: Assailed in these petitions for review on certiorari is the decision 1 of the eleventh division of the Court of Appeals in CA-G.R. CV No. 22010 promulgated on September 11, 1992 affirming in toto the decision of Branch 24 of the

Regional Trial Court of Laguna in Civil Case No. B-1766 dated February 22, 1989, 2 and the resolution dated December 29, 1992 denying petitioner R & B Insurance Corporation's (R & B Insurance) motion for reconsideration. As the factual antecedents and issues are the same, we shall decide the petitions jointly. The instant controversy involves a question of ownership over an unregistered parcel of land, identified as Lot No. 6, plan Psu-111331, with an area of 21,773 square meters, situated in Sala, Cabuyao, Laguna. It was originally owned by the late Jose Hemedes, father of Maxima Hemedes and Enrique D. Hemedes. On March 22, 1947 Jose Hemedes executed a document entitled "Donation Inter Vivos With Resolutory Conditions" 3 whereby he conveyed ownership over the subject land, together with all its improvements, in favor of his third wife, Justa Kauapin, subject to the following resolutory conditions: (a) Upon the death or remarriage of the DONEE, the title to the property donated shall revert to any of the children, or

their heirs, of the DONOR expressly designated by the DONEE in a public document conveying the property to the latter; or (b) In absence of such an express designation made by the DONEE before her death or remarriage contained in a public instrument as above provided, the title to the property shall automatically revert to the legal heirs of the DONOR in common. Pursuant to the first condition above mentioned, Justa Kausapin executed on September 27, 1960 a "Deed of Conveyance of Unregistered Real Property by Reversion" 4 conveying to Maxima Hemedes the subject property under the following terms That the said parcel of land was donated unto me by the said Jose Hemedes, my deceased husband, in a deed of "DONATION INTER VIVOS WITH RESOLUTORY CONDITIONS" executed by the donor in my favor, and

duly accepted by me on March 22, 1947, before Notary Public Luis Bella in Cabuyao, Laguna; That the donation is subject to the resolutory conditions appearing in the said deed of "DONATION INTER VIVOS WITH RESOLUTORY CONDITIONS," as follows: (a) Upon the death or remarriage of the DONEE, the title to the property donated shall revert to any of the children, or their heirs, of the DONOR expressly designated by the DONEE in a public document conveying the property to the latter; or (b) In absence of such an express designation made by the DONEE before her death or remarriage contained in a public instrument as above provided, the title to the property shall

automatically revert to the legal heirs of the DONOR in common. That, wherefore, in virtue of the deed of donation above mentioned and in the exercise of my right and privilege under the terms of the first resolutory condition therein contained and hereinabove reproduced, and for and in consideration of my love and affection, I do hereby by these presents convey, transfer, and deed unto my designee, MAXIMA HEMEDES, of legal age, married to RAUL RODRIGUEZ, Filipino and resident of No. 15 Acacia Road, Quezon City, who is one of the children and heirs of my donor, JOSE HEMEDES, the ownership of, and title to the property hereinabove described, and all rights and interests therein by reversion under the first resolutory condition in the above deed of donation; Except the possession and enjoyment of the said property which shall remain vested in me during my lifetime, or widowhood and which upon my death or remarriage

shall also automatically revert to, and be transferred to my designee, Maxima Hemedes. Maxima Hemedes, through her counsel, filed an application for registration and confirmation of title over the subject unregistered land. Subsequently, Original Certificate of Title (OCT) No. (0-941) 0-198 5 was issued in the name of Maxima Hemedes married to Raul Rodriguez by the Registry of Deeds of Laguna on June 8, 1962, with the annotation that "Justa Kausapin shall have the usufructuary rights over the parcel of land herein described during her lifetime or widowhood." It is claimed by R & B Insurance that on June 2, 1964, Maxima Hemedes and her husband Raul Rodriguez constituted a real estate mortgage over the subject property in its favor to serve as security for a loan which they obtained in the amount of P6,000.00. On February 22, 1968, R & B Insurance extrajudicially foreclosed the mortgage since Maxima Hemedes failed to pay the loan even after it became due on August 2, 1964. The land was sold at a public auction on

May 3, 1968 with R & B Insurance as the highest bidder and a certificate of sale was issued by the sheriff in its favor. Since Maxima Hemedes failed to redeem the property within the redemption period, R & B Insurance executed an Affidavit of Consolidation dated March 29, 1974 and on May 21, 1975 the Register of Deeds of Laguna cancelled OCT No. (0-941) 0-198 and issued Transfer Certificate of Title (TCT) No. 41985 in the name of R & B Insurance. The annotation of usufruct in favor of Justa Kausapin was maintained in the new title. 6 Despite the earlier conveyance of the subject land in favor of Maxima Hemedes, Justa Kausapin executed a "Kasunduan" on May 27, 1971 whereby she transferred the same land to her stepson Enrique D. Hemedes, pursuant to the resolutory condition in the deed of donation executed in her favor by her late husband Jose Hemedes. Enrique D. Hemedes obtained two declarations of real property in 1972, and again, in 1974, when the assessed value of the property was raised. Also, he has been paying the realty taxes on the property from the time

Justa Kausapin conveyed the property to him in 1971 until 1979. In the cadastral survey of Cabuyao, Laguna conducted from September 8, 1974 to October 10, 1974, the property was assigned Cadastral No. 2990, Cad. 455-D, Cabuyao Cadastre, in the name of Enrique Hemedes. Enrique Hemedes is also the named owner of the property in the records of the Ministry of Agrarian Reform office at Calamba, Laguna. On February 28, 1979, Enriques D. Hemedes sold the property to Dominium Realty and Construction Corporation (Dominium). On April 10, 1981, Justa Kausapin executed an affidavit affirming the conveyance of the subject property in favor of Enrique D. Hemedes as embodied in the "Kasunduan" dated May 27, 1971, and at the same time denying the conveyance made to Maxima Hemedes. On May 14, 1981, Dominium leased the property to its sister corporation Asia Brewery, Inc. (Asia Brewery) who, even before the signing of the contract of lease, constructed two warehouses made of steel and asbestos

costing about P10,000,000.00 each. Upon learning of Asia Brewery's constructions upon the subject property, R & B Insurance sent it a letter on March 16, 1981 informing the former of its ownership of the property as evidenced by TCT No. 41985 issued in its favor and of its right to appropriate the constructions since Asia Brewery is a builder in bad faith. On March 27, 1981, a conference was held between R & B Insurance and Asia Brewery but they failed to arrive at an amicable settlement.
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On May 8, 1981, Maxima Hemedes also wrote a letter addressed to Asia Brewery wherein she asserted that she is the rightful owner of the subject property by virtue of OCT No. (0-941) 0198 and that, as such, she has the right to appropriate Asia Brewery's constructions, to demand its demolition, or to compel Asia Brewery to purchase the land. In another letter of the same date addressed to R & B Insurance, Maxima Hemedes denied the execution of any real estate mortgage in favor of the latter.

On August 27, 1981, Dominium and Enrique D. Hemedes filed a complaint 7 with the Court of First Instance of Binan, Laguna for the annulment of TCT No. 41985 issued in favor of R & B Insurance and/or the reconveyance to Dominium of the subject property. Specifically, the complaint alleged that Dominium was the absolute owner of the subject property by virtue of the February 28, 1979 deed of sale executed by Enrique D. Hemedes, who in turn obtained ownership of the land from Justa Kausapin, as evidenced by the "Kasunduan" dated May 27, 1971. The plaintiffs asserted that Justa Kausapin never transferred the land to Maxima Hemedes and that Enrique D. Hemedes had no knowledge of the registration proceedings initiated by Maxima Hemedes. After considering the merits of the case, the trial court rendered judgment on February 22, 1989 in favor of plaintiffs Dominium and Enrique D. Hemedes, the dispositive portion of which states

WHEREFORE, judgment is hereby rendered: (a) Declaring Transfer Certificate of Title No. 41985 of the Register of Deeds of Laguna null and void and ineffective; (b) Declaring Dominium Realty and Construction Corporation the absolute owner and possessor of the parcel of land described in paragraph 3 of the complaint; (c) Ordering the defendants and all persons acting for and/or under them to respect such ownership and possession of Dominium Realty and Construction Corporation and to forever desist from asserting adverse claims thereon nor disturbing such ownership and possession; and
(d) Directing the Register of Deeds of Laguna to cancel said Transfer Certificate of Title No. 41985 in the name of R & B Insurance Corporation, and in lieu thereof, issue a new transfer certificate of title in

the name of Dominium Realty and Construction Corporation. No pronouncement as to costs and attorney's fees.

