Mixed Cases

FIRST DIVISION
[G.R. No. 149295. September 23, 2003]

PHILIPPINE NATIONAL BANK, petitioner, vs. GENEROSO DE JESUS,
represented by his Attorney-in-Fact, CHRISTIAN DE JESUS, respondent.
DECISION
VITUG, J.:
Petitioner Philippine National Bank disputes the decision handed down by
the Court of Appeals promulgated on 23 March 2001 in CA-G.R. CV No. 56001,
entitled Generoso De Jesus, represented by his Attorney-in-Fact, Christian De
Jesus, versus Philippine National Bank. The assailed decision has affirmed the
judgment rendered by the Regional Trial Court, Branch 44, of Mamburao,
Occidental Mindoro, declaring respondent Generoso de Jesus as being the true
and lawful owner of the 124-square-meter portion of the land covered by
Transfer Certificate of Title (TCT) No. T-17197 and ordering petitioner bank to
vacate the premises, to deliver possession thereof to respondent, and to remove
the improvement thereon.
It would appear that on 10 June 1995, respondent filed a complaint against
petitioner before the Regional Trial Court of Occidental Mindoro for recovery of
ownership and possession, with damages, over the questioned property. In his
complaint, respondent stated that he had acquired a parcel of land situated in
Mamburao, Occidental Mindoro, with an area of 1,144 square meters covered by
TCT No. T-17197, and that on 26 March 1993, he had caused a verification
survey of the property and discovered that the northern portion of the lot was
being encroached upon by a building of petitioner to the extent of 124 square
meters. Despite two letters of demand sent by respondent, petitioner failed and
refused to vacate the area.
Petitioner, in its answer, asserted that when it acquired the lot and the
building sometime in 1981 from then Mayor Bienvenido Ignacio, the
encroachment already was in existence and to remedy the situation, Mayor
Ignacio offered to sell the area in question (which then also belonged to Ignacio)
to petitioner at P100.00 per square meter which offer the latter claimed to have
accepted. The sale, however, did not materialize when, without the knowledge
and consent of petitioner, Mayor Ignacio later mortgaged the lot to the
Development Bank of the Philippines.
The trial court decided the case in favor of respondent declaring him to be
the rightful owner of the disputed 124-square-meter portion of the lot and
ordering petitioner to surrender possession of the property to respondent and
to cause, at its expense, the removal of any improvement thereon.
Ma. Tiffany T. Cabigon

Bachelor of Laws
University of Negros Occidental-Recoletos
The Court of Appeals, on appeal, sustained the trial court but it ordered to
be deleted the award to respondent of attorneys fees, as well as moral and
exemplary damages, and litigation expenses.
Petitioner went to this Court, via a petition for review, after the appellate
court had denied the banks motion for reconsideration, here now contending
that -
1. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN ADJUDGING PNB A
BUILDER IN BAD FAITH OVER THE ENCROACHED PROPERTY IN QUESTION;
2. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN NOT APPLYING IN
FAVOR OF PNB THE PROVISION OF ARTICLE 448 OF THE CIVIL CODE AND THE
RULING IN TECNOGAS PHILIPPINES MANUFACTURING CORP. VS. COURT OF
APPEALS, G.R. No. 108894, February 10, 1997, 268 SCRA 7.[1]
The Regional Trial Court and the Court of Appeals have both rejected the
idea that petitioner can be considered a builder in good faith. In the context
that such term is used in particular reference to Article 448, et seq., of the Civil
Code, a builder in good faith is one who, not being the owner of the land, builds
on that land believing himself to be its owner and unaware of any defect in his
title or mode of acquisition.
The various provisions of the Civil Code, pertinent to the subject, read:
Article 448. The owner of the land on which anything has been built, sown, or
planted in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in Articles 546
and 548, or to oblige the one who built or planted to pay the price of the land,
and the one who sowed, the proper rent. However, the builder or planter cannot
be obliged to buy the land if its value is considerably more than that of the
building or trees. In such a case, he shall pay reasonable rent, if the owner of
the land does not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
Article 449. He who builds, plants, or sows in bad faith on the land of another,
loses what is built, planted or sown without right to indemnity.
Article 450. The owner of the land on which anything has been built, planted or
sown in bad faith may demand the demolition of the work, or that the planting
or sowing be removed, in order to replace things in their former condition at
the expense of the person who built, planted or sowed; or he may compel the
builder or planter to pay the price of the land, and the sower the proper rent.
A builder in good faith can, under the foregoing provisions, compel the
landowner to make a choice between appropriating the building by paying the
proper indemnity or obliging the builder to pay the price of the land. The
choice belongs to the owner of the land, a rule that accords with the principle

Bachelor of Laws
of accession, i.e., that the accessory follows the principal and not the other way
around.[2] Even as the option lies with the landowner, the grant to him,
nevertheless, is preclusive. He much choose one. He cannot, for instance,
compel the owner of the building to instead remove it from the land.[3] In order,
however, that the builder can invoke that accruing benefit and enjoy his
corresponding right to demand that a choice be made by the landowner, he
should be able to prove good faith on his part.
Good faith, here understood, is an intangible and abstract quality with no
technical meaning or statutory definition, and it encompasses, among other
things, an honest belief, the absence of malice and the absence of design to
defraud or to seek an unconscionable advantage. An individuals personal good
faith is a concept of his own mind and, therefore, may not conclusively be
determined by his protestations alone. It implies honesty of intention, and
freedom from knowledge of circumstances which ought to put the holder upon
inquiry.[4] The essence of good faith lies in an honest belief in the validity of
ones right, ignorance of a superior claim, and absence of intention to overreach
another.[5]Applied to possession, one is considered in good faith if he is not
aware that there exists in his title or mode of acquisition any flaw which
invalidates it.[6]
Given the findings of both the trial court and the appellate court, it should
be evident enough that petitioner would fall much too short from its claim of
good faith. Evidently, petitioner was quite aware, and indeed advised, prior to
its acquisition of the land and building from Ignacio that a part of the building
sold to it stood on the land not covered by the land conveyed to it.
Equally significant is the fact that the building, constructed on the land by
Ignacio, has in actuality been part of the property transferred to
petitioner. Article 448, of the Civil Code refers to a piece of land whose
ownership is claimed by two or more parties, one of whom has built some
works (or sown or planted something) and not to a case where the owner of
the land is the builder, sower, or planter who then later loses ownership of
the land by sale or otherwise for, elsewise stated, where the true owner
himself is the builder of works on his own land, the issue of good faith or
bad faith is entirely irrelevant. [7]
In fine, petitioner is not in a valid position to invoke the provisions of
Article 448 of the Civil Code. The Court commiserates with petitioner in its
present predicament; upon the other hand, respondent, too, is entitled to his
rights under the law, particularly after having long been deprived of the
enjoyment of his property. Nevertheless, the Court expresses hope that the
parties will still be able to come up with an arrangement that can be mutually
suitable and acceptable to them.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 56001
is AFFIRMED. No costs. SO ORDERED.

Bachelor of Laws
FIRST DIVISION
G.R. No. 149295. September 23, 2003
PHILIPPINE NATIONAL BANK,, Petitioner, v. GENEROSO DE JESUS,
represented by his Attorney-in-Fact, CHRISTIAN DE JESUS, respondent.
DECISION
VITUG, J.:
Petitioner Philippine National Bank disputes the decision handed down by the
Court of Appeals promulgated on 23 March 2001 in CA-G.R. CV No. 56001,
entitled Generoso De Jesus, represented by his Attorney-in-Fact, Christian De
Jesus, versus Philippine National Bank. The assailed decision has affirmed the
judgment rendered by the Regional Trial Court, Branch 44, of Mamburao,
Occidental Mindoro, declaring respondent Generoso de Jesus as being the true
and lawful owner of the 124-square-meter portion of the land covered by
Transfer Certificate of Title (TCT) No. T-17197 and ordering petitioner bank to
vacate the premises, to deliver possession thereof to respondent, and to remove
the improvement thereon.
It would appear that on 10 June 1995, respondent filed a complaint against
petitioner before the Regional Trial Court of Occidental Mindoro for recovery of
ownership and possession, with damages, over the questioned property. In his
complaint, respondent stated that he had acquired a parcel of land situated in
Mamburao, Occidental Mindoro, with an area of 1,144 square meters covered by
TCT No. T-17197, and that on 26 March 1993, he had caused a verification
survey of the property and discovered that the northern portion of the lot was
being encroached upon by a building of petitioner to the extent of 124 square
meters. Despite two letters of demand sent by respondent, petitioner failed and
refused to vacate the area.
Petitioner, in its answer, asserted that when it acquired the lot and the building
sometime in 1981 from then Mayor Bienvenido Ignacio, the encroachment
already was in existence and to remedy the situation, Mayor Ignacio offered to
sell the area in question (which then also belonged to Ignacio) to petitioner at
P100.00 per square meter which offer the latter claimed to have accepted. The
sale, however, did not materialize when, without the knowledge and consent of
petitioner, Mayor Ignacio later mortgaged the lot to the Development Bank of
the Philippines.
The trial court decided the case in favor of respondent declaring him to be the
rightful owner of the disputed 124-square-meter portion of the lot and ordering
petitioner to surrender possession of the property to respondent and to cause,
at its expense, the removal of any improvement thereon.

Bachelor of Laws
The Court of Appeals, on appeal, sustained the trial court but it ordered to be
deleted the award to respondent of attorneys fees, as well as moral and
exemplary damages, and litigation expenses.
Petitioner went to this Court, via a petition for review, after the appellate court
had denied the banks motion for reconsideration, here now contending that -
1. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN ADJUDGING PNB A
BUILDER IN BAD FAITH OVER THE ENCROACHED PROPERTY IN QUESTION;
2. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN NOT APPLYING IN
FAVOR OF PNB THE PROVISION OF ARTICLE 448 OF THE CIVIL CODE AND THE
RULING IN TECNOGAS PHILIPPINES MANUFACTURING CORP. VS. COURT OF
APPEALS, G.R. No. 108894, February 10, 1997, 268 SCRA 7.1crlwvirtualibrry
The Regional Trial Court and the Court of Appeals have both rejected the idea
that petitioner can be considered a builder in good faith. In the context that
such term is used in particular reference to Article 448, et seq., of the Civil
Code, a builder in good faith is one who, not being the owner of the land, builds
on that land believing himself to be its owner and unaware of any defect in his
title or mode of acquisition.
The various provisions of the Civil Code, pertinent to the subject, read:
Article 448. The owner of the land on which anything has been built, sown, or
sowing or planting, after payment of the indemnity provided for in Articles 546
building or trees. In such a case, he shall pay reasonable rent, if the owner of
the land does not choose to appropriate the building or trees after proper
Article 449. He who builds, plants, or sows in bad faith on the land of another,
loses what is built, planted or sown without right to indemnity.
Article 450. The owner of the land on which anything has been built, planted or
sown in bad faith may demand the demolition of the work, or that the planting
or sowing be removed, in order to replace things in their former condition at
the expense of the person who built, planted or sowed; or he may compel the
builder or planter to pay the price of the land, and the sower the proper rent.
A builder in good faith can, under the foregoing provisions, compel the
landowner to make a choice between appropriating the building by paying
the proper indemnity or obliging the builder to pay the price of the land. The
choice belongs to the owner of the land, a rule that accords with the
principle of accession, i.e., that the accessory follows the principal and not

Bachelor of Laws
the other way around.2 Even as the option lies with the landowner, the grant
to him, nevertheless, is preclusive. He much choose one. He cannot, for
instance, compel the owner of the building to instead remove it from the
land.3 In order, however, that the builder can invoke that accruing benefit
and enjoy his corresponding right to demand that a choice be made by the
landowner, he should be able to prove good faith on his part.
Good faith, here understood, is an intangible and abstract quality with no
technical meaning or statutory definition, and it encompasses, among other
things, an honest belief, the absence of malice and the absence of design to
defraud or to seek an unconscionable advantage. An individuals personal
good faith is a concept of his own mind and, therefore, may not conclusively
be determined by his protestations alone. It implies honesty of intention,
and freedom from knowledge of circumstances which ought to put the
holder upon inquiry.4 The essence of good faith lies in an honest belief in the
validity of ones right, ignorance of a superior claim, and absence of
intention to overreach another.5 Applied to possession, one is considered in
good faith if he is not aware that there exists in his title or mode of
acquisition any flaw which invalidates it.6crlwvirtualibrry
Given the findings of both the trial court and the appellate court, it should
be evident enough that petitioner would fall much too short from its claim
of good faith. Evidently, petitioner was quite aware, and indeed advised,
prior to its acquisition of the land and building from Ignacio that a part of
the building sold to it stood on the land not covered by the land conveyed to
it.
Equally significant is the fact that the building, constructed on the land by
Ignacio, has in actuality been part of the property transferred to petitioner.
Article 448, of the Civil Code refers to a piece of land whose ownership is
claimed by two or more parties, one of whom has built some works (or sown or
planted something) and not to a case where the owner of the land is the
builder, sower, or planter who then later loses ownership of the land by sale
or otherwise for, elsewise stated, where the true owner himself is the builder
of works on his own land, the issue of good faith or bad faith is entirely
irrelevant.7crlwvirtualibrry
In fine, petitioner is not in a valid position to invoke the provisions of
Article 448 of the Civil Code. The Court commiserates with petitioner in its
present predicament; upon the other hand, respondent, too, is entitled to his
rights under the law, particularly after having long been deprived of the
enjoyment of his property. Nevertheless, the Court expresses hope that the
parties will still be able to come up with an arrangement that can be mutually
suitable and acceptable to them.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 56001 is
AFFIRMED. No costs.

Bachelor of Laws
SO ORDERED.
THIRD DIVISION
G.R. No. 167680 November 30, 2006
SAMUEL PARILLA, CHINITA PARILLA and DEODATO PARILLA, Petitioners,
vs.
DR. PROSPERO PILAR, Respondent.
DECISION
CARPIO MORALES, J.:
Assailed via Petition for Review on Certiorari is the Court of Appeals
Decision1 of January 19, 2005 reversing that of the Regional Trial Court (RTC)
of Vigan City, Branch 202 which affirmed the Decision3 of February 3, 2003 of
the Municipal Trial Court (MTC) of Bantay, Ilocos Sur.
Petitioner-spouses Samuel and Chinita Parilla and their co-petitioner-son
Deodato Parilla, as dealers4 of Pilipinas Shell Petroleum Corporation (Pilipinas
Shell), have been in possession of a parcel of land (the property) located at the
poblacion of Bantay, Ilocos Sur which was leased to it by respondent Dr.
Prospero Pilar under a 10-year Lease Agreement5 entered into in 1990.
When the lease contract between Pilipinas Shell and respondent expired in
2000, petitioners remained in possession of the property on which they built
improvements consisting of a billiard hall and a restaurant, maintained a sari-
sari store managed by Leonardo Dagdag, Josefina Dagdag and Edwin Pugal, and
allowed Flor Pelayo, Freddie Bringas and Edwin Pugal to use a portion thereof
as parking lot.6
Despite demands to vacate, petitioners7 and the other occupants8 remained in
the property.
Hence, respondent who has been residing in the United States,9 through his
attorney-in-fact Marivic Paz Padre, filed on February 4, 2002 a complaint for
ejectment before the Bantay MTC with prayer for the issuance of a writ of
preliminary injunction with damages10 against petitioners and the other
occupants of the property.
After trial, the MTC, by Decision of February 3, 2003, ordered herein petitioners
and their co-defendants and all persons claiming rights under them to vacate
the property and to pay the plaintiff-herein respondent the amount of
50,000.00 as reasonable compensation for the use of the property and
10,000.00 as attorneys fees and to pay the cost of suit. And it ordered
the plaintiff-herein respondent to reimburse defendants Samuel Parilla, Chinita
Parilla and Deodato Parilla the amount of Two Million Pesos (2,000,000.00)
representing the value of the improvements introduced on the property.

Bachelor of Laws
Respondent appealed to the RTC of Vigan City that portion of the trial courts
decision ordering him to reimburse petitioners the amount of Two Million
Pesos. The RTC affirmed the MTC Decision, however.11
On respondents petition for review, the Court of Appeals set aside the
questioned order for respondent to reimburse petitioners Two Million
Pesos.12 In setting aside the questioned order, the appellate court, applying
Article 546 of the New Civil Code which provides:
ART. 546. Necessary expenses shall be refunded to every possessor; but only
the possessor in good faith may retain the thing until he has been reimbursed
therefor.
Useful expenses shall be refunded only to the possessor in good faith with the
same right of retention, the person who has defeated him in the possession
having the option of refunding the amount of the expenses or of paying the
increase in value which the thing may have acquired by reason thereof[,]
held that "[herein petitioners] tolerated occupancy . . . could not be interpreted
to mean . . . that they are builders or possessors in good faith" 13 and that for
one to be a builder in good faith, it is assumed that he claims title to the
property which is not the case of petitioners.
Hence, the present petition which faults the appellate court to have erred
I. ..
WHEN IT SET ASIDE THE DECISIONS OF THE TRIAL COURTS WHICH
ORDERED THE RESPONDENT TO REIMBURSE PETITIONERS THE
AMOUNT OF TWO MILLION (2,000,000.00) PESOS FOR THE
SUBSTANTIAL IMPROVEMENTS INTRODUCED BY THEM ON THE
SUBJECT PREMISES.
II
. . . IN NOT HOLDING THAT PETITIONERS ARE BUILDERS IN GOOD FAITH
OF THE SUBSTANTIAL IMPROVEMENTS THEY HAD INTRODUCED ON THE
PREMISES, HENCE, THEY ARE ENTITLED TO REIMBURSEMENT OF SUCH
IMPROVEMENTS.
III
. . . IN NOT HOLDING THAT THE BUILDING WHICH PETITIONERS
ERECTED ON THE PREMISES WAS WORTH, AND THAT THE PETITIONERS
ACTUALLY SPENT, THE AMOUNT OF TWO MILLION (P2,000,000.00)
PESOS.
IV

Bachelor of Laws
. . . IN NOT HOLDING THAT PETITIONERS HAVE THE RIGHT OF
RETENTION OF THE PREMISES UNTIL THEY ARE REIMBURSED OF THE
SAID AMOUNT ADJUDGED IN THEIR FAVOR BY THE COURTS A QUO.14
Petitioners, proffering that neither respondent nor his agents or representatives
performed any act to prevent them from introducing the
improvements,15 contend that the appellate court should have applied Article
453 of the New Civil Code which provides that "[i]f there was bad faith not only
on the part of the person who built, planted or sowed on the land of another,
but also on the part of the owner of such land, the rights of one and the other
shall be the same as though both had acted in good faith."16
Petitioners thus conclude that being builders in good faith, until they are
reimbursed of the Two Million Peso-value of the improvements they had
introduced on the property, they have the right of retention or occupancy
thereof pursuant to Article 448, in relation to Article 546, of the New Civil
Code,17 otherwise, respondent would be unjustly enriched at their expense.
The petition fails in light of the following discussions.
The evidence shows that in 1960, a lease contract over the property was forged
between Shell Company of the Philippines Limited and respondents
predecessors-in-interest. In 1990, the lease contract was renewed by Pilipinas
Shell and respondent.
Petitioners, being dealers of Pilipinas Shells petroleum products, were allowed
to occupy the property. Petitioners are thus considered agents18 of Pilipinas
Shell. The factual milieu of the instant case calls then for the application of the
provisions on lease under the New Civil Code.
The right of the lessor upon the termination of a lease contract with respect to
useful improvements introduced on the leased property by a lessee is covered
by Article 1678 which reads:
Art. 1678. If the lessee makes, in good faith, useful improvements which are
suitable to the use for which the lease is intended, without altering the form or
substance of the property leased, the lessor upon the termination of the lease
shall pay the lessee one-half of the value of the improvements at that time.
Should the lessor refuse to reimburse said amount, the lessee may remove the
improvements, even though the principal thing may suffer damage thereby. He
shall not, however, cause any more impairment upon the property leased than
is necessary.
xxxx
The foregoing provision is a modification of the old Code under which the
lessee had no right at all to be reimbursed for the improvements introduced on
the leased property, he being entitled merely to the rights of a usufructuary
right of removal and set-off, but not of reimbursement.19

Bachelor of Laws
The modification introduced in the above-quoted paragraph of Article 1678 on
partial reimbursement was intended to prevent unjust enrichment of the lessor
which now has to pay one-half of the value of the improvements at the time the
lease terminates because the lessee has already enjoyed the same, whereas the
lessor could enjoy them indefinitely thereafter.20
As the law on lease under the New Civil Code has specific rules concerning
useful improvements introduced by a lessee on the property leased, it is
erroneous on the part of petitioners to urge this Court to apply Article 448, in
relation to Article 546, regarding their claim for reimbursement and to invoke
the right of retention before reimbursement is made. Article 448 and Article
546 read:
ART. 448. The owner of the land on which anything has been built, sown or
sowing or planting, after payment of the indemnity provided for in articles 546
building or trees. In such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after proper
ART. 546. Necessary expenses shall be refunded to every possessor; but only
the possessor in good faith may retain the thing until he has been reimbursed
therefor.
Useful expenses shall be refunded only to the possessor in good faith with the
same right of retention, the person who has defeated him in the possession
having the option of refunding the amount of the expenses or of paying the
increase in value which the thing may have acquired by reason thereof.
Jurisprudence is replete with cases21 which categorically declare that Article 448
covers only cases in which the builders, sowers or planters believe themselves
to be owners of the land or, at least, have a claim of title thereto, but not when
the interest is merely that of a holder, such as a mere tenant, agent or
usufructuary. A tenant cannot be said to be a builder in good faith as he has no
pretension to be owner.22
In a plethora of cases,23 this Court has held that Articles 448 of the Civil Code,
in relation to Article 546 of the same Code, which allows full reimbursement of
useful improvements and retention of the premises until reimbursement is
made, applies only to a possessor in good faith, i.e., one who builds on land
with the belief that he is the owner thereof. It does not apply where ones only
interest is that of a lessee under a rental contract; otherwise, it would always be
in the power of the tenant to "improve" his landlord out of his
property. 24 (Underscoring supplied)

Bachelor of Laws
Sia v. Court of Appeals,25 which cites Cabangis v. Court of
Appeals, exhaustively explains the applicability of Article 1678 on disputes
26
relating to useful improvements introduced by a lessee on leased premises, viz:

xxxx
Second. Petitioner stubbornly insists that he may not be ejected from private
respondent's land because he has the right, under Articles 448 and 546 of the
New Civil Code, to retain possession of the leased premises until he is paid the
full fair market value of the building constructed thereon by his parents.
Petitioner is wrong, of course. The Regional Trial Court and the Court of
Appeals correctly held that it is Article 1678 of the New Civil Code that governs
petitioner's right vis-a-vis the improvements built by his parents on private
respondent's land.
In the 1991 case of Cabangis v. Court of Appeals where the subject of the lease
contract was also a parcel of land and the lessee's father constructed a family
residential house thereon, and the lessee subsequently demanded indemnity
for the improvements built on the lessor's land based on Articles 448 and 546
of the New Civil Code, we pointed out that reliance on said legal provisions was
misplaced.
"The reliance by the respondent Court of Appeals on Articles 448 and 546 of
the Civil Code of the Philippines is misplaced. These provisions have no
application to a contract of lease which is the subject matter of this
controversy. Instead, Article 1678 of the Civil Code applies. . . .
xxxx
On the other hand, Article 448 governs the right of accession while Article 546
pertains to effects of possession. The very language of these two provisions
clearly manifest their inapplicability to lease contracts. . . .
xxxx
Thus, the improvements that the private respondent's father had introduced in
the leased premises were done at his own risk as lessee. The right to indemnity
equivalent to one-half of the value of the said improvements the house, the
filling materials, and the hollow block fence or wall is governed, as earlier
adverted to, by the provisions of Art. 1678, first paragraph of the Civil Code
above quoted. But this right to indemnity exists only if the lessor opts to
appropriate the improvements (Alburo v. Villanueva, supra, note 10 at 279-280;
Valencia v. Ayala de Roxas, supra, note 10 at 46). The refusal of the lessor to
pay the lessee one-half of the value of the useful improvements gives rise to the
right of removal. On this score, the commentary of Justice Paras is enlightening.
'Note that under the 1st paragraph of Art. 1678, the law on the right of
REMOVAL says that 'should the lessor refuse to reimburse said amount, the
lessee may remove the improvements, even though the principal thing may

Bachelor of Laws
suffer thereby.' While the phrase 'even though' implies that Art. 1678 always
applies regardless of whether or not the improvements can be removed without
injury to the leased premises, it is believed that application of the Article
cannot always be done. The rule is evidently intended for cases where a true
accession takes place as when part of the land leased is, say, converted into a
fishpond; and certainly not where as easily removable
thing (such as a wooden fence) has been introduced. There is no doubt that in a
case involving such a detachable fence, the lessee can take the same away with
him when the lease expires (5 E. Paras, Civil Code of the Philippines Annotated
345 [11th ed., 1986]).'
xxxx
Clearly, it is Article 1678 of the New Civil Code which applies to the present
case.1wphi1
Petitioners claim for reimbursement of the alleged entire value of the
improvements does not thus lie under Article 1678. Not even for one-half of
such alleged value, there being no substantial evidence, e.g., receipts or other
documentary evidence detailing costs of construction. Besides, by petitioners
admission, of the structures they originally built the billiard hall,
restaurant, sari-sari store and a parking lot, only the "bodega-like" sari-
sari store and the parking lot now exist.27
At all events, under Article 1678, it is the lessor who is given the option, upon
termination of the lease contract, either to appropriate the useful
improvements by paying one-half of their value at that time, or to allow the
lessee to remove the improvements. This option solely belongs to the lessor as
the law is explicit that "[s]hould the lessor refuse to reimburse said amount, the
lessee may remove the improvements, even though the principal thing may
suffer damage thereby." It appears that the lessor has opted not to reimburse.
WHEREFORE, the petition is DENIED. The Court of Appeals Decision of January
19, 2005 is AFFIRMED in light of the foregoing discussions.
Costs against petitioners.
SO ORDERED.

Bachelor of Laws
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 175444 December 14, 2011
JAIME ABALOS and SPOUSES FELIX SALAZAR and CONSUELO SALAZAR,
GLICERIO ABALOS, HEIRS OF AQUILINO ABALOS, namely: SEGUNDA
BAUTISTA, ROGELIO ABALOS, DOLORES A. ROSARIO, FELICIDAD ABALOS,
ROBERTO ABALOS, JUANITO ABALOS, TITA ABALOS, LITA A. DELA CRUZ
AND HEIRS OF AQUILINA ABALOS, namely: ARTURO BRAVO, PURITA B.
MENDOZA, LOURDES B. AGANON, CONSUELO B. SALAZAR, PRIMA B. DELOS
SANTOS, THELMA APOSTOL and GLECERIO ABALOS, Petitioners,
vs.
HEIRS OF VICENTE TORIO, namely: PUBLIO TORIO, LIBORIO TORIO,
VICTORINA TORIO, ANGEL TORIO, LADISLAO TORIO, PRIMO TORIO and
NORBERTO TORIO, Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari seeking to set aside the
Decision1 dated June 30, 2006 and Resolution2 dated November 13, 2006 by the
Court of Appeals (CA) in CA-G.R. SP No. 91887. The assailed Decision reversed
and set aside the Decision3 dated June 14, 2005 of the Regional Trial Court
(RTC) of Lingayen, Pangasinan, Branch 69, while the questioned Resolution
denied petitioners' Motion for Reconsideration.
The factual and procedural antecedents of the case are as follows:
On July 24, 1996, herein respondents filed a Complaint for Recovery of
Possession and Damages with the Municipal Trial Court (MTC) of Binmaley,
Pangasinan against Jaime Abalos (Jaime) and the spouses Felix and Consuelo
Salazar. Respondents contended that: they are the children and heirs of one
Vicente Torio (Vicente) who died intestate on September 11, 1973; at the time
of the death of Vicente, he left behind a parcel of land measuring 2,950 square
meters, more or less, which is located at San Isidro Norte, Binmaley,
Pangasinan; during the lifetime of Vicente and through his tolerance, Jaime and
the Spouses Salazar were allowed to stay and build their respective houses on
the subject parcel of land; even after the death of Vicente, herein respondents
allowed Jaime and the Spouses Salazar to remain on the disputed lot; however,
in 1985, respondents asked Jaime and the Spouses Salazar to vacate the subject
lot, but they refused to heed the demand of respondents forcing respondents
to file the complaint.4

Bachelor of Laws
Jaime and the Spouses Salazar filed their Answer with Counterclaim, denying
the material allegations in the Complaint and asserting in their Special and
Affirmative Defenses that: respondents' cause of action is barred by acquisitive
prescription; the court a quo has no jurisdiction over the nature of the action
and the persons of the defendants; the absolute and exclusive owners and
possessors of the disputed lot are the deceased predecessors of defendants;
defendants and their predecessors-in-interest had been in actual, continuous
and peaceful possession of the subject lot as owners since time immemorial;
defendants are faithfully and religiously paying real property taxes on the
disputed lot as evidenced by Real Property Tax Receipts; they have
continuously introduced improvements on the said land, such as houses, trees
and other kinds of ornamental plants which are in existence up to the time of
the filing of their Answer.5
On the same date as the filing of defendants' Answer with Counterclaim, herein
petitioners filed their Answer in Intervention with Counterclaim. Like the
defendants, herein petitioners claimed that their predecessors-in-interest were
the absolute and exclusive owners of the land in question; that petitioners and
their predecessors had been in possession of the subject lot since time
immemorial up to the present; they have paid real property taxes and
introduced improvements thereon.6
After the issues were joined, trial ensued.
On December 10, 2003, the MTC issued a Decision, the dispositive portion of
which reads as follows:
WHEREFORE, in view of the foregoing consideration[s], the Court adjudged the
case in favor of the plaintiffs and against the defendants and defendants-
intervenors are ordered to turn over the land in question to the plaintiffs (Lot
Nos. 869 and 870, Cad. 467-D. Binmaley Cadastre located in Brgy. San Isidro
Norte, Binmaley, Pangasinan with an area of 2,950 sq. m., more or less,
bounded and described in paragraph 3 of the Complaint[)]; ordering the
defendants and defendants-intervenors to remove their respective houses
standing on the land in dispute; further ordering the defendants and
defendants-intervenors, either singly or jointly to pay the plaintiffs land rent in
the amount of 12,000.00 per year to be reckoned starting the year 1996 until
defendants and defendants-intervenors will finally vacate the premises;
furthermore, defendants and defendants-intervenors are also ordered to pay,
either singly or jointly, the amount of 10,000.00 as and by way of attorney's
fees and costs of suit.
SO ORDERED.7
Jaime and the Spouses Salazar appealed the Decision of the MTC with the RTC
of Lingayen, Pangasinan.8 Herein petitioners, who were intervenors, did not file
an appeal.

Bachelor of Laws
In its Decision dated June 14, 2005, the RTC ruled in favor of Jaime and the
Spouses Salazar, holding that they have acquired the subject property through
prescription. Accordingly, the RTC dismissed herein respondents' complaint.
Aggrieved, herein respondents filed a petition for review with the CA assailing
the Decision of the RTC.
On June 30, 2006, the CA promulgated its questioned Decision, the dispositive
portion of which reads, thus:
WHEREFORE, the petition is GRANTED. The Decision dated June 14, 2005 of the
Regional Trial Court, Branch 69, Lingayen, Pangasinan is hereby REVERSED and
SET ASIDE. In its stead, a new one is entered reinstating the Decision dated
December 10, 2003 of the Municipal Trial Court of Binmaley, Pangasinan.
SO ORDERED.9
Jaime and the Spouses Salazar filed a Motion for Reconsideration, but the same
was denied by the CA in its Resolution dated November 13, 2006.
Hence, the instant petition based on a sole assignment of error, to wit:
THE COURT OF APPEALS ERRED IN NOT APPRECIATING THAT THE
PETITIONERS HEREIN ARE NOW THE ABSOLUTE AND EXCLUSIVE OWNERS
OF THE LAND IN QUESTION BY VIRTUE OF ACQUISITIVE PRESCRIPTION.10
The main issue raised by petitioners is whether they and their predecessors-in-
interest possessed the disputed lot in the concept of an owner, or whether their
possession is by mere tolerance of respondents and their predecessors-in-
interest. Corollarily, petitioners claim that the due execution and authenticity of
the deed of sale upon which respondents' predecessors-in-interest derived their
ownership were not proven during trial.
The petition lacks merit.
Preliminarily, the Court agrees with the observation of respondents that some
of the petitioners in the instant petition were the intervenors 11 when the case
was filed with the MTC. Records would show that they did not appeal the
Decision of the MTC.12 The settled rule is that failure to perfect an appeal
renders the judgment final and executory.13 Hence, insofar as the intervenors in
the MTC are concerned, the judgment of the MTC had already become final and
executory.
It also bears to point out that the main issue raised in the instant petition,
which is the character or nature of petitioners' possession of the subject parcel
of land, is factual in nature.
Settled is the rule that questions of fact are not reviewable in petitions for
review on certiorari under Rule 45 of the Rules of Court.14 Section 1 of Rule 45

Bachelor of Laws
states that petitions for review on certiorari "shall raise only questions of law
which must be distinctly set forth."
Doubtless, the issue of whether petitioners possess the subject property as
owners, or whether they occupy the same by mere tolerance of respondents, is
a question of fact. Thus, it is not reviewable.
Nonetheless, the Court has, at times, allowed exceptions from the
abovementioned restriction. Among the recognized exceptions are the
following:
(a) When the findings are grounded entirely on speculation, surmises, or
conjectures;
(b) When the inference made is manifestly mistaken, absurd, or
impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of facts;
(e) When the findings of facts are conflicting;
(f) When in making its findings the CA went beyond the issues of the
case, or its findings are contrary to the admissions of both the appellant
and the appellee;
(g) When the CAs findings are contrary to those by the trial court;
(h) When the findings are conclusions without citation of specific
evidence on which they are based;
(i) When the facts set forth in the petition as well as in the petitioners
main and reply briefs are not disputed by the respondent;
(j) When the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record; or
(k) When the CA manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, would justify a
different conclusion.15
In the present case, the findings of fact of the MTC and the CA are in conflict
with those of the RTC.
After a review of the records, however, the Court finds that the petition must
fail as it finds no error in the findings of fact and conclusions of law of the CA
and the MTC.
Petitioners claim that they have acquired ownership over the disputed lot
through ordinary acquisitive prescription.

Bachelor of Laws
Acquisitive prescription of dominion and other real rights may be ordinary or
extraordinary.16 Ordinary acquisitive prescription requires possession in good
faith and with just title for ten (10) years.17 Without good faith and just title,
acquisitive prescription can only be extraordinary in character which requires
uninterrupted adverse possession for thirty (30) years.18
Possession "in good faith" consists in the reasonable belief that the person from
whom the thing is received has been the owner thereof, and could transmit his
ownership.19 There is "just title" when the adverse claimant came into
possession of the property through one of the modes recognized by law for the
acquisition of ownership or other real rights, but the grantor was not the owner
or could not transmit any right.20
In the instant case, it is clear that during their possession of the property in
question, petitioners acknowledged ownership thereof by the immediate
predecessor-in-interest of respondents. This is clearly shown by the Tax
Declaration in the name of Jaime for the year 1984 wherein it contains a
statement admitting that Jaime's house was built on the land of Vicente,
respondents' immediate predecessor-in-interest.21 Petitioners never disputed
such an acknowledgment. Thus, having knowledge that they nor their
predecessors-in-interest are not the owners of the disputed lot, petitioners'
possession could not be deemed as possession in good faith as to enable them
to acquire the subject land by ordinary prescription. In this respect, the Court
agrees with the CA that petitioners' possession of the lot in question was by
mere tolerance of respondents and their predecessors-in-interest. Acts of
possessory character executed due to license or by mere tolerance of the owner
are inadequate for purposes of acquisitive prescription.22 Possession, to
constitute the foundation of a prescriptive right, must be en concepto de dueo,
or, to use the common law equivalent of the term, that possession should be
adverse, if not, such possessory acts, no matter how long, do not start the
running of the period of prescription.23
Moreover, the CA correctly held that even if the character of petitioners'
possession of the subject property had become adverse, as evidenced by their
declaration of the same for tax purposes under the names of their
predecessors-in-interest, their possession still falls short of the required period
of thirty (30) years in cases of extraordinary acquisitive prescription. Records
show that the earliest Tax Declaration in the name of petitioners was in 1974.
Reckoned from such date, the thirty-year period was completed in 2004.
However, herein respondents' complaint was filed in 1996, effectively
interrupting petitioners' possession upon service of summons on them.24Thus,
petitioners possession also did not ripen into ownership, because they failed to
meet the required statutory period of extraordinary prescription.
This Court has held that the evidence relative to the possession upon which the
alleged prescription is based, must be clear, complete and conclusive in order
to establish the prescription.25 In the present case, the Court finds no error on

Bachelor of Laws
the part of the CA in holding that petitioners failed to present competent
evidence to prove their alleged good faith in neither possessing the subject lot
nor their adverse claim thereon. Instead, the records would show that
petitioners' possession was by mere tolerance of respondents and their
predecessors-in-interest.1avvphi1
Finally, as to the issue of whether the due execution and authenticity of the
deed of sale upon which respondents anchor their ownership were not proven,
the Court notes that petitioners did not raise this matter in their Answer as well
as in their Pre-Trial Brief. It was only in their Comment to respondents' Petition
for Review filed with the CA that they raised this issue. Settled is the rule that
points of law, theories, issues, and arguments not adequately brought to the
attention of the trial court need not be, and ordinarily will not be, considered
by a reviewing court.26 They cannot be raised for the first time on appeal. To
allow this would be offensive to the basic rules of fair play, justice and due
process.27
Even granting that the issue of due execution and authenticity was properly
raised, the Court finds no cogent reason to depart from the findings of the CA,
to wit:
xxxx
Based on the foregoing, respondents [Jaime Abalos and the Spouses Felix and
Consuelo Salazar] have not inherited the disputed land because the same was
shown to have already been validly sold to Marcos Torio, who, thereupon,
assigned the same to his son Vicente, the father of petitioners [herein
respondents]. A valid sale was amply established and the said validity subsists
because the deed evidencing the same was duly notarized.
There is no doubt that the deed of sale was duly acknowledged before a notary
public. As a notarized document, it has in its favor the presumption of
regularity and it carries the evidentiary weight conferred upon it with respect to
its due execution. It is admissible in evidence without further proof of its
authenticity and is entitled to full faith and credit upon its face.28
Indeed, settled is the rule in our jurisdiction that a notarized document has in
its favor the presumption of regularity, and to overcome the same, there must
be evidence that is clear, convincing and more than merely preponderant;
otherwise, the document should be upheld.29 In the instant case, petitioners'
bare denials will not suffice to overcome the presumption of regularity of the
assailed deed of sale.
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of
the Court of Appeals in CA-G.R. SP No. 91887 are AFFIRMED.
SO ORDERED.

Bachelor of Laws
SECOND DIVISION
G.R. No. 109595 April 27, 2000
CRISTETA CHUA-BURCE, petitioner,
vs.
COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES, respondents.
QUISUMBING, J.:
On August 16, 1985, the Manager of Metropolitan Bank and Trust
Company Ramon Rocamora requested the Assistant Cashier Fructuoso
Peaflorto conduct a physical bundle count of the cash inside the vault, which
should total P4,000,000.00, more or less.
During this initial cash count, they discovered a shortage of P150,000.00.
The next day, to determine if there was actually a shortage, a re-verification of
the records and documents of the transactions in the bank was conducted.
There was still a shortage of P150,000.00.
The bank initiated investigations totalling four (4) in all. The first was by
Manager Ramon Rocamora and then by the bank's internal auditors Head
Antonio Batungbakal followed by the bank's Department of Internal Affairs
which conducted an independent investigation. Thereafter, the National Bureau
of Investigation came in to investigate. All of these investigations concluded
that there was a shortage of P150,000.00, and the person primarily responsible
was the bank's Cash Custodian, Cristeta Chua-Burce, the herein accused.
On November 4, 1985, unable to satisfactorily explain the shortage of
P150,000.00, the accused was terminated.
MBTC filed a Civil Case for Sum of Money and Damages with Preliminary
Attachment and Garnishment against petitioner and her husband, Antonio
Burce. The petitioner was also accused with estafa.
Thereafter, petitioner moved for the suspension of the criminal case on
the ground of the existence of a prejudicial question and that the resolution of
the civil case was determinative of her guilt or innocence in the criminal
case. The trial court granted the motion and suspended the trial of the criminal
case. On petition for certiorari to the Court of Appeals, the appellate court
ruled that there was no prejudicial question. 4
On March 18, 1991, the trial court rendered a consolidated
decision finding petitioner (a) guilty of estafa under Article 315 (1) (b) of the
Revised Penal Code in the criminal case, and (b) liable for the amount of
P150,000.00 in the civil case.

Bachelor of Laws
In a decision dated November 27, 1992, the Court of Appeals affirmed
the trial court's decision in toto. Petitioner's Motion for Reconsideration was
likewise denied.
The elements of estafa through conversion or misappropriation under Art. 315
(1) (b) of the Revised Penal Code are: 23
(1) that personal property is received in trust, on commission, for
administration or under any other circumstance involving the duty to
make delivery of or to return the same, even though the obligation is
guaranteed by a bond;
(2) that there is conversion or diversion of such property by the person
who has so received it or a denial on his part that he received it;
(3) that such conversion, diversion or denial is to the injury of another
and
(4) that there be demand for the return of the property.
Have the foregoing elements been met in the case at bar? We find the first
element absent. When the money, goods, or any other personal property is
received by the offender from the offended party (1) in trust or (2)
on commission or (3) for administration, the offender acquires both material
or physical possession and juridical possession of the thing
received. Juridical possession means a possession which gives the transferee
a right over the thing which the transferee may set up even against the
owner. In this case, petitioner was a cash custodian who was primarily
responsible for the cash-in-vault. Her possession of the cash belonging to the
bank is akin to that of a bank teller, both being mere bank employees.
In People v. Locson, 26 the receiving teller of a bank misappropriated the money
received by him for the bank. He was found liable for qualified theft on the
theory that the possession of the teller is the possession of the bank. We
explained in Locson that
The money was in the possession of the defendant as receiving teller of
the bank, and the possession of the defendant was the possession of the
bank. When the defendant, with grave abuse of confidence, removed the
money and appropriated it to his own use without the consent of the
bank, there was the taking or apoderamiento contemplated in the
definition of the crime of theft. 27
In the subsequent case of Guzman v. Court of Appeals, a travelling sales agent
misappropriated or failed to return to his principal the proceeds of things or
goods he was commissioned or authorized to sell. He was, however, found
liable for estafa under Article 315 (1) (b) of the Revised Penal Code, and not
qualified theft. In the Guzman case, we explained the distinction

Bachelor of Laws
between possession of a bank teller and an agent for purposes of determining
criminal liability
The case cited by the Court of Appeals (People vs. Locson. 57 Phil. 325), in
support of its theory that appellant only had the material possession of the
merchandise he was selling for his principal, or their proceeds, is not in
point. In said case the receiving teller of a bank who misappropriated
money received by him for the bank, was held guilty of qualified theft on
the theory that the possession of the teller is the possession of the bank.
There is an essential distinction between the possession by a receiving
teller of funds received from third persons paid to the bank, and an
agent who receives the proceeds of sales of merchandise delivered to
him in agency by his principal. In the former case, payment by third
persons to the teller is payment to the bank itself; the teller is a mere
custodian or keeper of the funds received, and has no independent right or
title to retain or possess the same as against the bank. An agent, on the
other hand, can even assert, as against his own principal, an independent,
autonomous, right to retain money or goods received in consequence of
the agency; as when the principal fails to reimburse him for advances he
has made, and indemnify him for damages suffered without his fault
(Article 1915, [N]ew Civil Code: Article 1730, old).
Petitioner herein being a mere cash custodian had no juridical possession
over the missing funds. Hence, the element of juridical possession being
absent, petitioner cannot be convicted of the crime of estafa under Article
315, No. 1 (b) of the Revised Penal Code. 29
WHEREFORE, the petition is hereby granted and petitioner is ACQUITTED of the
crime of estafa under Article 315 (1) (b) of the Revised Penal Code. Petitioner is
ordered RELEASED from custody unless she is being held for some other lawful
cause. No costs.1wphi1.nt. SO ORDERED.
SECOND DIVISION
PRECY BUNYI and MILA BUNYI, G.R. No. 172547

Petitioners,
Present:
- versus - QUISUMBING, J., Chairperson,

YNARES-SANTIAGO,*
CHICO-NAZARIO,*

Bachelor of Laws
FE S. FACTOR, BRION, and
Respondent. PERALTA,* JJ.
Promulgated:
June 30, 2009
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
For review on certiorari are the Decision[1] dated January 16, 2006 and
Resolution[2] dated April 26, 2006 of the Court of Appeals in CA-G.R. SP No.
90397, which had affirmed the Decision[3] dated March 7, 2005 of the Regional
Trial Court (RTC) of Las Pias City, Branch 198 in Civil Case No. LP-04-0160.
The antecedent facts are as follows:
Respondent Fe S. Factor is one of the co-owners of an 18-hectare piece of
land located in Almanza, Las Pias City. The ownership of the land originated
from respondents paternal grandparents Constantino Factor and Maura
Mayuga-Factor who had been in actual, continuous, peaceful, public, adverse
and exclusive possession and occupation of the land even before 1906.[4]
On December 9, 1975, the children of Constantino Factor and Maura
Mayuga-Factor filed a Petition for Original Registration and Confirmation of
Imperfect Title to the said parcel of land, or Lots 1, 2, 3 and 4 of Psu-253567,
before the RTC of Pasig City, Branch 71.[5] On December 8, 1994, the trial court
granted the petition in LRC Case No. N-9049 and declared the children of
Constantino Factor and Maura Mayuga-Factor as co-owners of the
property. [6] The children of Constantino Factor and Maura Mayuga-Factor
thereafter sold seven (7) hectares of the Factor family property during the same
year. The siblings, except Enrique Factor, respondents father, shared and
divided the proceeds of the sale among themselves, with the agreement that
Enrique would have as his share the portion of the property located in Antioch
Street, Pilar Executive Village, Almanza I, Las Pias City, known as the Factor
compound.
Following his acquisition thereof, Enrique caused the construction of
several houses in the compound including the subject property, a rest house,
where members of the Factor family stayed during get-togethers and
visits.[7] Petitioners Precy Bunyi and her mother, Mila Bunyi, were tenants in one
of the houses inside the compound, particularly in No. 8 Antioch
St., Pilar Village, Almanza, Las Pias City since 1999.[8]
When Enrique Factor died on August 7, 1993, the administration of the
Factor compound including the subject rest house and other residential houses
for lease was transferred and entrusted to Enriques eldest child, Gloria Factor-
Labao.

Bachelor of Laws
Gloria Factor-Labao, together with her husband Ruben Labao and their
son Reggie F. Labao, lived in Tipaz, Taguig, Metro Manila but visited and
sometimes stayed in the rest house because Gloria collected the rentals of the
residential houses and oversaw the Factor compound. When Gloria died
on January 15, 2001, the administration and management of the Factor
compound including the subject rest house, passed on to respondent Fe S.
Factor as co-owner of the property. As an act of goodwill and compassion,
considering that Ruben Labao was sickly and had no means of income,
respondent allowed him to stay at the rest house for brief, transient and
intermittent visits as a guest of the Factor family.
On May 31, 2002, Ruben Labao married petitioner Precy
Bunyi. On November 10, 2002, Ruben Labao died.
At about this time, respondent discovered that petitioners forcibly
opened the doors of the rest house and stole all the personal properties owned
by the Factor family and then audaciously occupied the premises. Respondent
alleged that petitioners unlawfully deprived her and the Factor family of the
subject propertys lawful use and possession. Respondent also added that when
she tried to enter the rest house on December 1, 2002, an unidentified person
who claimed to have been authorized by petitioners to occupy the premises,
barred, threatened and chased her with a jungle bolo. Thus, on September 12,
2003, respondent Fe S. Factor filed a complaint[9] for forcible entry against
herein petitioners Precy Bunyi and Mila Bunyi.
Petitioners, for their part, questioned Fes claim of ownership of the
subject property and the alleged prior ownership of her father Enrique
Factor. They asserted that the subject property was owned by Ruben Labao, and
that petitioner Precy with her husband moved into the subject property, while
petitioner Mila Bunyi, mother of Precy, remained in No. 8 Antioch St.
On July 13, 2004, the Metropolitan Trial Court (MeTC) of Las Pias City,
Branch 79 ruled in favor of Fe S. Factor. The dispositive portion of the decision
reads:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants ordering the latter and all
persons claiming rights under them to:
1. To immediately vacate the subject premises
and surrender possession thereof to the plaintiff.
2. To pay the monthly rental of P2,000.00
from December 1, 2002 up to the time they finally
vacate the premises.
3. To pay attorneys fee of Php 10,000.00.
The counter-claim is dismissed for lack of merit.

Bachelor of Laws
SO ORDERED.[10]
Petitioners appealed the decision to the RTC of Las Pias City, Branch 198,
which, however, affirmed in toto the decision of the MeTC and later denied
their motion for reconsideration.[11] Undaunted, petitioners filed a petition for
review before the Court of Appeals but it was denied also. Hence, the instant
petition before us.
Petitioners submit the following issues for the Courts consideration:
I.
[WHETHER] THE HONORABLE COURT OF APPEALS SERIOUSLY
ERRED IN LAW AND JURISPRUDENCE WHEN IT AFFIRMED THE
DECISION OF THE REGIONAL TRIAL COURT THAT FORCE, THREAT,
INTIMIDATION AND STEALTH HAD BEEN COMMITTED BY THE
PETITIONERS IN OCCUPYING THE SUBJECT RESIDENTIAL HOUSE;
II.
ERRED WHEN IT MISAPPRECIATED THE FACT THAT THE
RESPONDENT HAS A BETTER RIGHT OF PHYSICAL AND MATERIAL
POSSESSION OF THE SUBJECT PROPERTY;
III.
ERRED IN AFFIRMING THE FINDING OF THE REGIONAL [TRIAL]
COURT HOLDING PETITIONERS LIABLE TO PAY THE MONTHLY
RENTAL OF P2,000.00 FROM DECEMBER 1, 2002 UP TO THE TIME
THEY FINALLY VACATE PREMISES.[12]
The resolution of the first issue raised by petitioners requires us to
inquire into the sufficiency of the evidence presented below, a course of action
which this Court will not do, consistent with our repeated holding that the
Supreme Court is not a trier of facts.[13] The resolution of factual issues is the
function of lower courts, whose findings on these matters are received with
respect and considered binding by the Supreme Court subject only to certain
exceptions, none of which is present in the instant petition.[14] Noteworthy, in
this case, the cited findings of the RTC have been affirmed by the Court of
Appeals.
As to the second issue, the resolution thereof boils down to a
determination of who, between petitioners and respondent, would be entitled
to the physical possession of the subject property.
Both parties anchor their right of material possession of the disputed
property on their respective claims of ownership. Petitioners insist that

Bachelor of Laws
petitioner Precy has a better right of possession over the subject property since
she inherited the subject property as the surviving spouse and sole heir of
Ruben Labao, who owned the property before his death.
Respondent, on the other hand, hinges her claim of possession on the
fact that her predecessor-in-interest had prior possession of the property as
early as 1975.
After careful consideration, we find in favor of the respondent.
In ejectment cases, the only issue for resolution is who is entitled to the
physical or material possession of the property involved, independent of any
claim of ownership set forth by any of the party-litigants. The one who can
prove prior possession de facto may recover such possession even from the
owner himself.[15] Possession de facto is the physical possession of real
property. Possession de facto and not possession de jure is the only issue in a
forcible entry case.[16] This rule holds true regardless of the character of a
partys possession, provided, that he has in his favor priority of time which
entitles him to stay on the property until he is lawfully ejected by a person
having a better right by either accion publiciana or accion reivindicatoria.[17]
Petitioners argue that respondent was never in possession of the subject
property since the latter never occupied the same. They claim that they have
been in actual possession of the disputed property from the time petitioner
Precy married Ruben Labao in 2002.
In this instance, however, petitioners contention is unconvincing.
For one to be considered in possession, one need not have actual or
physical occupation of every square inch of the property at all
times.[18] Possession can be acquired not only by material occupation, but also
by the fact that a thing is subject to the action of ones will or by the proper acts
and legal formalities established for acquiring such right.[19] Possession can be
acquired by juridical acts. These are acts to which the law gives the force of
acts of possession. Examples of these are donations, succession, execution and
registration of public instruments, and the inscription of possessory
information titles.[20]
While petitioners claim that respondent never physically occupied the
subject property, they failed to prove that they had prior possession of the
subject property. On record, petitioner Precy Bunyi admitted that Gloria Factor-
Labao and Ruben Labao, as spouses, resided in Tipaz, Taguig, Metro Manila and
used the subject property whenever they visit the same.[21] Likewise, as pointed
out by the MeTC and the RTC, Ruben and petitioner Precys marriage certificate
revealed that at the time of their marriage, Ruben was residing at 123 A. Lake
St., San Juan, Metro Manila. Even Rubens death certificate showed that his place
of death and residence was at #4 Labao St., Tipaz, Taguig, Metro
Manila. Considering that her husband was never a resident of the subject

Bachelor of Laws
property, petitioner Precy failed to explain convincingly how she was able to
move in with Ruben Labao in the subject property during their marriage.
On the other hand, it was established that respondents grandparents,
Constantino Factor and Maura Mayuga-Factor, had been the occupants and in
possession of various agricultural parcel of lands situated in Almanza, Las Pias
City, in the concept of owners, for more than thirty years prior to 1975. In fact,
the RTC in its Decision dated December 8, 1994 in LRC Case No. N-9049 has
confirmed the rights of respondents predecessors over the subject property
and ordered the issuance of the corresponding certificate of title in their
favor.[22]
The right of respondents predecessors over the subject property is more
than sufficient to uphold respondents right to possession over the
same. Respondents right to the property was vested in her along with her
siblings from the moment of their fathers death.[23] As heir, respondent had the
right to the possession of the property, which is one of the attributes of
ownership. Such rights are enforced and protected from encroachments made
or attempted before the judicial declaration since respondent acquired
hereditary rights even before judicial declaration in testate or intestate
proceedings.[24]
After the death of Enrique Factor, it was his eldest child, Gloria Factor-
Labao who took over the administration of the subject property. And as a
consequence of co-ownership,[25] soon after the death of Gloria, respondent, as
one of the surviving co-owners, may be subrogated to the rights of the
deceased co-owner, which includes the right to the administration and
management of the subject property.
As found by the Court of Appeals, petitioners unsupported claim of
possession must yield to that of the respondent who traces her possession of
the subject property to her predecessors-in-interest who have always been in
possession of the subject property. Even assuming that respondent was never a
resident of the subject property, she could legally continue possessing the
property. Visiting the property on weekends and holidays is evidence of actual
or physical possession.[26] The fact of her residence somewhere else, by itself,
does not result in loss of possession of the subject property. The law does not
require one in possession of a house to reside in the house to maintain his
possession.[27] For, again, possession in the eyes of the law does not mean that a
man has to have his feet on every square meter of the ground before he is
deemed in possession.[28] There is no cogent reason to deviate from this
doctrine.
All things considered, this Court finds that respondent Fe S. Factor
successfully proved the extent and character of her possession over the
disputed property. As a consequence of her ownership thereof, respondent is
entitled to its possession, considering petitioners failure to prove prior

Bachelor of Laws
possession. The Court stresses, however, that its determination of ownership in
the instant case is not final. It is only a provisional determination for the sole
purpose of resolving the issue of possession. It would not bar or prejudice a
separate action between the same parties involving the quieting of title to the
subject property.[29]
As regards the means upon which the deprivation took effect, it is not
necessary that the respondent must demonstrate that the taking was done with
force, intimidation threat, strategy or stealth. The Supreme Court, in Baes v.
Lutheran Church in the Philippines,[30] explained:
In order to constitute force that would justify a forcible entry case,
the trespasser does not have to institute a state of war. The act of
going to the property and excluding the lawful possessor
therefrom necessarily implies the exertion of force over the
property which is all that is necessary and sufficient to show that
the action is based on the provisions of Section 1, Rule 70 of the
Rules of Court.[31]
As expressly stated in David v. Cordova:[32]
The words by force, intimidation, threat, strategy or stealth include
every situation or condition under which one person can
wrongfully enter upon real property and exclude another, who has
had prior possession therefrom. If a trespasser enters upon land in
open daylight, under the very eyes of the person already clothed
with lawful possession, but without the consent of the latter, and
there plants himself and excludes such prior possessor from the
property, the action of forcible entry and detainer can
unquestionably be maintained, even though no force is used by the
trespasser other than such as is necessarily implied from the mere
acts of planting himself on the ground and excluding the other
party.[33]
Respondent, as co-owner, has the control of the subject property even if
she does not stay in it. So when petitioners entered said property without the
consent and permission of the respondent and the other co-owners, the latter
were deprived of its possession. Moreover, the presence of an unidentified man
forbidding respondent from entering the subject property constitutes force
contemplated by Section 1,[34] Rule 70 of the Rules of Court.
As to the last issue, we have previously ruled that while the courts may
fix the reasonable amount of rent for the use and occupation of a disputed
property, they could not simply rely on their own appreciation of land values
without considering any evidence. The reasonable amount of any rent could not
be determined by mere judicial notice but by supporting evidence.[35] In the

Bachelor of Laws
instant case, we find no evidence on record to support the MeTCs award of
rent.
On the matter of attorneys fees awarded to the respondent, we are in
agreement to delete it. It is a well-settled rule that where attorneys fees are
granted, the court must explicitly state in the body of the decision, and not only
in the dispositive portion thereof, the legal reason for the award.[36] Again,
nothing in the body of both decisions of RTC and MeTC explicitly stated the
reasons for the award of attorneys fees.
WHEREFORE, the instant petition is DENIED. The challenged Decision
dated January 16, 2006 and Resolution dated April 26, 2006 of the Court of
Appeals in CA-G.R. SP No. 90397 are AFFIRMED withMODIFICATION that the
award of rentals and attorneys fees are DELETED.
No pronouncement as to costs.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 175604 April 10, 2008
THE PEOPLE OF THE PHILIPPINES, appellee,
vs.
SALVADOR PEAFLORIDA, JR., Y CLIDORO, appellant.

Bachelor of Laws
DECISION
TINGA, J.:
Subject of this appeal is the Decision1 of the Court of Appeals in CA-G.R. CR No.
01219, dated 31 July 2006, affirming in toto the judgment2 of the Regional Trial
Court of Camarines Sur, Branch 30, in Criminal Case No. T-1476. The trial court
found appellant Salvador Peaflorida y Clidoro guilty of transporting marijuana
and sentenced him to suffer the penalty of reclusion perpetua and to pay a fine
of one million pesos.
The Information against appellant reads:
That on or about the 7th day of June, 1994, in the afternoon thereat, at
Barangay Huyon-huyon, Municipality of Tigaon, Province of Camarines
Sur, Philippines and within the jurisdiction of this Honorable Court, the
above-named accused, with intent to sell, possess and to deliver with the
use of a bicycle, did then and there, willfully, unlawfully and feloniously
have in his possession, control and custody, [o]ne bundle estimated to be
one (1) kilo more or less, of dried marijuana leaves (Indian Hemp) without
the necessary license, permit or authority to sell, administer, deliver, give
away to another, distribute, dispatch in transit or transport any
prohibited drug from a competent officer as required by law.
ACTS CONTRARY TO LAW.3
Upon arraignment, appellant pleaded not guilty. Trial ensued.
Two police officers and one forensic chemist testified for the prosecution.
SPO3 Vicente Competente (Competente) narrated that in his capacity as chief of
the Investigation and Operation Division of the Philippine National Police (PNP)
station in Tigaon, Camarines Sur, that he received a tip from an asset that a
bundle of marijuana was being transported by appellant to Huyon-huyon from
another barangay in Tigaon, Camarines Sur.4 Major Domingo Agravante
(Agravante), chief of police of Tigaon, then organized a team composed of
Competente as team leader, SPO2 Ricardo Callo (Callo), SPO1 Portugal, PO3
Pillos and PO2 Edgar Latam. The team boarded the police mobile car and
proceeded to Sitio Nasulan in Barangay Huyon-huyon.5 They overtook appellant
who was on a bicycle. The police officers flagged appellant down and found
marijuana wrapped in a cellophane and newspaper together with other grocery
items. The amount of P1550.00 was also found in appellant's possession. The
police officers confiscated these items and took photographs thereof. Appellant
was then brought to the headquarters where he was booked. 6
Callo, who was the chief intelligence officer of Tigaon PNP, recounted that at
around 1:00 p.m. on 7 June 1994, he was called by Competente and was briefed
about the operation. While they were in Nasulan, the members of the police
team caught a man riding a bicycle who turned out to be appellant. Callo saw

Bachelor of Laws
the marijuana wrapped in a cellophane and newspaper in the bicycle of
appellant so the latter was brought to the police headquarters and turned over
to the desk officer. 7
Major Lorlie Arroyo (Arroyo), a forensic chemist at the PNP Crime Laboratory
Regional Office No. V, was presented as an expert witness to identify the
subject marijuana leaves. She related that after taking a representative sample
from the 928-gram confiscated dried leaves, the same was tested positive of
marijuana. The findings were reflected in Chemistry Report No. D-26-94 dated 9
June 1994.8
Appellant denied the accusations against him. Appellant, who is a resident of
Huyon-huyon, Tigaon, Camarines Sur, testified that in the morning of 7 June
1994, he first went to the house of Igmidio Miranda (Miranda) in Sagnay,
Camarines Sur. The latter accompanied appellant to the house of Arnel Dadis in
San Francisco, Tigaon to buy a dog. They, however, failed to get the dog;
prompting them to leave. On their way home, they met Boyet Obias (Obias) who
requested appellant to bring a package wrapped in a newspaper to Jimmy
Gonzales (Gonzales).9Appellant placed it in the basket in front of his bicycle
and Gonzales proceeded to the Tiagon town proper. He and Miranda parted
ways when they reached the place. Appellant dropped by the grocery store and
the blacksmith to get his scythe. On his way home, he was flagged down by the
police and was invited to go with them to the headquarters. Upon inspection of
the package in his bicycle, the police discovered the subject marijuana.
Appellant tried to explain that the package was owned by Obias but the police
did not believe him. He was sent to jail.10
Miranda corroborated the testimony of appellant that the two of them went to
San Francisco, Tigaon, Camarines Sur in the morning of 7 June 1994 to buy a
dog. On their way back to the town proper of Tigaon, they met Obias who
requested appellant to bring a package, which Miranda thought contained
cookies, to Gonzales. Upon reaching the town proper, they parted ways.11
On 26 October 1998, the trial court rendered judgment finding appellant guilty
beyond reasonable doubt of transporting a prohibited drug, a violation of
Section 4, Article II of Republic Act (R.A.) No. 6425, otherwise known as The
Dangerous Drugs Act of 1972, as amended by R.A. No. 7659. The dispositive
portion of the decision reads:
WHEREFORE, the accused Salvador Peaflorida[,Jr.] is hereby sentenced to
suffer the penalty of imprisonment of reclusion perpetua and to pay a
fine of One Million (P1,000,000.00) Pesos, with subsidiary imprisonment
in accordance with law, in case of insolvency for the fine and for him to
pay the costs.
The accused Salvador Peaflorida[,Jr.] shall be entitled to full credit of his
preventive imprisonment if he agreed to abide with the rules imposed

Bachelor of Laws
upon convicted person, otherwise, he shall be entitled to four-fifth (4/5)
credit thereof.
The subject marijuana consisting of 928 grams, possession thereof
being mala prohibita, the court hereby orders its confiscation in favor of
the Government to be destroyed in accordance with law.
This court, however, hereby recommends to His Excellency, the President
of the Philippines, through the Honorable Secretary of Justice to
commute the above penalty herein imposed, being too harsh; accordingly,
the said penalty imposed to accused Salvador Peaflorida[,Jr] shall be six
(6) years of prision correccional, as minimum, to eight (8) years and one
(1) day of prision mayor, as maximum.
SO ORDERED.12
In convicting appellant, the trial court lent credence to the testimonies of the
police officers, thus:
Now going over the evidence adduced, the court is convinced that the
accused Salvador Peaflorida[,Jr.] committed the offense of illegal
possession of 928 grams of marijuana, if not, of transporting it, as
charged. This is so, because it appears undisputed that on June 7, 1994,
at about 1:00 o'clock in the afternoon police officers Vicente Competente
and his four (4) other co-police officers apprehended the accused
Salvador Peaflorida[,Jr.] on the roadside at Nasulan, Huyon-huyon,
Tigaon, Camarines Sur [,] then riding on his bicycle and placed on the still
structure at its front, a thing wrapped in a newspaper and found to be
928 grams of marijuana. No ill-motive has been presented by the defense
against the police officers Vicente Competente and companions by falsely
testifying against the accused Salvador Peaflorida, Jr. So, the conclusion
is inevitable that the presumption that the police officers were in the
regular performance of their duties apply. The confiscation of the
marijuana subject of the instant case and the arrest of the accused
Salvador Peaflorida[,Jr.] by the said police officers being lawful, having
been caught in flagrante delicto, there is no need for the warrant for the
seizure of the fruit of the crime, the same being incidental to the lawful
arrest. Rightly so, because a person caught illegally possessing or
transporting drugs is subject to the warrantless search. Besides, object in
the "plain view" of an officer who has the right to be in the position to
have that view are subject to seizure and may be presented as evidence.13
In view of the penalty imposed, the case was directly appealed to this Court on
automatic review. Pursuant to our decision in People v. Mateo,14 however, this
case was referred to the Court of Appeals. The appellate court affirmed
appellant's conviction on 31 July 2006.

Bachelor of Laws
In a Resolution15 dated 14 February 2007, the parties were given to file their
supplemental briefs, if they so desire. Both parties manifested their intention
not to file any supplemental brief since all the issues and arguments have
already been raised in their respective briefs.16
Hence, the instant case is now before this Court on automatic review.
In assailing his conviction, appellant submits that there is doubt that he had
freely and consciously possessed marijuana. First, he claims that the alleged
asset did not name the person who would transport the marijuana to Huyon-
huyon. In view of the "vague" information supplied by the asset, the latter
should have been presented in court. Second, upon receipt of the information
from the asset, the police officers should have first investigated and tried to
obtain a warrant of arrest against appellant, instead of arbitrarily arresting him.
Third, appellant maintains that he is not aware of the contents of the package.
Fourth, upon arrival at the headquarters, the police did not determine the
contents and weight of the package. Fifth, appellant argues that the findings of
the forensic expert are questionable because there is doubt as to the identity of
the package examined.17
Prefatorily, factual findings of the trial courts, including their assessment of the
witness' credibility are entitled to great weight and respect by this Court,
particularly when the Court of Appeals affirm the findings. 18 Indeed, the trial
court is in the best position to assess the credibility of witnesses since it has
observed firsthand their demeanor, conduct and attitude under grilling
examination.19 After a review of the records of this case, we find no cogent
reason to disregard this time-honored principle.
We shall retrace the series of events leading to the arrest of appellant and
resolve the issues raised by him.
Acting on an asset's tip, a police team was organized to apprehend appellant
who was allegedly about to transport the subject marijuana. Appellant is wrong
in concluding that the asset did not name appellant. As early as 16 November
1996, appellant through counsel had already conceded in his
Memorandum20 filed with the trial court that based on the tip, he was about to
transport the contraband. It further cited excerpts from the result of the
preliminary investigation conducted by the judge on Competente, and we
quote:
Q: Did your [a]sset tell you the place and the person or persons involved?
A: Yes[,]sir.
Q: Where and who?
A: He said that marijuana is being transported from Tigaon town to Bgy.
Huyon-huyon by Salvador Peaflorida, Jr.21

Bachelor of Laws
Moreover, on cross-examination, the defense counsel even assumed that
according to the asset's tip it was appellant who was assigned to deliver the
contraband. And the witness under cross-examination affirmed it was indeed
appellant who would be making the delivery according to the tip:
Q: Will you inform this Honorable Court who has given you the tip that
the accused was going to deliver that marijuana[?] [W]ho is [this]
person?
A: It was a confidential tip.
Q: Now, but [sic] on June 1 you were in your office?
A: Yes[,] sir[.] I was in the office.
Q: Since your office is just near the Municipal Trial Court of Tigaon and
you were given a tip that Salvador Peaflorida[,Jr.] will be delivering
marijuana, why did you not get a [w]arrant of [a]rrest?
xxx
Q: The tip that was given to you that it was Salvador Peaflorida [who]
will be dealing marijuana on that date and according to you Salvador
was to travel from a certain town to Tigaon, is that the tip?
A: Yes[,] sir[.] That he would deliver marijuana.
Q: So, at the time that you form[ed] a team, Salvador was nowhere to be
seen, you have not seen the shadow of Salvador?
A: When the tip was given to us[,] I have not seen him[.] [B]ut the tip is he
will deliver from Tigaon to Huyon-huyon, that is why we chased
him.22 [Emphasis supplied]
Prescinding from the above argument, appellant insists that the asset should
have been presented in court. He invoked the court ruling in People v.
Libag,23 wherein the non-presentation of the informant was fatal to the case of
the prosecution. Libag cannot find application in this case. In that case, the
crime charged was the sale of shabuwhere the informant himself was a poseur-
buyer and a witness to the transaction. His testimony as a poseur-buyer was
indispensable because it could have helped the trial court in determining
whether or not the appellant had knowledge that the bag contained marijuana,
such knowledge being an essential ingredient of the offense for which he was
convicted.24 In this case, however, the asset was not present in the police
operation. The rule is that the presentation of an informant in an illegal drugs
case is not essential for conviction nor is it indispensable for a successful
prosecution because his testimony would merely be corroborative and
cumulative. Informants are generally not presented in court because of the
need to hide their identity and preserve their invaluable service to the police.25

Bachelor of Laws
Competente testified that his team caught up with appellant who was riding a
bicycle. He saw the marijuana in a package which appellant was carrying inside
his basket, thus:
Q: And so as the team leader x x x and in connection with the instruction
of Chief Domingo Agravante, what did you do?
A: We used the mobile and proceeded to the place, to the route where the
marijuana was being transported.
Q: When you said we to whom are you referring to?
A: The team.
Q: Were you able to go to the place as you said?
A: Yes, sir.
Q: So, upon reaching the place, [sic] what place was that?
A: Sitio Nasulan, Barangay Huyon-huyon, Tigaon, Camarines Sur.
Q: And upon reaching the place together with the other member of the
team, what did you find if you found any?
A: We overtook our suspect while riding in a bicycle and we stopped him.
Q: And did the suspect stop?
A: Yes[,] sir.
Q: Tell us the name of your suspect?
A: Salvador Peaflorida[,] Jr. y Clidoro.
Q: And after stopping the accused in this case, what else did you do[,] if
any[,] together with the team?
A: When we saw the marijuana and other groceries in his bicycle we
invited him to the headquarters.26
Callo also confirmed that he saw appellant transporting and in possession of
the subject marijuana:
Q: When you reached there[,] what happened next?
A: We have not reached yet [sic] the Huyon-huyon proper. [W]e are in
Nasulan when we met the man who had with him the marijuana.
xxx
Q: After you talked with the person with marijuana[,] what happened
next?