Both R & B Insurance and Maxima Hemedes appealed from the trial court's decision. On September 11, 1992 the Court of Appeals affirmed the assailed decision in toto and on December 29, 1992, it denied R & B Insurance's motion for reconsideration. Thus, Maxima Hemedes and R & B Insurance filed their respective petitions for review with this Court on November 3, 1992 and February 22, 1993, respectively. In G.R. No. 107132 9, petitioner Maxima Hemedes makes the following assignment of errors as regards public respondent's ruling I RESPONDENT COURT OF APPEALS GRAVELY ERRED IN APPLYING ARTICLE 1332 OF THE NEW CIVIL CODE IN DECLARING AS SPURIOUS THE DEED OF CONVEYANCE OF UNREGISTERED REAL PROPERTY BY REVERSION EXECUTED BY

JUSTA KAUSAPIN IN FAVOR OF PETITIONER MAXIMA HEMEDES. II RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING AS VOID AND OF NO LEGAL EFFECT THE "KASUNDUAN" DATED 27 MAY 1971 EXECUTED BY JUSTA KAUSAPIN IN FAVOR OF RESPONDENT ENRIQUE HEMEDES AND THE SALE OF THE SUBJECT PROPERTY BY RESPONDENT ENRIQUE HEMEDES IN FAVOR OF RESPONDENT DOMINIUM REALTY AND CONSTRUCTION CORPORATION. III RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT FINDING RESPONDENTS ENRIQUE AND DOMINIUM IN BAD FAITH. IV

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT ORIGINAL CERTIFICATE OF TITLE NO. (0-941) 0-198 ISSUED IN THE NAME OF PETITIONER MAXIMA HEMEDES NULL AND VOID. V RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT NO LOAN WAS OBTAINED BY PETITIONER MAXIMA HEMEDES FROM RESPONDENT R & B INSURANCE CORPORATION. VI RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT NO REAL ESTATE MORTGAGE OVER THE SUBJECT PROPERTY WAS EXECUTED BY PETITIONER MAXIMA HEMEDES IN FAVOR OF RESPONDENT R & B INSURANCE CORPORATION.

VII
RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT THE VALID TITLE COVERING THE SUBJECT PROPERTY IS THE ORIGINAL CERTIFICATE OF TITLE NO. (0-941) 0-198 IN THE NAME OF PETITIONER MAXIMA HEMEDES AND NOT THE TRANSFER CERTIFICATE OF TITLE (TCT) NO. 41985 IN THE NAME OF R & B INSURANCE CORPORATION.

10

Meanwhile, in G.R. No. 108472 11, petitioner R & B Insurance assigns almost the same errors, except with regards to the real estate mortgage allegedly executed by Maxima Hemedes in its favor. Specifically, R & B Insurance alleges that: I RESPONDENT COURT ERRONEOUSLY ERRED IN APPLYING ARTICLE 1332 OF THE CIVIL CODE. II RESPONDENT COURT SERIOUSLY ERRED IN GIVING CREDENCE ON (sic) THE KASUNDUAN BY AND BETWEEN JUSTA KAUSAPIN AND ENRIQUE NOTWITHSTANDING THE FACT THAT JUSTA KAUSAPIN BY

WAY OF A DEED OF CONVEYANCE OF UNREGISTERED REAL PROPERTY BY REVERSION CEDED THE SUBJECT PROPERTY TO MAXIMA SOME ELEVEN (11) YEARS EARLIER. III RESPONDENT COURT SERIOUSLY ERRED IN GIVING CREDENCE ON (sic) THE AFFIDAVIT OF REPUDIATION OF JUSTA KAUSAPIN NOTWITHSTANDING THE FACT THAT SHE IS A BIAS (sic) WITNESS AND EXECUTED THE SAME SOME TWENTY-ONE (21) YEARS AFTER THE EXECUTION OF THE DEED OF CONVEYANCE IN FAVOR OF MAXIMA. IV RESPONDENT COURT SERIOUSLY ERRED IN NOT FINDING THAT THE COMPLAINT OF ENRIQUE AND DOMINIUM HAS PRESCRIBED

AND/OR THAT ENRIQUE AND DOMINIUM WERE GUILTY OF LACHES. V RESPONDENT COURT SERIOUSLY ERRED IN FINDING R & B AS A MORTGAGEE NOT IN GOOD FAITH. VI
RESPONDENT COURT SERIOUSLY ERRED IN NOT GRANTING THE DAMAGES PRAYED FOR BY R & B IN ITS COUNTERCLAIM AND CROSSCLAIM.

12

The primary issue to be resolved in these consolidated petitions is which of the two conveyances by Justa Kausapin, the first in favor of Maxima Hemedes and the second in favor of Enrique D. Hemedes, effectively transferred ownership over the subject land. The Register of Deeds of Laguna issued OCT No. (0-941) 0-198 in favor of Maxima Hemedes on the strength of the "Deed of Conveyance of Unregistered Real Property by Reversion" executed by Justa Kausapin. Public respondent

upheld the trial court's finding that such deed is sham and spurious and has "no evidentiary value under the law upon which claimant Maxima Hemedes may anchor a valid claim of ownership over the property." In ruling thus, it gave credence to the April 10, 1981 affidavit executed by Justa Kausapin repudiating such deed of conveyance in favor of Maxima Hemedes and affirming the authenticity of the "Kasunduan" in favor of Enrique D. Hemedes. Also, it considered as pivotal the fact that the deed of conveyance in favor of Maxima Hemedes was in English and that it was not explained to Justa Kausapin, although she could not read nor understand English; thus, Maxima Hemedes failed to discharge her burden, pursuant to Article 1332 of the Civil Code, to show that the terms thereof were fully explained to Justa Kausapin. Public respondent concluded by holding that the registration of the property on the strength of the spurious deed of conveyance is null and void and does not confer any right of ownership upon Maxima Hemedes. 13

Maxima Hemedes argues that Justa Kausapin's affidavit should not be given any credence since she is obviously a biased witness as it has been shown that she is dependent upon Enrique D. Hemedes for her daily subsistence, and she was most probably influenced by Enrique D. Hemedes to execute the "Kasunduan" in his favor. She also refutes the applicability of article 1332. It is her contention that for such a provision to be applicable, there must be a party seeking to enforce a contract; however, she is not enforcing the "Deed of Conveyance of Unregistered Real Property by Reversion" as her basis in claiming ownership, but rather her claim is anchored upon OCT No. (0-941) 0-198 issued in her name, which document can stand independently from the deed of conveyance. Also, there exist various circumstances which show that Justa Kausapin did in fact execute and understand the deed of conveyance in favor of Maxima Hemedes. First, the "Donation Intervivos With Resolutory Conditions" executed by Jose Hemedes in favor of Justa Kausapin was also in English, but she never alleged that she did not understand such

document. Secondly, Justa Kausapin failed to prove that it was not her thumbmark on the deed of conveyance in favor of Maxima Hemedes and in fact, both Enrique D. Hemedes and Dominium objected to the request of Maxima Hemedes' counsel to obtain a specimen thumbmark of Justa Kausapin. 14 Public respondent's finding that the "Deed of Conveyance of Unregistered Real Property By Reversion" executed by Justa Kausapin in favor of Maxima Hemedes is spurious is not supported by the factual findings in this case. It is grounded upon the mere denial of the same by Justa Kausapin. A party to a contract cannot just evade compliance with his contractual obligations by the simple expedient of denying the execution of such contract. If, after a perfect and binding contract has been executed between the parties, it occurs to one of them to allege some defect therein as a reason for annulling it, the alleged defect must be conclusively proven, since the validity and fulfillment of contracts cannot be left to the will of one of the contracting parties. 15

Although a comparison of Justa Kausapin's thumbmark with the thumbmark affixed upon the deed of conveyance would have easily cleared any doubts as to whether or not the deed was forged, the records do not show that such evidence was introduced by private respondents and the lower court decisions do not make mention of any comparison having been made. 16 It is a legal presumption that evidence willfully suppressed would be adverse if produced. 17 The failure of private respondents to refute the due execution of the deed of conveyance by making a comparison with Justa Kausapin's thumbmark necessarily leads one to conclude that she did in fact affix her thumbmark upon the deed of donation in favor of her stepdaughter. Moreover, public respondent's reliance upon Justa Kausapin's repudiation of the deed of conveyance is misplaced for there are strong indications that she is a biased witness. The trial court found that Justa Kausapin was dependent upon Enrique D. Hemedes for financial assistance. 18 Justa Kausapin's own testimony attests to this fact

Atty. Conchu: Q: Aling Justa, can you tell the Honorable Court why you donated this particular property to Enrique Hemedes? A: Because I was in serious condition and he was the one supporting me financially. Q: As of today, Aling Justa are you continuing to receive any assistance from Enrique Hemedes? A: Yes Sir.
(TSN pp. 19 and 23, November 17, 1981)

19

Even Enrique Hemedes admitted that Justa Kausapin was dependent upon him for financial support. The transcripts state as follows: Atty. Mora: Now you said that Justa Kausapin has been receiving

from you advances for food, medicine & other personal or family needs? E. Hemedes: A: Yes. Q: Was this already the practice at the time this "Kasunduan" was executed? A: No that was increased, no, no, after this document. xxx xxx xxx Q: And because of these accommodations that you have given to Justa Kausapin; Justa Kausapin has in turn treated you very well because she's very grateful for that, is it not? A: I think that's human nature. Q: Answer me categorically, Mr. Hemedes she's very grateful?

A: Yes she might be grateful but not very grateful.