Bachelor of Laws
A: We saw on his bicycle a wrap[ped] marijuana.
Q: Who was in possession of that?
A: Salvador Peaflorida[,] Jr.
Q: How is that person related to the accused in this case now?
A: He is the one, sir.
Q: Kindly describe to us the marijuana that you are able to tell that it was
marijuana?
A: It was wrapped on [cellophane] and newspaper. We saw the edges of
the marijuana.
Q: For the [record], kindly describe to us the edges of the marijuana[;] its
appearance and color.
A: It was like a shape of ream of coupon bond and the color is green.27
These positive and categorical declarations of two police officers deserve
weight and credence in light of the presumption of regularity accorded to them
and the lack of motive on their part to falsely testify against appellant.
Appellant resorts to a challenge on the validity of his arrest predicated on lack
of a warrant of arrest. The OSG correctly justifies the failure to apply for an
arrest warrant because at that point, time was of the essence in appellant's
apprehension, noting in the same breath that there is no law requiring
investigation and surveillance upon receipt of tips from assets before
conducting police operations.28 The police officers succinctly testified on this
point when cross-examined, viz:
Q: Will you inform this Honorable Court who has given you the tip that
the accused was going to deliver that marijuana, who is that person?
A: It was a confidential tip.
Q: Now, but [sic] on June 1 you were in your office?
A: Yes[,] sir[.] I was in the office.
Q: Since your office is just near the Municipal Trial Court of Tigaon and
you were given a tip that Salvador Peaflorida[,Jr.] will be delivering
marijuana, why did you not get a [w]arrant of [a]rrest from the court?
A: There was no time to apply for a search warrant because just after the
information was received, we proceeded.
xxx

Bachelor of Laws
Q: If that is true, Mr. Competente that you were given a tip, the most that
you will do is first see the Judge of Tigaon in as much as you have not
seen yet [sic] the said person carrying marijuana?
A: There was no time for us to apply, because the marijuana is being
delivered so we have no more time to see the Judge.
xxx
Q: Are you aware of the law that illegally confiscated marijuana cannot be
used in court?
FISCAL SOLANO: Conclusion of law.
A: Yes, sir[.] [I]f it is illegally confiscated it cannot be used in court.
ATTY. CLEDERA: Despite that prohibition under the rules[,] you insisted
in apprehending Salvador Peaflorida[,Jr.] without warrant of arrest
inspite of the fact that you know that restriction?
A: Our apprehension was in plain view.
Q: How can you see that it was in open view when according to you the
house of Salvador is 120 meters[?] [H]ow can you see that distance?
A: I could see that because the marijuana was carried in his bicycle, we
have seen it.
Q: In what street?
A: Huyon-huyon[,] Sitio Nasulan, Tigaon, Camarines Sur.
Q: About what time did you see him?
A: 1:00 o'clock sir.
x x x29
The police was tipped off at around 1:00 p.m. that appellant was transporting
marijuana to Huyon-huyon. Certainly, they had no time to secure an arrest
warrant as appellant was already in transit and already committing a crime. The
arrest was effected after appellant was caught in flagrante delicto. He was seen
riding his bicycle and carrying with him the contraband, hence, demonstrating
that a crime was then already being committed. Under the circumstances, the
police had probable cause to believe that appellant was committing a crime.
Thus, the warrantless arrest is justified.
Article II, Section 4 of R.A. No. 6425, as amended by R.A. No. 7659, states:
SEC. 4. Sale, Administration, Delivery, Distribution and Transportation of
Prohibited Drugs. The penalty of reclusion perpetua to death and a fine
ranging from five hundred thousand pesos to ten million pesos shall be

Bachelor of Laws
imposed upon any person who, unless authorized by law, shall sell,
administer, deliver, give away to another, distribute, dispatch in transit or
transport any prohibited drug, or shall act as broker in any of such
transactions. x x x.
Jurisprudence defines "transport" as "to carry or convey from one place to
another."30 In the instant case, appellant was riding his bicycle when he was
caught by the police. He admitted that he was about to convey the package,
which contained marijuana, to a certain Jimmy Gonzales.
Appellant, however, denies any knowledge that the package in his possession
contained marijuana. But the trial court rejected his contention, noting that it
was impossible for appellant not to be aware of the contents of the package
because "marijuana has a distinct sweet and unmistakable aroma x x x which
would have alarmed him."31
Taking one step further, the appellate court went on to declare that being mala
prohibita, one commits the crime under R.A. No. 6425 by mere possession of a
prohibited drug without legal authority. Intent, motive or knowledge thereof is
not necessary.32
Appellant, in the main, asserts that he did not freely and consciously possess
marijuana.33 In criminal cases involving prohibited drugs, there can be no
conviction unless the prosecution shows that the accused knowingly possessed
the prohibited articles in his person, or that animus possidendi is shown to be
present together with his possession or control of such article. Animus
possidendi is only prima facie. It is subject to contrary proof and may be
rebutted by evidence that the accused did not in fact exercise power and
control over the thing in question, and did not intend to do so. The burden of
evidence is thus shifted to the possessor to explain absence of animus
possidendi.34
Knowledge refers to a mental state of awareness of a fact. Since courts cannot
penetrate the mind of an accused and thereafter state its perceptions with
certainty, resort to other evidence is necessary. Animus possidendi, as a state of
mind, may be determined on a case-to-case basis by taking into consideration
the prior or contemporaneous acts of the accused, as well as the surrounding
circumstances. Its existence may and usually must be inferred from the
attendant events in each particular case.35
Appellant failed to satisfactorily establish his lack of knowledge of possession
in the instant case. First, the marijuana was found in the bicycle he himself was
driving. Second, the police officers first readily saw in plain view the edges of
the marijuana leaves jutting out of the package. Third, it is incredulous that
appellant did not ask Obias what the package contained when the latter
requested him to do the delivery errand since the package was wrapped in a
newspaper and weighed almost one kilogram. The same observation was
reached by the trial court:

Bachelor of Laws
Finally, it is very hard for the court to accept the claim of the accused
Salvador Peaflorida[,Jr.] that he does not know that the thing wrapped in
a newspaper which Boyet Obias, now dead, requested the accused
Peaflorida[,Jr.] would deliver to a certain Jimmy Gonzales whose present
whereabouts is not known, was a marijuana. Its odor is different
especially from tobacco. This was observed by the court during the trial
of the case, everytime the wrapper containing the subject marijuana with
a volume of 928 grams is brought to court its odor is noticeable. For the
accused Peaflorida[,Jr.], not to notice it is hard to believe. Rightly so,
because marijuana has a distinct sweet and unmistakable aroma very
different from (and not nauseating) unlike tobacco. This aroma would
have alarmed him.36
Furthermore, it appeared from the cross-examination of appellant that Obias
was an acquaintance. In the ordinary course of things, one is expected to
inquire about the contents of a wrapped package especially when it is a mere
acquaintance who requests the delivery and, more so, when delivery is to a
place some distance away.
Anent appellant's claim that the package examined by Arroyo was not the one
confiscated from him, the appellate court had this to say:
SPO3 Competente testified that marijuana was confiscated from
appellant. The pictures of appellant, together with the items seized from
him, depict a package containing dry leaves suspected to be marijuana.
On the other hand, Forensic Chemist Arroyo testified that the specimen
she examined was delivered to her by Major Agravante on June 9, 1994 or
two days after the apprehension. From these series of events, it can be
inferred that the package confiscated from appellant and the specimen
delivered to Forensic Chemist Arroyo for laboratory examination were
one and the same.37
Despite intense grilling from the defense counsel, Arroyo never faltered and
was in fact consistent in declaring that she received the specimen from
Agravante on 9 June 1994 and immediately conducted the laboratory test.
Finally, the lower courts correctly sentenced appellant to suffer the penalty
of reclusion perpetua and to pay a fine of one million pesos by virtue of the
amendment to Section 4, R.A. No. 6425 by R.A. No. 7659.38
WHEREFORE, in view of the foregoing, the decision of the Regional Trial Court
of San Jose, Camarines Sur, Branch 30 in Criminal Case No. T-1476, finding
appellant Salvador Peaflorida y Clidoro guilty beyond reasonable doubt of
violation of Section 4, Article II of R.A. No. 6425 (Dangerous Drugs Act) as
amended, and sentencing him to suffer the penalty of reclusion perpetua and to
pay a fine of One Million Pesos (P1,000,000.00), is AFFIRMED in toto.
SO ORDERED.

Bachelor of Laws
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 184274 February 23, 2011
MARK SOLEDAD y CRISTOBAL, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
NACHURA, J.:

Bachelor of Laws
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
seeking to reverse and set aside the Court of Appeals (CA) Decision1 dated June
18, 2008 and Resolution2 dated August 22, 2008 in CA-G.R. CR. No. 30603. The
assailed Decision affirmed with modification the September 27, 2006
decision3 of the Regional Trial Court (RTC), Branch 202, Las Pias City, finding
petitioner Mark C. Soledad guilty beyond reasonable doubt of Violation of
Section 9(e), Republic Act (R.A.) No. 8484, or the Access Devices Regulations Act
of 1998; while the assailed Resolution denied petitioners motion for
reconsideration.
The facts of the case, as narrated by the CA, are as follows:
Sometime in June 2004, private complainant Henry C. Yu received a call on his
mobile phone from a certain "Tess" or "Juliet Villar" (later identified as Rochelle
Bagaporo), a credit card agent, who offered a Citifinancing loan assistance at a
low interest rate. Enticed by the offer, private complainant invited Rochelle
Bagaporo to go to his office in Quezon City. While in his office, Rochelle
Bagaporo indorsed private complainant to her immediate boss, a certain
"Arthur" [later identified as petitioner]. In their telephone conversation,
[petitioner] told private complainant to submit documents to a certain "Carlo"
(later identified as Ronald Gobenchiong). Private complainant submitted various
documents, such as his Globe handyphone original platinum gold card,
identification cards and statements of accounts. Subsequently, private
complainant followed up his loan status but he failed to get in touch with either
[petitioner] or Ronald Gobenchiong.
During the first week of August 2004, private complainant received his Globe
handyphone statement of account wherein he was charged for two (2) mobile
phone numbers which were not his. Upon verification with the phone company,
private complainant learned that he had additional five (5) mobile numbers in
his name, and the application for said cellular phone lines bore the picture of
[petitioner] and his forged signature. Private complainant also checked with
credit card companies and learned that his Citibank Credit Card database
information was altered and he had a credit card application with Metrobank
Card Corporation (Metrobank).
Thereafter, private complainant and Metrobanks junior assistant manager
Jefferson Devilleres lodged a complaint with the National Bureau of
Investigation (NBI) which conducted an entrapment operation.
During the entrapment operation, NBIs Special Investigator (SI) Salvador
Arteche [Arteche], together with some other NBI operatives, arrived in Las Pias
around 5:00 P.M. [Arteche] posed as the delivery boy of the Metrobank credit
card. Upon reaching the address written on the delivery receipt, [Arteche] asked
for Henry Yu. [Petitioner] responded that he was Henry Yu and presented to
[Arteche] two (2) identification cards which bore the name and signature of
private complainant, while the picture showed the face of [petitioner].

Bachelor of Laws
[Petitioner] signed the delivery receipt. Thereupon, [Arteche] introduced himself
as an NBI operative and apprehended [petitioner]. [Arteche] recovered from
[petitioner] the two (2) identification cards he presented to [Arteche] earlier. 4
Petitioner was thus charged with Violation of Section 9(e), R.A. No. 8484 for
"possessing a counterfeit access device or access device fraudulently applied
for." The accusatory portion of the Information reads:
That on or about the 13th day of August 2004, or prior thereto, in the City of
Las Pias, and within the jurisdiction of this Honorable Court, the above-named
accused, conspiring and confederating with certain Rochelle Bagaporo a.k.a.
Juliet Villar/Tess and a certain Ronald Gobenciong a.k.a. Carlo and all of them
mutually helping and aiding each other, did then and there willfully, unlawfully
and feloniously defraud complainant HENRY YU by applying a credit card, an
access device defined under R.A. 8484, from METROBANK CARD
CORPORATION, using the name of complainant Henry C. Yu and his personal
documents fraudulently obtained from him, and which credit card in the name
of Henry Yu was successfully issued and delivered to said accused using a
fictitious identity and addresses of Henry Yu, to the damage and prejudice of
the real Henry Yu.
CONTRARY TO LAW.5
Upon arraignment, petitioner pleaded "not guilty." Trial on the merits ensued.
After the presentation of the evidence for the prosecution, petitioner filed a
Demurrer to Evidence, alleging that he was not in physical and legal possession
of the credit card presented and marked in evidence by the prosecution. In an
Order dated May 2, 2006, the RTC denied the Demurrer to Evidence as it
preferred to rule on the merits of the case.6
On September 27, 2006, the RTC rendered a decision finding petitioner guilty
as charged, the dispositive portion of which reads:
In the light of the foregoing, the Court finds accused Mark Soledad y Cristobal
a.k.a. "Henry Yu," "Arthur" GUILTYbeyond reasonable doubt of violation of
Section 9(e), Republic Act 8484 (Access Device Regulation Act of 1998).
Accordingly, pursuant to Section 10 of Republic Act 8484 and applying the
Indeterminate Sentence Law, said accused is hereby sentenced to suffer an
imprisonment penalty of six (6) years of prision correccional, as minimum, to
not more than ten (10) years of prision mayor, as maximum. Further, accused is
also ordered to pay a fine of Ten Thousand Pesos (10,000.00) for the offense
committed.
SO ORDERED.7
On appeal, the CA affirmed petitioners conviction, but modified the penalty
imposed by the RTC by deleting the terms prision correccional and prision
mayor.

Bachelor of Laws
Hence, this petition raising the following issues:
(1) Whether or not the Information is valid;
(2) Whether or not the Information charges an offense, or the offense
petitioner was found guilty of;
(3) Whether or not petitioner was sufficiently informed of the nature of
the accusations against him;
(4) Whether or not petitioner was legally in "possession" of the credit card
subject of the case.8
The petition is without merit.
Petitioner was charged with Violation of R.A. No. 8484, specifically Section 9(e),
which reads as follows:
Section 9. Prohibited Acts. The following acts shall constitute access device
fraud and are hereby declared to be unlawful:
xxxx
(e) possessing one or more counterfeit access devices or access devices
fraudulently applied for.
Petitioner assails the validity of the Information and claims that he was not
informed of the accusation against him. He explains that though he was
charged with "possession of an access device fraudulently applied for," the act
of "possession," which is the gravamen of the offense, was not alleged in the
Information.
We do not agree.
Section 6, Rule 110 of the Rules of Criminal Procedure lays down the guidelines
in determining the sufficiency of a complaint or information. It states:
SEC. 6. Sufficiency of complaint or information. A complaint or information is
sufficient if it states the name of the accused; the designation of the offense
given by the statute; the acts or omissions complained of as constituting the
offense; the name of the offended party; the approximate date of the
commission of the offense; and the place where the offense was committed.
In the Information filed before the RTC, it was clearly stated that the accused is
petitioner "Mark Soledad y Cristobal a.k.a. Henry Yu/Arthur." It was also
specified in the preamble of the Information that he was being charged with
Violation of R.A. No. 8484, Section 9(e) for possessing a counterfeit access
device or access device fraudulently applied for. In the accusatory portion
thereof, the acts constituting the offense were clearly narrated in that
"[petitioner], together with other persons[,] willfully, unlawfully and feloniously

Bachelor of Laws
defrauded private complainant by applying [for] a credit card, an access device
defined under R.A. [No.] 8484, from Metrobank Card Corporation, using the
name of complainant Henry C. Yu and his personal documents fraudulently
obtained from him, and which credit card in the name of Henry Yu was
successfully issued, and delivered to said accused using a fictitious identity and
addresses of Henry Yu, to the damage and prejudice of the real Henry Yu."
Moreover, it was identified that the offended party was private complainant
Henry Yu and the crime was committed on or about the 13th day of August
2004 in the City of Las Pias. Undoubtedly, the Information contained all the
necessary details of the offense committed, sufficient to apprise petitioner of
the nature and cause of the accusation against him. As aptly argued by
respondent People of the Philippines, through the Office of the Solicitor
General, although the word "possession" was not used in the accusatory portion
of the Information, the word "possessing" appeared in its preamble or the first
paragraph thereof. Thus, contrary to petitioners contention, he was apprised
that he was being charged with violation of R.A. No. 8484, specifically section
9(e) thereof, for possession of the credit card fraudulently applied for.
The Courts discussion in People v. Villanueva9 on the relationship between the
preamble and the accusatory portion of the Information is noteworthy, and we
quote:
The preamble or opening paragraph should not be treated as a mere
aggroupment of descriptive words and phrases. It is as much an essential part
[of] the Information as the accusatory paragraph itself. The preamble in fact
complements the accusatory paragraph which draws its strength from the
preamble. It lays down the predicate for the charge in general terms; while the
accusatory portion only provides the necessary details. The preamble and the
accusatory paragraph, together, form a complete whole that gives sense and
meaning to the indictment. x x x.
xxxx
Moreover, the opening paragraph bears the operative word "accuses," which
sets in motion the constitutional process of notification, and formally makes
the person being charged with the commission of the offense an accused.
Verily, without the opening paragraph, the accusatory portion would be nothing
but a useless and miserably incomplete narration of facts, and the entire
Information would be a functionally sterile charge sheet; thus making it
impossible for the state to prove its case.
The Information sheet must be considered, not by sections or parts, but as one
whole document serving one purpose, i.e., to inform the accused why the full
panoply of state authority is being marshaled against him. Our task is not to
determine whether allegations in an indictment could have been more artfully
and exactly written, but solely to ensure that the constitutional requirement of
notice has been fulfilled x x x.10lawph!l

Bachelor of Laws
Besides, even if the word "possession" was not repeated in the accusatory
portion of the Information, the acts constituting it were clearly described in the
statement "[that the] credit card in the name of Henry Yu was successfully
issued, and delivered to said accused using a fictitious identity and addresses
of Henry Yu, to the damage and prejudice of the real Henry Yu." Without a
doubt, petitioner was given the necessary data as to why he was being
prosecuted.
Now on the sufficiency of evidence leading to his conviction.
Petitioner avers that he was never in possession of the subject credit card
because he was arrested immediately after signing the acknowledgement
receipt. Thus, he did not yet know the contents of the envelope delivered and
had no control over the subject credit card.11
Again, we find no value in petitioners argument.
The trial court convicted petitioner of possession of the credit card
fraudulently applied for, penalized by R.A. No. 8484. The law, however, does
not define the word "possession." Thus, we use the term as defined in Article
523 of the Civil Code, that is, "possession is the holding of a thing or the
enjoyment of a right." The acquisition of possession involves two elements: the
corpus or the material holding of the thing, and the animus possidendi or the
intent to possess it.12 Animus possidendi is a state of mind, the presence or
determination of which is largely dependent on attendant events in each case. It
may be inferred from the prior or contemporaneous acts of the accused, as well
as the surrounding circumstances.13
In this case, prior to the commission of the crime, petitioner fraudulently
obtained from private complainant various documents showing the latters
identity. He, thereafter, obtained cellular phones using private complainants
identity. Undaunted, he fraudulently applied for a credit card under the name
and personal circumstances of private complainant. Upon the delivery of the
credit card applied for, the "messenger" (an NBI agent) required two valid
identification cards. Petitioner thus showed two identification cards with his
picture on them, but bearing the name and forged signature of private
complainant. As evidence of the receipt of the envelope delivered, petitioner
signed the acknowledgment receipt shown by the messenger, indicating therein
that the content of the envelope was the Metrobank credit card.
Petitioner materially held the envelope containing the credit card with the
intent to possess. Contrary to petitioners contention that the credit card never
came into his possession because it was only delivered to him, the above
narration shows that he, in fact, did an active part in acquiring possession by
presenting the identification cards purportedly showing his identity as Henry
Yu. Certainly, he had the intention to possess the same. Had he not actively
participated, the envelope would not have been given to him. Moreover, his
signature on the acknowledgment receipt indicates that there was delivery and

Bachelor of Laws
that possession was transferred to him as the recipient. Undoubtedly,
petitioner knew that the envelope contained the Metrobank credit card, as
clearly indicated in the acknowledgment receipt, coupled with the fact that he
applied for it using the identity of private complainant.
Lastly, we find no reason to alter the penalty imposed by the RTC as modified
by the CA. Section 10 of R.A. No. 8484 prescribes the penalty of imprisonment
for not less than six (6) years and not more than ten (10) years, and a fine of
10,000.00 or twice the value of the access device obtained, whichever is
greater. Thus, the CA aptly affirmed the imposition of the indeterminate
penalty of six years to not more than ten years imprisonment, and a fine of
10,000.00.
WHEREFORE, premises considered, the petition is DENIED for lack of merit. The
Court of Appeals Decision dated June 18, 2008 and Resolution dated August
22, 2008 in CA-G.R. CR. No. 30603 are AFFIRMED.
SO ORDERED.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 80298 April 26, 1990
EDCA PUBLISHING & DISTRIBUTING CORP., petitioner,
vs.
THE SPOUSES LEONOR and GERARDO SANTOS, doing business under the
name and style of "SANTOS BOOKSTORE," and THE COURT OF
APPEALS, respondents.
Emiliano S. Samson, R. Balderrama-Samson, Mary Anne B. Samson for
petitioner.
Cendana Santos, Delmundo & Cendana for private respondents.
CRUZ, J.:

Bachelor of Laws
The case before us calls for the interpretation of Article 559 of the Civil Code
and raises the particular question of when a person may be deemed to have
been "unlawfully deprived" of movable property in the hands of another. The
article runs in full as follows:
Art. 559. The possession of movable property acquired in good faith is
equivalent to a title. Nevertheless, one who has lost any movable or has
been unlawfully deprived thereof, may recover it from the person in
possession of the same.
If the possessor of a movable lost or of which the owner has been
unlawfully deprived has acquired it in good faith at a public sale, the
owner cannot obtain its return without reimbursing the price paid
therefor.
The movable property in this case consists of books, which were bought from
the petitioner by an impostor who sold it to the private respondents.
Ownership of the books was recognized in the private respondents by the
Municipal Trial Court, 1 which was sustained by the Regional Trial
Court, 2 which was in turn sustained by the Court of Appeals. 3 The petitioner
asks us to declare that all these courts have erred and should be reversed.
This case arose when on October 5, 1981, a person identifying himself as
Professor Jose Cruz placed an order by telephone with the petitioner company
for 406 books, payable on delivery. 4 EDCA prepared the corresponding invoice
and delivered the books as ordered, for which Cruz issued a personal check
covering the purchase price of P8,995.65. 5 On October 7, 1981, Cruz sold 120
of the books to private respondent Leonor Santos who, after verifying the
seller's ownership from the invoice he showed her, paid him P1,700.00. 6
Meanwhile, EDCA having become suspicious over a second order placed by
Cruz even before clearing of his first check, made inquiries with the De la Salle
College where he had claimed to be a dean and was informed that there was no
such person in its employ. Further verification revealed that Cruz had no more
account or deposit with the Philippine Amanah Bank, against which he had
drawn the payment check. 7 EDCA then went to the police, which set a trap and
arrested Cruz on October 7, 1981. Investigation disclosed his real name as
Tomas de la Pea and his sale of 120 of the books he had ordered from EDCA
to the private respondents. 8
On the night of the same date, EDCA sought the assistance of the police in
Precinct 5 at the UN Avenue, which forced their way into the store of the
private respondents and threatened Leonor Santos with prosecution for buying
stolen property. They seized the 120 books without warrant, loading them in a
van belonging to EDCA, and thereafter turned them over to the petitioner. 9
Protesting this high-handed action, the private respondents sued for recovery
of the books after demand for their return was rejected by EDCA. A writ of

Bachelor of Laws
preliminary attachment was issued and the petitioner, after initial refusal,
finally surrendered the books to the private respondents. 10 As previously
stated, the petitioner was successively rebuffed in the three courts below and
now hopes to secure relief from us.
To begin with, the Court expresses its disapproval of the arbitrary action of the
petitioner in taking the law into its own hands and forcibly recovering the
disputed books from the private respondents. The circumstance that it did so
with the assistance of the police, which should have been the first to uphold
legal and peaceful processes, has compounded the wrong even more
deplorably. Questions like the one at bar are decided not by policemen but by
judges and with the use not of brute force but of lawful writs.
Now to the merits
It is the contention of the petitioner that the private respondents have not
established their ownership of the disputed books because they have not even
produced a receipt to prove they had bought the stock. This is unacceptable.
Precisely, the first sentence of Article 559 provides that "the possession of
movable property acquired in good faith is equivalent to a title," thus
dispensing with further proof.
The argument that the private respondents did not acquire the books in good
faith has been dismissed by the lower courts, and we agree. Leonor Santos first
ascertained the ownership of the books from the EDCA invoice showing that
they had been sold to Cruz, who said he was selling them for a discount
because he was in financial need. Private respondents are in the business of
buying and selling books and often deal with hard-up sellers who urgently have
to part with their books at reduced prices. To Leonor Santos, Cruz must have
been only one of the many such sellers she was accustomed to dealing with. It
is hardly bad faith for any one in the business of buying and selling books to
buy them at a discount and resell them for a profit.
But the real issue here is whether the petitioner has been unlawfully deprived
of the books because the check issued by the impostor in payment therefor was
dishonored.
In its extended memorandum, EDCA cites numerous cases holding that the
owner who has been unlawfully deprived of personal property is entitled to its
recovery except only where the property was purchased at a public sale, in
which event its return is subject to reimbursement of the purchase price. The
petitioner is begging the question. It is putting the cart before the horse. Unlike
in the cases invoked, it has yet to be established in the case at bar that EDCA
has been unlawfully deprived of the books.
The petitioner argues that it was, because the impostor acquired no title to the
books that he could have validly transferred to the private respondents. Its

Bachelor of Laws
reason is that as the payment check bounced for lack of funds, there was a
failure of consideration that nullified the contract of sale between it and Cruz.
The contract of sale is consensual and is perfected once agreement is reached
between the parties on the subject matter and the consideration. According to
the Civil Code:
Art. 1475. The contract of sale is perfected at the moment there is a
meeting of minds upon the thing which is the object of the contract and
upon the price.
From that moment, the parties may reciprocally demand performance,
subject to the provisions of the law governing the form of contracts.
xxx xxx xxx
Art. 1477. The ownership of the thing sold shall be transferred to the
vendee upon the actual or constructive delivery thereof.
Art. 1478. The parties may stipulate that ownership in the thing shall not
pass to the purchaser until he has fully paid the price.
It is clear from the above provisions, particularly the last one quoted, that
ownership in the thing sold shall not pass to the buyer until full payment of the
purchase only if there is a stipulation to that effect. Otherwise, the rule is that
such ownership shall pass from the vendor to the vendee upon the actual or
constructive delivery of the thing sold even if the purchase price has not yet
been paid.
Non-payment only creates a right to demand payment or to rescind the
contract, or to criminal prosecution in the case of bouncing checks. But absent
the stipulation above noted, delivery of the thing sold will effectively transfer
ownership to the buyer who can in turn transfer it to another.
In Asiatic Commercial Corporation v. Ang,11 the plaintiff sold some cosmetics to
Francisco Ang, who in turn sold them to Tan Sit Bin. Asiatic not having been
paid by Ang, it sued for the recovery of the articles from Tan, who claimed he
had validly bought them from Ang, paying for the same in cash. Finding that
there was no conspiracy between Tan and Ang to deceive Asiatic the Court of
Appeals declared:
Yet the defendant invoked Article 464 12 of the Civil Code providing,
among other things that "one who has been unlawfully deprived of
personal property may recover it from any person possessing it." We do
not believe that the plaintiff has been unlawfully deprived of the cartons
of Gloco Tonic within the scope of this legal provision. It has voluntarily
parted with them pursuant to a contract of purchase and sale. The
circumstance that the price was not subsequently paid did not render
illegal a transaction which was valid and legal at the beginning.

Bachelor of Laws
In Tagatac v. Jimenez,13 the plaintiff sold her car to Feist, who sold it to
Sanchez, who sold it to Jimenez. When the payment check issued to Tagatac by
Feist was dishonored, the plaintiff sued to recover the vehicle from Jimenez on
the ground that she had been unlawfully deprived of it by reason of Feist's
deception. In ruling for Jimenez, the Court of Appeals held:
The point of inquiry is whether plaintiff-appellant Trinidad C. Tagatac
has been unlawfully deprived of her car. At first blush, it would seem that
she was unlawfully deprived thereof, considering that she was induced to
part with it by reason of the chicanery practiced on her by Warner L.
Feist. Certainly, swindling, like robbery, is an illegal method of
deprivation of property. In a manner of speaking, plaintiff-appellant was
"illegally deprived" of her car, for the way by which Warner L. Feist
induced her to part with it is illegal and is punished by law. But does this
"unlawful deprivation" come within the scope of Article 559 of the New
Civil Code?
xxx xxx xxx
. . . The fraud and deceit practiced by Warner L. Feist earmarks this sale
as a voidable contract (Article 1390 N.C.C.). Being a voidable contract, it is
susceptible of either ratification or annulment. If the contract is ratified,
the action to annul it is extinguished (Article 1392, N.C.C.) and the
contract is cleansed from all its defects (Article 1396, N.C.C.); if the
contract is annulled, the contracting parties are restored to their
respective situations before the contract and mutual restitution follows
as a consequence (Article 1398, N.C.C.).
However, as long as no action is taken by the party entitled, either that of
annulment or of ratification, the contract of sale remains valid and
binding. When plaintiff-appellant Trinidad C. Tagatac delivered the car to
Feist by virtue of said voidable contract of sale, the title to the car passed
to Feist. Of course, the title that Feist acquired was defective and
voidable. Nevertheless, at the time he sold the car to Felix Sanchez, his
title thereto had not been avoided and he therefore conferred a good title
on the latter, provided he bought the car in good faith, for value and
without notice of the defect in Feist's title (Article 1506, N.C.C.). There
being no proof on record that Felix Sanchez acted in bad faith, it is safe
to assume that he acted in good faith.
The above rulings are sound doctrine and reflect our own interpretation of
Article 559 as applied to the case before us.
Actual delivery of the books having been made, Cruz acquired ownership over
the books which he could then validly transfer to the private respondents. The
fact that he had not yet paid for them to EDCA was a matter between him and
EDCA and did not impair the title acquired by the private respondents to the
books.

Bachelor of Laws
One may well imagine the adverse consequences if the phrase "unlawfully
deprived" were to be interpreted in the manner suggested by the petitioner. A
person relying on the seller's title who buys a movable property from him
would have to surrender it to another person claiming to be the original owner
who had not yet been paid the purchase price therefor. The buyer in the second
sale would be left holding the bag, so to speak, and would be compelled to
return the thing bought by him in good faith without even the right to
reimbursement of the amount he had paid for it.
It bears repeating that in the case before us, Leonor Santos took care to
ascertain first that the books belonged to Cruz before she agreed to purchase
them. The EDCA invoice Cruz showed her assured her that the books had been
paid for on delivery. By contrast, EDCA was less than cautious in fact, too
trusting in dealing with the impostor. Although it had never transacted with
him before, it readily delivered the books he had ordered (by telephone) and as
readily accepted his personal check in payment. It did not verify his identity
although it was easy enough to do this. It did not wait to clear the check of this
unknown drawer. Worse, it indicated in the sales invoice issued to him, by the
printed terms thereon, that the books had been paid for on delivery, thereby
vesting ownership in the buyer.
Surely, the private respondent did not have to go beyond that invoice to satisfy
herself that the books being offered for sale by Cruz belonged to him; yet she
did. Although the title of Cruz was presumed under Article 559 by his mere
possession of the books, these being movable property, Leonor Santos
nevertheless demanded more proof before deciding to buy them.
It would certainly be unfair now to make the private respondents bear the
prejudice sustained by EDCA as a result of its own negligence.1wphi1 We
cannot see the justice in transferring EDCA's loss to the Santoses who had
acted in good faith, and with proper care, when they bought the books from
Cruz.
While we sympathize with the petitioner for its plight, it is clear that its remedy
is not against the private respondents but against Tomas de la Pea, who has
apparently caused all this trouble. The private respondents have themselves
been unduly inconvenienced, and for merely transacting a customary deal not
really unusual in their kind of business. It is they and not EDCA who have a
right to complain.
WHEREFORE, the challenged decision is AFFIRMED and the petition is DENIED,
with costs against the petitioner.

Bachelor of Laws
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 123498 November 23, 2007
BPI FAMILY BANK, Petitioner,
vs.
AMADO FRANCO and COURT OF APPEALS, Respondents.
DECISION
NACHURA, J.:
Banks are exhorted to treat the accounts of their depositors with meticulous
care and utmost fidelity. We reiterate this exhortation in the case at bench.
Before us is a Petition for Review on Certiorari seeking the reversal of the Court
of Appeals (CA) Decision1 in CA-G.R. CV No. 43424 which affirmed with
modification the judgment2 of the Regional Trial Court, Branch 55, Manila
(Manila RTC), in Civil Case No. 90-53295.
This case has its genesis in an ostensible fraud perpetrated on the petitioner
BPI Family Bank (BPI-FB) allegedly by respondent Amado Franco (Franco) in
conspiracy with other individuals,3 some of whom opened and maintained

Bachelor of Laws
separate accounts with BPI-FB, San Francisco del Monte (SFDM) branch, in a
series of transactions.
On August 15, 1989, Tevesteco Arrastre-Stevedoring Co., Inc. (Tevesteco)
opened a savings and current account with BPI-FB. Soon thereafter, or on
August 25, 1989, First Metro Investment Corporation (FMIC) also opened a time
deposit account with the same branch of BPI-FB with a deposit of
100,000,000.00, to mature one year thence.
Subsequently, on August 31, 1989, Franco opened three accounts, namely, a
current,4 savings,5 and time deposit,6with BPI-FB. The current and savings
accounts were respectively funded with an initial deposit of 500,000.00 each,
while the time deposit account had 1,000,000.00 with a maturity date of
August 31, 1990. The total amount of 2,000,000.00 used to open these
accounts is traceable to a check issued by Tevesteco allegedly in consideration
of Francos introduction of Eladio Teves,7 who was looking for a conduit bank
to facilitate Tevestecos business transactions, to Jaime Sebastian, who was
then BPI-FB SFDMs Branch Manager. In turn, the funding for the 2,000,000.00
check was part of the 80,000,000.00 debited by BPI-FB from FMICs time
deposit account and credited to Tevestecos current account pursuant to an
Authority to Debit purportedly signed by FMICs officers.
It appears, however, that the signatures of FMICs officers on the Authority to
Debit were forged.8 On September 4, 1989, Antonio Ong,9 upon being shown the
Authority to Debit, personally declared his signature therein to be a forgery.
Unfortunately, Tevesteco had already effected several withdrawals from its
current account (to which had been credited the 80,000,000.00 covered by the
forged Authority to Debit) amounting to 37,455,410.54, including the
2,000,000.00 paid to Franco.
On September 8, 1989, impelled by the need to protect its interests in light of
FMICs forgery claim, BPI-FB, thru its Senior Vice-President, Severino
Coronacion, instructed Jesus Arangorin10 to debit Francos savings and current
accounts for the amounts remaining therein.11 However, Francos time deposit
account could not be debited due to the capacity limitations of BPI-FBs
computer.12
In the meantime, two checks13 drawn by Franco against his BPI-FB current
account were dishonored upon presentment for payment, and stamped with a
notation "account under garnishment." Apparently, Francos current account
was garnished by virtue of an Order of Attachment issued by the Regional Trial
Court of Makati (Makati RTC) in Civil Case No. 89-4996 (Makati Case), which had
been filed by BPI-FB against Franco et al.,14 to recover the 37,455,410.54
representing Tevestecos total withdrawals from its account.
Notably, the dishonored checks were issued by Franco and presented for
payment at BPI-FB prior to Francos receipt of notice that his accounts were

Bachelor of Laws
under garnishment.15 In fact, at the time the Notice of Garnishment dated
September 27, 1989 was served on BPI-FB, Franco had yet to be impleaded in
the Makati case where the writ of attachment was issued.
It was only on May 15, 1990, through the service of a copy of the Second
Amended Complaint in Civil Case No. 89-4996, that Franco was impleaded in
the Makati case.16 Immediately, upon receipt of such copy, Franco filed a Motion
to Discharge Attachment which the Makati RTC granted on May 16, 1990. The
Order Lifting the Order of Attachment was served on BPI-FB on even date, with
Franco demanding the release to him of the funds in his savings and current
accounts. Jesus Arangorin, BPI-FBs new manager, could not forthwith comply
with the demand as the funds, as previously stated, had already been debited
because of FMICs forgery claim. As such, BPI-FBs computer at the SFDM Branch
indicated that the current account record was "not on file."
With respect to Francos savings account, it appears that Franco agreed to an
arrangement, as a favor to Sebastian, whereby 400,000.00 from his savings
account was temporarily transferred to Domingo Quiaoits savings account,
subject to its immediate return upon issuance of a certificate of deposit which
Quiaoit needed in connection with his visa application at the Taiwan Embassy.
As part of the arrangement, Sebastian retained custody of Quiaoits savings
account passbook to ensure that no withdrawal would be effected therefrom,
and to preserve Francos deposits.
On May 17, 1990, Franco pre-terminated his time deposit account. BPI-FB
deducted the amount of 63,189.00 from the remaining balance of the time
deposit account representing advance interest paid to him.
These transactions spawned a number of cases, some of which we had already
resolved.
FMIC filed a complaint against BPI-FB for the recovery of the amount of
80,000,000.00 debited from its account.17The case eventually reached this
Court, and in BPI Family Savings Bank, Inc. v. First Metro Investment
Corporation,18 we upheld the finding of the courts below that BPI-FB failed to
exercise the degree of diligence required by the nature of its obligation to treat
the accounts of its depositors with meticulous care. Thus, BPI-FB was found
liable to FMIC for the debited amount in its time deposit. It was ordered to pay
65,332,321.99 plus interest at 17% per annum from August 29, 1989 until
fully restored. In turn, the 17% shall itself earn interest at 12% from October 4,
1989 until fully paid.
In a related case, Edgardo Buenaventura, Myrna Lizardo and Yolanda Tica
(Buenaventura, et al.),19 recipients of a 500,000.00 check proceeding from the
80,000,000.00 mistakenly credited to Tevesteco, likewise filed suit.
Buenaventura et al., as in the case of Franco, were also prevented from effecting
withdrawals20 from their current account with BPI-FB, Bonifacio Market, Edsa,
Caloocan City Branch. Likewise, when the case was elevated to this Court
Bachelor of Laws
docketed as BPI Family Bank v. Buenaventura,21 we ruled that BPI-FB had no
right to freeze Buenaventura, et al.s accounts and adjudged BPI-FB liable
therefor, in addition to damages.
Meanwhile, BPI-FB filed separate civil and criminal cases against those believed
to be the perpetrators of the multi-million peso scam.22 In the criminal case,
Franco, along with the other accused, except for Manuel Bienvenida who was
still at large, were acquitted of the crime of Estafa as defined and penalized
under Article 351, par. 2(a) of the Revised Penal Code.23 However, the civil
case24 remains under litigation and the respective rights and liabilities of the
parties have yet to be adjudicated.
Consequently, in light of BPI-FBs refusal to heed Francos demands to unfreeze
his accounts and release his deposits therein, the latter filed on June 4, 1990
with the Manila RTC the subject suit. In his complaint, Franco prayed for the
following reliefs: (1) the interest on the remaining balance25 of his current
account which was eventually released to him on October 31, 1991; (2) the
balance26 on his savings account, plus interest thereon; (3) the advance
interest27 paid to him which had been deducted when he pre-terminated his
time deposit account; and (4) the payment of actual, moral and exemplary
damages, as well as attorneys fees.
BPI-FB traversed this complaint, insisting that it was correct in freezing the
accounts of Franco and refusing to release his deposits, claiming that it had a
better right to the amounts which consisted of part of the money allegedly
fraudulently withdrawn from it by Tevesteco and ending up in Francos
accounts. BPI-FB asseverated that the claimed consideration of 2,000,000.00
for the introduction facilitated by Franco between George Daantos and Eladio
Teves, on the one hand, and Jaime Sebastian, on the other, spoke volumes of
Francos participation in the fraudulent transaction.
On August 4, 1993, the Manila RTC rendered judgment, the dispositive portion
of which reads as follows:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor
of [Franco] and against [BPI-FB], ordering the latter to pay to the former the
following sums:
1. 76,500.00 representing the legal rate of interest on the amount of
450,000.00 from May 18, 1990 to October 31, 1991;
2. 498,973.23 representing the balance on [Francos] savings account as
of May 18, 1990, together with the interest thereon in accordance with
the banks guidelines on the payment therefor;
3. 30,000.00 by way of attorneys fees; and
4. 10,000.00 as nominal damages.

Bachelor of Laws
The counterclaim of the defendant is DISMISSED for lack of factual and legal
anchor.
Costs against [BPI-FB].
SO ORDERED.28
Unsatisfied with the decision, both parties filed their respective appeals before
the CA. Franco confined his appeal to the Manila RTCs denial of his claim for
moral and exemplary damages, and the diminutive award of attorneys fees. In
affirming with modification the lower courts decision, the appellate court
decreed, to wit:
WHEREFORE, foregoing considered, the appealed decision is hereby AFFIRMED
with modification ordering [BPI-FB] to pay [Franco] 63,189.00 representing the
interest deducted from the time deposit of plaintiff-appellant. 200,000.00 as
moral damages and 100,000.00 as exemplary damages, deleting the award of
nominal damages (in view of the award of moral and exemplary damages) and
increasing the award of attorneys fees from 30,000.00 to 75,000.00.
Cost against [BPI-FB].
SO ORDERED.29
In this recourse, BPI-FB ascribes error to the CA when it ruled that: (1) Franco
had a better right to the deposits in the subject accounts which are part of the
proceeds of a forged Authority to Debit; (2) Franco is entitled to interest on his
current account; (3) Franco can recover the 400,000.00 deposit in Quiaoits
savings account; (4) the dishonor of Francos checks was not legally in order; (5)
BPI-FB is liable for interest on Francos time deposit, and for moral and
exemplary damages; and (6) BPI-FBs counter-claim has no factual and legal
anchor.
The petition is partly meritorious.
We are in full accord with the common ruling of the lower courts that BPI-FB
cannot unilaterally freeze Francos accounts and preclude him from
withdrawing his deposits. However, contrary to the appellate courts ruling, we
hold that Franco is not entitled to unearned interest on the time deposit as well
as to moral and exemplary damages.
First. On the issue of who has a better right to the deposits in Francos
accounts, BPI-FB urges us that the legal consequence of FMICs forgery claim is
that the money transferred by BPI-FB to Tevesteco is its own, and considering
that it was able to recover possession of the same when the money was
redeposited by Franco, it had the right to set up its ownership thereon and
freeze Francos accounts.

Bachelor of Laws
BPI-FB contends that its position is not unlike that of an owner of personal
property who regains possession after it is stolen, and to illustrate this point,
BPI-FB gives the following example: where Xs television set is stolen by Y who
thereafter sells it to Z, and where Z unwittingly entrusts possession of the TV
set to X, the latter would have the right to keep possession of the property and
preclude Z from recovering possession thereof. To bolster its position, BPI-FB
cites Article 559 of the Civil Code, which provides:
Article 559. The possession of movable property acquired in good faith is
equivalent to a title. Nevertheless, one who has lost any movable or has been
unlawfully deprived thereof, may recover it from the person in possession of
the same.
If the possessor of a movable lost or of which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot obtain
its return without reimbursing the price paid therefor.
BPI-FBs argument is unsound. To begin with, the movable property mentioned
in Article 559 of the Civil Code pertains to a specific or determinate thing. 30 A
determinate or specific thing is one that is individualized and can be identified
or distinguished from others of the same kind.31
In this case, the deposit in Francos accounts consists of money which, albeit
characterized as a movable, is generic and fungible.32 The quality of being
fungible depends upon the possibility of the property, because of its nature or
the will of the parties, being substituted by others of the same kind, not having
a distinct individuality.33
Significantly, while Article 559 permits an owner who has lost or has been
unlawfully deprived of a movable to recover the exact same thing from the
current possessor, BPI-FB simply claims ownership of the equivalent amount of
money, i.e., the value thereof, which it had mistakenly debited from FMICs
account and credited to Tevestecos, and subsequently traced to Francos
account. In fact, this is what BPI-FB did in filing the Makati Case against Franco,
et al. It staked its claim on the money itself which passed from one account to
another, commencing with the forged Authority to Debit.
It bears emphasizing that money bears no earmarks of peculiar
ownership,34 and this characteristic is all the more manifest in the instant case
which involves money in a banking transaction gone awry. Its primary function
is to pass from hand to hand as a medium of exchange, without other evidence
of its title.35 Money, which had passed through various transactions in the
general course of banking business, even if of traceable origin, is no exception.
Thus, inasmuch as what is involved is not a specific or determinate personal
property, BPI-FBs illustrative example, ostensibly based on Article 559, is
inapplicable to the instant case.

Bachelor of Laws
There is no doubt that BPI-FB owns the deposited monies in the accounts of
Franco, but not as a legal consequence of its unauthorized transfer of FMICs
deposits to Tevestecos account. BPI-FB conveniently forgets that the deposit of
money in banks is governed by the Civil Code provisions on simple loan or
mutuum.36 As there is a debtor-creditor relationship between a bank and its
depositor, BPI-FB ultimately acquired ownership of Francos deposits, but such
ownership is coupled with a corresponding obligation to pay him an equal
amount on demand.37Although BPI-FB owns the deposits in Francos accounts, it
cannot prevent him from demanding payment of BPI-FBs obligation by drawing
checks against his current account, or asking for the release of the funds in his
savings account. Thus, when Franco issued checks drawn against his current
account, he had every right as creditor to expect that those checks would be
honored by BPI-FB as debtor.
More importantly, BPI-FB does not have a unilateral right to freeze the accounts
of Franco based on its mere suspicion that the funds therein were proceeds of
the multi-million peso scam Franco was allegedly involved in. To grant BPI-FB,
or any bank for that matter, the right to take whatever action it pleases on
deposits which it supposes are derived from shady transactions, would open
the floodgates of public distrust in the banking industry.
Our pronouncement in Simex International (Manila), Inc. v. Court of
Appeals38 continues to resonate, thus:
The banking system is an indispensable institution in the modern world and
plays a vital role in the economic life of every civilized nation. Whether as mere
passive entities for the safekeeping and saving of money or as active
instruments of business and commerce, banks have become an ubiquitous
presence among the people, who have come to regard them with respect and
even gratitude and, most of all, confidence. Thus, even the humble wage-earner
has not hesitated to entrust his lifes savings to the bank of his choice, knowing
that they will be safe in its custody and will even earn some interest for him.
The ordinary person, with equal faith, usually maintains a modest checking
account for security and convenience in the settling of his monthly bills and the
payment of ordinary expenses. x x x.
In every case, the depositor expects the bank to treat his account with the
utmost fidelity, whether such account consists only of a few hundred pesos or
of millions. The bank must record every single transaction accurately, down to
the last centavo, and as promptly as possible. This has to be done if the
account is to reflect at any given time the amount of money the depositor can
dispose of as he sees fit, confident that the bank will deliver it as and to
whomever directs. A blunder on the part of the bank, such as the dishonor of
the check without good reason, can cause the depositor not a little
embarrassment if not also financial loss and perhaps even civil and criminal
litigation.

Bachelor of Laws
The point is that as a business affected with public interest and because of the
nature of its functions, the bank is under obligation to treat the accounts of its
depositors with meticulous care, always having in mind the fiduciary nature of
their relationship. x x x.
Ineluctably, BPI-FB, as the trustee in the fiduciary relationship, is duty bound to
know the signatures of its customers. Having failed to detect the forgery in the
Authority to Debit and in the process inadvertently facilitate the FMIC-
Tevesteco transfer, BPI-FB cannot now shift liability thereon to Franco and the
other payees of checks issued by Tevesteco, or prevent withdrawals from their
respective accounts without the appropriate court writ or a favorable final
judgment.
Further, it boggles the mind why BPI-FB, even without delving into the
authenticity of the signature in the Authority to Debit, effected the transfer of
80,000,000.00 from FMICs to Tevestecos account, when FMICs account was a
time deposit and it had already paid advance interest to FMIC. Considering that
there is as yet no indubitable evidence establishing Francos participation in the
forgery, he remains an innocent party. As between him and BPI-FB, the latter,
which made possible the present predicament, must bear the resulting loss or
inconvenience.
Second. With respect to its liability for interest on Francos current account, BPI-
FB argues that its non-compliance with the Makati RTCs Order Lifting the
Order of Attachment and the legal consequences thereof, is a matter that ought
to be taken up in that court.
The argument is tenuous. We agree with the succinct holding of the appellate
court in this respect. The Manila RTCs order to pay interests on Francos
current account arose from BPI-FBs unjustified refusal to comply with its
obligation to pay Franco pursuant to their contract of mutuum. In other words,
from the time BPI-FB refused Francos demand for the release of the deposits in
his current account, specifically, from May 17, 1990, interest at the rate of 12%
began to accrue thereon.39
Undeniably, the Makati RTC is vested with the authority to determine the legal
consequences of BPI-FBs non-compliance with the Order Lifting the Order of
Attachment. However, such authority does not preclude the Manila RTC from
ruling on BPI-FBs liability to Franco for payment of interest based on its
continued and unjustified refusal to perform a contractual obligation upon
demand. After all, this was the core issue raised by Franco in his complaint
before the Manila RTC.
Third. As to the award to Franco of the deposits in Quiaoits account, we find
no reason to depart from the factual findings of both the Manila RTC and the
CA.

Bachelor of Laws
Noteworthy is the fact that Quiaoit himself testified that the deposits in his
account are actually owned by Franco who simply accommodated Jaime
Sebastians request to temporarily transfer 400,000.00 from Francos savings
account to Quiaoits account.40 His testimony cannot be characterized as
hearsay as the records reveal that he had personal knowledge of the
arrangement made between Franco, Sebastian and himself.41
BPI-FB makes capital of Francos belated allegation relative to this particular
arrangement. It insists that the transaction with Quiaoit was not specifically
alleged in Francos complaint before the Manila RTC. However, it appears that
BPI-FB had impliedly consented to the trial of this issue given its extensive
cross-examination of Quiaoit.
Section 5, Rule 10 of the Rules of Court provides:
Section 5. Amendment to conform to or authorize presentation of evidence.
When issues not raised by the pleadings are tried with the express or implied
consent of the parties, they shall be treated in all respects as if they had been
raised in the pleadings. Such amendment of the pleadings as may be necessary
to cause them to conform to the evidence and to raise these issues may be
made upon motion of any party at any time, even after judgment; but failure to
amend does not affect the result of the trial of these issues. If evidence is
objected to at the trial on the ground that it is now within the issues made by
the pleadings, the court may allow the pleadings to be amended and shall do so
with liberality if the presentation of the merits of the action and the ends of
substantial justice will be subserved thereby. The court may grant a
continuance to enable the amendment to be made. (Emphasis supplied)
In all, BPI-FBs argument that this case is not the right forum for Franco to
recover the 400,000.00 begs the issue. To reiterate, Quiaoit, testifying during
the trial, unequivocally disclaimed ownership of the funds in his account, and
pointed to Franco as the actual owner thereof. Clearly, Francos action for the
recovery of his deposits appropriately covers the deposits in Quiaoits account.
Fourth. Notwithstanding all the foregoing, BPI-FB continues to insist that the
dishonor of Francos checks respectively dated September 11 and 18, 1989 was
legally in order in view of the Makati RTCs supplemental writ of attachment
issued on September 14, 1989. It posits that as the party that applied for the
writ of attachment before the Makati RTC, it need not be served with the Notice
of Garnishment before it could place Francos accounts under garnishment.
The argument is specious. In this argument, we perceive BPI-FBs clever but
transparent ploy to circumvent Section 4,42 Rule 13 of the Rules of Court. It
should be noted that the strict requirement on service of court papers upon the
parties affected is designed to comply with the elementary requisites of due
process. Franco was entitled, as a matter of right, to notice, if the requirements
of due process are to be observed. Yet, he received a copy of the Notice of
Garnishment only on September 27, 1989, several days after the two checks he
Bachelor of Laws
issued were dishonored by BPI-FB on September 20 and 21, 1989. Verily, it was
premature for BPI-FB to freeze Francos accounts without even awaiting service
of the Makati RTCs Notice of Garnishment on Franco.
Additionally, it should be remembered that the enforcement of a writ of
attachment cannot be made without including in the main suit the owner of the
property attached by virtue thereof. Section 5, Rule 13 of the Rules of Court
specifically provides that "no levy or attachment pursuant to the writ issued x x
x shall be enforced unless it is preceded, or contemporaneously accompanied,
by service of summons, together with a copy of the complaint, the application
for attachment, on the defendant within the Philippines."
Franco was impleaded as party-defendant only on May 15, 1990. The Makati
RTC had yet to acquire jurisdiction over the person of Franco when BPI-FB
garnished his accounts.43 Effectively, therefore, the Makati RTC had no authority
yet to bind the deposits of Franco through the writ of attachment, and
consequently, there was no legal basis for BPI-FB to dishonor the checks issued
by Franco.
Fifth. Anent the CAs finding that BPI-FB was in bad faith and as such liable for
the advance interest it deducted from Francos time deposit account, and for
moral as well as exemplary damages, we find it proper to reinstate the ruling of
the trial court, and allow only the recovery of nominal damages in the amount
of 10,000.00. However, we retain the CAs award of 75,000.00 as attorneys
fees.
In granting Francos prayer for interest on his time deposit account and for
moral and exemplary damages, the CA attributed bad faith to BPI-FB because it
(1) completely disregarded its obligation to Franco; (2) misleadingly claimed
that Francos deposits were under garnishment; (3) misrepresented that
Francos current account was not on file; and (4) refused to return the
400,000.00 despite the fact that the ostensible owner, Quiaoit, wanted the
amount returned to Franco.
In this regard, we are guided by Article 2201 of the Civil Code which provides:
Article 2201. In contracts and quasi-contracts, the damages for which the
obligor who acted in good faith is liable shall be those that are the natural and
probable consequences of the breach of the obligation, and which the parties
have foreseen or could have reasonable foreseen at the time the obligation was
constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the non-
performance of the obligation. (Emphasis supplied.)
We find, as the trial court did, that BPI-FB acted out of the impetus of self-
protection and not out of malevolence or ill will. BPI-FB was not in the corrupt

Bachelor of Laws
state of mind contemplated in Article 2201 and should not be held liable for all
damages now being imputed to it for its breach of obligation. For the same
reason, it is not liable for the unearned interest on the time deposit.
Bad faith does not simply connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing of wrong; it
partakes of the nature of fraud.44 We have held that it is a breach of a known
duty through some motive of interest or ill will.45 In the instant case, we cannot
attribute to BPI-FB fraud or even a motive of self-enrichment. As the trial court
found, there was no denial whatsoever by BPI-FB of the existence of the
accounts. The computer-generated document which indicated that the current
account was "not on file" resulted from the prior debit by BPI-FB of the
deposits. The remedy of freezing the account, or the garnishment, or even the
outright refusal to honor any transaction thereon was resorted to solely for the
purpose of holding on to the funds as a security for its intended court
action,46 and with no other goal but to ensure the integrity of the accounts.
We have had occasion to hold that in the absence of fraud or bad faith, 47 moral
damages cannot be awarded; and that the adverse result of an action does not
per se make the action wrongful, or the party liable for it. One may err, but
error alone is not a ground for granting such damages.48
An award of moral damages contemplates the existence of the following
requisites: (1) there must be an injury clearly sustained by the claimant,
whether physical, mental or psychological; (2) there must be a culpable act or
omission factually established; (3) the wrongful act or omission of the
defendant is the proximate cause of the injury sustained by the claimant; and
(4) the award for damages is predicated on any of the cases stated in Article
2219 of the Civil Code.49
Franco could not point to, or identify any particular circumstance in Article
2219 of the Civil Code,50 upon which to base his claim for moral
damages.1wphi1
Thus, not having acted in bad faith, BPI-FB cannot be held liable for moral
damages under Article 2220 of the Civil Code for breach of contract.51
We also deny the claim for exemplary damages. Franco should show that he is
entitled to moral, temperate, or compensatory damages before the court may
even consider the question of whether exemplary damages should be awarded
to him.52 As there is no basis for the award of moral damages, neither can
exemplary damages be granted.
While it is a sound policy not to set a premium on the right to litigate, 53 we,
however, find that Franco is entitled to reasonable attorneys fees for having
been compelled to go to court in order to assert his right. Thus, we affirm the
CAs grant of 75,000.00 as attorneys fees.

Bachelor of Laws
Attorneys fees may be awarded when a party is compelled to litigate or incur
expenses to protect his interest,54 or when the court deems it just and
equitable.55 In the case at bench, BPI-FB refused to unfreeze the deposits of
Franco despite the Makati RTCs Order Lifting the Order of Attachment and
Quiaoits unwavering assertion that the 400,000.00 was part of Francos
savings account. This refusal constrained Franco to incur expenses and litigate
for almost two (2) decades in order to protect his interests and recover his
deposits. Therefore, this Court deems it just and equitable to grant Franco
75,000.00 as attorneys fees. The award is reasonable in view of the complexity
of the issues and the time it has taken for this case to be resolved.56
Sixth. As for the dismissal of BPI-FBs counter-claim, we uphold the Manila
RTCs ruling, as affirmed by the CA, that BPI-FB is not entitled to recover
3,800,000.00 as actual damages. BPI-FBs alleged loss of profit as a result of
Francos suit is, as already pointed out, of its own making. Accordingly, the
denial of its counter-claim is in order.
WHEREFORE, the petition is PARTIALLY GRANTED. The Court of Appeals
Decision dated November 29, 1995 is AFFIRMED with the MODIFICATION that
the award of unearned interest on the time deposit and of moral and exemplary
damages is DELETED.
No pronouncement as to costs.
SO ORDERED.
THIRD DIVISION
[G.R. No. 134692. August 1, 2000]
ELISEO FAJARDO, JR., and MARISSA FAJARDO, petitioners,
vs. FREEDOM TO BUILD, INC., respondent.
DECISION
VITUG, J.:
Freedom To Build, Incorporated, an owner-developer and seller of low-
cost housing, sold to petitioner-spouses, a house and lot designated Lot
No. 33, Block 14, of the De la Costa Homes in Barangka, Marikina, Metro
Manila. The Contract to Sell executed between the parties, contained a
Restrictive Covenant providing certain prohibitions, to wit:[1]
"Easements. For the good of the entire community, the homeowner
must observe a two-meter easement in front. No structure of any
kind (store, garage, bodega, etc.) may be built on the front
easement.
"x x x.............................x x x.............................x x x

Bachelor of Laws
"Upward expansion. A second storey is not prohibited. But the
second storey expansion must be placed above the back portion of
the house and should not extend forward beyond the apex of the
original building.
"x x x.............................x x x.............................x x x
"Front expansion: 2nd Storey: No unit may be extended in the front
beyond the line as designed and implemented by the developer in
the 60 sq. m. unit. In other words, the 2nd floor expansion, in
front, is 6 meters back from the front property line and 4 meters
back from the front wall of the house, just as provided in the 60 sq.
m. units."[2]
The above restrictions were also contained in Transfer Certificate of Title
No. N-115384 covering the lot issued in the name of petitioner-spouses.
The controversy arose when petitioners, despite repeated warnings from
respondent, extended the roof of their house to the property line and
expanded the second floor of their house to a point directly above the
original front wall.[3] Respondent filed before the Regional Trial Court,
National Capital Judicial Region, Branch 261, Pasig City, an action to
demolish the unauthorized structures.
After trial, judgment was rendered against petitioners; thus:
"WHEREFORE, premises considered, defendant spouses Eliseo B.
Fajardo, Jr., and Marissa F. Fajardo are hereby directed to
immediately demolish and remove the extension of their expanded
housing unit that exceeds the limitations imposed by the
Restrictive Covenant, otherwise the Branch Sheriff of this Court
shall execute this decision at the expense of the defendants.
"As to damages and attorney's fees, it appearing from the records
of this case that no evidence to sustain the same was adduced by
either of the parties, the Court deems it proper not to award any.
"SO ORDERED."[4]
On appeal to it, the Court of Appeals affirmed the decision of the trial
court.
In their petition for review to this Court, the spouses contest the
judgment of the courts below. Adjacent owners reportedly have no
objection to the construction, and have even expressed interest in
undertaking a similar expansion in their respective residences. Moreover,
the couple's two children, a son and a daughter, might soon get married
and then share, with their families, living quarters with petitioners. The
latter also assail the personality of private respondent to question the

Bachelor of Laws
construction which have effectively relinquished its ownership, right or
interest over the subdivision upon the execution of the Deed of Absolute
Sale in favor of the individual homeowners. Per the contract between
Freedom to Build Incorporated and the De la Costa Low Income Project
Homeowners' Association (hereinafter homeowners' association),
petitioners aver, the enforcement of the prohibitions contained in the
"Restrictive Covenant" originally residing on respondent is now lodged in
the homeowners' association. Petitioners maintain that it is incumbent
upon the homeowners' association, not on respondent, to enforce
compliance with the provisions of the covenant.
A perusal of the provisions of the covenant would show that the
restrictions therein imposed were intended -
"For the protection and benefit of the De La Costa Low Income
Housing Project, and of all the persons who may now, or hereafter
become owners of any part of the project, and as part of the
consideration for the conveyance of the housing unit, these
restrictions are promulgated in order that; the intents and
purposes for which the project was designed shall be upheld; to
wit: subsequent duly approved sale and assignments of housing
units shall be made only to low income families; a certain level of
privacy shall be observed; a community spirit shall be fostered; and
an undisturbed possession and occupancy at the homeowners shall
be maintained."[5]
Restrictive covenants are not, strictly speaking, synonymous with
easements. While it may be correct to state that restrictive covenants on
the use of land or the location or character of buildings or other
structures thereon may broadly be said to create easements or rights, it
can also be contended that such covenants, being limitations on the
manner in which one may use his own property,[6] do not result in true
easements,[7] but a case of servitudes (burden), sometimes characterized
to be negative easements or reciprocal negative easements. Negative
easement is the most common easement created by covenant or
agreement whose effect is to preclude the owner of the land from doing
an act, which, if no easement existed, he would be entitled to do.[8]
Courts which generally view restrictive covenants with disfavor for being
a restriction on the use of one's property, have, nevertheless, sustained
them[9] where the covenants are reasonable,[10] not contrary to public
policy,[11] or to law,[12] and not in restraint of trade.[13] Subject to these
limitations, courts enforce restrictions to the same extent that will lend
judicial sanction to any other valid contractual relationship.[14] In general,
frontline restrictions on constructions have been held to be valid
stipulations.[15]

Bachelor of Laws
The provisions in a restrictive covenant prescribing the type of the
building to be erected are crafted not solely for the purpose of creating
easements, generally of light and view, nor as a restriction as to the type
of construction,[16]but may also be aimed as a check on the subsequent
uses of the building[17] conformably with what the developer originally
might have intended the stipulations to be. In its Memorandum,
respondent states in arguing for the validity of the restrictive covenant
that the -
"x x x restrictions are not without specific purpose. In a low cost-
socialized housing, it is of public knowledge that owners-
developers are constrained to build as many number of houses on
a limited land area precisely to accommodate marginalized lot
buyers, providing as much as possible the safety, aesthetic and
decent living condition by controlling overcrowding. Such project
has been designed to accommodate at least 100 families per
hectare."[18]
There appears to be no cogent reasons for not upholding restrictive
covenants aimed to promote aesthetics, health, and privacy or to prevent
overcrowding.
Viewed accordingly, the statement of petitioners that their immediate
neighbors have not opposed the construction is unavailing to their cause,
the subject restrictive covenant not being intended for the benefit of
adjacent owners but to prescribe the uses of the building, i.e., to ensure,
among other things, that the structures built on De la Costa Homes
Subdivision would prevent overcrowding and promote privacy among
subdivision dwellers. The argument then of petitioners that expansion is
necessary in order to accommodate the individual families of their two
children must fail for like reason. Nor can petitioners claim good faith;
the restrictive covenants are explicitly written in the Contract To Sell and
annotated at the back of the Transfer Certificate of Title.
Petitioners raise the issue of the personality of respondent to enforce the
provisions of the covenant. Broadly speaking, a suit for equitable
enforcement of a restrictive covenant can only be made by one for whose
benefit it is intended.[19] It is not thus normally enforceable by one who
has no right nor interest in the land for the benefit of which the
restriction has been imposed.[20] Thus, a developer of a subdivision can
enforce restrictions, even as against remote grantees of lots, only if he
retains part of the land.[21] There would have been merit in the argument
of petitioners - that respondent, having relinquished ownership of the
subdivision to the homeowners, is precluded from claiming any right or
interest on the same property - had not the homeowners' association,
confirmed by its board of directors, allowed respondent to enforce the
provisions of the restrictive covenant.

Bachelor of Laws
Finally, petitioners argue that for lack of a specific provision, prescribing
the penalty of demolition in the "Restrictive Covenant" in the event of a
breach thereof, the prayer of respondent to demolish the structure
should fail. This argument has no merit; Article 1168 of the New Civil
Code states:
"When the obligation consists in not doing and the obligor does
what has been forbidden him, it shall be undone at his expense."
This Court is not unaware of its ruling in Ayala Corporation vs. Ray
Burton Development Corporation,[22] which has merely adjudged the
payment of damages in lieu of demolition. In the aforementioned case,
however, the elaborate mathematical formula for the determination of
compensatory damages which takes into account the current
construction cost index during the immediately preceding 5 years based
on the weighted average of wholesale price and wage indices of the
National Census and Statistics Office and the Bureau of Labor Statistics is
explicitly provided for in the Deed of Restrictions entered into by the
parties. This unique and peculiar circumstance, among other strong
justifications therein mentioned, is not extant in the case at bar.
In sum, the Court holds that -
(1)....The provisions of the Restrictive Covenant are valid;
(2)....Petitioners must be held to be bound thereby; and
(3)....Since the extension constructed exceeds the floor area limits
of the Restrictive Covenant, petitioner-spouses can be required to
demolish the structure to the extent that it exceeds the prescribed
floor area limits.
WHEREFORE, the assailed decision, dated 13 July 1998, of the Court of
Appeals in CA-G.R. CV No. 50085, sustaining that of the court a quo, is
AFFIRMED. No costs.
SO ORDERED.

Bachelor of Laws
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 97039 April 24, 1992
CONCORDIO ABELLANA, SR., PEDRO E. MENDEZ, VERANO BADANA,
CONCORDIO ABELLANA, JR., TEODOLFO ABELLANA, MUSSULINI BUCAO,
REMEDIOS GARCIANO, ALFREDO SY, JUANITO JABELLANA, CATALINO
LABANDERO, PURISIMO JABELLANA, ANDRES LASTIMOSA, LUCRESIA VDS.
DE BENTE, PAULA VDA. DE BACUS, ARTURO JABELLANA, FLORENTINO
LARIOSA, LEODY DE LA PEA, PELAGIA JABELLANA, FE GOCELA, SEVERINO
QUINAMADA and NARCISA LASTIMOSA, petitioners,
vs.
HON. COURT OF APPEALS, ORLANDO P. NAYA, ROSENDO ESTOYE, JR. and
the MUNICIPAL GOVERNMENT OF TALISAY, CEBU, represented by the Mayor
and Members of the Sanguniang Bayan, respondents.
APOLINARIO ENGUIO, RICO VILLARIN, MARIA ROSARIO BALBUENA, JOSE
TIROL, ASUNCION DE LA PEA, ROGELIO B. GUYOT, LEONIZA FAUSTINO,
MAMERTO ZAMORAS, ANTONIO CAL, VICENTE ALMENDRAS, MICHAEL

Bachelor of Laws
SERRANO, EDUARDO PADERNOS, MA. LUZ SANCHEZ, R. CABARERO, OSCAR
NAPOLI and ROBERTO BUENO, intervenors.
GRIO-AQUINO, J.:
The petitioners who live on a parcel of land abutting the northwestern side of
the Nonoc Homes Subdivision, sued to establish an easement of right of way
over a subdivision road which, according to the petitioners, used to be a mere
footpath which they and their ancestors had been using since time immemorial,
and that, hence, they had acquired, through prescription, an easement of right
of way therein. The construction of a wall by the respondents around the
subdivision deprived the petitioners of the use of the subdivision road which
gives the subdivision residents access to the public highway. They asked that
the high concrete walls enclosing the subdivision and cutting of their access to
the subdivision road be removed and that the road be opened to them.
The private respondents denied that there was a pre-existing footpath in the
place before it was developed into a subdivision. They alleged furthermore that
the Nonoc Subdivision roads are not the shortest way to a public road for there
is a more direct route from the petitioners' land to the public highway.
After trial, the trial court rendered judgment disposing as follows:
WHEREFORE, judgment is hereby rendered, and, accordingly,
defendants Orlando P. Naya and Rosendo Estoye, Jr. and the
intervenors are hereby ordered to demolish the subject fences or
enclosures at the dead ends of Road Lots 1 and 3 of the Nonoc
Homes Subdivision at their expense and to leave them open for the
use of the plaintiffs and the general public, within fifteen (15) days
from finality of this judgment. The complaint as against defendant
Municipal Government of Talisay, Cebu is ordered dismissed. All
counterclaims are ordered dismissed. No pronouncement as to
costs. (p.15, Rollo.)
However, on appeal by the defendants and intervenors (now private
respondents), the appellate court on October 17, 1990, reversed the appealed
judgment. It found that:
As borne out by the records of the case, the abovementioned requisites
essential for the grant of an easement of right of way are not obtaining in this
case hence no alternative presents itself except reversal of the judgment below.
...
However, the foregoing is without prejudice to the filing of the appropriate
action by the proper authorities. Records bear that attention of the Municipal
Mayor of Talisay was already called by the Provincial Fiscal to Opinion No. 172,
Series of 1975, of the Department of Justice wherein the Acting Secretary of
Justice opined that "road lots in a private subdivision are private property and

Bachelor of Laws
should be acquired by the government by donation, purchase or expropriation
if they are to be utilized for a public highway. . . ."
xxx xxx xxx
WHEREFORE, the judgment appealed from is hereby REVERSED and set aside.
The Municipal Government of Talisay, Cebu, at its option, may institute the
proper action for expropriation. (p. 22, Rollo)
In an order dated January 9, 1991, the appellate court denied petitioners'
motion for reconsideration of the aforesaid decision. Hence, this petition for
review in which the petitioners allege that the Court of Appeals erred:
1. in not holding that the easement claimed by them is a legal
easement established by law (Art. 619. Civil Code) and acquired by
them by virtue of a title under Art. 620, Civil Code and P.D. No. 957
through the National Housing Authority which has exclusive
jurisdiction to regulate subdivision and condominium projects;
2. in not holding that the footpaths and passageways which were
converted into subdivision road lots have acquired the status of
public streets in view of Section 4 of Municipal Ordinance No. 1,
Series of 1969 of Talisay, Cebu which provides that subdivision
roads shall be used not only for the exclusive use of the
homeowners but also for the general public, and Section 5 of
Ordinance No. 5, Series of 1974, which provides that "those
subdivision road lots whose use by the public are (sic) deemed
necessary by the proper authorities shall be made available for
public use" (p. 7, Rollo); and
3. in not determining whether or not the closure of the dead ends
of road lots 1 and 3 of the Nonoc Homes Subdivision by the private
respondents, Estoye and Naya, was legal.
After deliberating on their petition for review of the decision dated October 17,
1990 of the Court of Appeals in CA-G.R. CV No. 19948, and the private
respondents' comments, we find that the petition raises merely factual issues
which are not reviewable by this Court under Rule 45 of the Rules of Court, and
that, in any event, no reversible error was committed by the Court of Appeals in
dismissing the complaint on the ground that the requisite conditions do not
exist for the grant of an easement of right of way in favor of the petitioners'
land under Articles 649 and 650 of the Civil Code. The appellate court did not
err in holding that the road lots in a private subdivision are private property,
hence, the local government should first acquire them by donation, purchase,
or expropriation, if they are to be utilized as a public road.
Petitioners' assumption that an easement of right of way is continuous and
apparent and may be acquired by prescription under Article 620 of the Civil

Bachelor of Laws
Code, is erroneous. The use of a footpath or road may be apparent but it is not
a continuous easement because its use is at intervals and depends upon the acts
of man. It can be exercised only if a man passes or puts his feet over somebody
else's land (4 Manresa 597; Haffman vs. Shoemaker, 71 SE 198, both cited on p.
454, Vol. 2, 6th Ed., Paras, Civil Code of the Philippines). Hence, a right of way is
not acquirable by prescription (Cuaycong, et al, vs Benedicto, et al., 37 Phil. 781;
Ronquillo, et al. vs. Roco, et al., 103 Phil. 84; Ayala de Roxas vs. Case, 8 Phil.
197).
Neither may petitioners invoke Section 29 of P.D. 957 which provides:
Sec. 29. Right of Way to Public Road. The owner or developer of a
subdivision without access to any existing public road or street
must secure a right of way to a public road or street and such right
of way must be developed and maintained according to the
requirement of the government authorities concerned.
The above provision applies to the owner or developer of a subdivision (which
petitioners are not) without access to a public highway.
The petitioners' allegation that the footpaths which were converted to
subdivision roads have acquired the status of public streets, is not well taken.
In the first place, whether or not footpaths previously existed in the area which
is now known as the Nonoc Homes Subdivision, is a factual issue which this
Court may not determine for it is not a trier of facts.
The municipal ordinances which declared subdivision roads open to public use
"when deemed necessary by the proper authorities" (p. 7, Rollo) simply allow
persons other than the residents of the Nonoc Homes Subdivision, to use the
roads therein when they are inside the subdivision but those ordinances do not
give outsiders a right to open the subdivision walls so they can enter the
subdivision from the back. As the private respondents pointed out in their
Comment:
The closure of the dead ends of road lots 1 and 3 is a valid exercise
of proprietary rights. It is for the protection of residents in the
subdivision from night prowlers and thieves. And the public is not
denied use of the subdivision roads, only that the users must get
inside the subdivision through the open ends of the road lots that
link the same to the public road. It is common to most, if not all
subdivisions in Cebu, Metro Manila and other places, that points of
ingress to and egress from the subdivision are the points where the
subdivision roads intersect with public roads. It is of judicial notice
that most, if not all, subdivisions are enclosed and fenced with only
one or few points that are used as ingress to and egress from the
subdivisions. (54-55, Rollo)

Bachelor of Laws
WHEREFORE, finding no merit in the petition for review, the same is DENIED
with costs against the petitioners.
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 172077 October 9, 2009
BICOL AGRO-INDUSTRIAL PRODUCERS COOPERATIVE, INC.
(BAPCI), Petitioner,
vs.
EDMUNDO O. OBIAS, PERFECTO O. OBIAS, VICTOR BAGASINA, ELENA
BENOSA, MELCHOR BRANDES, ROGELIO MONTERO, PEDRO MONTERO,
CLAUDIO RESARI, PILAR GALON, ANTONIO BUISON, PRUDENCIO BENOSA,
JR., MARIA VILLAMER and ROBERTO PADUA, Respondent.
DECISION
PERALTA, J.:
Before this Court is a Petition for Review on certiorari 1 under Rule 65 of the
Rules of Court, seeking to set aside the August 24, 2005 Decision2 and March
28, 2006 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 59016.