(TSN, p. 34, June 15, 1984)

20

A witness is said to be biased when his relation to the cause or to the parties is such that he has an incentive to exaggerate or give false color to his statements, or to suppress or to pervert the truth, or to state what is false. 21At the time the present case was filed in the trial court in 1981, Justa Kausapin was already 80 years old, suffering from worsening physical infirmities and completely dependent upon her stepson Enrique D. Hemedes for support. It is apparent that Enrique D. Hemedes could easily have influenced his aging stepmother to donate the subject property to him. Public respondent should not have given credence to a witness that was obviously biased and partial to the cause of private respondents. Although it is a well-established rule that the matter of credibility lies within the province of the trial court, such rule does not apply when the witness' credibility has been put in serious doubt, such as when there appears on the

record some fact or circumstance of weight and influence, which has been overlooked or the significance of which has been misinterpreted. 22 Finally, public respondent was in error when it sustained the trial court's decision to nullify the "Deed of Conveyance of Unregistered Real Property by Reversion" for failure of Maxima Hemedes to comply with article 1332 of the Civil Code, which states: When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former. Art. 1332 was intended for the protection of a party to a contract who is at a disadvantage due to his illiteracy, ignorance, mental weakness or other handicap. 23 This article contemplates a situation wherein a contract has been entered into, but the consent of one of the parties is

vitiated by mistake or fraud committed by the other contracting party. 24 This is apparent from the ordering of the provisions under Book IV, Title II, Chapter 2, section 1 of the Civil Code, from which article 1332 is taken. Article 1330 states that A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable. This is immediately followed by provisions explaining what constitutes mistake, violence, intimidation, undue influence, or fraud sufficient to vitiate consent. 25 In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract. 26 Fraud, on the other hand, is present when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to. 27 Clearly, article 1332 assumes that the consent of the contracting party imputing the

mistake or fraud was given, although vitiated, and does not cover a situation where there is a complete absence of consent.
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In this case, Justa Kausapin disclaims any knowledge of the "Deed of Conveyance of Unregistered Real Property by Reversion" in favor of Maxima Hemedes. In fact, she asserts that it was only during the hearing conducted on December 7, 1981 before the trial court that she first caught a glimpse of the deed of conveyance and thus, she could not have possibly affixed her thumbmark thereto. 28 It is private respondents' own allegations which render article 1332 inapplicable for it is useless to determine whether or not Justa Kausapin was induced to execute said deed of conveyance by means of fraud employed by Maxima Hemedes, who allegedly took advantage of the fact that the former could not understand English, when Justa Kausapin denies even having seen the document before the present case was initiated in 1981. It has been held by this Court that ". . . mere preponderance of evidence is not sufficient to

overthrow a certificate of a notary public to the effect that the grantor executed a certain document and acknowledged the fact of its execution before him. To accomplish this result, the evidence must be so clear, strong and convincing as to exclude all reasonable controversy as to the falsity of the certificate, and when the evidence is conflicting, the certificate will be upheld." 29 In the present case, we hold that private respondents have failed to produce clear, strong, and convincing evidence to overcome the positive value of the "Deed Conveyance of Unregistered Real Property by Reversion" a notarized document. The mere denial of its execution by the donor will not suffice for the purpose. In upholding the deed of conveyance in favor of Maxima Hemedes, we must concomitantly rule that Enrique D. Hemedes and his transferee, Dominium, did not acquire any rights over the subject property. Justa Kausapin sought to transfer to her stepson exactly what she had earlier transferred to Maxima Hemedes the ownership of the subject property pursuant to

the first condition stipulated in the deed of donation executed by her husband. Thus, the donation in favor of Enrique D. Hemedes is null and void for the purported object thereof did not exist at the time of the transfer, having already been transferred to his sister. 30 Similarly, the sale of the subject property by Enrique D. Hemedes to Dominium is also a nullity for the latter cannot acquire more rights than its predecessor-in-interest and is definitely not an innocent purchaser for value since Enrique D. Hemedes did not present any certificate of title upon which it relied. The declarations of real property by Enrique D. Hemedes, his payment of realty taxes, and his being designated as owner of the subject property in the cadastral survey of Cabuyao, Laguna and in the records of the Ministry of Agrarian Reform office in Calamba, Laguna cannot defeat a certificate of title, which is an absolute and indefeasible evidence of ownership of the property in favor of the person whose name appears therein. 31Particularly, with regard to tax declarations and tax receipts, this Court has held on several occasions that

the same do not by themselves conclusively prove title to land. 32 We come now to the question of whether or not R & B Insurance should be considered an innocent purchaser of the land in question. At the outset, we note that both the trial court and appellate court found that Maxima Hemedes did in fact execute a mortgage over the subject property in favor of R & B Insurance. This finding shall not be disturbed because, as we stated earlier, it is a rule that the factual findings of the trial court, especially when affirmed by the Court of Appeals, are entitled to respect, and should not be disturbed on appeal. 33 In holding that R & B Insurance is not a mortgagee in good faith, public respondent stated that the fact that the certificate of title of the subject property indicates upon its face that the same is subject to an encumbrance, i.e. usufructuary rights in favor of Justa Kausapin during her lifetime or widowhood, should have prompted R & B Insurance to ". . . investigate further the circumstances behind this

encumbrance on the land in dispute," but which it failed to do. Also, public respondent considered against R & B Insurance the fact that it made it appear in the mortgage contract that the land was free from all liens, charges, taxes and encumbrances. 34 R & B Insurance alleges that, contrary to public respondent's ruling, the presence of an encumbrance on the certificate of title is not reason for the purchaser or a prospective mortgagee to look beyond the face of the certificate of title. The owner of a parcel of land may still sell the same even though such land is subject to a usufruct; the buyer's title over the property will simply be restricted by the rights of the usufructuary. Thus, R & B Insurance accepted the mortgage subject to the usufructuary rights of Justa Kausapin. Furthermore, even assuming that R & B Insurance was legally obliged to go beyond the title and search for any hidden defect or inchoate right which could defeat its right thereto, it would not have discovered anything since the mortgage was entered into in 1964, while the "Kasunduan" conveying the land to

Enrique D. Hemedes was only entered into in 1971 and the affidavit repudiating the deed of conveyance in favor of Maxima Hemedes was executed by Justa Kausapin in 1981. 35 We sustain petitioner R & B Insurance's claim that it is entitled to the protection of a mortgagee in good faith. It is a well-established principle that every person dealing with registered land may safely rely on the correctness of the certificate of title issued and the law will in no way oblige him to go behind the certificate to determine the condition of the property. 36 An innocent purchaser for value 37 is one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim of another person. 38 The annotation of usufructuary rights in favor of Justa Kausapin upon Maxima Hemedes' OCT dose not impose upon R & B Insurance the obligation to investigate the validity of its

mortgagor's title. Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance. 39 The usufructuary is entitled to all the natural, industrial and civil fruits of the property 40 and may personally enjoy the thing in usufruct, lease it to another, or alienate his right of usufruct, even by a gratuitous title, but all the contracts he may enter into as such usufructuary shall terminate upon the expiration of the usufruct. 41 Clearly, only the jus utendi and jus fruendi over the property is transferred to the usufructuary. 42 The owner of the property maintains the jus disponendi or the power to alienate, encumber, transform, and even destroy the same. 43 This right is embodied in the Civil Code, which provides that the owner of property the usufruct of which is held by another, may alienate it, although he cannot alter the property's form or substance, or do anything which may be prejudicial to the usufructuary. 44

There is no doubt that the owner may validly mortgage the property in favor of a third person and the law provides that, in such a case, the usufructuary shall not be obliged to pay the debt of the mortgagor, and should the immovable be attached or sold judicially for the payment of the debt, the owner shall be liable to the usufructuary for whatever the latter may lose by reason thereof. 45 Based on the foregoing, the annotation of usufructuary rights in favor of Justa Kausapin is not sufficient cause to require R & B Insurance to investigate Maxima Hemedes' title, contrary to public respondent's ruling, for the reason that Maxima Hemedes' ownership over the property remained unimpaired despite such encumbrance. R & B Insurance had a right to rely on the certificate of title and was not in bad faith in accepting the property as a security for the loan it extended to Maxima Hemedes. Even assuming in gratia argumenti that R & B Insurance was obligated to look beyond the certificate of title and investigate the title of its mortgagor, still, it would not have discovered

any better rights in favor of private respondents. Enrique D. Hemedes and Dominium base their claims to the property upon the "Kasunduan" allegedly executed by Justa Kausapin in favor of Enrique Hemedes. As we have already stated earlier, such contract is a nullity as its subject matter was inexistent. Also, the land was mortgaged to R & B Insurance as early as 1964, while the "Kasunduan" was executed only in 1971 and the affidavit of Justa Kausapin affirming the conveyance in favor of Enrique D. Hemedes was executed in 1981. Thus, even if R & B Insurance investigated the title of Maxima Hemedes, it would not have discovered any adverse claim to the land in derogation of its mortgagor's title. We reiterate that at no point in time could private respondents establish any rights or maintain any claim over the land. It is a well-settled principle that where innocent third persons rely upon the correctness of a certificate of title and acquire rights over the property, the court cannot just disregard such rights. Otherwise, public confidence in the certificate of title, and ultimately, the Torrens system, would be impaired for everyone dealing

with registered property would still have to inquire at every instance whether the title has been regularly or irregularly issued. 46Being an innocent mortgagee for value, R & B Insurance validly acquired ownership over the property, subject only to the usufructuary rights of Justa Kausapin thereto, as this encumbrance was properly annotated upon its certificate of title. The factual findings of the trial court, particularly when affirmed by the appellate court, carry great weight and are entitled to respect on appeal, except under certain circumstances. 47 One such circumstance that would compel the Court to review the factual findings of the lower courts is where the lower courts manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion. 48Also, it is axiomatic that the drawing of the proper legal conclusions from such factual findings are within the peculiar province of this Court. 49 As regards R & B Insurance's prayer that Dominium be ordered to demolish the

warehouses or that it be declared the owner thereof since the same were built in bad faith, we note that such warehouses were constructed by Asia Brewery, not by Dominium. However, despite its being a necessary party in the present case, the lower courts never acquired jurisdiction over Asia Brewery, whether as a plaintiff or defendant, and their respective decisions did not pass upon the constructions made upon the subject property. Courts acquire jurisdiction over a party plaintiff upon the filing of the complaint, while jurisdiction over the person of a party defendant is acquired upon the service of summons in the manner required by law or by his voluntary appearance. As a rule, if a defendant has not been summoned, the court acquires no jurisdiction over his person, and any personal judgment rendered against such defendant is null and void. 50 In the present case, since Asia Brewery is a necessary party that was not joined in the action, any judgment rendered in this case shall be without prejudice to its rights. 51