Bachelor of Laws
The facts of the case:
Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO) was
established at Himaao, Pili, Camarines Sur. In the same year, BISUDECO
constructed a road ("the disputed road") measuring approximately 7 meters
wide and 2.9 kilometers long. The disputed road was used by BISUDECO in
hauling and transporting sugarcane to and from its mill site (Pensumil) and has
thus become indispensable to its sugar milling operations.4
On October 30, 1992, petitioner Bicol Agro-Industrial Producers Cooperative,
Inc. acquired the assets of BISUDECO. On April 19, 1993, petitioner filed a
Complaint5 against respondents Edmundo Obias, Perfecto Obias, Victor
Bagasina, Elena Benosa, Melchor Brandes, Rogelio Montero, Pedro Montero,
Claudio Resari, Pilar Galon, Antonio Buison, Prudencio Benosa, Jr., Victor
Bagasina Jr., Maria Villamer, and Roberto Padua, alleging that on March 27,
1993 and April 3, 1993, respondents unjustifiably barricaded the disputed road
by placing bamboos, woods, placards and stones across it, preventing
petitioners and the other sugar planters vehicles from passing through the
disputed road, thereby causing serious damage and prejudice to petitioner.6
Petitioner alleged that BISUDECO constructed the disputed road pursuant to an
agreement with the owners of the ricefields the road traversed. The agreement
provides that BISUDECO shall employ the children and relatives of the
landowners in exchange for the construction of the road on their properties.
Petitioner contends that through prolonged and continuous use of the disputed
road, BISUDECO acquired a right of way over the properties of the landowners,
which right of way in turn was acquired by it when it bought BISUDECOs
assets. Petitioner prayed that respondents be permanently ordered to restrain
from barricading the disputed road and from obstructing its free passage.7
In an Order8 dated April 19, 1993, the Regional Trial Court of Pili (RTC),
Camarines Sur, 5th Judicial Region, Branch 31, ordered respondents, their
agents and representatives to cease and desist from placing barricades on the
disputed road.9
In their Answer,10 respondents denied having entered into an agreement with
BISUDECO regarding the construction and the use of the disputed road. They
alleged that BISUDECO, surreptitiously and without their knowledge and
consent, constructed the disputed road on their properties and has since then
intermittently and discontinuously used the disputed road for hauling
sugarcane despite their repeated protests. Respondents claimed they tolerated
BISUDECO in the construction and the use of the road since BISUDECO was a
government-owned and controlled corporation, and the entire country was then
under Martial Law. Respondents likewise denied that the road has become a
public road, since no public funds were used for its construction and
maintenance. Moreover, respondents alleged that with the exception of
Edmundo and Perfecto Obias, they are actual tillers of the ricelands, having

Bachelor of Laws
acquired their rights over said lands under Presidential Decree No. 27 (PD 27).
Edmundo and Perfecto Obias are the owners of the eastern portion of the
property on which a portion of the road going to BISUDECO was constructed.
Respondents denied that they barricaded the road.11
Jaime Manubay and Manolito Maralit, for themselves and in representation of
other sugarcane planters, filed the first complaint-in-intervention.12
Petitioner filed an Amended Complaint13 and with leave of court a Re-Amended
Complaint,14 where it averred, as an alternative cause of action in the event the
lower court does not find merit in its causes of action, that it will avail of the
benefits provided for under Article 64915 of the New Civil Code. Petitioner thus
demanded from respondents a right of way over the disputed road for its use.16
Respondents filed an Answer17 to refute petitioners alternative cause of action.
Respondents claimed that the road from the sugarmill to the Maharlika
Highway at Barangay Romero, Bula, Camarines Sur, which exits at the Rural
Bank of Bula site, had a distance of only about 15 kilometers; hence,
respondents asserted that said road was shorter and was a more appropriate
right of way than the disputed road.18
On July 21, 1993, the RTC issued a Writ of Preliminary Injunction 19 ordering the
respondents to desist from constructing barricades across the road.
On June 28, 1994, nine other cooperatives20 filed their Complaint-in-
Intervention.21
On June 25, 1997 the RTC rendered a Decision,22 the dispositive portion of
which reads:
WHEREFORE, premises considered, a decision is hereby rendered declaring the
Writ of Preliminary Injunction issued against all the herein defendants, their
agents, representatives and such other persons acting in their behalf,
permanent and perpetual BUT the plaintiff Bicol Agro-Industrial Cooperative,
Inc., (BAPCI) is hereby ordered to pay the owners of the lots affected by the
road, viz: Pedro Montero 299,040.00; Pedro Galon 52,920.00; Clara Padua
46,410.00; Antonio Buizon 35,070.00; Rogelio Montero 41,160.00;
Maria Villamer 41,580.00; Melchor Brandes 76,440.00; Prudencio Benosa
41, 650.00; Elena Benosa 39,550.00; Victor Bagasina, Jr. 39,410.00; and
Claudio Resari 40,950.00. Upon full payment thereof, the plaintiff shall be
declared the absolute owner of the road in question. Legal rate if interest is
hereby imposed upon the plaintiff from the finality of this decision until fully
payment hereof. No costs.
SO ORDERED.23
The RTC ruled that petitioner failed to present any concrete evidence to prove
that there was an agreement between BISUDECO and respondents for the
construction of the disputed road.24 Moreover, it held that petitioner did not

Bachelor of Laws
acquire the same by prescription.25 The RTC, however, also held that petitioner
was entitled to a compulsory easement of right of way as provided for under
Article 649 of the New Civil Code upon payment of proper indemnity to
respondents.26
Both parties filed a motion for reconsideration of the RTC Decision. Petitioner
contended that: (1) the value of the land is excessive; (2) the evidence is
insufficient to justify the award; (3) the decision is contrary to law and
jurisprudence. Respondents, on the other hand, alleged that: (1) the trial court
erred in declaring the persons mentioned in the decisions dispositive portion
to be entitled to indemnity for the construction and the use of the disputed
road; (2) BAPCI should not be declared the absolute owner of the disputed road
upon full payment of the indemnity due to the defendants; and (3) the decision
failed to award damages.27
On September 24, 1997, the RTC denied both motions for reconsideration.28 The
parties then appealed to the CA.
On August 24, 2005, the CA rendered a Decision, the dispositive portion of
which reads:
WHEREFORE, premises considered, the appeal is PARTLY GRANTED. The
assailed decision of the Regional Trial Court, Branch 31, Pili, Camarines Sur, in
Civil Case No. P-1899 is hereby MODIFIED as follows: the awards of
Php46,410.00 to Clara Padua and Php41,650.00 to Prudencio Benosa are hereby
DELETED, and the declaration that the plaintiff BAPCI shall become the
absolute owner of the disputed road upon full payment of indemnity is
REVERSED and SET ASIDE. Accordingly, the owners of the servient estate in the
easement of right of way recognized in this Decision shall retain ownership of
the lands affected by the easement in accordance with Art. 630 of the Civil
Code. We hereby AFFIRM the appeal in all other respects.
SO ORDERED.29
The CA affirmed the finding of the RTC that there was no conclusive proof to
sufficiently establish the existence of an agreement between BISUDECO and
respondents regarding the construction of the disputed road.30 Moreover, the
CA also declared that an easement of right of way is discontinuous and as such
cannot be acquired by prescription.31 The CA likewise affirmed the finding of
the RTC that petitioner was entitled to a compulsory easement of right of way
upon payment of proper indemnity to respondents. The CA, however, declared
that ownership over the disputed road should remain with respondents, despite
the grant of a compulsory easement.32Lastly, the CA deleted the awards to
Prudencio Benosa (Benosa) and Clara Padua (Padua), since the former never
claimed ownership of any portion of the lands affected by the disputed road
and the latter was not a party to the proceedings below.33

Bachelor of Laws
Petitioner then filed a Motion for Reconsideration alleging among others that
the CA Decision failed to rule on the issue of estoppel and laches. Moreover,
Benosa and Padua filed a Motion for Reconsideration assailing the portion of
the CA Decision deleting the award of indemnity to them. On March 28, 2006,
the CA issued a Resolution denying the same.
Hence, herein petition, with petitioner raising the following assignment of
errors, to wit:
I.
THE HONORABLE COURT OF APPEALS ERRED SERIOUSLY IN NOT FINDING
THAT THERE WAS FORGED AN AGREEMENT BETWEEN BISUDECO
MANAGEMENT AND THE PRIVATE RESPONDENTS FOR THE CONTRUCTION
OF THE ROAD IN QUESTION.
II.
THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN NOT
CONSIDERING THE PRINCIPLES OF PRESCRIPTION, LACHES AND ESTOPPEL
IN THE CASE AT BAR.
III.
THE HONORABLE COURT OF APPEALS ERRED IN COMPLETELY
DISREGARDING THE CLASSIFICATION OF THE ROAD IN QUESTION AS
BARANGAY ROAD.
IV.
IN THE ALTERNATIVE CAUSE OF ACTION, THE PUBLIC RESPONDENT
SERIOUSLY ERRED IN CONSIDERING THE VALUATION OF THE LANDS
AFFECTED BY THE ROAD IN 1994, AND NOT IN 1974, WHEN SAID ROAD
WAS CONSTRUCTED.
V.
THE HONORABLE PUBLIC RESPONDENT ERRED SERIOUSLY WHEN IT FAILED
ALSO TO CONSIDER THE LEGAL PRINCIPLE OF UNJUST ENRIGHTMENT AT
THE EXPENSE OF ANOTHER.34
At the outset, this Court shall address some procedural matters. Quite
noticeably, herein petition is denominated as one filed under Rule 65 35 of the
Rules of Court notwithstanding that it seeks to assail the Decision and
Resolution of the CA. Clearly, petitioner had availed of the improper remedy as
the appeal from a final disposition of the CA is a petition for review under Rule
45 and not a special civil action under Rule 65 of the Rules of Court.36
In Active Realty and Development Corporation v. Fernandez,37 this Court
discussed the difference between petitions filed under Rule 65 and Rule 45, viz:

Bachelor of Laws
A petition for certiorari under Rule 65 is proper to correct errors of jurisdiction
committed by the lower court, or grave abuse of discretion which is tantamount
to lack of jurisdiction. This remedy can be availed of when "there is no appeal,
or any plain, speedy, and adequate remedy in the ordinary course of law."
Appeal by certiorari under Rule 45 of the Rules of Court, on the other hand, is a
mode of appeal available to a party desiring to raise only questions of law from
a judgment or final order or resolution of the Court of Appeals,
the Sandiganbayan, the Regional Trial Court or other courts whenever
authorized by law.
x x x The general rule is that the remedy to obtain reversal or modification of
judgment on the merits is appeal. Thus, the proper remedy for the petitioner
should have been a petition for review on certiorari under Rule 45 of the Rules
of Court since the decision sought to be reversed is that of the CA. The
existence and availability of the right of appeal proscribes a resort to certiorari,
because one of the requisites for availment of the latter is precisely that "there
should be no appeal. The remedy of appeal under Rule 45 of the Rules of Court
was still available to the petitioner.38
Rule 45 is clear that decisions, final orders or resolutions of the Court of
Appeals in any case, i.e., regardless of the nature of the action or proceeding
involved, may be appealed to this Court by filing a petition for review, which
would be but a continuation of the appellate process over the original
case.39 Moreover, it is basic that one cannot avail of the remedy provided for
under Rule 65 when an appeal is still available. Hence, petitioner should have
filed its petition under Rule 45.
The procedural infirmity notwithstanding and in the interest of substantial
justice, this Court shall consider herein petition as one filed under Rule 45
especially since it was filed well within the reglementary period proscribed
under the said Rule. The Court also takes notice that the assignment of errors
raised by petitioner does not allege grave abuse of discretion or lack of
jurisdiction on the part of the CA.
On the Existence of an Agreement between BISUDECO and Respondents
Anent the first error raised, petitioner argues that the CA erred in not finding
that BISUDECO and respondents forged an agreement for the construction of
the road in dispute. Petitioner thus asserts its entitlement to an easement of
right of way over the properties of respondents by virtue of said agreement.
An easement of right of way was succinctly explained by the CA in the
following manner, to wit:
Easement or servitude is an encumbrance imposed upon an immovable for the
benefit of another immovable belonging to a different owner. By its creation,
easement is established either by law (in which case it is a legal easement) or by

Bachelor of Laws
will of the parties (a voluntary easement). In terms of use, easement may either
be continuous or discontinuous. The easement of right of way the privilege
of persons or a particular class of persons to pass over anothers land,
usually through one particular path or linen is characterized as
a discontinuous easement because its use is in intervals and depends on the
act of man. Because of this character, an easement of a right of way may
only be acquired by virtue of a title.40
Article 622 of the New Civil Code is the applicable law in the case at bar, viz:
Art. 622. Continuous non-apparent easements, and discontinuous ones,
whether apparent or not, may be acquired only by virtue of a title.
Based on the foregoing, in order for petitioner to acquire the disputed road as
an easement of right-of-way, it was incumbent upon petitioner to show its right
by title or by an agreement with the owners of the lands that said road
traversed.
While conceding that they have no direct evidence of the alleged agreement,
petitioner posits that they presented circumstantial evidence which, if taken
collectively, would prove its existence.41 Specifically, petitioner cites the
following circumstances, to wit:
a. The agreement was of public knowledge.42 Allegedly BISUDECO and
respondents entered into an agreement for the construction of the road
provided that the latter, their children or relatives were employed with
BISUDECO.
b. The road was continuously used by BISUDECO and the public in
general.43
c. There was no protest or complaint from respondents for almost a
period of two decades.44
d. The portions of the land formerly belonging to respondents affected
by the road were already segregated and surveyed from the main lots.45
e. The road in dispute is already a barangay road.
The well-entrenched rule in our jurisdiction is that only questions of law may
be entertained by this Court in a petition for review on certiorari. This rule,
however, is not iron-clad and admits certain exceptions, such as when (1) the
conclusion is grounded on speculations, surmises or conjectures; (2) the
inference is manifestly mistaken, absurd or impossible; (3) there is grave abuse
of discretion; (4) the judgment is based on a misapprehension of facts; (5) the
findings of fact are conflicting; (6) there is no citation of specific evidence on
which the factual findings are based; (7) the findings of absence of facts are
contradicted by the presence of evidence on record; (8) the findings of the
Court of Appeals are contrary to those of the trial court; (9) the Court of

Bachelor of Laws
Appeals manifestly overlooked certain relevant and undisputed facts that, if
properly considered, would justify a different conclusion; (10) the findings of
the Court of Appeals are beyond the issues of the case; and (11) such findings
are contrary to the admissions of both parties.46
After a painstaking review of the records, this Court finds no justification to
warrant the application of any exception to the general rule.
Crucial to the petitioners cause was its burden of proving the existence of the
alleged agreement between BISUDECO and respondents for the construction of
the road. In this regard, the RTC found that petitioner failed to prove its
existence, to wit:
It is clear that the plaintiff failed to present any concrete evidence to prove that
there was such an agreement between BISUDECO and defendants. Hereunder
quoted are the testimonies of plaintiffs witnesses regarding the alleged
agreement.
Romeo Deveterbo, Transportation Superintendent of BISUDECO testified

Cross Examination by Atty. Pejo
Q: You also mentioned that there was an agreement between Senator Cea,
Mr. Obias and some of the tenants?
A: Yes.
Q: You mentioned that this was not in writing, am I right?
A: Yes.
Q: How did you know about it that it was not in writing, who told you,
Senator Cea?
A: It was commonly known to all original employees of the BISUDECO.
Q: You know it from the management?
A: From co-employees.
Q: You learned about that agreement from you co-employees?
A: Yes.
Q: In other words, therefore, that is why you said you are confused
between Edmundo Cea and Perfecto Obias because you just learned it
from other employees and you were never present when they talked
about it, am I right?
A: Yes. x x x

Bachelor of Laws
To this effect also is the testimony of Angel Lobo, head of the agricultural
Department of BAPCI, to wit:
A: Yes, your Honor?
COURT: From where did you learn?
A: From people whom I talked with at that time and it is a public
common knowledge at that time.
xxx
Atty. Carandang: I repeat my question, Your Honor.
You said you acquired it from or because of common knowledge and you
mentioned some people. Who are those people you are referring to whom
you acquired that knowledge?
A: Most of all, the late Benjamin Bagasina, Barangay Captain at that time
who was our employee in consideration of this agreement, then we have
also a Civil Engineering Head, Civil Engineering Department who is
responsible for the maintenance of this road. I learned from him that this
arrangement established the fact why this road was constructed.
Q: Who is the head of the Engineering Dept?
xxx
COURT: May answer.
A: Engineer Pablo Tordilla who was then the head of our Civil Engineering
Dept.
But this Engineer Pablo Tordilla, Lobos alleged source of the information,
was never presented in Court. And, according to the Chief Accountant of
BAPCI, David Severo:
A: When I was interviewing Mrs. Alma Montero Penaflor she filed to me a
certain arrangement related to the used of the land to Himaao as road
going to the central.
COURT: You mean Himaao Millsite road?
A: Yes, sir.
Atty. Carandang:
Q: What arrangement is that supposedly filed to you?
A: She told me in exchange for the use of the road, the relatives or
owners or tenants of the land will be hired by the sugar Central?

Bachelor of Laws
COURT:
Q: So, only the tenants not the owners?
A: The tenants children the road belongs.
xxx
Finally, intervenor Antonio Austria, in trying to show you that there was
consent and approval on the part of the defendant Edmundo Obias to
give the right of way to BISUDECO at the time to be used in hauling the
sugarcane of the planters to the Central, averred the following uncertain
statements:
A: Well, he has (sic) having a case against PENSUNIL, regarding the
property I think the right of way going to PENSUMIL right now we discuss
it and he said he is allowing it anymore but then I reminded him wayback
in 1974 to 1980 he was one of the biggest planters in the part of Partido
so he consented to the late I think Edmundo Cea, the owner of BISUDECO
at that time to pass his property since he is also milling a lot of things at
that time and many other things one of the concession mill was I think
some of the tenants there in Himaao will be employed in the mill.
xxx
These aforequoted testimonies of the plaintiffs witnesses failed to
satisfactorily establish the plaintiffs contention that there was such an
agreement. Likewise, the list of the Employees of Defendants relatives,
son/daughter employed by the BISUDECO (Exhibit H) does not in any manner
prove the alleged agreement.47
For its part, the CA also ruled that petitioner failed to prove the existence of the
said agreement, to wit:
Like the lower court, we found no conclusive proof to sufficiently establish the
existence of an agreement between BISUDECO and the defendants-appellants
regarding the construction and the use of the disputed road. The lower court
correctly disbelieved the plaintiffs-appellants contention that an agreement
existed because there is simply no direct evidence to support this allegation.
BAPCI submitted purely circumstantial evidence that are not sufficiently
adequate as basis for the inference than an agreement existed. By themselves,
the circumstances the plaintiffs-appellants cited i.e., the employment of
sixteen (16) relatives of the defendants-appellants; the defendants-appellants
unjustified silence; the fact that the existence of the agreement is known to
everyone, etc. are events susceptible of diverse interpretations and do not
necessarily lead to BAPCIs desired conclusion. Additionally, the testimonies
that the plaintiffs-appellants presented are mainly hearsay, as not one among
the witnesses had personal knowledge of the agreement by reason of direct
participation in the agreement or because the witness was present when the

Bachelor of Laws
agreement was concluded by the parties. Thus, given the defendants-appellants
categorical denial that an agreement existed, we sustain the lowers conclusion
that no agreement existed between BISUDECO and the defendants-appellants.48
Based on the foregoing, the inability of petitioner to prove the existence of an
agreement militates its allegations in herein petition. On this score, both the
RTC and the CA are one in ruling that petitioner had failed to prove the
existence of the agreement between BISUDECO and the respondents for the
construction of the road. Also, well-established is the rule that "factual findings
of the Court of Appeals are conclusive on the parties and carry even more
weight when the said court affirms the factual findings of the trial
court."49 Hence, this Court finds no reason to reverse such findings.
On Acquisition by Prescription
Petitioner would have this Court re-examine Costabella Corporation v. Court of
Appeals50 (Costabella) where the Court held that, "It is already well-established
that a right of way is discontinuous and, as such, cannot be acquired by
prescription."51 Petitioner contends that some recognized authorities52 share its
view that an easement of right of way may be acquired by prescription.
Be that as it may, this Court finds no reason to re-examine Costabella. This
Court is guided by Bogo-Medellin Milling Co., Inc. v. Court of Appeals53 (Bogo-
Medellin), involving the construction of a railroad track to a sugar mill. In Bogo-
Medellin, this Court discussed the discontinuous nature of an easement of right
of way and the rule that the same cannot be acquired by prescription, to wit:
Continuous and apparent easements are acquired either by virtue of a title or
by prescription of ten years.
The trial court and the Court of Appeals both upheld this view for the reason
that the railroad right of way was, according to them, continuous and
apparent in nature. The more or less permanent railroad tracks were
visually apparent and they continuously occupied the subject strip of land from
1959 (the year the easement granted by Feliciana Santillan to petitioner
expired). Thus, with the lapse of the 10-year prescriptive period in 1969,
petitioner supposedly acquired the easement of right of way over the subject
land.
Following the logic of the courts a quo, if a road for the use of vehicles or the
passage of persons is permanently cemented or asphalted, then the right of
way over it becomes continuous in nature. The reasoning is erroneous.
Under civil law and its jurisprudence, easements are either continuous or
discontinuous according to the manner they are exercised, not according to the
presence of apparent signs or physical indications of the existence of such
easements. Thus, easement is continuous if its use is, or may be, incessant
without the intervention of any act of man, like the easement of drainage; and it

Bachelor of Laws
is discontinuous if it is used at intervals and depends on the act of man, like
the easement of right of way.
The easement of right of way is considered discontinuous because it is
exercised only if a person passes or sets foot on somebody elses land. Like a
road for the passage of vehicles or persons, an easement of right of way of
railroad tracks is discontinuous because the right is exercised only if and when
a train operated by a person passes over another's property. In other words, the
very exercise of the servitude depends upon the act or intervention of man
which is the very essence of discontinuous easements.
The presence of more or less permanent railroad tracks does not, in any way,
convert the nature of an easement of right of way to one that is continuous. It
is not the presence of apparent signs or physical indications showing the
existence of an easement, but rather the manner of exercise thereof, that
categorizes such easement into continuous or discontinuous. The presence of
physical or visual signs only classifies an easement into apparent or non-
apparent. Thus, a road (which reveals a right of way) and a window (which
evidences a right to light and view) are apparent easements, while an easement
of not building beyond a certain height is non-apparent.
In Cuba, it has been held that the existence of a permanent railway does not
make the right of way a continuous one; it is only apparent. Therefore, it cannot
be acquired by prescription. In Louisiana, it has also been held that a right of
passage over another's land cannot be claimed by prescription because this
easement is discontinuous and can be established only by title.
In this case, the presence of railroad tracks for the passage of petitioners trains
denotes the existence of an apparent but discontinuous easement of right of
way. And under Article 622 of the Civil Code, discontinuous easements, whether
apparent or not, may be acquired only by title. Unfortunately, petitioner
Bomedco never acquired any title over the use of the railroad right of way
whether by law, donation, testamentary succession or contract. Its use of the
right of way, however long, never resulted in its acquisition of the easement
because, under Article 622, the discontinuous easement of a railroad right of
way can only be acquired by title and not by prescription.54
Applying Bogo-Medellin to the case at bar, the conclusion is inevitable that the
road in dispute is a discontinuous easement notwithstanding that the same
may be apparent. To reiterate, easements are either continuous or
discontinuous according to the manner they are exercised, not according to the
presence of apparent signs or physical indications of the existence of such
easements. Hence, even if the road in dispute has been improved and
maintained over a number of years, it will not change its discontinuous nature
but simply make the same apparent. To stress, Article 622 of the New Civil
Code states that discontinuous easements, whether apparent or not, may be
acquired only by virtue of a title.

Bachelor of Laws
On Laches and Estoppel
Petitioner argues that estoppel and laches bar respondents from exercising
ownership rights over the properties traversed by the road in dispute. In
support of said argument, petitioner posits that BISUDECO had been peacefully
and continuously using the road without any complaint or opposition on the
part of the respondents for almost twenty years. Respondents, on the other
hand, claim that they merely tolerated the use of their land as BISUDECO was a
government-owned and controlled corporation and considering that the
disputed road was constructed during the time of Martial Law.
There is no absolute rule on what constitutes laches. It is a rule of equity and
applied not to penalize neglect or sleeping on ones rights, but rather to avoid
recognizing a right when to do so would result in a clearly unfair situation. The
question of laches is addressed to the sound discretion of the court and each
case must be decided according to its particular circumstances.55 It is the better
rule that courts, under the principle of equity, should not be guided or bound
strictly by the statute of limitations or the doctrine of laches if wrong or
injustice will result.56
In herein petition, the CA denied petitioners argument in the wise:
As previously explained in our Decision, the applicable law is Article 622 of the
Civil Code of the Philippines, which provides:
Art. 622. Continuous non-apparent easements, and discontinuous ones,
whether apparent or not, may be acquired only by virtue of a title.
The eminent jurist, former Senator Arturo M. Tolentino, opines that this
provision seeks to prevent the imposition of a burden on a tenement based
purely on the generosity, tolerance and spirit of neighborliness of the owners
thereof.
We applied the cited provision to the case in ruling that no easement of right of
way was acquired; based on the evidence presented, the plaintiff-appellant
failed to satisfactorily prove the existence of an agreement evidencing any right
or title to use the disputed road. We additionally rejected the plaintiff-
appellants position that it had acquired the easement of right of way through
acquisitive prescription, as settled jurisprudence states that an easement of
right of way cannot be acquired by prescription.
We hold the same view on the issue of acquisition of an easement of right of
way by laches. To our mind, settled jurisprudence on the application of the
principle of estoppel by laches militates against the acquisition of an easement
of right of way by laches.
Laches is a doctrine in equity and our courts are basically courts of law and not
courts of equity; equity, which has been aptly described as "justice outside
legality," should be applied only in the absence of, and never against, statutory

Bachelor of Laws
law; Aeguetas nunguam contravenit legis. Based on this principle, we find that
the positive mandate of Article 622 of the Civil Code the statutory provision
requiring title as basis for the acquisition of an easement of a right of way
precludes the application of the equitable principle of laches.57
This Court agrees with the CA. The fact that the law is categorical that
discontinuous easements cannot be acquired by prescription militates against
petitioners claim of laches. To stress, discontinuous easements can only be
acquired by title. More importantly, whether or not the elements of laches are
present is a question involving a factual determination by the trial
court.58 Hence, the same being a question of fact, it cannot be the proper
subject of herein petition. On the other hand, as to the issue of estoppel, this
Court likewise agrees with the finding of the CA that petitioner did not present
any evidence that would show an admission, representation or conduct by
respondents that will give rise to estoppel.59
Classification of the Road in Dispute as a Barangay Road
Petitioner argues that the CA erred when it disregarded the classification of the
road in question as a barangay road. In support of said argument, petitioner
presented Exhibit Q, a Tax Declaration or Field Appraisal and Assessment
Sheet60 (1991 FAAS) with Survey Number 1688-40 and PIN No. 026-01-009-08-
037, dated April 30, 1991, which they claim proves that the road in dispute is
already a barangay road.
The same is again a question of fact which cannot be the proper subject of
herein petition. Petitioner cannot have this Court re-examine the evidentiary
value of the documents it presented before the RTC as the same is not a
function of this Court. In any case, after a closer scrutiny of the 1991 FAAS, this
Court holds that the same is insufficient to prove petitioners claim.
Respondents, in their Comment,61 argue against the classification of the road in
dispute as a barangay road in the wise:
Petitioner also stated that the Honorable Court of Appeals fails to consider the
fact that the owner of the road in question is the Municipality of Pili in the
Province of Camarines Sur and as proof of such claim they presented and
marked as Exhibit Q, tax declaration no. 009-756 or Annex D of their Petition.
However, private respondents wish to call the attention of this Honorable Court
to the following:
a. Tax Declaration No. 009-828 attached as Annex C-6 of the Verified
Petition declared in the name of Edmundo Obias (one of the private
respondents);
b. Actual Use portion of said Annex C-6 marked as Exh. No. N-6-a-1 which
states "Road Lot (BISUDECO Road)"; and

Bachelor of Laws
c. The Memoranda portion in the second page of Annex C-6 which states:
"Revised to declare the property in The name of the rightful owner,
Edmundo Obias based from the approved subdivision plan, Bsd-05-
000055 (OLT) & technical descriptions. Likewise area was made to
conform with the said subdivision plan from 4,773 sq.m. to 11,209 sq.m.
Obviously, the alleged Exhibit Q of the Petitioner is an erroneous tax
declaration, thus, negates the claim of the Petitioner that the same is owned by
the Municipality of Pili and has been declared a barangay road. Private
respondents cannot understand why the herein Petitioner alleged this matter
and used it as a proof to support their claim when they are already in
possession of a tax declaration correcting the same and even attached the same
as part of their Petition.62
In its Reply,63 petitioner counters:
II. While Petitioners claim that the road belongs to the Municipal Government of
Pili, yet what they attached to the Petition as Annex "C-7" is a tax declaration of
Edmundo Obias. Petitioners have the following observations:
xxxx
(b) That land of Edmundo Obias covered by Annex "C-6" to the Petition is not
included or involved in this case at bar. His name does not appear to be
awarded in the Decision of the Honorable Court of Appeals and also in the list
of beneficiaries to receive monetary considerations made by Mr. Angel Lobo.64
After a painstaking review of the records, this Court is more inclined to believe
the claim of respondents. The claim of petitioner to the effect that the land of
Edmundo Obias is not included in the case at bar is misleading. It may be true
that Edmundo was not awarded indemnity by the lower courts, however, the
same does not mean that his lands do not form part of the subject matter of
herein petition.
It bears to stress that Edmundo claimed in the CA that he was the owner of the
affected ricelands and that respondents were merely his tenants-beneficiaries
under PD 27, otherwise known as the Tenant Emancipation Decree. 65 The CA,
however, dismissed said claim because it was raised for the first time on
appeal. It also held that the averments in the documents submitted by
Edmundo in the RTC described respondents as "owners" of the land they till;
hence, the same constituted binding judicial admissions.66
Based on the foregoing, petitioner's attempt to refute the contents of the 1995
FAAS by claiming that the lands of Edmundo are not involved in the case at bar
must fail. It is clear that respondents are the tenant-beneficiaries of the lands of
Edmundo under PD 27; hence, contrary to the claim of petitioner, the lands of
Edmundo are the subject matter of herein petition.

Bachelor of Laws
In addition, it is curious that petitioner relies on the 1991 FAAS yet finds
exception to the contents of the 1995 FAAS. After a closer scrutiny of both
documents, it appears to this Court that the land described in the 1991 FAAS is
also the same land described in the 1995 FAAS. Both FAAS involve land
measuring 4,773 square meters. Likewise, both FAAS have the same PIN
Number (026-01-009-08-037) and Survey Number (1688-40). Accordingly, the
annotation contained in the 1995 FAAS, to the effect that a "BISUDECO road"
does not belong to the Municipality of Pili, serves to weaken petitioners
claim.1avvphi1
The Court also considers portions of the RTC Decision where it can be gathered
that the road in dispute is not a barangay road, to wit:
At this point, it is important to note that defendants admitted the identity of
the road and the area of the same as reflected in the Commissioners Report,
during the Pre-trial held last September 19, 1995.
Engr. Roberto Revilla testified that a portion of the road inside the property of
Edmundo Obias, is a barangay road which are lots A-52 sq.m., B-789 sq.m. and
C-655 sq.m. or a total of 1,497 sq.m. which starts from the intersection of the
National Road and the road to Pensumil up to Corner 9 of Lot 37, Bsc-05-
000055 (OCT) in the name of Pedro O. Montero. Engr. Revilla concluded that the
actual area occupied by the road in question is the sum of areas of Lots D-2042
sq.m., E-2230 sq.m., F-756 sq.m., G-663 sq.m., H-501 sq.m. , I-588 sq.m., J-594
sq.m., K-l092 sq.m., L-595 sq.m., M-459 sq.m., N-106 sq.m., O-585 sq.m. and P-
563 sq.m., or a total of 10,774 square meters. Said road starts from corner 9 of
the lot of Pedro Montero which is equivalent to corner 25 of Lot 40 Bsd-05-
000055 (OCT) going to the Southern Direction and ending at corner 25 of Lot
1688 Cad. 291 Pili Cadastre covered by OCT No. 120-217 (1276) in the name of
spouses Edmundo Obias and Nelly Valencia and spouses Perfecto Obias and
Adelaida Abenojar.67
The RTC findings of fact thus shows that while certain portions of the property
of Edmundo is a barangay road, the same only pertains to Lots A, B and C, or a
total of 1,497 square meters, which is distinct from the road in dispute which
pertains to different lots (lots E to P) and covers a total area of 10,774 square
meters.
In light of the foregoing, considering that the contents of the 1991 FAAS is
disputable, it was incumbent on petitioner to present documents which would
evidence the expropriation of the road in dispute by the local government as a
barangay road. Under the prevailing circumstances, the documents of the
expropriation proceedings would have been the best evidence available and the
absence thereof is certainly damaging to petitioners cause.
Amount of Indemnity Due & On Unjust Enrichment

Bachelor of Laws
Petitioner manifested in the RTC its desire, in the alternative, to avail of a
compulsory easement of right of way as provided for under Article 649 the New
Civil Code. Said relief was granted by the RTC because of the unavailability of
another adequate outlet from the sugar mill to the highway. Despite the grant
of a compulsory easement of right of way, petitioner, however, assails both the
RTC and CA Decision with regard to the amount of indemnity due respondents.
Petitioner likens the proceedings at bar to an expropriation proceeding where
just compensation must be based on the value of the land at the time of
taking.68 Petitioner thus maintains that the compensation due to respondents
should have been computed in 1974 when the road was constructed.69
This Court does not agree. Article 649 of the New Civil Code states:
The owner, or any person who by virtue of a real right may cultivate or use any
immovable, which is surrounded by other immovables pertaining to other
persons and without adequate outlet to a public highway, is entitled to demand
a right of way through the neighboring estates, after payment of the proper
indemnity.
Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent
passage, the indemnity shall consist of the value of the land occupied and the
amount of the damage cause to the servient estate.
Based on the foregoing, it is clear that the law does not provide for a specific
formula for the valuation of the land. Neither does the same state that the value
of the land must be computed at the time of taking. The only primordial
consideration is that the same should consist of the value of the land and the
amount of damage caused to the servient estate. Hence, the same is a question
of fact which should be left to the sound discretion of the RTC. In this regard,
the RTC ruled:
The market value per hectare in 1974 or at the time of taking or prior to its
conversion to road is 6,500/hectare, the same being a first class riceland
irrigated therefore the total market value is 6,864.31. The 1994 Market Value
of 1,292,880.00 is the value assigned to the property in question after it was
already developed as a road lot where the unit value applied per square meter
is 120.00 for 5th class residential lot.
It has to be remembered however that the cost of transforming the land to road
was entirely borne by BISUDECO including its maintenance, repair and the cost
of the improvements and by plaintiff after its acquisition. Thus, the 120.00
unit value is exorbitant while the 1974 valuation of 6,500/hectare is low and
unreasonable.
In fine, this Court will adopt the unit value of 70.00 per square meter as
shown by Exhibit "Q," the Real Property Field Assessment Sheet No. 009-756.70

Bachelor of Laws
In addition, the CA ruled:
We stress that the amount of proper indemnity due to the landowners does not
only relate to the market value of their property but comprehends as well the
corresponding damage caused to the servient estate. It is undisputed that the
BISUDECO began the construction and used of the disputed road in 1974. While
the maintenance was borne by BISUDECO and now by BAPCI who principally
used the disputed road for their sugar milling operations, the defendants-
appellants have been deprived of the use do their ricefields because of the
roads construction since 1974. Thus, it is but proper to compensate them for
this deprivation, over and above the prevailing market value of the affected
property. To our mind, in light of the circumstances surrounding the
acquisition of the affected ricelands and the construction of the disputed road,
particularly the absence of a definitive agreement to show that the defendants-
appellants consented to the roads construction, we find the 70.00 per square
meter indemnity awarded by the lower court in accordance with the Real
Property Field Assessment Sheet No. 009-756, to be fair and reasonable under
the circumstances.71
Withal, this Court finds no error as to the proper amount of indemnity due
respondents as the findings of both the RTC and the CA appear to be fair and
reasonable under the prevailing circumstances and in accordance with the
provisions of Article 649 of the New Civil Code.
WHEREFORE, premises considered, the petition is DENIED. The August 24,
2005 Decision and October 27, 2005 Resolution of the Court of Appeals in CA-
G.R. CV No. 59016 are hereby AFFIRMED. SO ORDERED.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 160613 February 12, 2008
APOLINARDITO C. QUINTANILLA and PERFECTA C.
QUINTANILLA, petitioners,
vs.
PEDRO ABANGAN and DARYL'S COLLECTION INTL. INC., respondents.
RESOLUTION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the
Rules of Civil Procedure seeking the reversal of the Court of Appeals (CA)
Decision2 dated April 21, 2003, which affirmed the Decision3 of the Regional
Trial Court (RTC), Branch 57 of Cebu City, dated June 21, 2000.

Bachelor of Laws
This controversy flows from a case for Easement of Right of Way filed by
petitioner Apolinardito C. Quintanilla (Apolinardito) and his mother, petitioner
Perfecta C. Quintanilla (Perfecta) against respondent Pedro Abangan (Pedro) and
respondent Daryl's Collection International, Inc. (DARYL'S).
Sometime in the 1960s, Perfecta bought Lot No. 3771-B-1-A, with an area of
2,244 square meters, located at Inayawan, Cebu City (the dominant estate) from
one Dionisio Abasolo, who formerly owned all the properties therein.
Thereafter, Perfecta donated the dominant estate to Apolinardito, who is now
the registered owner thereof.4Petitioners own QC Rattan Inc., a domestic
corporation engaged in the manufacture and export of rattan-made furniture.
In the conduct of their business, they use vans to haul and transport raw
materials and finished products. As they wanted to expand their business and
construct a warehouse on their property (the dominant estate), they asked for a
right of way from Pedro sometime in April 1994.
However, it appears that Pedro, who was the owner of Lot No. 3771-A-1,
containing an area of 1,164 square meters5 (the servient estate) and a lot near
the dominant estate, sold the same to DARYL'S on March 24, 1994,6and
thereafter, DARYL'S constructed a warehouse over the servient estate, enclosing
the same with a concrete fence.
Petitioners, thus, sought the imposition of an easement of right of way, six (6)
meters in width, or a total area of 244 square meters, over the servient estate.
On June 21, 2000, the RTC dismissed the case for lack of merit. The RTC held
that petitioners failed to establish that the imposition of the right of way was
the least prejudicial to the servient estate. The RTC noted that there is already a
concrete fence around the area and that six (6) meters from the said concrete
fence was a concrete warehouse. Thus, substantial damage and substantial
reduction in area would be caused the servient estate. Moreover, the RTC
observed that petitioners' insistence on passing through the servient estate
would make for easy and convenient access to the main thoroughfare for their
vans. Otherwise, if the right of way were to be constituted on any of the other
surrounding properties, their vans would have to make a turn. On this premise,
the RTC opined that mere convenience to the dominant estate was not
necessarily the basis for setting up a compulsory easement of right of way.
Aggrieved, petitioners went to the CA on appeal.
In its Decision dated April 21, 2003, the CA affirmed the RTC Decision, holding
that the criterion of least prejudice to the servient estate must prevail over the
shortest distance. A longer way may, thus, be established to avoid injury to the
servient tenement, such as when there are constructions or walls which can be
avoided by a round-about way,7as in this case. Petitioners filed a Motion for
Reconsideration,8 but the same was denied in the CA Resolution 9dated
September 24, 2003.

Bachelor of Laws
Hence, the instant petition based on the following grounds:
a) IN A COMPULSORY EASEMENT OF RIGHT OF WAY, AS SET FORTH IN
THE PRECONDITIONS UNDER ARTICLES 64910 AND 65011 OF THE NEW
CIVIL CODE, THE DETERMINATION OF THE LEAST PREJUDICIAL OR
LEAST DAMAGE TO THE SERVIENT ESTATE SHOULD BE AT THE TIME OF
THE FILING OF THE ORIGINAL COMPLAINT AND NOT AFTER THE FILING,
ESPECIALLY WHEN THE OWNER OF THE SERVIENT ESTATE IS GUILTY OF
ABUSE OF RIGHTS CONSIDERED AS THE GREATEST OF ALL POSSIBLE
WRONGS OR BAD FAITH BY CONSTRUCTING A CONCRETE FENCE AND
WAREHOUSE THEREON THROUGH MISREPRESENTATION TO THE OFFICE
OF THE CEBU CITY BUILDING OFFICIAL THAT IT HAD GRANTED A RIGHT
OF WAY OF SIX (6) METERS TO PETITIONERS; AND
b) WHETHER OR NOT COMPLIANCE WITH THE PRECONDITIONS SET
FORTH IN ARTICLES 649 AND 650 OF THE NEW CIVIL CODE IS SUPERIOR
TO THE "MERE CONVENIENCE RULE AGAINST THE OWNER OF THE
DOMINANT ESTATE."
Petitioners claim that DARYL'S constructed the concrete fence only after
petitioners filed the case for an Easement of Right of Way against Pedro on May
27, 1994. They submit that the criterion of least prejudice should be applied at
the time of the filing of the original complaint; otherwise, it will be easy for the
servient estate to evade the burden by subsequently constructing structures
thereon in order to increase the damage or prejudice.12 Moreover, they pointed
out that a Notice of Lis Pendens was annotated on Pedro's title. Thus,
petitioners aver that DARYL'S is in bad
faith and is guilty of abuse of rights as provided under Article 19 13 of the New
Civil Code.14
On the other hand, DARYL'S counters that petitioners belatedly imputed bad
faith to it since petitioners' pre-trial brief filed with the RTC contained no
allegation of bad faith or misrepresentation. Moreover, DARYL'S reiterates its
position that establishing a right of way over the servient estate would cause
substantial damage, considering that a concrete fence has already been erected
thereon. Most importantly, DARYL'S submits that petitioners can have adequate
ingress to or egress from the dominant estate by passing through other
surrounding vacant lots. Lastly,
DARYL'S points out that when Perfecta bought the dominant estate from
Dionisio Abasolo, the surrounding lots were also owned by the latter.15
For his part, Pedro manifests that he is adopting all the defenses invoked by
DARYL'S in the belief that he is no longer a party to the instant case as he had
already sold the servient estate to DARYL'S and a title already issued in the
latter's name.16

Bachelor of Laws
The instant petition lacks merit.
We hold that Apolinardito as owner of the dominant estate together with
Perfecta failed to discharge the burden of proving the existence and
concurrence of all the requisites in order to validly claim a compulsory right of
way against respondents.17
It should be remembered that to be entitled to a legal easement of right of way,
the following requisites must be satisfied: (1) the dominant estate is
surrounded by other immovables and has no adequate outlet to a public
highway; (2) proper indemnity has been paid; (3) the isolation was not due to
acts of the proprietor of the dominant estate; and (4) the right of way claimed is
at the point least prejudicial to the servient estate.18
The fourth requisite is absent.
We are in full accord with the ruling of the CA when it aptly and judiciously
held, to wit:
As provided for under the provisions of Article 650 of the New Civil
Code, the easement of right of way shall be established at the point least
prejudicial to the servient estate, and, insofar as consistent with this rule,
where the distance from the dominant estate to a public highway may be
the shortest. Where there are several tenements surrounding the
dominant estate, and the easement may be established on any of them,
the one where the way is shortest and will cause the least damage should
be chosen. But if these two circumstances do not concur in a single
tenement, as in the instant case, the way which will cause the least
damage should be used, even if it will not be the shortest. The criterion of
least prejudice to the servient estate must prevail over the criterion of
shortest distance. The court is not bound to establish what is the shortest;
a longer way may be established to avoid injury to the servient tenement,
such as when there are constructions or walls which can be avoided by a
round-about way, as in the case at bar.
As between a right of way that would demolish a fence of strong
materials to provide ingress and egress to a public highway and another
right of way which although longer will only require a van or vehicle to
make a turn, the second alternative should be preferred. Mere
convenience for the dominant estate is not what is required by law as the
basis for setting up a compulsory easement. Even in the face of necessity,
if it can be satisfied without imposing the easement, the same should not
be imposed.
Finally, worthy of note, is the undisputed fact that there is already a
newly opened public road barely fifty (50) meters away from the property
of appellants, which only shows that another requirement of the law, that

Bachelor of Laws
is, there is no adequate outlet, has not been met to establish a
compulsory right of way.
Such pronouncement by the CA is in line with this Court's ruling in Quimen v.
Court of Appeals,19 where we held that as between a right of way that would
demolish a store of strong materials to provide egress to a public highway, and
another right of way which, although longer, will only require an avocado tree
to be cut down, the second alternative should be preferred.
As a rule, findings of fact of the CA, affirming those of the trial court, are
generally final and conclusive on this Court.20 While this Court has recognized
several exceptions21 to this rule, none of these exceptions finds application in
this case. Ergo, we find no cogent reason and reversible error to disturb the
unanimous findings of the RTC and the CA as these are amply supported by the
law and evidence on record.
WHEREFORE, the instant Petition is DENIED for lack of merit. The assailed
Court of Appeals Decision, dated April 21, 2003, and Resolution dated
September 24, 2003 are hereby AFFIRMED. Costs against the petitioners.
SO ORDERED.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 112331 May 29, 1996
ANASTACIA QUIMEN, petitioner,
vs.
COURT OF APPEALS and YOLANDA Q. OLIVEROS, respondents.
BELLOSILLO, J.:p
IN EASEMENT OF RIGHT OF WAY that easement where the way is shortest and
will cause least prejudice shall be chosen. However, if the two circumstances do
not concur in a single tenement, the way where damage will be least shall be
used even if not the shortest route.1 This is so because least prejudice prevails
overshortest distance. This means that the court is not bound to establish what
is the shortest distance; a longer way may be adopted to avoid injury to the

Bachelor of Laws
servient estate, such as when there are constructions or walls which can be
avoided by a round about way, or to secure the interest of the dominant owner,
such as when the shortest distance would place the way on a dangerous decline.
Thus we conclude from the succeeding facts: Petitioner Anastacia Quimen
together with her brothers Sotero, Sulpicio, Antonio and sister Rufina inherited
a piece of property situated in Pandi, Bulacan. They agreed to subdivide the
property equally among themselves, as they did, with the shares of Anastacia,
Sotero, Sulpicio and Rufina abutting the municipal road.
The share of Anastacia, located at the extreme left, was designated as Lot No.
1448-B-1. It is bounded on the right by the property of Sotero designated as Lot.
No. 14413-B-2. Adjoining Sotero's property on the right are Lots Nos. 1448-B-3
and 1448-B-4 originally owned by Rufina and Sulpicio, respectively, but which
were later acquired by a certain Catalina Santos. Located directly behind the
lots of Anastacia and Sotero is the share of their brother Antonio designated as
Lot No. 1448-B-C which the latter divided into two (2) equal parts, now Lots
Nos. 1448-B-6-A and 1448-B-6-B, each with an area of 92 square meters. Lot No.
1448-B-6-A is located behind Anastacia's Lot No. 1448-B-1, while Lot No. 1448-
B-6-B is behind the property of Sotero, father of respondent Yolanda.
In February 1982 Yolanda purchased Lot No. 1448-B-6-A from her uncle
Antonio through her aunt Anastacia who was then acting as his administratrix.
According to Yolanda, when petitioner offered her the property for sale she was
hesitant to buy as it had no access to a public road. But Anastacia prevailed
upon her to buy the lot with the assurance that she would give her a right of
way on her adjoining property for P200.00 per square meter.
Thereafter, Yolanda constructed a house on the lot she bought using as her
passageway to the public highway a portion of Anastacia's property. But when
Yolanda finally offered to pay for the use of the pathway Anastacia refused to
accept the payment. In fact she was thereafter barred by Anastacia from
passing through her property.2
In February 1986 Yolanda purchased the other lot of Antonio Quimen, Lot No.
1448-B-6-B, located directly behind the property of her parents who provided
her a pathway gratis et amore between their house, extending about nineteen
(19) meters from the lot of Yolanda behind the sari sari store of Sotero, and
Anastacia's perimeter fence. The store is made of strong materials and occupies
the entire frontage of the lot measuring four (4) meters wide and nine meters
(9) long. Although the pathway leads to the municipal road it is not adequate
for ingress and egress. The municipal road cannot be reached with facility
because the store itself obstructs the path so that one has to pass through the
back entrance and the facade of the store to reach the road.
On 29 December 1987 Yolanda filed an action with the proper court praying for
a right of way through Anastacia's property. An ocular inspection upon
instruction of the presiding judge was conducted by the branch clerk of court.

Bachelor of Laws
The report was that the proposed right of way was at the extreme right of
Anastacia's property facing the public highway, starting from the back of
Sotero's sari-sari store and extending inward by one (1) meter to her property
and turning left for about five (5) meters to avoid the store of Sotero in order to
reach the municipal road3 and the way was unobstructed except for an avocado
tree standing in the middle.4
But on 5 September 1991 the trial court dismissed the complaint for lack of
cause of action; explaining that the right of way through Sotero's property was
a straight path and to allow a detour by cutting through Anastacia's property
would no longer make the path straight. Hence the trial court concluded that it
was more practical to extend the existing pathway to the public road by
removing that portion of the store blocking the path as that was the shortest
route to the public road and the least prejudicial to the parties concerned than
passing through Anastacia's property.5
On appeal by respondent Yolanda, the Court of Appeals reversed the lower
court and held that she was entitled to a right of way on petitioner's property
and that the way proposed by Yolanda would cause the least damage and
detriment to the servient estate.6 The appellate court however did not award
damages to private respondent as petitioner did not act in bad faith in resisting
the claim.
Petitioner now comes to us imputing ERROR to respondent Court of Appeals:
(a) in disregarding the agreement of the parties; (b) in considering petitioner's
property as a servient estate despite the fact that it does not abut or adjoin the
property of private respondent; and, (c) in holding that the one-meter by five-
meter passage way proposed by private respondent is the least prejudicial and
the shortest distance to the public road.
Incidentally, petitioner denies having promised private respondent a right of
way. She claims that her agreement with private respondent was to provide the
latter with a right of way on the other lot of Antonio Quimen under her
administration when it was not yet sold to private respondent. Petitioner insists
that passing through the property of Yolanda's parents is more accessible to
the public road than to make a detour to her property and cut down the
avocado tree standing thereon.
Petitioner further argues that when Yolanda purchased Lot No.
1448-B-6-B in 1986 the easement of right of way she provided her (petitioner)
was ipso jure extinguished as a result of the merger of ownership of the
dominant and the servient estates in one person so that there was no longer
any compelling reason to provide private respondent with a right of way as
there are other surrounding lots suitable for the purpose. Petitioner strongly
maintains that the proposed right of way is not the shortest access to the
public road because of the detour and that, moreover, she is likely to suffer the
most damage as she derives a net income of P600.00 per year from the sale of

Bachelor of Laws
the fruits of her avocado tree, and considering that an avocado has an average
life span of seventy (70) years, she expects a substantial earning from it.7
But we find no cogent reason to disturb the ruling of respondent appellate
court granting a right of way to private respondent through petitioner's
property. In fact, as between petitioner Anastacia and respondent Yolanda their
agreement has already been rendered moot insofar as it concerns the
determination of the principal issue herein presented. The voluntary easement
in favor of private respondent, which petitioner now denies but which the court
is inclined to believe, has in fact become a legal easement or an easement by
necessity constituted by law.8
As defined, an easement is a real right on another's property, corporeal and
immovable, whereby the owner of the latter must refrain from doing or
allowing somebody else to do or something to be done on his property, for the
benefit of another person or tenement.9 It is jus in re aliena, inseparable,
indivisible and perpetual, unless extinguished by causes provided by law. A
right of way in particular is a privilege constituted by covenant or granted by
law 10 to a person or class of persons to pass over another's property when his
tenement is surrounded by realties belonging to others without an adequate
outlet to the public highway. The owner of the dominant estate can demand a
right of way through the servient estate provided he indemnifies the owner
thereof for the beneficial use of his property. 11
The conditions sine quo non for a valid grant of an easement of right of way
are: (a) the dominant estate is surrounded by other immovables without an
adequate outlet to a public highway; (b) the dominant estate is willing to pay
the proper indemnity; (c) the isolation was not due to the acts of the dominant
estate; and, (d) the right of way being claimed is at a point least prejudicial to
the servient estate. 12
A cursory examination of the complaint of respondent Yolanda for a right of
way 13 readily shows that
[E]ven before the purchase of the said parcels of land the plaintiff
was reluctant to purchase the same for they are enclosed with
permanent improvements like a concrete fence and store and have
(sic) no egress leading to the road but because of the assurance of
the defendant that plaintiff will be provided one (1) meter wide and
five (5) meters long right of way in the sum of P200.00 per square
meter to be taken from Anastacia's lot at the side of a concrete
store until plaintiff reach(es) her father's land, plaintiff was
induced to buy the aforesaid parcels of land . . . That the aforesaid
right of way is the shortest, most convenient and the least onerous
leading to the road and being used by the plaintiff's predecessors-
in-interest from the very inception . . .

Bachelor of Laws
The evidence clearly shows that the property of private respondent is hemmed
in by the estates of other persons including that of petitioner; that she offered
to pay P200.00 per square meter for her right of way as agreed between her and
petitioner; that she did not cause the isolation of her property; that the right of
way is the least prejudicial to the servient estate. 14 These facts are confirmed in
the ocular inspection report of the clerk of court, more so that the trial court
itself declared that "[t]he said properties of Antonio Quimen which were
purchased by plaintiff Yolanda Quimen Oliveros were totally isolated from the
public highway and there appears an imperative need for an easement of right
of way to the public highway." 15
Petitioner finally insists that respondent court erroneously concluded that the
right of way proposed by private respondent is the least onerous to the parties.
We cannot agree. Article 650 of the New Civil Code explicitly states that the
easement of right of way shall be established at the point least prejudicial to
the servient estate and, insofar as consistent with this rule, where the distance
from the dominant estate to a public highway may be the shortest. The
criterion of least prejudice to the servient estate must prevail over the criterion
of shortest distance although this is a matter of judicial appreciation. While
shortest distance may ordinarily imply least prejudice, it is not always so as
when there are permanent structures obstructing the shortest distance; while
on the other hand, the longest distance may be free of obstructions and the
easiest or most convenient to pass through. In other words, where the
easement may be established on any of several tenements surrounding the
dominant estate, the one where the way is shortest and will cause the least
damage should be chosen. However, as elsewhere stated, if these two (2)
circumstances do not concur in a single tenement, the way which will cause the
least damage should be used, even if it will not be the shortest. 16 This is the
test.
In the trial court, petitioner openly admitted
Q. You testified during your direct examination about
this plan, kindly go over this and please point to us in
what portion of this plan is the house or store of the
father of the (plaintiff )?
A. This one, sir (witness pointed a certain portion
located near the proposed right of way).
xxx xxx xxx
Q. Now, you will agree with me . . . that this portion is
the front portion of the lot owned by the father of the
plaintiff and which was (sic) occupied by a store made
up of strong materials?
A. It is not true, sir.

Bachelor of Laws
Q. What materials does (sic) this store of the father of
the plaintiff made of?
A. Hollow blocks and the side is made of wood, sir.
xxx xxx xxx
Q. Just before your brother disposed that 1/2 portion
of the lot in question, what right of way does (sic) he
use in reaching the public road, kindly point to this
sketch that he is (sic) using in reaching the public
road?
A. In my property, sir.
Q. Now you will agree with me . . . the main reason why
your brother is (sic) using this property is because
there was a store located near this portion?
A. Yes, and according to the father of Yolanda there is
no other way than this, sir. 17
The trial court found that Yolanda's property was situated at the back of her
father's property and held that there existed an available space of about
nineteen (19) meters long which could conveniently serve as a right of way
between the boundary line and the house of Yolanda's father; that the vacant
space ended at the left back of Sotero's store which was made of strong
materials; that this explained why Yolanda requested a detour to the lot of
Anastacia and cut an opening of one (1) meter wide and five (5) meters long to
serve as her right of way to the public highway. But notwithstanding its factual
observations, the trial court concluded, although erroneously, that Yolanda was
not entitled to a right of way on petitioner's property since a detour through it
would not make the line straight and would not be the route shortest to the
public highway.
In applying Art. 650 of the New Civil Code, respondent Court of Appeals
declared that the proposed right of way of Yolanda, which is one (1) meter wide
and five (5) meters long at the extreme right of petitioner's property, will cause
the least prejudice and/or damage as compared to the suggested passage
through the property of Yolanda's father which would mean destroying the sari
sari store made of strong materials. Absent any showing that these findings
and conclusion are devoid of factual support in the records, or are so glaringly
erroneous, this Court accepts and adopts them. As between a right of way that
would demolish a store of strong materials to provide egress to a public
highway, and another right of way which although longer will only require an
avocado tree to be cut down, the second alternative should be preferred. After
all, it is not the main function of this Court to analyze or weigh the evidence
presented all over again where the petition would necessarily invite calibration

Bachelor of Laws
of the whole evidence considering primarily the credibility of witnesses,
existence and relevancy of specific surrounding circumstances, their relation to
each other, and the probabilities of the situation. 18 In sum, this Court finds that
the decision of respondent appellate court is thoroughly backed up by law and
the evidence.
WHEREFORE, no reversible error having been committed by respondent Court
of Appeals, the petition is DENIED and the decision subject of review is
AFFIRMED. Costs against petitioner.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 173252 July 17, 2009
UNISOURCE COMMERCIAL AND DEVELOPMENT CORPORATION, Petitioner,
vs.
JOSEPH CHUNG, KIAT CHUNG and KLETO CHUNG, Respondents.
DECISION
QUISUMBING, J.:
The instant petition assails the Decision1 dated October 27, 2005 and the
Resolution2 dated June 19, 2006 of the Court of Appeals in CA-G.R. CV No.
76213. The appellate court had reversed and set aside the Decision3 dated
August 19, 2002 of the Regional Trial Court of Manila, Branch 49, in Civil Case
No. 00-97526.
The antecedent facts are as follows:

Bachelor of Laws
Petitioner Unisource Commercial and Development Corporation is the
registered owner of a parcel of land covered by Transfer Certificate of Title
(TCT) No. 1762534 of the Register of Deeds of Manila. The title contains a
memorandum of encumbrance of a voluntary easement which has been carried
over from the Original Certificate of Title of Encarnacion S. Sandico. The
certified English translation5 of the annotation reads:
By order dated 08 October 1924 of the Court of First Instance of Manila,
Chamber IV (AP-7571/T-23046), it is declared that Francisco Hidalgo y
Magnifico has the right to open doors in the course of his lot described as Lot
No. 2, Block 2650 of the map that has been exhibited, towards the left of the
Callejon that is used as a passage and that appears as adjacent to the said Lot 2
and to pass through the land of Encarnacion Sandico y Santana, until the bank
of the estero that goes to the Pasig River, and towards the right of the other
Callejon that is situated between the said Lot 2 and Lot 4 of the same Block N.6
As Sandicos property was transferred to several owners, the memorandum of
encumbrance of a voluntary easement in favor of Francisco M. Hidalgo was
consistently annotated at the back of every title covering Sandicos property
until TCT No. 176253 was issued in petitioners favor. On the other hand,
Hidalgos property was eventually transferred to respondents Joseph Chung,
Kiat Chung and Cleto Chung under TCT No. 121488.7
On May 26, 2000, petitioner filed a Petition to Cancel the Encumbrance of
Voluntary Easement of Right of Way8 on the ground that the dominant estate
has an adequate access to a public road which is Matienza Street. The trial court
dismissed the petition on the ground that it is a land registration case.
Petitioner moved for reconsideration. Thereafter, the trial court conducted an
ocular inspection of the property. In an Order9 dated November 24, 2000, the
trial court granted the motion and made the following observations:
1. The dominant estate is a property enclosed with a concrete fence with
no less than three (3) doors in it, opening to an alley belonging to the
servient estate owned by the petitioner. The alley is leading to Matienza
St.;
2. The dominant estate has a house built thereon and said house has a
very wide door accessible to Matienza St. without any obstruction. Said
street is perpendicular to J.P. Laurel St.
It is therefore found that the dominant estate has an egress to Matienza St. and
does not have to use the servient estate.10
In their Answer,11 respondents countered that the extinguishment of the
easement will be of great prejudice to the locality and that petitioner is guilty
of laches since it took petitioner 15 years from acquisition of the property to
file the petition.

Bachelor of Laws
In a Decision dated August 19, 2002, the trial court ordered the cancellation of
the encumbrance of voluntary easement of right of way in favor of the
dominant estate owned by respondents. It found that the dominant estate has
no more use for the easement since it has another adequate outlet to a public
road which is Matienza Street. The dispositive portion of the decision reads:
IN VIEW OF ALL THE FOREGOING, the Court hereby orders the cancellation of
the Memorandum of Encumbrance annotated in TCT No. 176253 which granted
a right of way in favor of the person named therein and, upon the finality of
this decision, the Register of Deeds of the City of Manila is hereby directed to
cancel said encumbrance.
With respect to the other prayers in the petition, considering that the same are
mere incidents to the exercise by the owners of right of their ownership which
they could well do without the Courts intervention, this Court sees no need to
specifically rule thereon. The Court cannot award plaintiffs claims for damages
and attorneys fees for lack of sufficient bases therefor.
SO ORDERED.12
Respondents appealed to the Court of Appeals. On October 27, 2005, the
appellate court reversed the decision of the trial court and dismissed the
petition to cancel the encumbrance of voluntary easement of right of way.
The appellate court ruled that when petitioners petition was initially dismissed
by the executive judge, the copy of the petition and the summons had not yet
been served on respondents. Thus, when petitioner moved to reconsider the
order of dismissal, there was no need for a notice of hearing and proof of
service upon respondents since the trial court has not yet acquired jurisdiction
over them. The trial court acquired jurisdiction over the case and over
respondents only after the summons was served upon them and they were later
given ample opportunity to present their evidence.
The appellate court also held that the trial court erred in canceling the
encumbrance of voluntary easement of right of way. The appellate court ruled
that Article 631(3)13 of the Civil Code, which was cited by the trial court, is
inapplicable since the presence of an adequate outlet to a highway extinguishes
only legal or compulsory easements but not voluntary easements like in the
instant case. There having been an agreement between the original parties for
the provision of an easement of right of way in favor of the dominant estate,
the same can be extinguished only by mutual agreement or by renunciation of
the owner of the dominant estate.
The decretal portion of the decision reads:
WHEREFORE, the foregoing considered, the appeal is hereby GRANTED and the
assailed decision is REVERSED and SET ASIDE. Accordingly, the petition to
cancel the encumbrance of right of way is dismissed for lack of merit.

Bachelor of Laws
No costs.
SO ORDERED.14
Before us, petitioner alleges that the Court of Appeals erred in:
I.
BRUSHING ASIDE PETITIONERS CONTENTION THAT THE EASEMENT IS
PERSONAL SINCE THE ANNOTATION DID NOT PROVIDE THAT IT IS
BINDING ON THE HEIRS OR ASSIGNS OF SANDICO.
II.
NOT CONSIDERING THAT THE EASEMENT IS PERSONAL SINCE NO
COMPENSATION WAS GIVEN TO PETITIONER.
III.
DISREGARDING THE CIVIL CODE PROVISION ON UNJUST ENRICHMENT.
IV.
TREATING THE EASEMENT AS PREDIAL.15
Petitioner contends that the fact that Sandico and Hidalgo resorted to judicial
intervention only shows that they contested the existence of the requisite
factors establishing a legal easement. Besides, the annotation itself provides
that the easement is exclusively confined to the parties mentioned therein, i.e.,
Sandico and Hidalgo. It was not meant to bind their heirs or assigns; otherwise,
they would have expressly provided for it. Petitioner adds that it would be an
unjust enrichment on respondents part to continue enjoying the easement
without adequate compensation to petitioner. Petitioner also avers that to say
that the easement has attached to Hidalgos property is erroneous since such
property no longer exists after it has been subdivided and registered in
respondents respective names.16 Petitioner further argues that even if it is
bound by the easement, the same can be cancelled or revoked since the
dominant estate has an adequate outlet without having to pass through the
servient estate.
Respondents adopted the disquisition of the appellate court as their counter-
arguments.
The petition lacks merit.
As defined, an easement is a real right on anothers property, corporeal and
immovable, whereby the owner of the latter must refrain from doing or
allowing somebody else to do or something to be done on his property, for the
benefit of another person or tenement. Easements are established either by law

Bachelor of Laws
or by the will of the owner. The former are called legal, and the latter, voluntary
easements.17
In this case, petitioner itself admitted that a voluntary easement of right of way
exists in favor of respondents.1avvphi1 In its petition to cancel the
encumbrance of voluntary easement of right of way, petitioner alleged that
"[t]he easement is personal. It was voluntarily constituted in favor of a certain
Francisco Hidalgo y Magnifico, the owner of [the lot] described as Lot No. 2,
Block 2650."18 It further stated that "the voluntary easement of the right of way
in favor of Francisco Hidalgo y Magnifico was constituted simply by will or
agreement of the parties. It was not a statutory easement and definitely not an
easement created by such court order because [the] Court merely declares the
existence of an easement created by the parties."19 In its Memorandum20 dated
September 27, 2001, before the trial court, petitioner reiterated that "[t]he
annotation found at the back of the TCT of Unisource is a voluntary
easement."21
Having made such an admission, petitioner cannot now claim that what exists
is a legal easement and that the same should be cancelled since the dominant
estate is not an enclosed estate as it has an adequate access to a public road
which is Callejon Matienza Street.22 As we have said, the opening of an adequate
outlet to a highway can extinguish only legal or compulsory easements, not
voluntary easements like in the case at bar. The fact that an easement by grant
may have also qualified as an easement of necessity does not detract from its
permanency as a property right, which survives the termination of the
necessity.23 A voluntary easement of right of way, like any other contract, could
be extinguished only by mutual agreement or by renunciation of the owner of
the dominant estate.241avvphi1
Neither can petitioner claim that the easement is personal only to Hidalgo since
the annotation merely mentioned Sandico and Hidalgo without equally binding
their heirs or assigns. That the heirs or assigns of the parties were not
mentioned in the annotation does not mean that it is not binding on them.
Again, a voluntary easement of right of way is like any other contract. As such,
it is generally effective between the parties, their heirs and assigns, except in
case where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of
law.25 Petitioner cites City of Manila v. Entote26 in justifying that the easement
should bind only the parties mentioned therein and exclude those not so
mentioned. However, that case is inapplicable since the issue therein was
whether the easement was intended not only for the benefit of the owners of
the dominant estate but of the community and the public at large.27 In
interpreting the easement, the Court ruled that the clause "any and all other
persons whomsoever" in the easement embraces only "those who are privy to
the owners of the dominant estate, Lots 1 and 2 Plan Pcs-2672" and excludes
"the indiscriminate public from the enjoyment of the right-of-way easement."28

Bachelor of Laws
We also hold that although the easement does not appear in respondents title
over the dominant estate, the same subsists. It is settled that the registration of
the dominant estate under the Torrens system without the annotation of the
voluntary easement in its favor does not extinguish the easement. On the
contrary, it is the registration of the servient estate as free, that is, without the
annotation of the voluntary easement, which extinguishes the easement.29
Finally, the mere fact that respondents subdivided the property does not
extinguish the easement. Article 618 30 of the Civil Code provides that if the
dominant estate is divided between two or more persons, each of them may use
the easement in its entirety, without changing the place of its use, or making it
more burdensome in any other way.
WHEREFORE, the instant petition is DENIED. The Decision dated October 27,
2005 and the Resolution dated June 19, 2006 of the Court of Appeals in CA-
G.R. CV No. 76213 are AFFIRMED.
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 182567 July 13, 2009
GUILLERMO M. TELMO, Petitioner,
vs.
LUCIANO M. BUSTAMANTE, Respondent.
DECISION
NACHURA, J.:
For our consideration is a Petition1 for Review on Certiorari under Rule 45 of
the Rules of Court in relation to Section 27, paragraph 3 of the Ombudsman Act
of 1989 (Republic Act No. 6770). Subject of the Petition is the Decision 2 dated
October 13, 2005 and the Order3 dated March 17, 2006 of the Office of the
Deputy Ombudsman for Luzon.
This case arose from the Verified Complaint4 filed by respondent Luciano M.
Bustamante before the Office of the Deputy Ombudsman for Luzon against

Bachelor of Laws
petitioner Guillermo Telmo, Municipal Engineer of Naic, Cavite, Danilo
Consumo, Barangay (Brgy.) Chairman, Brgy. Halang, Naic, Cavite, and Elizalde
Telmo, a private individual.
The complaint alleged that respondent is a co-owner of a real property of 616
square meters in Brgy. Halang, Naic, Cavite, known as Lot 952-A and covered by
Transfer Certificate of Title No. T-957643 of the Register of Deeds of Cavite.
Petitioner and Elizalde Telmo (Telmos) are the owners of the two (2) parcels of
land denominated as Lot 952-B and 952-C, respectively, located at the back of
respondents lot. When his lot was transgressed by the construction of the
Noveleta-Naic-Tagaytay Road, respondent offered for sale the remaining lot to
the Telmos. The latter refused because they said they would have no use for it,
the remaining portion being covered by the roads 10-meter easement.
The complaint further alleged that, on May 8, 2005, respondent caused the
resurvey of Lot 952-A in the presence of the Telmos. The resurvey showed that
the Telmos encroached upon respondents lot. Petitioner then uttered,
"Hanggat ako ang municipal engineer ng Naic, Cavite, hindi kayo
makakapagtayo ng anuman sa lupa nyo; hindi ko kayo bibigyan ng building
permit."
On May 10, 2005, respondent put up concrete poles on his lot. However, around
7:00 p.m. of the same day, the Telmos and their men allegedly destroyed the
concrete poles. The following day, respondents relatives went to Brgy.
Chairman Consumo to report the destruction of the concrete poles. Consumo
told them that he would not record the same, because he was present when the
incident occurred. Consumo never recorded the incident in the barangay
blotter.
Respondent complained that he and his co-owners did not receive any just
compensation from the government when it took a portion of their property for
the construction of the Noveleta-Naic-Tagaytay Road. Worse, they could not
enjoy the use of the remaining part of their lot due to the abusive, Illegal, and
unjust acts of the Telmos and Consumo. Respondent charged the latter
criminallyfor violation of Article 3125 of the Revised Penal Code and Section
3(e)6 of Republic Act No. 30197 and administrativelyfor violation of Section
4 (a)8, (b)9, (c)10, and (e)11of Republic Act No. 6713.12
In his Counter-Affidavit,13 petitioner denied having uttered the words attributed
to him by respondent, and claimed that he only performed his official duties in
requiring an application for a building permit before any structure can be
erected on government property. He said that respondent insisted on enclosing
with barbed wire and concrete posts the lot that already belonged to the
national government, which had now been converted into a national road. He
also alleged that if he allowed the enclosures erected by the respondent, other
residents would be denied ingress to and egress from their own properties.