As to its claim for moral damages, we hold that R & B Insurance is not entitled to the same for it has not alleged nor proven the factual basis for the same. Neither is it entitled to exemplary damages, which may only be awarded if the claimant is entitled to moral, temperate, liquidated or compensatory damages. 52 R & B Insurance's claim for attorney's fees must also fail. The award of attorney's fees is the exception rather than the rule and counsel's fees are not to be awarded every time a party wins a suit. Its award pursuant to article 2208 of the Civil Code demands factual, legal and equitable justification and cannot be left to speculation and conjecture. 53 Under the circumstances prevailing in the instant case, there is no factual or legal basis for an award of attorney's fees. WHEREFORE, the assailed decision of public respondent and its resolution dated February 22, 1989 are REVERSED. We uphold petitioner R & B Insurance's assertion of ownership over the property in dispute, as evidenced by TCT No. 41985, subject to the usufructuary rights of Justa Kausapin, which encumbrance has been

properly annotated upon the said certificate of title. No pronouncement as to costs. SO ORDERED.
Digest

FACTS: Jose Hemedes executed a document entitled Donation Inter Vivos With Resolutory Conditions conveying ownership a parcel of land, together with all its improvements, in favor of his third wife, Justa Kauapin, subject to the resolutory condition that upon the latters death or remarriage, the title to the property donated shall revert to any of the children, or heirs, of the DONOR expressly designated by the DONEE. Pursuant to said condition, Justa Kausapin executed a Deed of Conveyance of Unregistered Real Property by Reversion conveying to Maxima Hemedes the subject property.

Maxima Hemedes and her husband Raul Rodriguez constituted a real estate mortgage over the subject property in favor of R & B Insurance to serve as security for a loan which they obtained. R & B Insurance extrajudicially foreclosed the mortgage since Maxima Hemedes failed to pay the loan even. The land was sold at a public auction with R & B Insurance as the highest bidder. A new title was subsequently issued in favor the R&B. The annotation of usufruct in favor of Justa Kausapin was maintained in the new title. Despite the earlier conveyance of the subject land in favor of Maxima Hemedes, Justa Kausapin executed a Kasunduan whereby she transferred the same land to her stepson Enrique D. Hemedes, pursuant to the resolutory

condition in the deed of donation executed in her favor by her late husband Jose Hemedes. Enrique D. Hemedes obtained two declarations of real property, when the assessed value of the property was raised. Also, he has been paying the realty taxes on the property from the time Justa Kausapin conveyed the property to him. In the cadastral survey, the property was assigned in the name of Enrique Hemedes. Enrique Hemedes is also the named owner of the property in the records of the Ministry of Agrarian Reform office at Calamba, Laguna. Enriques D. Hemedes sold the property to Dominium Realty and Construction Corporation (Dominium). Dominium leased the property to its sister corporation Asia Brewery, Inc. (Asia Brewery) who made constructions therein. Upon learning

of Asia Brewerys constructions, R & B Insurance sent it a letter informing the former of its ownership of the property. A conference was held between R & B Insurance and Asia Brewery but they failed to arrive at an amicable settlement. Maxima Hemedes also wrote a letter addressed to Asia Brewery asserting that she is the rightful owner of the subject property and denying the execution of any real estate mortgage in favor of R&B. Dominium and Enrique D. Hemedes filed a complaint with the CFI for the annulment of TCT issued in favor of R & B Insurance and/or the reconveyance to Dominium of the subject property alleging that Dominion was the absolute owner of the land.

The trial court ruled in favor of Dominium and Enrique Hemedes. ISSUE: W/N the donation in favor of Enrique Hemedes was valid? HELD: NO. Enrique D. Hemedes and his transferee, Dominium, did not acquire any rights over the subject property. Justa Kausapin sought to transfer to her stepson exactly what she had earlier transferred to Maxima Hemedes the ownership of the subject property pursuant to the first condition stipulated in the deed of donation executed by her husband. Thus, the donation in favor of Enrique D. Hemedes is null and void for the purported object thereof did not exist at the time of the transfer, having already been transferred to his sister. Similarly, the sale of the subject property by Enrique D. Hemedes to Dominium is also a nullity for the latter cannot acquire

more rights than its predecessor-in-interest and is definitely not an innocent purchaser for value since Enrique D. Hemedes did not present any certificate of title upon which it relied. The declarations of real property by Enrique D. Hemedes, his payment of realty taxes, and his being designated as owner of the subject property in the cadastral survey of Cabuyao, Laguna and in the records of the Ministry of Agrarian Reform office in Calamba, Laguna cannot defeat a certificate of title, which is an absolute and indefeasible evidence of ownership of the property in favor of the person whose name appears therein. Particularly, with regard to tax declarations and tax receipts, this Court has held on several occasions that the same do not by themselves conclusively prove title to land.

G.R. No. L-123

December 12, 1945

JOSEFA FABIE, petitioner, vs. JOSE GUTIERREZ DAVID, Judge of First Instance of Manila, NGO BOO SOO and JUAN GREY,respondents. Sancho Onocencio for petitioner. Serverino B. Orlina for respondent Ngo Soo. No appearance for other respondents.

OZAETA, J.: The petitioner Josefa Fabie is the usufructuary of the income of certain houses located at 372376 Santo Cristo, Binondo, and 950-956 Ongpin, Santa Cruz, Manila, under the ninth clause of the will of the deceased Rosario Fabie y Grey, which textually reads as follows: NOVENO. Lego a mi ahijada menor de edad, Maria Josefa de la Paz Fabie, en usufructo vitalicio las rentas de las fincas situadas en la Calle Santo Cristo Numeros 372 al 376 del Disrito de Binondo, de esta

Ciudad de Manila, descrita en el Certificado Original de Titulo No. 3824; y en la Calle Ongpin, Numeros 950 al 956 del Distrito de Santa Cruz, Manila descrita en el Certificado Original de Titulo No. 5030, expedidos por el Registrador de Titulos de Manila, y prohibo enajene, hipoteque, permute o transfiera de algun modo mientras que ella sea menor de edad. Nombro a Serafin Fabie Macario, mi primo por linea paterna tutor de la persona y bienes de mi ahijada menor, Maria Josefa de la Paz Fabie. The owner of Santo Cristo property abovementioned is the respondent Juan Grey, while those of the Ongpin property are other person not concern herein. Previous to September 1944 litigation arose between Josefa Fabie as plaintiff and Juan Grey as defendant and the owner of the Ongpin property as intervenors, involving the administration of the houses mentioned in clause 9 of the will above quoted (civil case No. 1659 of the Court of First Instance of Manila). That suit was decided by the court on

September 2, 1944, upon a stipulation in writing submitted by the parties to and approved by the court. The pertinent portions of said stipulation read as follows: (4) Heretofore, the rent of said properties have been collected at times by the respective owners of the properties, at other times by the usufructuary, and lastly by the defendant Juan Grey as agent under a written agreement dated March 31, 1942, between the owners of both properties and the usufructuary. (5) When the rents were collected by the owners, the net amounts thereof were duly paid to the usufructuary after the expenses for real estate taxes, repairs and insurance premiums, including the documentary stamps, on the properties and the expenses of collecting the rents had been deducted, and certain amount set aside as a reserve for contingent liabilities. When the rents were collected by the usufructuary, she herself paid the expenses aforesaid. When the rents are collected by the defendant

Juan Grey under the agreement of March 31, 1942, the net amounts thereof were duly paid to the usufructuary, after deducting and setting aside the items aforesaid, monthly, until the month of October 1943, when the usufructuary refused to continue with the agreement of March 31, 1942.

II. The parties hereto jointly petition the Court to render judgment adopting the foregoing as finding of facts and disposing that: (8) Beginning with the month of September 1944, the usufructuary shall collect all the rents of the both the Sto. Cristo and the Ongpin properties. (9) The usufructuary shall, at her own cost and expense, pay all the real estate taxes, special assessments, and insurance premiums, including the documentary stamps, and make all the necessary repairs on each of the properties, promptly when due or, in the case of repairs, when the

necessary, giving immediate, written notice to the owner or owners of the property concerned after making such payment or repairs. In case of default on the part of the usufructuary, the respective owners of the properties shall have the right to make the necessary payment, including penalties and interest, if any, on the taxes and special assessments, and the repairs and in that event the owner or owners shall entitled to collect all subsequent rents of the property concerned until the amount paid by him or them and the expenses of collection are fully covered thereby, after which the usufructuary shall again collect the rents in accordance herewith. (10) The foregoing shall be in effect during the term of the usufruct and shall be binding on the successors and assigns of each of the parties. (11) Nothing herein shall be understood as affecting any right which the respective owners of the properties have or may have

as such and which is not specifically the subject of this stipulation. In June 1945 Josefa Fabie commenced an action of unlawful detainer against the herein respondent Ngo Boo Soo (who says that his correct name is Ngo Soo), alleging in her amended complaint that the defendant is occupying the premises located at 372-376 Santo Cristo on a month-to month rental payable in advance not latter than the 5th of each month; that she is the administratrix and usufructuary of said premises; "that the defendant offered to pay P300 monthly rent payable in advance not later than the 5th of every month, beginning the month of April 1945, for the said of premises including the one door which said defendant, without plaintiff's consent and contrary to their agreement, had subleased to another Chinese, but plaintiff refused, based on the fact that the herein plaintiff very badly needs the said house to live in, as her house was burned by the Japanese on the occasion of the entry of the American liberators in the City and which was located then at No. 38 Flores, Dominga, Pasay; that