Bachelor of Laws
In his own counter-affidavit, Consumo denied collusion with petitioner in not
recording in the barangay blotter the subject incident. He explained that on May
10, 2005 at around 5:00 p.m., he was summoned by petitioner to intercede,
because the respondent and his men were fencing the subject property.
Consumo obliged, personally saw the fence being built, and observed that even
the trucks owned by petitioner were enclosed therein. When he asked
respondent if he had the necessary permit and the proper barangay clearance
to do so, respondents lawyer, Atty. San Gaspar, replied that there was no need
for the permit and clearance since respondent was just fencing his own
property. Thus, Consumo could not prevent the ongoing fencing, but told
respondent and company to wait for petitioner to decide the matter.
Consumo further alleged that after putting up the fence, respondent and his
companions left without waiting for the arrival of petitioner. When petitioner
arrived, he explained to the people present that the property enclosed by
respondent is owned by the government and that no one is allowed to construct
any fence without a permit from him, as the Municipal Engineer, or from any
building official of the local government of Naic, Cavite. Consumo said that the
residents affected by the fence constructed by respondent were the ones who
pulled out the concrete posts in order to provide access to the national road.
These residents included the petitioner, whose trucks used for delivering sand
and hollow blocks were enclosed and also denied access.
In his Counter-Affidavit,14 Elizalde Telmo denied having encroached, occupied
or taken possession of respondents property. He claimed that, on May 10,
2005, he was merely an onlooker to the altercation between petitioner and
respondent. He said that petitioner, his brother, insisted that respondent could
not enclose the property in question unless the latter obtains a building permit
from the Office of the Municipal Engineer/Building Official, since it appeared
that the subject property was no longer a property of respondent but was
converted into government property by virtue of the 30-meter road set-back
imposed by the Zoning Ordinance of the Municipality of Naic, Cavite. Elizalde
Telmo stated that he did not offer any resistance to the fencing of the property
in question. He observed, though, that when they learned that petitioner was
arriving at the place, respondent and his companions just left the vicinity.
Later, petitioner and respondent filed their respective position papers 15 upon
the directive of the Graft Investigating and Prosecuting Officer. Their position
papers reiterated the allegations made in their respective affidavits earlier
submitted.
In the Decision16 dated October 13, 2005, the Office of the Deputy Ombudsman
for Luzon found petitioner and Danilo Consumo administratively liable, but
dismissed the charge against Elizalde Telmo for lack of jurisdiction over his
person, he being a private individual. The dispositive portion of the Decision
states

Bachelor of Laws
WHEREFORE, premises considered, the undersigned investigator respectfully
recommends the following, to wit:
(1) That the administrative complaint against respondent Elizalde Telmo
be DISMISSED for lack of jurisdiction;
(2) That respondent Guillermo Telmo be meted the PENALTY OF FINE
EQUIVALENT TO SIX (6) MONTHS SALARY for violation of Section 4 of
Republic Act No. 6713; and
(3) That respondent Danilo Consumo be meted the PENALTY OF FINE
EQUIVALENT TO THREE (3) MONTHS HONORARIA for violation of Section
4 of Republic Act No. 6713.
SO DECIDED.17
Petitioner filed a Motion for Reconsideration,18 wherein he elaborated that he
just performed his official duties when he summarily removed the concrete
posts erected by respondent to enclose the property.
In the Order19 dated March 17, 2006, the Office of the Deputy Ombudsman for
Luzon denied the Motion for Reconsideration for lack of merit.
Hence, this petition anchored on the following grounds:
A. THE HONORABLE DEPUTY OMBUDSMAN FOR LUZON SERIOUSLY ERRED
WHEN HE DECLARED THAT THERE WAS NO VALID TAKING OF RESPONDENTS
LOT BY MEANS OF EXPROPRIATION.
B. THE HONORABLE DEPUTY OMBUDSMAN FOR LUZON SERIOUSLY ERRED
WHEN HE DECLARED THAT PETITIONER SHOULD BE AUTHORIZED BY THE
MUNICIPAL MAYOR OR BY THE COURT TO ABATE PUBLIC NUISANCE OR
NUISANCE PER SE.
C. THE HONORABLE DEPUTY OMBUDSMAN FOR LUZON ERRED WHEN HE
METED THE PENALTY OF FINE EQUIVALENT TO SIX (6) MONTHS SALARY FOR
VIOLATION OF SECTION 4 OF REPUBLIC ACT NO. 6713.20
In essence, petitioner contends that the property claimed and enclosed with
concrete posts by respondent was validly taken by the National Government
through its power of eminent domain, pursuant to Executive Order No. 113, as
amended by Executive Order No. 253, creating the Noveleta-Naic-Tagaytay
Road. In this context, petitioner contends that the concrete posts erected by
respondent were a public nuisance under Article 694 (4)21 of the Civil Code,
more particularly a nuisance per se, which may be summarily abated under
Article 699 (3)22 of the same Code. Petitioner says that as the Municipal
Engineer, he is also the Building Official of Naic, Cavite; and thus, it was well
within his authority, pursuant to Section 214, paragraph two (2) of the National
Building Code, to order the removal of the concrete posts. Petitioner likewise

Bachelor of Laws
claims that Section 23 of Revised Philippine Highway Act (Presidential Decree
No. 17)23 mandated him to remove respondents concrete posts. Petitioner
concludes that since he merely performed his official duties in removing the
concrete posts erected by petitioner from the property, which is already owned
by the government, he must be absolved of any administrative liability.
Instead of filing his comment on the petition, respondent manifested through
counsel that he is no longer interested in pursuing this case, submitting
therewith his Affidavit of Desistance24 dated December 5, 2007. Respondent
alleged in the affidavit that the administrative charges he lodged against
petitioner were brought about by a misunderstanding between them, which
differences have already been settled. Consequently, this case should now be
dismissed.
We disagree.
The desistance of the complainant does not necessarily result in the dismissal
of the administrative complaint because the Court attaches no persuasive value
to a desistance, especially when executed as an afterthought.25 It should be
remembered that the issue in an administrative case is not whether the
complaint states a cause of action against the respondent, but whether the
public officials have breached the norms and standards of the public
service.26 Considering that petitioner admitted in his pleadings that he
summarily removed the concrete posts erected by respondent, allegedly within
the parameters of his authority as Municipal Engineer of Naic, Cavite, it is only
proper that this case be decided on its merits rather than on the basis of the
desistance of respondent.
It cannot be denied that respondents property was taken by the National
Government thru the Department of Public Works and Highways when it
constructed the Noveleta-Naic-Tagaytay Road. What is not clear from the
records of this case is whether respondents property was taken as part of the
national road itself or only as part of the right-of-way easement therefor. We
observe that the re-survey plan27 of his property attached by respondent to his
complaint and the survey plan28 of the Noveleta-Naic-Tagaytay Road submitted
by petitioner appear to be different. Nevertheless, it is evident from the sketch
plans that respondent could not enclose his property because it is now being
used by the National Government. Therefore, whatever cause of action
respondent may have in his claim for just compensation for the taking of his
property, the same should be lodged against the National Government.
While it is settled that respondent does not have the legal right to enclose the
property, we should now determine whether petitioner indeed performed his
official functions properly.
First. Petitioner claims that his act of summarily removing respondents
concrete posts was authorized under the National Building Code (Presidential

Bachelor of Laws
Decree No. 1096). The provision he cites correctly pertains to Section 215,
which reads
Sec. 215. Abatement of Dangerous Buildings.When any building or structure
is found or declared to be dangerous or ruinous, the Building Official shall
order its repair, vacation or demolition depending upon the decree of danger to
life, health, or safety. This is without prejudice to further action that may be
taken under the provisions of Articles 482 and 694 to 707 of the Civil Code of
the Philippines.1avvphi1
To better understand this provision, we refer to Section 214 of the same law,
which defines what are dangerous and ruinous buildings or structures
susceptible of abatement. It provides
Sec. 214. Dangerous and Ruinous Buildings or Structures. Dangerous buildings
are those which are herein declared as such or are structurally unsafe or not
provided with safe egress, or which constitute a fire hazard, or are otherwise
dangerous to human life, or which in relation to existing use, constitute a
hazard to safety or health or public welfare because of inadequate
maintenance, dilapidation, obsolescence, or abandonment, or which otherwise
contribute to the pollution of the site or the community to an intolerable
degree.1avvphi1
A careful reading of the foregoing provisions would readily show that they do
not apply to the respondents situation. Nowhere was it shown that the
concrete posts put up by respondent in what he believed was his and his co-
owners property were ever declared dangerous or ruinous, such that they can
be summarily demolished by petitioner.
What is more, it appears that the concrete posts do not even fall within the
scope of the provisions of the National Building Code. The Code does not
expressly define the word "building." However, we find helpful the dictionary
definition of the word "building," viz:
[A] constructed edifice designed usually covered by a roof and more or less
completely enclosed by walls, and serving as a dwelling, storehouse, factory,
shelter for animals, or other useful structure distinguished from structures
not designed for occupancy (as fences or monuments) and from structures not
intended for use in one place (as boats or trailers) even though subject to
occupancy.29
The provisions of the National Building Code would confirm that "building" as
used therein conforms to this definition. Thus, applying the statutory
construction principle of ejusdem generic,30 the word "structure" should be
construed in the context of the definition of the word "building." The concrete
posts put up by respondent on the property are not properly covered by the
definition of the word "building" nor is it embraced in the corresponding
interpretation of the word "structure."

Bachelor of Laws
Second. Petitioner contends that respondents concrete posts were in the nature
of a nuisance per se, which may be the subject of summary abatement sans any
judicial proceedings. Again, we disagree.
A nuisance per se is that which affects the immediate safety of persons and
property and may be summarily abated under the undefined law of
necessity.31 Evidently, the concrete posts summarily removed by petitioner did
not at all pose a hazard to the safety of persons and properties, which would
have necessitated immediate and summary abatement. What they did, at most,
was to pose an inconvenience to the public by blocking the free passage of
people to and from the national road.
Third. Petitioner likewise maintains that his authority to perform the assailed
official act sprang from Section 23 of the Revised Philippine Highway Act. He
posits that this provision is particularly implemented by Department Order No.
52,32 Series of 2003 of the Department of Public Works and Highways for the
Removal of Obstructions and Prohibited Uses within the Right-of-Way of
National Roads.
Department Order No. 52 directs all District Engineers to immediately remove
or cause the removal of all obstructions and prohibited uses within the right-of-
way of all national roads in their respective jurisdictions. These obstructions
and prohibited uses include, among others, all kinds of private, temporary and
permanent structures, such as buildings, houses, shanties, stores, shops, stalls,
sheds, posts, canopies, billboards, signages, advertisements, fences, walls,
railings, basketball courts, garbage receptacles, and the like. The Department
Order requires the District Engineers to issue notices to the concerned persons
to remove the obstructions and prohibited uses within the right-of-way, and
shall follow through prompt compliance with these notices and full
implementation of the Order. It further provides that appropriate sanctions will
be taken against those who fail to comply with its provisions.
Gauging the action of petitioner based on the guidelines set by Department
Order No. 52, from which he claims his authority, we cannot but conclude that
petitioner went beyond the scope of his official power because it is the
concerned District Engineer of the Department of Public Works and Highways
who should have ordered respondent to remove the concrete posts. The
petitioner failed to show that he was duly authorized by the District Engineer to
implement the Department Order in Naic, Cavite. More importantly, even
assuming that petitioner had been duly authorized to order the removal of the
concrete posts of respondent, he failed to prove that he issued the required
notice to respondent to remove the said structures before he did the removal
himself. Note that petitioner, in fact, admitted in his pleadings that he
summarily removed the said posts.
The Revised Philippine Highway Act and Department Order No. 52 do not
expressly provide for the administrative sanction to be taken against public

Bachelor of Laws
officials violating their provisions. Hence, we must refer to the Uniform Rules
on Administrative Cases in the Civil Service. We believe that the administrative
offense committed by petitioner through the questioned act was only
Discourtesy in the Course of Official Duties, which is a light offense under Rule
IV, Section 52 of the said Rules. The penalties imposable for such an offense are
a reprimand for the first offense, a suspension from 1 day to 30 days for the
second offense, and dismissal from public service for the third offense. Since
this appears to be petitioners first offense, his action warrants only a
REPRIMAND.
WHEREFORE, the Decision dated October 13, 2005 and the Order dated March
17, 2006 of the Office of the Deputy Ombudsman for Luzon finding petitioner
Guillermo M. Telmo, Municipal Engineer of Naic, Cavite, administratively
culpable for violation of Section 4 of Republic Act No. 6713, imposing upon him
the penalty of fine equivalent to his six 6-month salary, must be MODIFIED.
Guillermo M. Telmo is instead found administratively guilty of DISCOURTESY
IN THE COURSE OF OFFICIAL DUTIES and is hereby REPRIMANDED. Costs
against petitioner.
SO ORDERED.
5
Art. 312. Occupation of real property or usurpation of real rights in
property. Any person who, by means of violence against or intimidation
of persons, shall take possession of any real property or shall usurp any
real rights in property belonging to another, in addition to the penalty
incurred for the acts of violence executed by him, shall be punished by a
fine from 50 to 100 per centum of the gain which he shall have obtained,
but not less than 75 pesos.
If the value of the gain cannot be ascertained, a fine of from 200 to
500 pesos shall be imposed.
6
Section 3. Corrupt practices of public officers In addition to acts or
omissions of public officers already penalized by existing law, the
following shall constitute corrupt practices of any public officer and are
hereby declared to be unlawful:
xxx
(e) Causing any undue injury to any party, including the
Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official,
administrative or judicial functions through manifest partiality,
evident bad faith or gross inexcusable negligence. This provision
shall apply to officers and employees of offices or government
corporations charged with the grant of licences or permits or other
concessions.

Bachelor of Laws
7
Anti-Graft and Corrupt Practices Act.
8
Section 4. Norms of Conduct of Public Officials and Employees. (A)
Every public official and employee shall observe the following as
standards of personal conduct in the discharge and execution of official
duties:
(a) Commitment to public interest. Public officials and employees
shall always uphold the public interest over and above personal
interest. All government resources and powers of their respective
offices must be employed and used efficiently, effectively, honestly
and economically, particularly to avoid wastage in public funds and
revenues.
9
(b) Professionalism. Public officials and employees shall perform and
discharge their duties with the highest degree of excellence,
professionalism, intelligence and skill. They shall enter public service
with utmost devotion and dedication to duty. They shall endeavor to
discourage wrong perceptions of their roles as dispensers or peddlers of
undue patronage.
10
(c) Justness and sincerity. Public officials and employees shall remain
true to the people at all times. They must act with justness and sincerity
and shall not discriminate against anyone, especially the poor and the
underprivileged. They shall at all times respect the rights of others, and
shall refrain from doing acts contrary to law, good morals, good customs,
public policy, public order, public safety and public interest. They shall
not dispense or extend undue favors on account of their office to their
relatives whether by consanguinity or affinity except with respect to
appointments of such relatives to positions considered strictly
confidential or as members of their personal staff whose terms are
coterminous with theirs.
11
(e) Responsiveness to the public. Public officials and employees shall
extend prompt, courteous, and adequate service to the public. Unless
otherwise provided by law or when required by the public interest, public
officials and employees shall provide information of their policies and
procedures in clear and understandable language, ensure openness of
information, public consultations and hearings whenever appropriate,
encourage suggestions, simplify and systematize policy, rules and
procedures, avoid red tape and develop an understanding and
appreciation of the socio-economic conditions prevailing in the country,
especially in the depressed rural and urban areas.

Bachelor of Laws
SUPREME COURT
Manila
EN BANC
G.R. No. 177807 October 11, 2011
EMILIO GANCAYCO, Petitioner,
vs.
CITY GOVERNMENT OF QUEZON CITY AND METRO MANILA DEVELOPMENT
AUTHORITY, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 177933
METRO MANILA DEVELOPMENT AUTHORITY, Petitioner,
vs.
JUSTICE EMILIO A. GANCAYCO (Retired), Respondent,
DECISION
SERENO, J.:

Bachelor of Laws
Before us are consolidated Petitions for Review under Rule 45 of the Rules of
Court assailing the Decision1promulgated on 18 July 2006 and the
Resolution2 dated 10 May 2007 of the Court of Appeals in CA-G.R. SP No.
84648.
The Facts
In the early 1950s, retired Justice Emilio A. Gancayco bought a parcel of land
located at 746 Epifanio delos Santos Avenue (EDSA),3 Quezon City with an area
of 375 square meters and covered by Transfer Certificate of Title (TCT) No.
RT114558.
On 27 March 1956, the Quezon City Council issued Ordinance No. 2904,
entitled "An Ordinance Requiring the Construction of Arcades, for Commercial
Buildings to be Constructed in Zones Designated as Business Zones in the
Zoning Plan of Quezon City, and Providing Penalties in Violation Thereof."4
An arcade is defined as any portion of a building above the first floor
projecting over the sidewalk beyond the first storey wall used as protection for
pedestrians against rain or sun.5
Ordinance No. 2904 required the relevant property owner to construct an
arcade with a width of 4.50 meters and height of 5.00 meters along EDSA, from
the north side of Santolan Road to one lot after Liberty Avenue, and from one
lot before Central Boulevard to the Botocan transmission line.
At the outset, it bears emphasis that at the time Ordinance No. 2904 was
passed by the city council, there was yet no building code passed by the
national legislature. Thus, the regulation of the construction of buildings was
left to the discretion of local government units. Under this particular ordinance,
the city council required that the arcade is to be created by constructing the
wall of the ground floor facing the sidewalk a few meters away from the
property line. Thus, the building owner is not allowed to construct his wall up
to the edge of the property line, thereby creating a space or shelter under the
first floor. In effect, property owners relinquish the use of the space for use as
an arcade for pedestrians, instead of using it for their own purposes.
The ordinance was amended several times. On 8 August 1960, properties
located at the Quezon City-San Juan boundary were exempted by Ordinance No.
60-4477 from the construction of arcades. This ordinance was further amended
by Ordinance No. 60-4513, extending the exemption to commercial buildings
from Balete Street to Seattle Street. Ordinance No. 6603 dated 1 March 1966
meanwhile reduced the width of the arcades to three meters for buildings along
V. Luna Road, Central District, Quezon City.
The ordinance covered the property of Justice Gancayco. Subsequently,
sometime in 1965, Justice Gancayco sought the exemption of a two-storey

Bachelor of Laws
building being constructed on his property from the application of Ordinance
No. 2904 that he be exempted from constructing an arcade on his property.
On 2 February 1966, the City Council acted favorably on Justice Gancaycos
request and issued Resolution No. 7161, S-66, "subject to the condition that
upon notice by the City Engineer, the owner shall, within reasonable time,
demolish the enclosure of said arcade at his own expense when public interest
so demands."6
Decades after, in March 2003, the Metropolitan Manila Development Authority
(MMDA) conducted operations to clear obstructions along the sidewalk of EDSA
in Quezon City pursuant to Metro Manila Councils (MMC) Resolution No. 02-28,
Series of 2002.7 The resolution authorized the MMDA and local government
units to "clear the sidewalks, streets, avenues, alleys, bridges, parks and other
public places in Metro Manila of all illegal structures and obstructions."8
On 28 April 2003, the MMDA sent a notice of demolition to Justice Gancayco
alleging that a portion of his building violated the National Building Code of the
Philippines (Building Code)9 in relation to Ordinance No. 2904. The MMDA gave
Justice Gancayco fifteen (15) days to clear the portion of the building that was
supposed to be an arcade along EDSA.10
Justice Gancayco did not comply with the notice. Soon after the lapse of the
fifteen (15) days, the MMDA proceeded to demolish the party wall, or what was
referred to as the "wing walls," of the ground floor structure. The records of the
present case are not entirely clear on the extent of the demolition; nevertheless,
the fact of demolition was not disputed. At the time of the demolition, the
affected portion of the building was being used as a restaurant.
On 29 May 2003, Justice Gancayco filed a Petition11 with prayer for a temporary
restraining order and/or writ of preliminary injunction before the Regional
Trial Court (RTC) of Quezon City, docketed as Civil Case No. Q03-49693,
seeking to prohibit the MMDA and the City Government of Quezon City from
demolishing his property. In his Petition,12 he alleged that the ordinance
authorized the taking of private property without due process of law and just
compensation, because the construction of an arcade will require 67.5 square
meters from the 375 square meter property. In addition, he claimed that the
ordinance was selective and discriminatory in its scope and application when it
allowed the owners of the buildings located in the Quezon City-San Juan
boundary to Cubao Rotonda, and Balete to Seattle Streets to construct arcades
at their option. He thus sought the declaration of nullity of Ordinance No. 2904
and the payment of damages. Alternately, he prayed for the payment of just
compensation should the court hold the ordinance valid.
The City Government of Quezon City claimed that the ordinance was a valid
exercise of police power, regulating the use of property in a business zone. In
addition, it pointed out that Justice Gancayco was already barred by estoppel,
laches and prescription.

Bachelor of Laws
Similarly, the MMDA alleged that Justice Gancayco could not seek the
nullification of an ordinance that he had already violated, and that the
ordinance enjoyed the presumption of constitutionality. It further stated that
the questioned property was a public nuisance impeding the safe passage of
pedestrians. Finally, the MMDA claimed that it was merely implementing the
legal easement established by Ordinance No. 2904.13
The RTC rendered its Decision on 30 September 2003 in favor of Justice
Gancayco.14 It held that the questioned ordinance was unconstitutional, ruling
that it allowed the taking of private property for public use without just
compensation. The RTC said that because 67.5 square meters out of Justice
Gancaycos 375 square meters of property were being taken without
compensation for the publics benefit, the ordinance was confiscatory and
oppressive. It likewise held that the ordinance violated owners right to equal
protection of laws. The dispositive portion thus states:
WHEREFORE, the petition is hereby granted and the Court hereby declares
Quezon City Ordinance No. 2094,15Series of 1956 to be unconstitutional, invalid
and void ab initio. The respondents are hereby permanently enjoined from
enforcing and implementing the said ordinance, and the respondent MMDA is
hereby directed to immediately restore the portion of the party wall or wing
wall of the building of the petitioner it destroyed to its original condition.
IT IS SO ORDERED.
The MMDA thereafter appealed from the Decision of the trial court. On 18 July
2006, the Court of Appeals (CA) partly granted the appeal.16 The CA upheld the
validity of Ordinance No. 2904 and lifted the injunction against the
enforcement and implementation of the ordinance. In so doing, it held that the
ordinance was a valid exercise of the right of the local government unit to
promote the general welfare of its constituents pursuant to its police powers.
The CA also ruled that the ordinance established a valid classification of
property owners with regard to the construction of arcades in their respective
properties depending on the location. The CA further stated that there was no
taking of private property, since the owner still enjoyed the beneficial
ownership of the property, to wit:
Even with the requirement of the construction of arcaded sidewalks within his
commercial lot, appellee still retains the beneficial ownership of the said
property. Thus, there is no "taking" for public use which must be subject to just
compensation. While the arcaded sidewalks contribute to the public good, for
providing safety and comfort to passersby, the ultimate benefit from the same
still redounds to appellee, his commercial establishment being at the forefront
of a busy thoroughfare like EDSA. The arcaded sidewalks, by their nature,
assure clients of the commercial establishments thereat some kind of
protection from accidents and other hazards. Without doubt, this sense of
protection can be a boon to the business activity therein engaged. 17

Bachelor of Laws
Nevertheless, the CA held that the MMDA went beyond its powers when it
demolished the subject property. It further found that Resolution No. 02-28
only refers to sidewalks, streets, avenues, alleys, bridges, parks and other
public places in Metro Manila, thus excluding Justice Gancaycos private
property. Lastly, the CA stated that the MMDA is not clothed with the authority
to declare, prevent or abate nuisances. Thus, the dispositive portion stated:
WHEREFORE, the appeals are PARTLY GRANTED. The Decision dated September
30, 2003 of the Regional Trial Court, Branch 224, Quezon City, is MODIFIED, as
follows:
1) The validity and constitutionality of Ordinance No. 2094,18 Series of
1956, issued by the City Council of Quezon City, is UPHELD; and
2) The injunction against the enforcement and implementation of the
said Ordinance is LIFTED.
SO ORDERED.
This ruling prompted the MMDA and Justice Gancayco to file their respective
Motions for Partial Reconsideration.19
On 10 May 2007, the CA denied the motions stating that the parties did not
present new issues nor offer grounds that would merit the reconsideration of
the Court.20
Dissatisfied with the ruling of the CA, Justice Gancayco and the MMDA filed
their respective Petitions for Review before this Court. The issues raised by the
parties are summarized as follows:
I. WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM
ASSAILING THE VALIDITY OF ORDINANCE NO. 2904.
II. WHETHER OR NOT ORDINANCE NO. 2904 IS CONSTITUTIONAL.
III. WHETHER OR NOT THE WING WALL OF JUSTICE GANCAYCOS
BUILDING IS A PUBLIC NUISANCE.
IV. WHETHER OR NOT THE MMDA LEGALLY DEMOLISHED THE PROPERTY
OF JUSTICE GANCAYCO.
The Courts Ruling
Estoppel
The MMDA and the City Government of Quezon City both claim that Justice
Gancayco was estopped from challenging the ordinance, because, in 1965, he
asked for an exemption from the application of the ordinance. According to
them, Justice Gancayco thereby recognized the power of the city government to
regulate the construction of buildings.

Bachelor of Laws
To recall, Justice Gancayco questioned the constitutionality of the ordinance on
two grounds: (1) whether the ordinance "takes" private property without due
process of law and just compensation; and (2) whether the ordinance violates
the equal protection of rights because it allowed exemptions from its
application.
On the first ground, we find that Justice Gancayco may still question the
constitutionality of the ordinance to determine whether or not the ordinance
constitutes a "taking" of private property without due process of law and just
compensation. It was only in 2003 when he was allegedly deprived of his
property when the MMDA demolished a portion of the building. Because he was
granted an exemption in 1966, there was no "taking" yet to speak of.
Moreover, in Acebedo Optical Company, Inc. v. Court of Appeals,21 we held:
It is therefore decisively clear that estoppel cannot apply in this case. The fact
that petitioner acquiesced in the special conditions imposed by the City Mayor
in subject business permit does not preclude it from challenging the said
imposition, which is ultra vires or beyond the ambit of authority of respondent
City Mayor. Ultra vires acts or acts which are clearly beyond the scope of one's
authority are null and void and cannot be given any effect. The doctrine of
estoppel cannot operate to give effect to an act which is otherwise null and void
or ultra vires. (Emphasis supplied.)
Recently, in British American Tobacco v. Camacho,22 we likewise held:
We find that petitioner was not guilty of estoppel. When it made the
undertaking to comply with all issuances of the BIR, which at that time it
considered as valid, petitioner did not commit any false misrepresentation or
misleading act. Indeed, petitioner cannot be faulted for initially undertaking to
comply with, and subjecting itself to the operation of Section 145(C), and only
later on filing the subject case praying for the declaration of its
unconstitutionality when the circumstances change and the law results in what
it perceives to be unlawful discrimination. The mere fact that a law has been
relied upon in the past and all that time has not been attacked as
unconstitutional is not a ground for considering petitioner estopped from
assailing its validity. For courts will pass upon a constitutional question only
when presented before it in bona fide cases for determination, and the fact that
the question has not been raised before is not a valid reason for refusing to
allow it to be raised later. (Emphasis supplied.)
Anent the second ground, we find that Justice Gancayco may not question the
ordinance on the ground of equal protection when he also benefited from the
exemption. It bears emphasis that Justice Gancayco himself requested for an
exemption from the application of the ordinance in 1965 and was eventually
granted one. Moreover, he was still enjoying the exemption at the time of the
demolition as there was yet no valid notice from the city engineer. Thus, while
the ordinance may be attacked with regard to its different treatment of

Bachelor of Laws
properties that appears to be similarly situated, Justice Gancayco is not the
proper person to do so.
Zoning and the regulation of the construction of buildings are valid exercises of
police power .
In MMDA v. Bel-Air Village Association,23 we discussed the nature of police
powers exercised by local government units, to wit:
Police power is an inherent attribute of sovereignty. It has been defined as the
power vested by the Constitution in the legislature to make, ordain, and
establish all manner of wholesome and reasonable laws, statutes and
ordinances, either with penalties or without, not repugnant to the Constitution,
as they shall judge to be for the good and welfare of the commonwealth, and
for the subjects of the same. The power is plenary and its scope is vast and
pervasive, reaching and justifying measures for public health, public safety,
public morals, and the general welfare.
It bears stressing that police power is lodged primarily in the National
Legislature. It cannot be exercised by any group or body of individuals not
possessing legislative power. The National Legislature, however, may delegate
this power to the President and administrative boards as well as the lawmaking
bodies of municipal corporations or local government units. Once delegated,
the agents can exercise only such legislative powers as are conferred on them
by the national lawmaking body.
To resolve the issue on the constitutionality of the ordinance, we must first
determine whether there was a valid delegation of police power. Then we can
determine whether the City Government of Quezon City acted within the limits
of the delegation.
It is clear that Congress expressly granted the city government, through the city
council, police power by virtue of Section 12(oo) of Republic Act No. 537, or the
Revised Charter of Quezon City,24 which states:
To make such further ordinances and regulations not repugnant to law as may
be necessary to carry into effect and discharge the powers and duties conferred
by this Act and such as it shall deem necessary and proper to provide for the
health and safety, promote the prosperity, improve the morals, peace, good
order, comfort, and convenience of the city and the inhabitants thereof, and for
the protection of property therein; and enforce obedience thereto with such
lawful fines or penalties as the City Council may prescribe under the provisions
of subsection (jj) of this section.
Specifically, on the powers of the city government to regulate the construction
of buildings, the Charter also expressly provided that the city government had
the power to regulate the kinds of buildings and structures that may be erected
within fire limits and the manner of constructing and repairing them.25

Bachelor of Laws
With regard meanwhile to the power of the local government units to issue
zoning ordinances, we apply Social Justice Society v. Atienza.26 In that case, the
Sangguniang Panlungsod of Manila City enacted an ordinance on 28 November
2001 reclassifying certain areas of the city from industrial to commercial. As a
result of the zoning ordinance, the oil terminals located in those areas were no
longer allowed. Though the oil companies contended that they stood to lose
billions of pesos, this Court upheld the power of the city government to pass
the assailed ordinance, stating:
In the exercise of police power, property rights of individuals may be subjected
to restraints and burdens in order to fulfil the objectives of the government.
Otherwise stated, the government may enact legislation that may interfere with
personal liberty, property, lawful businesses and occupations to promote the
general welfare. However, the interference must be reasonable and not
arbitrary. And to forestall arbitrariness, the methods or means used to protect
public health, morals, safety or welfare must have a reasonable relation to the
end in view.
The means adopted by the Sanggunian was the enactment of a zoning
ordinance which reclassified the area where the depot is situated from
industrial to commercial. A zoning ordinance is defined as a local city or
municipal legislation which logically arranges, prescribes, defines and
apportions a given political subdivision into specific land uses as present and
future projection of needs. As a result of the zoning, the continued operation of
the businesses of the oil companies in their present location will no longer be
permitted. The power to establish zones for industrial, commercial and
residential uses is derived from the police power itself and is exercised for the
protection and benefit of the residents of a locality. Consequently, the
enactment of Ordinance No. 8027 is within the power of the Sangguniang
Panlungsod of the City of Manila and any resulting burden on those affected
cannot be said to be unjust... (Emphasis supplied)
In Carlos Superdrug v. Department of Social Welfare and Development, 27 we
also held:
For this reason, when the conditions so demand as determined by the
legislature, property rights must bow to the primacy of police power because
property rights, though sheltered by due process, must yield to general welfare.
Police power as an attribute to promote the common good would be diluted
considerably if on the mere plea of petitioners that they will suffer loss of
earnings and capital, the questioned provision is invalidated. Moreover, in the
absence of evidence demonstrating the alleged confiscatory effect of the
provision in question, there is no basis for its nullification in view of the
presumption of validity which every law has in its favor. (Emphasis supplied.)
In the case at bar, it is clear that the primary objectives of the city council of
Quezon City when it issued the questioned ordinance ordering the construction

Bachelor of Laws
of arcades were the health and safety of the city and its inhabitants; the
promotion of their prosperity; and the improvement of their morals, peace,
good order, comfort, and the convenience. These arcades provide safe and
convenient passage along the sidewalk for commuters and pedestrians, not just
the residents of Quezon City. More especially so because the contested portion
of the building is located on a busy segment of the city, in a business zone
along EDSA.
Corollarily, the policy of the Building Code,28 which was passed after the
Quezon City Ordinance, supports the purpose for the enactment of Ordinance
No. 2904. The Building Code states:
Section 102. Declaration of Policy. It is hereby declared to be the policy of the
State to safeguard life, health, property, and public welfare, consistent with the
principles of sound environmental management and control; and to this end,
make it the purpose of this Code to provide for all buildings and structures, a
framework of minimum standards and requirements to regulate and control
their location, site, design quality of materials, construction, occupancy, and
maintenance.
Section 1004 likewise requires the construction of arcades whenever existing or
zoning ordinances require it. Apparently, the law allows the local government
units to determine whether arcades are necessary within their respective
jurisdictions.
Justice Gancayco argues that there is a three-meter sidewalk in front of his
property line, and the arcade should be constructed above that sidewalk rather
than within his property line. We do not need to address this argument
inasmuch as it raises the issue of the wisdom of the city ordinance, a matter we
will not and need not delve into.
To reiterate, at the time that the ordinance was passed, there was no national
building code enforced to guide the city council; thus, there was no law of
national application that prohibited the city council from regulating the
construction of buildings, arcades and sidewalks in their jurisdiction.
The "wing walls" of the building are not nuisances per se.
The MMDA claims that the portion of the building in question is a nuisance per
se.
We disagree.
The fact that in 1966 the City Council gave Justice Gancayco an exemption from
constructing an arcade is an indication that the wing walls of the building are
not nuisances per se. The wing walls do not per se immediately and adversely
affect the safety of persons and property. The fact that an ordinance may
declare a structure illegal does not necessarily make that structure a nuisance.