defendant was duly notified on March 24 and April 14, 1945, to leave the said premises, but he refused"; and she prayed for judgment of eviction and for unpaid rentals. The defendant answered alleging that he was and since 1908 had been a tenant of the premises in question, which he was using and had always used principally as a store and secondarily for living quarters; that he was renting it from its owner and administrator Juan Grey; "that plaintiff is merely the usufructuary of the income therefrom, and by agreement between her and said owner, which is embodied in a final judgment of the Court of First Instance of Manila, her only right as usufructuary of the income is to receive the whole of such income; that she has no right or authority to eject tenants, such right being in the owner and administrator of the house, the aforesaid Juan Grey, who has heretofore petitioned this Court for permission to intervene in this action; that plaintiff herein has never had possession of said property; that defendant's lease contract with the owner of the house is for 5-year period, with renewal option at the end of

each period, and that his present lease due to expire on December 31, 1945 . . .; that on June 1, 1945, defendant made a written offer to plaintiff to compromise and settle the question of the amount of rent to be paid by defendant . . . but said plaintiff rejected the same for no valid reason whatever and instituted the present action; that the reason plaintiff desires to eject defendant from the property is that she wishes to lease the same to other persons for a higher rent, ignoring the fact that as usufructuary of the income of the property she has no right to lease the property; that the defendant has subleased no part of the house to any person whomsoever. Juan Grey intervened in the unlawful detainer suit, alleging in his complaint in intervention that he is the sole and absolute owner of the premises in question; that the plaintiff Josefa Fabie is the usufructuary of the income of said premises; by virtue of a contract between him and the intervenor which will expire on December 31, 1945, with the option to renew it for another period of five years from and after said date; that under the agreement between

the intervenor and plaintiff Josefa Fabie in civil case No. 1659 of the Court of First Instance of Manila, which was approved by the court and incorporated in its decision of September 2, 1944, the only right recognized in favor of Josefa Fabie as usufructuary of the income of said premises is to receive the rents therefrom when due; and that as usufructuary she has no right nor authority to administer the said premises nor to lease them nor to evict tenants, which right and authority are vested in the intervenor as owner of the premises. The municipal court (Judge Mariano Nable presiding) found that under paragraph 9 of the stipulation incorporated in the decision of the Court First Instance of Manila in civil; case No. 1659, the plaintiff usufructuary is the administratrix of the premises in question, and that the plaintiff had proved her cause. Judgment was accordingly rendered ordering the defendant Ngo Soo to vacate the premises and to pay the rents at the rate of P137.50 a month beginning April 1, 1945. The complaint in intervention was dismissed.

Upon appeal to the Court of First Instance of Manila the latter (thru Judge Arsenio P. Dizon) dismissed the case for the following reason: "The main issue *** is not a mere question of possession but precisely who is entitled to administer the property subject matter of this case and who should be the tenant, and the conditions of the lease. These issues were beyond the jurisdiction of the municipal court. This being case, this Court, as appellate court, is likewise without jurisdiction to take cognizance of the present case." A motion for reconsideration filed by the plaintiff was denied by Judge Jose Gutierrez David, who sustained the opinion of Judge Dizon.
lawphi1.net

The present original action was instituted in this Court by Josefa Fabie to annul the order of the dismissal and to require to the Court of First Instance to try and decide the case on the merits. The petitioner further prays that the appeal of the intervenor Juan Grey be declared out of time on the ground that he receive copy of the decision on August 3 but did not file his notice of appeal until August 25, 1945.

1. The first question to determine is whether the action instituted by the petitioner Josefa Fabie in the municipal court is a purely possessory action and as such within the jurisdiction of said court, or an action founded on property right and therefore beyond the jurisdiction of the municipal court. In other words, is it an action of unlawful detainer within the purview of section 1 of Rule 72, or an action involving the title to or the respective interests of the parties in the property subject of the litigation? Said section 1 of Rule 72 provides that "a landlord, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such landlord, vendor vendee, or other person, may, at any time within one year after such unlawful deprivation of withholding of possession, bring an action in the proper inferior court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming

under them, for the restitution of such possession, together with the damages and costs." It is admitted by the parties that the petitioner Josefa Fabie is the usufructuary of the income of the property in question and that the respondent Juan Grey is the owner thereof. It is likewise admitted that by virtue of a final judgment entered in civil case No. 1659 of the Court of First Instance of Manila between the usufructuary and the owner, the former has the right to collect all the rents of said property for herself with the obligation on her part to pay all the real estate taxes, special assessments, and insurance premiums, and make all necessary repairs thereon, and in case default on her part the owner shall have the right to do all those things, in which event he shall be entitled to collect all subsequent rents of the property concerned until the amount paid by him and the expenses of collection are fully satisfied, after which the usufructuary shall again collect the rents. There is therefore no dispute as to the title to or the respective interests of the parties in the property in question. The naked title to

the property is to admittedly in the respondent Juan Grey, but the right to all the rents thereof, with the obligation to pay the taxes and insurance premiums and make the necessary repairs, is, also admittedly, vested in the usufructuary, the petitioner Josefa Fabie, during her lifetime. The only question between the plaintiff and the intervenor is: Who has the right to manage or administer the property to select the tenant and to fix the amount of the rent? Whoever has that right has the right to the control and possession of the property in question, regardless of the title thereto. Therefore, the action is purely possessory and not one in any way involving the title to the property. Indeed, the averments and the prayer of the complaint filed in the municipal court so indicate, and as a matter of fact the defendant Ngo Soo does not pretend to be the owner of the property, but on the contrary admits to be a mere tenant thereof. We have repeatedly held that in determining whether an action of this kind is within the original jurisdiction of the municipal court or of the Court of First Instance, the averments of the complaint and the

character of the relief sought are primarily to be consulted; that the defendant in such an action cannot defeat the jurisdiction of the justice of the peace or municipal court by setting up title in himself; and that the factor which defeats the jurisdiction of said court is the necessity to adjudicate the question of title. (Mediranvs. Villanueva, 37 Phil., 752, 759; Medel vs. Militante, 41 Phil., 526, 529; Sevilla vs. Tolentino, 51 Phil., 333; Supia and Batioco vs. Quintero and Ayala, 59 Phil., 312; Lizo vs. Carandang, G.R. No. 47833, 2 Off. Gaz., 302; Aguilarvs. Cabrera and Flameo, G.R. No. 49129.) The Court of First Instance was evidently confused and led to misconstrue the real issue by the complaint in intervention of Juan Grey, who, allying himself with the defendant Ngo Soo, claimed that he is the administrator of the property with the right to select the tenant and dictate the conditions of the lease, thereby implying that it was he and not the plaintiff Josefa Fabie who had the right to bring the action and oust the tenant if necessary. For the guidance of that court and to obviate such

confusion in its disposal of the case on the merits, we deem it necessary and proper to construe the judgment entered by the Court of First Instance of Manila in civil case No. 1659, entitled "Josefa Fabie and Jose Carandang, plaintiffs, vs. Juan Grey, defendant, and Nieves G. Vda. de Grey, et al., intervenors-defendants" which judgment was pleaded by the herein respondents Juan Grey and Ngo Soo in the municipal court. According the decision, copy of which was submitted to this Court as Appendix F of the petition and as Annex 1 of the answer, there was an agreement, dated March 31, 1942, between the usufructuary Josefa Fabie and the owner Juan Grey whereby the latter as agent collected the rents of the property in question and delivered the same to the usufructuary after deducting the expenses for taxes, repairs, insurance premiums and the expenses of collection; that in the month of October 1943 the usufructuary refused to continue with the said agreement of March 31, 1942, and thereafter the said case arose between the parties, which by stipulation approved by the court was settled among them

in the following manner: Beginning with the month of September 1944 the usufructuary shall collect all the rents of the property in question; shall, at her own cost and expense, pay all the real estate taxes, special assessments, and insurance premiums, including the documentary stamps, and make all the necessary repairs on the property; and in case of default on her part the owner shall the right to do any or all of those things, in which event he shall be entitled to collect all subsequent rents until the amounts paid by him are fully satisfied, after which the usufructuary shall again collect the rents. It was further stipulated by the parties and decreed by the court that "the foregoing shall be in effect during the term of the usufruct and shall be binding on the successors and assigns of each of the parties." Construing said judgment in the light of the ninth clause of the will of the deceased Rosario Fabie y Grey, which was quoted in the decision and by which Josefa Fabie was made by the usufructuary during her lifetime of the income of the property in question, we find that the said

usufructuary has the right to administer the property in question. All the acts of administration to collect the rents for herself, and to conserve the property by making all necessary repairs and paying all the taxes, special assessments, and insurance premiums thereon were by said judgment vested in the usufructuary. The pretension of the respondent Juan Grey that he is the administrator of the property with the right to choose the tenants and to dictate the conditions of the lease is contrary to both the letter and the spirit of the said clause of the will, the stipulation of the parties, and the judgment of the court. He cannot manage or administer the property after all the acts of management and administration have been vested by the court, with his consent, in the usufructuary. He admitted that before said judgment he had been collecting the rents as agent of the usufructuary under an agreement with the latter. What legal justification or valid excuse could he have to claim the right to choose the tenant and fix the amount of the rent when under the will, the stipulation of the parties, and the final judgment

of the court it is not he but the usufructuary who is entitled to said rents? As long as the property is properly conserved and insured he can have no cause for complaint, and his right in that regard is fully protected by the terms of the stipulation and the judgment of the court above mentioned. To permit him to arrogate to himself the privilege to choose the tenant, to dictate the conditions of the lease, and to sue when the lessee fails to comply therewith, would be to place the usufructuary entirely at his mercy. It would place her in the absurd situation of having a certain indisputable right without the power to protect, enforce, and fully enjoy it. One more detail needs clarification. In her complaint for desahucio Josefa Fabie alleges that she needs the premises in question to live in, as her former residence was burned. Has she the right under the will and the judgment in question to occupy said premises herself? We think that, as a corollary to her right to all the rent, to choose the tenant, and to fix the amount of the rent, she necessarily has the right to choose herself as the tenant thereof, if she wishes to; and, as she fulfills her obligation to

pay the taxes and insure and conserve the property properly, the owner has no legitimate cause to complain. As Judge Nable of the municipal court said in his decision, "the pretension that the plaintiff, being a mere usufructuary of the rents, cannot occupy the property, is illogical if it be taken into account that that could not have been the intention of the testatrix." We find that upon the pleadings, the undisputed facts, and the law the action instituted in the municipal court by the petitioner Josefa Fabie against the respondent Ngo Soo is one of unlawful detainer, within the original jurisdiction of said court, and that therefore Judges Dizon and Gutierrez David of the Court of First Instance erred in holding otherwise and in quashing the case upon appeal. 2. The next question to determine is the propriety of the remedy availed of by the petitioner in this Court. Judging from the allegations and the prayer of the petition, it is in the nature of certiorari and mandamus, to annul the order of dismissal and to require the Court

of First Instance to try and decide the appeal on the merits. Under section 3 of Rule 67, when any tribunal unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, and there is no other plain, speedy, and adequate remedy in the ordinary course of law, it may be compelled by mandamus to do the act required to be done to protect the rights of the petitioner. If, as we find, the case before the respondent judge is one of unlawful detainer, the law specifically requires him to hear and decide that case on the merits, and his refusal to do so would constitute an unlawful neglect in the performance of that duty within section 3 of Rule 67. Taking into consideration that the law requires that an unlawful detainer case be promptly decided (sections 5 and 8, Rule 72),it is evident that an appeal from the order of dismissal would not be a speedy and adequate remedy; and under the authority of Cecilio vs. Belmonte (48 Phil., 243, 255), and Aguilar vs. Cabrera and Flameo (G.R. No. 49129), we hold that mandamuslies in this case.

3. The contention of the petitioner that the appeal of the intervenor Juan Grey was filed out of time is not well founded. Although said respondent received copy of the decision of the municipal court on August 3, 1945, according to the petitioner (on August 6, 1945, according to the said respondent), it appears from the sworn answer of the respondent Ngo Soo in this case that on August 8 he filed a motion for reconsideration, which was granted in part on August 18. Thus, if the judgment was modified on August 18, the time for the intervenor Juan Grey to appeal therefrom did not run until he was notified of said judgment as modified, and since he filed his notice of appeal on August 23, it would appear that his appeal was filed on time. However, we observe in this connection that said appeal of the intervenor Juan Grey, who chose not to answer the petition herein, would be academic in view of the conclusions we have reached above that the rights between him as owner and Josefa Fabie as usufructuary of the property in question have been definitely settled by final judgment in civil case No. 1659 of the Court of First Instance of Manila in the

sense that the usufructuary has the right to administer and possess the property in question, subject to certain specified obligations on her part. The orders of dismissal of the respondent Court of First Instance, dated September 22 and October 31, 1945, in the desahucio case (No. 71149) are set aside that court is directed to try and decide the said case on the merits; with the costs hereof against the respondent Ngo Soo. G.R. No. L-56249 May 29, 1987 IN THE MATTER OF THE TESTATE ESTATE OF THE DECEASED REV. FATHER TEODORO ARANAS, RAMONA B. VDA. DE ARANAS, ADELIA B. ARANAS-FERNANDEZ, HEIRS OF THE LATE RODULFO B. ARANAS, ETC., ET AL., petitioners, vs. VICENTE B. ARANAS AND HON. LUIS B. MANTA, respondents.

PARAS, J.: This is a petition for certiorari which seeks to declare the orders of respondent Judge dated July 16, 1980 and September 23, 1980 as an exercise of a gross abuse of discretion amounting to lack of jurisdiction, by ruling that the properties under Group C of the testate estate of the late Fr.Teodoro Aranas are subject to remunerative legacies. The antecedent facts of the case are as follows: Fr. Teodoro Aranas, a priest of the Roman Catholic Church, died on January 19, 1953. He had executed on June 6, 1946 his Last Will and Testament which was admitted to probate on August 31, 1956. In said Last Will and Testament, Fr. Teodoro Aranas stipulated the following: A. The return to Aniceto Aranas or his heirs of all properties acquired by Fr. Aranas from his brother Aniceto Aranas and ten (10) parcels of land described in the Will inherited by the testator from his parents.

B. The return to Carmelo Aranas or his heirs of all properties acquired by Fr. Aranas from his brother Carmelo Aranas and ten (10) parcels of land described in the Will inherited by the testator from his parents. C. The special administration of the remainder of the estate of the testator by Vicente Aranas, a faithful and serviceable nephew and designating him also as recipient of 1/2 of the produce of said properties after deducting the expenses for the administration and the other 1/2 of the produce to be given to the Catholic Church for the eternal repose of the testator's soul. Said pertinent provision reads as follows:
1

Fourth. It is my will that the lands I had bought from other persons should be converged and placed under a "special administrator." The special administrator of these lands, for his office, should receive one half of all the produce from which shall be deducted the expenses for the administration, and the other half of the produce should be received by the Roman Catholic Church and should

be spent for my soul, Vicente B. Aranas (Tingting), because he is a faithful and serviceable nephew, should be the first special administrator of said properties, without bond, until his death or until he should not want to hold the said office anymore. Anyone of the sons of my brother Carmelo Aranas can hold the said office of special administrator, and none other than they. Their father, my brother Carmelo Aranas shall be the one to decide who among them shall hold the said office, but upon the death of my said brother Carmelo Aranas, his said sons will have power to select the one among them ourselves. The special administration is perpetual. The lower court in its Order 2 dated November 17, 1977 ruled, upon petitioners' (in Sp. Proc. No. 303) "Motion for the Declaration of Heirs and Partition; and for Removal of the Administrator (Vicente Aranas) and/or for his Permission to Resign, and appointment of His Successor" that the "perpetual inalienability and administration of the portion of the estate of the

late Rev. Fr. Teodoro Aranas, administered by Vicente Aranas, is nun and void after twenty years from January 19, 1954 ... " and declared in the same order the heirs of the late Fr. Teodoro Aranas. It also declared that "the removal of Vicente Aranas will, therefore, not serve the ends of justice and for the best interest of all the heirs, particularly with respect to the portion of the estate taken by the heirs of Aniceto Aranas, represented by the petitioners herein and the rest of the heirs of Carmelo, represented by the intervenors, coheirs of Administrator Vicente Aranas." 3 However, the abovesaid Order was subsequently set aside upon the "Urgent Motion for Reconsideration and to Declare Testate and Intestate Heirs of the late Fr. Teodoro Aranas," filed by the administrator Vicente Aranas on the allegation that said order was violative of due process and without legal and factual basis because only the issue for the removal of the administrator was heard and not the matter of the declaration of heirs. Thus, the lower court declared in its Order, 4 dated July 16, 1980 that the Order dated November 17, 1977 is "set

aside and in the interest of justice, reopened in order that other heirs, successors-in-interest of Felino Aranas, 5 could likewise assert their claims, as in the case of the heirs of Aniceto Aranas and Carmelo Aranas." 6 Their Motion for Reconsideration having been denied by the lower court in its order dated September 23, 1980, petitioners now come before Us by certiorari raising the issue that the lower court erred in setting aside its order dated November 17, 1977 and in not applying the provisions on Usufruct of the New Civil Code with respect to the properties referred to as Group "C" in the Last Will and Testament. The court ruled in its questioned order that this particular group of properties (Group "C") is subject to the following: 1. Remunerative legacy by way of usufruct of the net proceeds of 1/2 of the estate after deducting expenses for administration in favor of Vicente Aranas, during his lifetime and shall continue an administrator of the estate,

and, who, upon his death or refusal to continue such usufruct, may be succeeded by any of the brothers of the administrator as selected by their father, Carmelo Aranas, if still alive or one selected by his sons if, he, Carmelo, is dead; Pursuant to the Will. (Article 562, 563, 564 and 603 of the New Civil Code). 2. Legacy in favor of the Roman Catholic Church, particularly the Archbishop diocese of Cagayan de Oro City Represented by the Reverend Archbishop Patrick H. Cronin over onehalf of the proceeds of the properties under Group "C." (Article 603, New Civil Code) and to last for a period of Fifty years from the effective date of the legacy, Article 605, New Civil Code). (Annex "L-14," p. 87, Rollo) Assailing the aforementioned ruling, petitioners rely heavily on the doctrine laid down in Art. 870 of the New Civil Code to wit:

Art. 870. The dispositions of the testator declaring all or part of the estate inalienable for more than twenty years are void. A cursory reading of the English translation of the Last Will and Testament shows that it was the sincere intention and desire of the testator to reward his nephew Vicente Aranas for his faithful and unselfish services by allowing him to enjoy one-half of the fruits of the testator's third group of properties until Vicente's death and/or refusal to act as administrator in which case, the administration shall pass to anyone chosen by Carmelo Aranas among his sons and upon Carmelo's death, his sons will have the power to select one among themselves. Vicente Aranas therefore as a usufructuary has the right to enjoy the property of his uncle with all the benefits which result from the normal enjoyment (or exploitation) of another's property, with the obligation to return, at the designated time, either the same thing, or in special cases its equivalent. This right of Vicente to enjoy the fruits of the properties is temporary and therefore not perpetual as there

is a limitation namely his death or his refusal. Likewise his designation as administrator of these properties is limited by his refusal and/or death and therefore it does not run counter to Art. 870 of the Civil Code relied upon by the petitioners. Be it noted that Vicente Aranas is not prohibited to dispose of the fruits and other benefits arising from the usufruct. Neither are the naked owners (the other heirs) of the properties, the usufruct of which has been given to Vicente Aranas prohibited from disposing of said naked ownership without prejudice of course to Vicente's continuing usufruct. To void the designation of Vicente Aranas as usufructuary and/or administrator is to defeat the desire and the dying wish of the testator to reward him for his faithful and unselfish services rendered during the time when said testator was seriously ill or bed-ridden. The proviso must be respected and be given effect until the death or until the refusal to act as such of the instituted usufructuary/administrator, after which period, the property can be properly disposed of, subject to the limitations provided

in Art. 863 of the Civil Code concerning a fideicommissary substitution, said Article says: A fideicommissary substitution by virtue of which the fiduciary or first heir instituted is entrusted with the obligation to preserve and to transmit to a second heir the whole or part of the inheritance, shall be valid and shall take effect, provided such substitution does not go beyond one degree from the heir originally instituted, and provided further, that the fiduciary or first heir and the second heir are living at the time of the death of the testator. It is contended by petitioners that the ruling made by respondent court dated November 17, 1977 was already final and not subject to correction as what was set aside and to be reheard was only regarding the determination of additional heirs. Such contention is not worthy of credence. Respondents in their Memorandum allege and it is not disputed by petitioners that the order of November 17, 1977 has not yet become final because it was

received only on January 12, 1978 by the counsel for respondent Vicente Aranas and the Motion for Reconsideration and to declare testamentary and intestate heirs dated January 17, 1978 was filed by the said respondent within the reglementary period. Besides the validity or invalidity of the usufructuary dispositions would affect the determination of heirs. As to petitioners' allegation that the order of July 16, 1980 is without basis, the record shows that during the hearing of the urgent motion for reconsideration and to declare testamentary and intestate heirs, it was proven conclusively by the said respondent Vicente B. Aranas that he was instituted as a remunerative legatee per mandate of the Last Will and Testament by way of usufructuary. Likewise the right of the Roman Catholic Church as the other usufructuary legatee for the duration of the statutory lifetime of a corporation, that is, 50 years from the date of the effectivity of said legacy, was also established. 7

WHEREFORE, the instant petition is hereby dismissed. SO ORDERED.

G.R. No. L-51333 May 18, 1989 RAMONA R. LOCSIN, accompanied by her husband RENATO L. LOCSIN; TERESITA R. GUANZON, accompanied by her husband ROMEO G. GUANZON; CELINA R. SIBUG; accompanied by her husband CARLOS V. SIBUG; MA. LUISA R. PEREZ, accompanied by her husband JOSE V. PEREZ; EDITHA R. YLANAN, accompanied by her husband CARLOS W. YLANAN; and ANA MARIE R. BENEDICTO, accompanied by her husband JOSE LUIS U. BENEDICTO, petitioners, vs. HONORABLE JUDGE VICENTE P. VALENZUELA, Judge of the Court of First Instance of Negros Occidental, Branch III and SPOUSES JOSEPH SCHON, and HELEN BENNETT SCHON, respondents. G.R. No. 52289 May 19, 1989 RAMONA R. LOCSIN, accompanied by her husband RENATO L. LOCSIN; TERESITA R. GUANZON, accompanied by her husband ROMEO G. GUANZON; CELINA R. SIBUG; accompanied by her husband CARLOS V. SIBUG; MA. LUISA R. PEREZ, accompanied by her husband JOSE V. PEREZ; EDITHA R. YLANAN, accompanied by her husband CARLOS W. YLANAN; and ANA MARIE R. BENEDICTO, accompanied by her husband JOSE LUIS U. BENEDICTO, petitioners, vs. CARLOS PANALIGAN, AMADO MARQUEZ, HERBERT PEDROS, ANTONIO FELICIANO, JR., HUGO AGUILOS, ALBERTO GUBATON, JULIA VDA. DE ESQUELITO, SERAFIN JANDOQUELE, SEFERIAS ESQUESIDA, CARLOS DELA CRUZ, ELISEO GELONGOS, ESPINDION JOCSON, SALVADOR MUNUN, ULFIANO ALEGRIA, and IRENEO BALERA, and Spouses JOSEPH SCHON, and HELEN BENNETTE SCHON, respondents. G.R. No. L-51333 May 18, 1989 RAMONA R. LOCSIN, accompanied by her husband RENATO L. LOCSIN; TERESITA R. GUANZON, accompanied by her husband ROMEO G. GUANZON; CELINA R. SIBUG; accompanied by her husband CARLOS V. SIBUG; MA. LUISA R. PEREZ, accompanied by her husband JOSE V. PEREZ; EDITHA R. YLANAN, accompanied by her husband CARLOS W. YLANAN; and ANA MARIE R. BENEDICTO, accompanied by her husband JOSE LUIS U. BENEDICTO, petitioners, vs. HONORABLE JUDGE VICENTE P. VALENZUELA, Judge of the Court of First Instance of Negros Occidental, Branch III and SPOUSES JOSEPH SCHON, and HELEN BENNETT SCHON, respondents.

Mirano, Mirano & Associates for petitioners in both cases. Jose V. Valmayor & Samuel SM. Lezama for private respondents in G.R. No. 51333. Bonifacio R. Cruz for private respondents in G.R. No. 52289. RESOLUTION

FELICIANO, J.: There are before us for review the following: (1) the decision of the Court of First Instance of Negros Occidental, Branch 3, in Civil Case No. 13823; and (2) the decision of the Court of Agrarian Relations, 11th Judicial District, in CAR Case No. 76. Both of these decisions dismissed the petitioners' complaints for lack of jurisdiction. Petitioners Ramona R. Locsin, Teresita R. Guanzon, Celina R. Sibug, Ma. Lusia R. Perez, Editha R. Ylanan and Ana Marie R. Benedicto were co-owners of a large tract of agricultural land known as "Hacienda Villa Regalado" located in Barrio Panubigan, Canlaon City, Negros Occidental. The tract of land was covered by Transfer Certificate of Title No. T-494 and there more particularly described in the following terms: TRANSFER CERTIFICATE OF TITLE NO. T-494
A parcel of land (Lot 2-G) of the subdivision plan Psd-28446, Sheet 2, being a portion of Lot 2 (remaining portion) described in plan II-6992, G.L.R.O. Record No. 133), situated in the Barrio of Panubigan, Municipality of Canlaon Province of Negros Occidental, Bounded on the N., by Lot 2-A of the subdivision plan; on the E., and S., by Binalbagan River; on the W., by Lot 2-E of the subdivision plan; on the NW., by Lots 2-F and 2-A of the subdivision plan. ...containing an area of THREE MILLION THIRTY-THREE THOUSAND AND FORTY EIGHT (3,033,048) square meters, more or less. 1

A portion of this land, known as Lot No. 2-C-A-3 and consisting of an area of 60.07464 hectares, was subject to the lifetime usufructuary rights of respondent Helen Schon:. The bulk of this lot was cultivated by the following lessees-tenants who customarily delivered the rental to Helen Schon: TENANTS
1. Carlos Panaligan 2. Amado Marquez 3. Herbert Pedros 4. Antonio Feliciano, Jr. 5. Hugo Aguilos 6. Alberto Gubaton 2.00 Ha. 1.50 Ha. 1.50 Ha. 2.00 Ha. 3.50 Ha. 8.90 Ha.

7. Hulo Aguilos 8. Julia Vda. de Esquelito 9. Carlos Panaligan 10. Serafin Jandoquele 11. Seferias Esquesida 12. Carlos de la Cruz 13 Eliseo Gelongos 14. Espindion Jocson 15. Salvador Munon 16. Ulfiano Alegria 17. Ireneo Balera TOTAL

1.32 Ha. 2.25 Ha. 1.25 Ha. 5.35 Ha. 2.00 Ha. 4.70 Ha. 3.00 Ha. 5.55 Ha. 1.5884 Ha. 1.85 Ha. 8.30 Ha. 56.555 Ha. 2

On 22 October 1972, after the onset of the martial law administration of former President Marcos, Presidential Decree No. 27 was promulgated, decreeing the "Emancipation of Tenants." The tract of land owned in common by the petitioners, including the portion thereof subject to Helen Schon's usufructuary rights, fell within the scope of "Operation Land Transfer." In consequence, staff members of the Department of Agrarian Relations Identified the tenant-tillers of said land, and the necessary parcellary map sketch was made and submitted to the Bureau of Lands Office in Dumaguete City. 3 Petitioners through counsel sought the opinion of the DAR as to who (petitioners or respondent Helen Schon) should be entitled to receive the rental payments which continued to be made by the respondent tenants to Helen Schon. The DAR District Officer rendered an opinion on 30 May 1977 that the rental payments as of 22 October 1972 were properly considered as amortization payments for the land and as such should pertain to the land- owners and not to the usufructuary. 4 1. Civil Case No. 13828, Court of First Instance of Negros Occidental On 22 May 1978, petitioners filed against the spouses Joseph and Helen Schon Civil Case No. 13828 in the then Court of First Instance of Negros Occidental, for collection of rentals plus damages with prayer for preliminary injunction. There petitioners claimed that since the land subject to Helen Schon's usufructuary rights was among the parcels of land which colectively had been declared by the DAR as a land reform area pursuant to Presidential Decree No. 27, the rental payments which the respondent spouses had been colecting from the tenants really pertained and should be delivered to petitioners, beginning from 21 October 1972, as constituting or forming part of the amortization payments for the land to be made by the tenants. Petitioners sought in that case to recover from the Schons all such previous rentals or the money value thereof, and prayed for injunction to prevent the respondents from collecting any further rental payments from the tenants of the land involved.

Upon the other hand, in their Answer filed on 12 July 1978, the respondents Schon contended that under the provisions of Section 12 of Presidential Decree No. 946 dated 17 June 1976, and given the facts involved in Civil Case No. 13823, the Court of First Instance was bereft of jurisdiction over the subject matter of the case. That jurisdiction, the Schon spouses urged, was vested in the CAR instead. Respondents further argued that, upon the assumption arguendo that the Court of First Instance did have jurisdiction, Article 609 of the Civil Code must in any case be applied by that court in resolving the case . 5 2. CAR Case No. 76, Court of Agrarian Relations Approximately five (5) months after filing their complaint before the Negros Occidental Court of First Instance, petitioners filed a second complaint on 13 October 1978, this time with the Court of Agrarian Relations, 11th Judicial District, San Carlos City. In this complaint before the Agrarian Court, petitioners impleaded as co-respondents of the spouses Schon the tenants who were cultivating the land burdened with the usufruct of Helen Schon. Petitioners prayed that the respondent tenants be required to pay to petitioners (rather than to the spouses Schon) all future rentals beginning with the crop year of 1978 and every year thereafter, until full payment of the amortization payments computed by the DAR. In their Answer, the respondents Schon once again asserted lack of jurisdiction over the subject matter of the case, this time on the part of the Court of Agrarian Relations. Respondents contended that the dispute between petitioners and respondents Schon related to the continued existence or termination of the usufructuary rights of Helen Schon, which issue did not constitute an agrarian dispute and therefore had to be litigated elsewhere, i.e., before the regular courts of first instance. The respondent tenants, for their part, agreed with the Schons that there was no tenancy relationship existing in respect of the land cultivated by them, since such land had already been brought within the ambit of "Operation Land Transfer", and prayed that the petitioners and the usufructuary be required to litigate among themselves their respective rights before the proper court. 3. Dismissal of Civil Case No. 13823 and CAR Case No. 76 On 15 February 1979, the Agrarian Court rendered a decision dismissing petitioners' complaint in CAR Case No. 76. The Court of Agrarian Relations held that it had no jurisdiction to decide the case: ... it is crystal clear that the contending parties are actually Ramona R. Locsin, et al., and the naked owners of 101 hectares of subject agricultural land, on one hand, and Helen Bennett-Schon, who is the usufructuary of the same land, on the other. For all legal intents and purposes, Helen Bennett-Schon belongs to the category of a landowner, since she is the recipient of any and all fruit derived from the land of which the plaintiffs are the naked owners. The usufruct lasts for as long as Helen Bennett-Schon lives. Therefore, this case actually is a dispute between two landowners one, the naked owners, the other, the beneficial owner hose controversy revolves on who of them should receive the rentals being paid by the tenants or lessees on the land in question. Consequently, there is as between the two contending parties, no agrarian dispute which this Court may take cognizance of. Under the circumstances, it is the considered stand of this Court that it is not the proper forum both with respect to the second amended complaint and with respect to the petition for appointment of a receiver.
WHEREFORE, RESOLVING BOTH THE SECOND AMENDED COMPLAINT AND THE PETITION FOR APPOINTMENT OF A RECEIVER, THE LATTER BEING ONLY A

REPLAY OF THE FORMER, BOTH ARE DISMISSED FOR LACK OF JURISDICTION (pp. 7-8 Decision) 6

Petitioners appealed the decision of the Agrarian Court to the Court of Appeals, the appeal being there docketed as C.A.-G.R. SP No. 09-440. In a Decision dated 27 November 1979, however, the Court of Appeals ruled that since the only issue presented in the appeal was whether or not the Court of Agrarian Relations had jurisdiction to try and decide CAR Case No. 76, the appeal raised "a pure question of law" and certified the case to the Supreme Court for the latter's disposition. We turn to Civil Case No. 13823. On 16 March 1979, the then Court of First Instance of Negros Occidental issued an order also dismissing the complaint of petitioners on the same ground of lack of jurisdiction to hear and decide that case. The Court of First Instance held that it was the Court of Agrarian Relations that had jurisdiction over the case, and rationalized this position in the following manner: In determining whether this Court has jurisdiction, necessarily, a determination should first be made as to the nature of the lease rentals that were being paid to the defendants by the tenants-lessees. There is no question that on May 30, 1977, the Provincial Chairman of Operation Land Transfer rendered an opinion that the rentals as of October 21, 1972 was to be considered as amortization payment to the land and as such should pertain to the land owners and not to the usufructuary, the defendants herein (Annex 'B' of the Complaint). Section 12 of Presidential Decree No. 946 enumerates the case that falls under the original and exclusive jurisdiction of the Court of Agrarian Relations, as follows: (a) Cases involving the rights and obligation of persons in cultivation and use of agricultural land ...; (b) Questions involving rights granted and obligations im posed by law, presidential decrees, orders, instructions, rules and regulations issued and promulgations in relation to the agrarian reform program ...; (c) Cases involving the collection of amortization on payment for lands acquired under Presidential Decree No. 27 as amended ... It could be seen from the above that the jurisdiction given to the Court of Agrarian Relations is so broad and sweeping as to cover the issue involved in the present case. ... the agricultural leasehold relation is not limited to that of a purely landlord and tenant relationship. The agricultural leasehold relationship is established also with respect to the person who furnished the landholding either as owner, civil lessee, usufructuary or legal possessor and the person who cultivates the same. It might as well be asked whether the opinion of the Provincial Chairman of Operation Land Transfer previously adverted to and which is now one of the issues in this incident would involve the determination of the rights granted and obligations imposed in relation to the agrarian reform program. The search for an answer need not be deferred as reference to Par. (b) of Presidential Decree No. 49 provides such answerxxxxxxxxx

Questions involving rights granted and obligations imposed by the law, presidential decrees, orders, instructions, rules and regulations issued and promulgations in relation to the agrarian reform program.
Clearly, the determination of the nature of the payment made by the tenants to the defendants herein is a question which involved the right of the tenants in relation to the land reform program of the government. 7

The above order of the Negros Occidental Court of First Instance was brought directly to us by petitioners on a Petition for Review in G.R. No. 51333. G.R. No. 51333 and G.R. No. 52289 were consolidated by a Resolution of this Court dated 16 June 1982. The consolidated cases present the question of which court had jurisdiction to decide one and the other case. Both the Court of First Instance and the agrarian Court were persuaded by the adroit and disingenuous pleading of respondent Schon's counsel. Beyond the question of jurisdiction over the subject matter, is, of course, the substantive question of twhether the peitioner as naked owners of the land subjected to the beneficial owner's right of Helen Schon, became entitled to the payment's made by the tenants or lessees of such land from and after the property was declared part of a land reform area. The issue of which court is vested with jurisdiction over Civil Case no. 13823 and CAR Case No. 76 is, happily, no longer a live one. Jurisdiction over both cases is clearly vested in the appropiate Regional Trial Court in view of the provisions of Section 19(7) of Batas Pambansa Blg. 129 which was enacted by the Batasang Pambansa on 10 August 1981 and fully implemented on 14 February 1983. 8 Section 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise exclusive original jurisdiction: xxx xxx xxx (7) In all civil actions and special proceedings falling within the exclusive origin al jurisdiction of juvenile and domestic relations courts and of the courts of agrarian relations as now provided by law; xxx xxx xxx (Emphasis supplied) The Regional Trial Courts have full authority and jurisdiction to interpret and apply both the mass of statutes and rules and regulations relating to land reform and the general civil law, including the law on usufruct. Unlike a regional trial court sitting as a probate court, a region al trial court seized of an agrarian dispute and interpreting and applying statutes and administrative rules and regulations concerning land reform and the sliminations of agricultural tenancy relationships, continues to act as a court of general and plenary jurisdiction. Section 44 of b.P. Blg. 129 abolished the Courts of Agrarian Relations and did not re-create them.

We note that resolution of the underlying substantive issues here raised requires examination of both land reform statutes and related rules and regulations (and as well the practice of the relevant administrative agency or executive department) and the Civil Code provisions on usufruct. Mindful of the length of timewhich has gone by since the first of the consolidated cases reched this Court, and in the effort to render expeditious justice, we have considered whether we should now confront and resolve the issue relating to the legal character of the payments made by the respondents tenants-lessees since 21 October 1972 to respondent Helen Schon, as well as the issue relating to the possible application of Article 609 of the Civil Code. Because, however, of the nature and importance of the first issue, and considering that the pleadings and the records of theses two (2) cases are bare of any substantial discussion by the parties on both issues, the Court feels it would not be prudent to resolve those issues without further proceedings. We are convinced, however, that those issues are primarily, if not wholly, issues of law rather than of fact and that hence there appears no need to remand these cases to the Regional Trial Court for further proceedings there. Instead, we shall require the parties to file memoranda on the issues above indicated, and the direct the Solicitor General to intervene in these cases and to file a memorandum addressing the same issues. ACCORDINGLY, the Court Resolved to: (1) REQUIRE the petition and private respondents in G.R. Nos. 51333 and 52289 to file simultaneous memoranda addressing the substantive issues identified above, within thirty (30) days from notice hereof, and to FURNISH the Solicitor General a copy of their respective memoranda; and (2) to DIRECT the Solicitor General to file a motion for intervention on behalf of the government and a memorandum on the same substantive questions within thirty (30) days from receipt of petitioners' and private respondents' memoranda. SO ORDERED.