Bachelor of Laws
Article 694 of the Civil Code defines nuisance as any act, omission,
establishment, business, condition or property, or anything else that (1) injures
or endangers the health or safety of others; (2) annoys or offends the senses; (3)
shocks, defies or disregards decency or morality; (4) obstructs or interferes
with the free passage of any public highway or street, or any body of water; or,
(5) hinders or impairs the use of property. A nuisance may be per se or per
accidens. A nuisance per se is that which affects the immediate safety of
persons and property and may summarily be abated under the undefined law
of necessity.29
Clearly, when Justice Gancayco was given a permit to construct the building,
the city council or the city engineer did not consider the building, or its
demolished portion, to be a threat to the safety of persons and property. This
fact alone should have warned the MMDA against summarily demolishing the
structure.
Neither does the MMDA have the power to declare a thing a nuisance. Only
courts of law have the power to determine whether a thing is a nuisance. In AC
Enterprises v. Frabelle Properties Corp.,30 we held:
We agree with petitioner's contention that, under Section 447(a)(3)(i) of R.A. No.
7160, otherwise known as the Local Government Code, the Sangguniang
Panglungsod is empowered to enact ordinances declaring, preventing or abating
noise and other forms of nuisance. It bears stressing, however, that
the Sangguniang Bayan cannot declare a particular thing as a nuisance per se
and order its condemnation. It does not have the power to find, as a fact, that a
particular thing is a nuisance when such thing is not a nuisance per se; nor can
it authorize the extrajudicial condemnation and destruction of that as a
nuisance which in its nature, situation or use is not such. Those things must be
determined and resolved in the ordinary courts of law. If a thing be in fact, a
nuisance due to the manner of its operation, that question cannot be
determined by a mere resolution of the Sangguniang Bayan. (Emphasis
supplied.)
MMDA illegally demolished the property of Justice Gancayco.
MMDA alleges that by virtue of MMDA Resolution No. 02-28, Series of 2002, it is
empowered to demolish Justice Gancaycos property. It insists that the Metro
Manila Council authorized the MMDA and the local government units to clear
the sidewalks, streets, avenues, alleys, bridges, parks and other public places in
Metro Manila of all illegal structures and obstructions. It further alleges that it
demolished the property pursuant to the Building Code in relation to Ordinance
No. 2904 as amended.
However, the Building Code clearly provides the process by which a building
may be demolished. The authority to order the demolition of any structure lies
with the Building Official. The pertinent provisions of the Building Code
provide:

Bachelor of Laws
SECTION 205. Building Officials. Except as otherwise provided herein, the
Building Official shall be responsible for carrying out the provisions of this
Code in the field as well as the enforcement of orders and decisions made
pursuant thereto.
Due to the exigencies of the service, the Secretary may designate incumbent
Public Works District Engineers, City Engineers and Municipal Engineers act as
Building Officials in their respective areas of jurisdiction.
The designation made by the Secretary under this Section shall continue until
regular positions of Building Official are provided or unless sooner terminated
for causes provided by law or decree.
xxx xxx xxx
SECTION 207. Duties of a Building Official. In his respective territorial
jurisdiction, the Building Official shall be primarily responsible for the
enforcement of the provisions of this Code as well as of the implementing rules
and regulations issued therefor. He is the official charged with the duties of
issuing building permits.
In the performance of his duties, a Building Official may enter any building or
its premises at all reasonable times to inspect and determine compliance with
the requirements of this Code, and the terms and conditions provided for in
the building permit as issued.
When any building work is found to be contrary to the provisions of this Code,
the Building Official may order the work stopped and prescribe the terms
and/or conditions when the work will be allowed to resume. Likewise, the
Building Official is authorized to order the discontinuance of the occupancy or
use of any building or structure or portion thereof found to be occupied or
used contrary to the provisions of this Code.
xxx xxx xxx
SECTION 215. Abatement of Dangerous Buildings. When any building or
structure is found or declared to be dangerous or ruinous, the Building Official
shall order its repair, vacation or demolition depending upon the degree of
danger to life, health, or safety. This is without prejudice to further action that
may be taken under the provisions of Articles 482 and 694 to 707 of the Civil
Code of the Philippines. (Emphasis supplied.)
MMDA v. Trackworks Rail Transit Advertising, Vending and Promotions, Inc.31 is
applicable to the case at bar. In that case, MMDA, invoking its charter and the
Building Code, summarily dismantled the advertising media installed on the
Metro Rail Transit (MRT) 3. This Court held:
It is futile for MMDA to simply invoke its legal mandate to justify the
dismantling of Trackworks' billboards, signages and other advertising media.

Bachelor of Laws
MMDA simply had no power on its own to dismantle, remove, or destroy the
billboards, signages and other advertising media installed on the MRT3
structure by Trackworks. In Metropolitan Manila Development Authority v. Bel-
Air Village Association, Inc., Metropolitan Manila Development Authority v. Viron
Transportation Co., Inc., and Metropolitan Manila Development Authority v.
Garin, the Court had the occasion to rule that MMDA's powers were limited to
the formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installing a system, and
administration. Nothing in Republic Act No. 7924 granted MMDA police power,
let alone legislative power.
Clarifying the real nature of MMDA, the Court held:
...The MMDA is, as termed in the charter itself, a "development authority". It is
an agency created for the purpose of laying down policies and coordinating
with the various national government agencies, people's organizations, non-
governmental organizations and the private sector for the efficient and
expeditious delivery of basic services in the vast metropolitan area. All its
functions are administrative in nature and these are actually summed up in the
charter itself, viz:
Sec.2. Creation of the Metropolitan Manila Development Authority.- xxx.

The MMDA shall perform planning, monitoring and coordinative functions, and
in the process exercise regulatory and supervisory authority over the delivery
of metro-wide services within Metro Manila, without diminution of the
autonomy of local government units concerning purely local matters.
The Court also agrees with the CA's ruling that MMDA Regulation No. 96-009
and MMC Memorandum Circular No. 88-09 did not apply to Trackworks'
billboards, signages and other advertising media. The prohibition against
posting, installation and display of billboards, signages and other advertising
media applied only to public areas, but MRT3, being private property pursuant
to the BLT agreement between the Government and MRTC, was not one of the
areas as to which the prohibition applied. Moreover, MMC Memorandum
Circular No. 88-09 did not apply to Trackworks' billboards, signages and other
advertising media in MRT3, because it did not specifically cover MRT3, and
because it was issued a year prior to the construction of MRT3 on the center
island of EDSA. Clearly, MMC Memorandum Circular No. 88-09 could not have
included MRT3 in its prohibition.
MMDA's insistence that it was only implementing Presidential Decree No. 1096
(Building Code) and its implementing rules and regulations is not persuasive.
The power to enforce the provisions of the Building Code was lodged in the
Department of Public Works and Highways (DPWH), not in MMDA, considering
the law's following provision, thus:

Bachelor of Laws
Sec. 201. Responsibility for Administration and Enforcement. -
The administration and enforcement of the provisions of this Code including
the imposition of penalties for administrative violations thereof is hereby
vested in the Secretary of Public Works, Transportation and Communications,
hereinafter referred to as the "Secretary."
There is also no evidence showing that MMDA had been delegated by DPWH to
implement the Building Code. (Emphasis supplied.)
Additionally, the penalty prescribed by Ordinance No. 2904 itself does not
include the demolition of illegally constructed buildings in case of violations.
Instead, it merely prescribes a punishment of "a fine of not more than two
hundred pesos (200.00) or by imprisonment of not more than thirty (30) days,
or by both such fine and imprisonment at the discretion of the Court, Provided,
that if the violation is committed by a corporation, partnership, or any juridical
entity, the Manager, managing partner, or any person charged with the
management thereof shall be held responsible therefor." The ordinance itself
also clearly states that it is the regular courts that will determine whether there
was a violation of the ordinance.
As pointed out in Trackworks, the MMDA does not have the power to enact
ordinances. Thus, it cannot supplement the provisions of Quezon City
Ordinance No. 2904 merely through its Resolution No. 02-28.
Lastly, the MMDA claims that the City Government of Quezon City may be
considered to have approved the demolition of the structure, simply because
then Quezon City Mayor Feliciano R. Belmonte signed MMDA Resolution No. 02-
28. In effect, the city government delegated these powers to the MMDA. The
powers referred to are those that include the power to declare, prevent and
abate a nuisance32 and to further impose the penalty of removal or demolition
of the building or structure by the owner or by the city at the expense of the
owner.33
MMDAs argument does not hold water. There was no valid delegation of
powers to the MMDA. Contrary to the claim of the MMDA, the City Government
of Quezon City washed its hands off the acts of the former. In its Answer, 34 the
city government stated that "the demolition was undertaken by the MMDA only,
without the participation and/or consent of Quezon City." Therefore, the MMDA
acted on its own and should be held solely liable for the destruction of the
portion of Justice Gancaycos building.
WHEREFORE, in view of the foregoing, the Decision of the Court of Appeals in
CA-G.R. SP No. 84648 is AFFIRMED.
SO ORDERED.

Bachelor of Laws
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 184478 March 21, 2012
JAIME S. PEREZ, both in his personal and official capacity as Chief, Marikina
Demolition Office, Petitioner,
vs.
SPOUSES FORTUNITO L. MADRONA and YOLANDA B. PANTE, Respondents.
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition for review on certiorari under Rule 45 of
the 1997 Rules of Civil Procedure, as amended, seeking to set aside the March
31, 2008 Decision1 and September 10, 2008 Resolution2 of the Court of Appeals
(CA) in CA-G.R. CV. No. 83675. The CA affirmed in toto the Decision3 of the
Regional Trial Court (RTC) of Marikina City, Branch 192 granting respondents
prayer for injunction against petitioner.
The antecedents follow:

Bachelor of Laws
Respondent-spouses Fortunito Madrona and Yolanda B. Pante are registered
owners of a residential property located in Lot 22, Block 5, France Street corner
Italy Street, Greenheights Subdivision, Phase II, Marikina City and covered by
Transfer Certificate of Title No. 1693654 of the Registry of Deeds of Marikina. In
1989, respondents built their house thereon and enclosed it with a concrete
fence and steel gate.
In 1999, respondents received the following letter dated May 25, 1999 from
petitioner Jaime S. Perez, Chief of the Marikina Demolition Office:
Owner Judge F.L. Madrona
Lot 22 B. 5 Phase II
Green Heights[, Concepcion,] Marikina City
G./ Gng. F.L. Madrona[:]
Ito po ay may kinalaman sa bahay/istruktura na inyong itinayo sa (naturang
lugar), Marikina, Kalakhang Maynila.
Bakod umusli sa Bangketa
Ang naturang pagtatayo ng bahay/istruktura ay isang paglabag sa umiiral na
batas/programa na ipatutupad ng Pamahalaang Bayan ng Marikina na nauukol
sa:
[] PD 1096
(National Building Code of the Philippines)
[ ] PD 772
(Anti-Squatting Law)
[] Programa sa Kalinisan at Disiplina sa Bangketa
[ ] RA 7279
(Urban Development and Housing Act of 1992)
[ ] PD 296
(Encroachment on rivers, esteros, drainage channels and other waterways)
[] RA 917 as amended by Section 23, PD. No. 17, DO No. 4 Series of 1987
(Illegally occupied/constructed improvements within the road right-of-way)
Dahil po dito, kayo ay binibigyan ng taning na Pitong (7) araw simula sa
pagkatanggap ng sulat na ito para kusang alisin ang inyong istruktura. Ang
hindi ninyo pagsunod sa ipinag-uutos na ito ay magbubunsod sa amin upang
gumawa ng kaukulang hakbang na naa[a]yon sa itinatadhana ng Batas.
Sa inyong kaalaman, panuntuan at pagtalima.
Lubos na gumagalang,

Bachelor of Laws
(Sgd.)
JAIME S. PEREZ
Tagapamahala
Marikina Demolition Office5
As response, respondent Madrona sent petitioner a three-page letter6 dated June
8, 1999 stating that the May 25, 1999 letter (1) contained an accusation libelous
in nature as it is condemning him and his property without due process; (2) has
no basis and authority since there is no court order authorizing him to
demolish their structure; (3) cited legal bases which do not expressly give
petitioner authority to demolish; and (4) contained a false accusation since their
fence did not in fact extend to the sidewalk.
On June 9, 1999, respondents received a letter7 from petitioner requesting them
to provide his office a copy of the relocation survey on the subject property.
Respondents, however, did not oblige because it was as if petitioner was fishing
evidence from them.
More than a year later or on February 28, 2001, petitioner sent another
letter8 with the same contents as the May 25, 1999 letter but this time giving
respondents ten days from receipt thereof to remove the structure allegedly
protruding to the sidewalk. This prompted respondents to file a complaint9 for
injunction before the Marikina City RTC on March 12, 2001.
In respondents injunction complaint, they alleged that (1) petitioners letters
made it appear that their fence was encroaching on the sidewalk and directed
them to remove it, otherwise he would take the corresponding action; (2)
petitioners threat of action would be damaging and adverse to respondents
and appears real, earnest and imminent; (3) the removal of their fence, which
would include the main gate, would certainly expose the premises and its
occupants to intruders or third persons; (4) petitioner has no legal authority to
demolish structures in private properties and the laws he cited in his letters do
not give him any authority to do so; (5) respondents enjoy the legal
presumption of rightful possession of every inch of their property; (6) if
petitioner accuses them of erroneous possession, he should so prove only
through the proper forum which is the courts; (7) their fence is beside the
sidewalk and the land on which it stands has never been the subject of
acquisition either by negotiation or expropriation from the government; (8)
petitioners intended act of demolition even in the guise of a road right of way
has no factual or legal basis since there is no existing infrastructure project of
the national government or Marikina City government; and (9) petitioners letter
and his intended act of demolition are malicious, unfounded, meant only to
harass respondents in gross violation of their rights and in excess and outside
the scope of his authority, thereby rendering him accountable both in his
personal and official capacity.

Bachelor of Laws
Respondents likewise sought the issuance of a temporary restraining order
(TRO) and a writ of preliminary injunction to enjoin petitioner and all persons
acting under him from doing any act of demolition on their property and that
after trial, the injunction be made permanent. They also prayed for moral and
exemplary damages and attorneys fees.
On March 14, 2001, petitioner was served the corresponding summons.10
On March 16, 2001, the RTC issued a TRO against petitioner.11
On March 29, 2001, petitioner filed an Urgent Ex Parte Motion for Extension to
File Answer12 until April 13, 2001. It appears however that petitioners counsel
failed to file an Answer within the extended period requested. Thus, on
motion13 of respondents, petitioner was declared in default on July 13, 2001. 14
On July 25, 2001, petitioner filed a Motion to Lift Order of Default (with Ex-
Parte Motion to Admit Answer and Notice Entry of Appearance).15 According to
petitioners new counsel, an answer was not filed due to the former counsels
voluminous work load as lone lawyer in the City Legal Office.
On December 10, 2001, the RTC issued an Order16 denying the motion to lift the
order of default. Aside from finding that the motion failed to include a notice
of hearing, the RTC also held that the alleged cause of delay is not excusable as
voluminous work load of the counsel cannot justify the disregard of court
processes or failure to abide by the period fixed by the rules and since the
delay consisted not only a few days but over a hundred and three days.
Petitioner moved to reconsider the order but the same was denied by the RTC
in its March 6, 2002 Order.17
Petitioner thereafter filed a petition for certiorari18 before the CA assailing the
default order. Thus, on April 18, 2002, the RTC issued an order suspending the
proceedings of the injunction case "until such time when the Petition for
Certiorari shall have been disposed of with finality."19
On August 20, 2002, the CA rendered a decision20 dismissing the petition for
certiorari for lack of merit. Petitioner moved to reconsider the appellate courts
decision, but the motion was denied by Resolution21 dated January 30, 2003.
On September 15, 2003, the RTC issued an Order22 dismissing the injunction
complaint without prejudice. It held that respondents "have not instituted any
action before th[e] Court showing that they are still interested in further
prosecuting th[e] case" and "[i]n accordance with Section 3, Rule 17 of the Rules
of Court, the Court is constrained to dismiss the complaint for failure of
[respondents] to prosecute their complaint for an unreasonable length of time."
However, upon motion of respondents, the dismissal order was set aside and
the complaint was reinstated by Order23 dated December 3, 2003. The RTC
agreed with the observation of respondents that it was the court which
suspended the proceedings in the injunction case pending final disposition of

Bachelor of Laws
the petition for certiorari before the CA, and when the RTC issued the dismissal
order, there was yet no entry of judgment from the CA and so it cannot be said
that the petition was already "disposed of with finality." Respondents were then
allowed to present their evidence ex parte before the branch clerk of court.
On July 27, 2004, the RTC rendered a Decision24 in favor of respondents. The
fallo of the RTC decision reads:
WHEREFORE, Judgment is hereby rendered in favor of the plaintiffs. As prayed
for, defendant Jaime S. Perez, Chief of the Demolition Office of Marikina City,
or any person acting for and in his behalf as well as the successors to his office,
is permanently enjoined from performing any act which would tend to destroy
or demolish the perimeter fence and steel gate of the plaintiffs property
situated at Lot 22, Block 5, France Street corner Italy Street, Phase II,
Greenheights Subdivision, Concepcion, Marikina City.
Defendant is further ordered to pay the amount of Twenty Thousand
(P20,000.00) Pesos as attorneys fees and Five Thousand (P5,000.00) Pesos for
the costs of suit.25
The RTC held that respondents, being lawful owners of the subject property,
are entitled to the peaceful and open possession of every inch of their property
and petitioners threat to demolish the concrete fence around their property is
tantamount to a violation of their rights as property owners who are entitled to
protection under the Constitution and laws. The RTC also ruled that there is no
showing that respondents fence is a nuisance per se and presents an
immediate danger to the communitys welfare, nor is there basis for petitioners
claim that the fence has encroached on the sidewalk as to justify its summary
demolition.
Petitioner appealed the RTC decision to the CA. On March 31, 2008, the
appellate court rendered the assailed decision affirming the RTC decision.
Hence this petition based on the following grounds:
I.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN
AFFIRMING THE ACTION OF THE LOWER COURT IN
REINSTATING/REVIVING THE COMPLAINT FILED BY THE RESPONDENTS.
II.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN
AFFIRMING THE RULING OF THE LOWER COURT THAT THE
RESPONDENTS ARE ENTITLED TO PERMANENT INJUNCTION, THEREBY
RESTRAINING THE PETITIONER OR ANYONE ACTING FOR AND ON HIS
BEHALF FROM CARRYING OUT THE THREATENED DEMOLITION OF THEIR
PERIMETER FENCE AND STEEL GATE.

Bachelor of Laws
III.
THE COURT OF APPEALS COMMITTED A REVERSIBLE [ERROR] IN
AFFIRMING THE RULING OF THE LOWER COURT ORDERING THE
PETITIONER TO PAY THE RESPONDENTS THE AMOUNTS OF TWENTY
THOUSAND PESOS (P20,000.00) AS ATTORNEYS FEES AND FIVE
THOUSAND PESOS (P5,000.00) AS COSTS OF SUIT.26
Essentially, the issues to be resolved in the instant case are: (1) Did the trial
court err in reinstating the complaint of respondents? (2) Are the requisites for
the issuance of a writ of injunction present? and (3) Is petitioner liable to pay
attorneys fees and costs of suit?
Petitioner argues that there was express admission of negligence by
respondents and therefore, reinstatement of their dismissed complaint was not
justified.
We disagree.
A perusal of the respondents motion for reconsideration27 of the order of
dismissal reveals that there was no admission of negligence by respondents,
either express or implied. Respondents only contended that (1) they were under
the impression that it would be the RTC which would issue the order to
continue the proceedings once it considers that the petition before the CA had
already been disposed of with finality, and (2) their counsels records do not
show that the CA had already issued an entry of judgment at the time the
dismissal order was issued. They also only stated that they followed up with
the CA the issuance of the entry of judgment but they were just told to wait for
its delivery by mail. Petitioners imputation that respondents expressly
admitted negligence is therefore clearly unfounded.
Additionally, as correctly found by both the RTC and the CA, it did not appear
that respondent lost interest in prosecuting their case nor was their counsel
negligent in handling it. Accordingly, there was no basis for the dismissal order
and reinstatement of respondents complaint was justified.
As to the propriety of the issuance of the writ of injunction, petitioner claims
that the requisites therefor are not present in the instant case. Petitioner
contends that service of a mere notice cannot be construed as an invasion of a
right and only presupposes the giving of an opportunity to be heard before any
action could be taken. He also claims that it is clear from the records of the
case that respondents concrete fence was constructed on a part of the sidewalk
in gross violation of existing laws and ordinance and thus, they do not have
absolute right over the same. According to petitioner, the encroachment is
clearly apparent in the Sketch Plan of the government geodetic engineer as
compared to the Location Plan attached to respondents complaint. He likewise
contends that the clearing of the sidewalks is an infrastructure project of the
Marikina City Government and cannot be restrained by the courts as provided

Bachelor of Laws
in Presidential Decree No. 1818.28 Lastly, petitioner points out that the trial
court should not have merely relied on the testimonies of respondents alleging
that his men were already in the subdivision and destroying properties on other
streets to prove that there was urgent necessity for the issuance of the writ.
We disagree.
For injunction to issue, two requisites must concur: first, there must be a right
to be protected and second, the acts against which the injunction is to be
directed are violative of said right.29 Here, the two requisites are clearly present:
there is a right to be protected, that is, respondents right over their concrete
fence which cannot be removed without due process; and the act, the summary
demolition of the concrete fence, against which the injunction is directed,
would violate said right.
If petitioner indeed found respondents fence to have encroached on the
sidewalk, his remedy is not to demolish the same summarily after respondents
failed to heed his request to remove it. Instead, he should go to court and prove
respondents supposed violations in the construction of the concrete fence.
Indeed, unless a thing is a nuisance per se, it may not be abated summarily
without judicial intervention.30 Our ruling in Lucena Grand Central Terminal,
Inc. v. JAC Liner, Inc., on the need for judicial intervention when the nuisance is
not a nuisance per se, is well worth mentioning. In said case, we ruled:
Respondents can not seek cover under the general welfare clause authorizing
the abatement of nuisances without judicial proceedings. That tenet applies to
a nuisance per se, or one which affects the immediate safety of persons and
property and may be summarily abated under the undefined law of necessity
(Monteverde v. Generoso, 52 Phil. 123 [1982]). The storage of copra in the
quonset building is a legitimate business. By its nature, it can not be said to be
injurious to rights of property, of health or of comfort of the community. If it
be a nuisance per accidens it may be so proven in a hearing conducted for that
purpose. It is not per se a nuisance warranting its summary abatement without
judicial intervention. [Underscoring supplied.]
In Pampanga Bus Co., Inc. v. Municipality of Tarlac where the appellant-
municipality similarly argued that the terminal involved therein is a nuisance
that may be abated by the Municipal Council via an ordinance, this Court held:
"Suffice it to say that in the abatement of nuisances the provisions of the Civil
Code (Articles 694-707) must be observed and followed. This appellant failed to
do."31
Respondents fence is not a nuisance per se. By its nature, it is not injurious to
the health or comfort of the community. It was built primarily to secure the
property of respondents and prevent intruders from entering it. And as
correctly pointed out by respondents, the sidewalk still exists. If petitioner
believes that respondents fence indeed encroaches on the sidewalk, it may be
so proven in a hearing conducted for that purpose. Not being a nuisance per se,

Bachelor of Laws
but at most a nuisance per accidens, its summary abatement without judicial
intervention is unwarranted.
Regarding the third issue, petitioner argues that he was just performing his
duties and as public officer, he is entitled to the presumption of regularity in
the performance of his official functions. Unless there is clear proof that he
acted beyond his authority or in evident malice or bad faith, he contends that
he cannot be held liable for attorneys fees and costs of suit.
Respondents, for their part, counter that the presumption of regularity has
been negated by the fact that despite their reply to the first notice, which put
petitioner on notice that what he was doing was ultra vires, he still reiterated
his earlier demand and threat of demolition. Having been warned by
respondents that his acts were in fact violations of law, petitioner should have
been more circumspect in his actions and should have pursued the proper
remedies that were more in consonance with the dictates of due process.
Respondents further pray for moral damages for the serious anxieties and
sleepless nights they suffered and exemplary damages to serve as an example
to other public officials that they should be more circumspect in the
performance of their duties.
We agree with respondents.
As respondents were forced to file a case against petitioner to enjoin the
impending demolition of their property, the award of attorneys fees and costs
of suit is justified. Clearly, respondents wanted to settle the problem on their
alleged encroachment without resorting to court processes when they replied
by letter after receiving petitioners first notice. Petitioner, however, instead of
considering the points raised in respondents reply-letter, required them to
submit the relocation plan as if he wants respondents to prove that they are not
encroaching on the sidewalk even if it was he who made the accusation of
violation in the first place. And when he did not get the "proof" he was
requiring from respondents, he again sent a notice with a threat of summary
demolition. This gave respondents no other choice but to file an injunction
complaint against petitioner to protect their rights.
With regard to respondents claim for moral damages, this Court rules that they
are entitled thereto in the amount of 10,000.00 pursuant to Article 221732 of
the Civil Code. As testified to by respondents, they suffered anxiety and
sleepless nights since they were worried what would happen to their children
who were left by themselves in their Marikina residence while they were in
Ormoc City if petitioner would make real his threat of demolition on their
fence.1wphi1
We likewise hold that respondents are entitled to exemplary damages in the
amount of 5,000.00 to serve as an example to other public officials that they
should be more circumspect in the performance of their duties.

Bachelor of Laws
WHEREFORE, the March 31, 2008 Decision and September 10, 2008 Resolution
of the Court of Appeals in CA-G.R. CV. No. 83675 are AFFIRMED with
MODIFICATION. Petitioner Jaime S. Perez, Chief of the Demolition Office of
Marikina City is ORDERED to pay respondent Spouses Fortunito L. Madrona
and Yolanda B. Pante moral damages in the amount of 10,000.00 and
exemplary damages in the amount of 5,000.00.
SO ORDERED.
SECOND DIVISION
G.R. No. 132964 February 18, 2000
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
DAVID REY GUZMAN, represented by his Attorney-in-Fact, LOLITA G.
ABELA, and the REGISTER OF DEEDS OF BULACAN, MEYCAUAYAN
BRANCH, respondents.
BELLOSILLO, J.:
The REPUBLIC OF THE PHILIPPINES seeks the nullification of the 5 March 1998
Decision of the Court of Appeals1 which affirmed the dismissal by the Regional
Trial Court, Br. 77, Malolos, Bulacan, of the petition for escheat filed by the
Government.2
David Rey Guzman, a natural-born American citizen, is the son of the spouses
Simeon Guzman,3 a naturalized American citizen, and Helen Meyers Guzman,
an American citizen. In 1968 Simeon died leaving to his sole heirs Helen and
David an estate consisting of several parcels of land located in Bagbaguin, Sta.
Maria, Bulacan, covered by TCT Nos. T-146837 (M), T-146839 (M), T-146840 (M),
T-146841 (M), T-146842 (M), T-120254 (M) and T-120257 (M).
Bachelor of Laws
On 29 December 1970 Helen and David executed a Deed of Extrajudicial
Settlement of the Estate of Simeon Guzman dividing and adjudicating to
themselves all the property belonging to the estate of Simeon. The document of
extrajudicial settlement was registered in the Office of the Register of Deeds on
8 December 1971. The taxes due thereon were paid through their attorneys-in-
fact, Attys. Juan L. Austria and Lolita G. Abela, and the parcels of land were
accordingly registered in the name of Helen Meyers Guzman and David Rey
Guzman in undivided equal shares.
On 10 December 1981 Helen executed a Quitclaim Deed assigning, transferring
and conveying to her son David her undivided one-half (1/2) interest on all the
parcels of land subject matter of the Deed of Extrajudicial Settlement of the
Estate of Simeon Guzman. Since the document appeared not to have been
registered, upon advice of Atty. Lolita G. Abela, Helen executed another
document, a Deed of Quitclaim, on 9 August 1989 confirming the earlier deed
of quitclaim as well as modifying the document to encompass all her other
property in the Philippines.4
On 18 October 1989 David executed a Special Power of Attorney where he
acknowledged that he became the owner of the parcels of land subject of the
Deed of Quitclaim executed by Helen on 9 August 1989 and empowering Atty.
Lolita G. Abela to sell or otherwise dispose of the lots. On 1 February 1990 Atty.
Lolita G. Abela, upon instruction of Helen, paid donor's taxes to facilitate the
registry of the parcels of land in the name of David.
On 16 March 1994 a certain Atty. Mario A. Batongbacal wrote the Office of the
Solicitor General and furnished it with documents showing that David's
ownership of the one-half (1/2) of the estate of Simeon Guzman was defective.
On the basis thereof, the Government filed before the Regional Trial Court of
Malolos Bulacan a Petition for Escheat praying that one-half (1/2) of David's
interest in each of the subject parcels of land be forfeited in its favor. On 9
August 1994 David Rey Guzman responded with a prayer that the petition be
dismissed.
On 11 July 1995 the trial court dismissed the petition holding that the two (2)
deeds of quitclaim executed by Helen Meyers Guzman had no legal force and
effect so that the ownership of the property subject thereof remained with her.5
The Government appealed6 the dismissal of the petition but the appellate court
affirmed the court a quo.
Petitioner anchors its argument on Art. XII of the Constitution which provides
Sec. 7. Save in cases of hereditary succession, no private lands shall be

transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.

Bachelor of Laws
Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a
natural-born citizen of the Philippines who has lost his Philippine
citizenship may be a transferee of private lands, subject to limitations
provided by law.
Thus as a rule, only a Filipino citizen can acquire private lands in the
Philippines. The only instances when a foreigner can acquire private lands in
the Philippines are by hereditary succession and if he was formerly a natural-
born Filipino citizen who lost his Philippine citizenship. Petitioner therefore
contends that the acquisition of the parcels of land by David does not fall
under any of these exceptions. It asserts that David being an American citizen
could not validly acquire one-half (1/2) interest in each of the subject parcels of
land by way of the two (2) deeds of quitclaim as they are in reality
donations inter vivos. It also reasons out that the elements of donation are
present in the conveyance made by Helen in favor of David: first, Helen
consented to the execution of the documents; second, the dispositions were
made in public documents; third, David manifested his acceptance of the
donation in the Special Power of Attorney he executed in favor of Atty. Lolita G.
Abela; fourth, the deeds were executed with the intention of benefiting David;
and lastly, there was a resultant decrease in the assets or patrimony of Helen,
being the donor. Petitioner further argues that the payment of donor's taxes on
the property proved that Helen intended the transfer to be a gift or
donation inter vivos.
David maintains, on the other hand, that he acquired the property by right of
accretion and not by way of donation, with the deeds of quitclaim merely
declaring Helen's intention to renounce her share in the property and not an
intention to donate. He further argues that, assuming there was indeed a
donation, it never took effect since the Special Power of Attorney he executed
does not indicate acceptance of the alleged donation.
There are three (3) essential elements of a donation: (a) the reduction of the
patrimony of the donor; (b) the increase in the patrimony of the donee; and, (c)
the intent to do an act of liberality or animus donandi. When applied to a
donation of an immovable property, the law further requires that the donation
be made in a public document and that there should be an acceptance thereof
made in the same deed of donation or in a separate public document.7 In cases
where the acceptance is made in a separate instrument, it is mandated that the
donor should be notified thereof in an authentic form, to be noted in both
instruments.8
Not all the elements of a donation of an immovable property are present in the
instant case. The transfer of the property by virtue of the Deed of Quitclaim
executed by Helen resulted in the reduction of her patrimony as donor and the
consequent increase in the patrimony of David as donee. However, Helen's
intention to perform an act of liberality in favor of David was not sufficiently
established. A perusal of the two (2) deeds of quitclaim reveals that Helen

Bachelor of Laws
intended to convey to her son David certain parcels of land located in the
Philippines, and to re-affirm the quitclaim she executed in 1981 which likewise
declared a waiver and renunciation of her rights over the parcels of land. The
language of the deed of quitclaim is clear that Helen merely contemplated a
waiver of her rights, title and interest over the lands in favor of David, and not
a donation. That a donation was far from Helen's mind is further supported by
her deposition which indicated that she was aware that a donation of the
parcels of land was not possible since Philippine law does not allow such an
arrangement.9 She reasoned that if she really intended to donate something to
David it would have been more convenient if she sold the property and gave
him the proceeds therefrom.10 It appears that foremost in Helen's mind was the
preservation of the Bulacan realty within the bloodline of Simeon from where
they originated, over and above the benefit that would accrue to David by
reason of her renunciation.11 The element of animus donandi therefore was
missing.
Likewise, the two (2) deeds of quitclaim executed by Helen may have been in
the nature of a public document but they lack the essential element of
acceptance in the proper form required by law to make the donation valid. We
find no merit in petitioner's argument that the Special Power of Attorney
executed by David in favor of Atty. Lolita G. Abela manifests his implied
acceptance of his mother's alleged donation as a scrutiny of the document
clearly evinces the absence thereof. The Special Power of Attorney merely
acknowledges that David owns the property referred to and that he authorizes
Atty. Abela to sell the same in his name. There is no intimation, expressly or
impliedly, that David's acquisition of the parcels of land is by virtue of Helen's
possible donation to him and we cannot look beyond the language of the
document to make a contrary construction as this would be inconsistent with
the parol evidence rule.12
Moreover, it is mandated that if an acceptance is made in a separate public
writing the notice of the acceptance must be noted not only in the document
containing the acceptance but also in the deed of donation. Commenting on
Art. 633 of the Civil Code from whence Art. 74913 came Manresa said: "If the
acceptance does not appear in the same document, it must be made in another.
Solemn words are not necessary; it is sufficient if it shows the intention to
accept . . . . it is necessary that formal notice thereof be given to the donor, and
the fact that due notice has been given must be noted in both instruments.
Then and only then is the donation perfected.14
Thus, in Santos v. Robledo we emphasized that when the deed of donation is
recorded in the registry of property the document that evidences the
acceptance if this has not been made in the deed of gift should also be
recorded. And in one or both documents, as the case may be, the notification of
the acceptance as formally made to the donor or donors should be duly set
forth.15 Where the deed of donation fails to show the acceptance, or where the

Bachelor of Laws
formal notice of the acceptance made in a separate instrument is either not
given to the donor or else noted in the deed of donation, and in the separate
acceptance, the donation is null and void.16
These requisites, definitely prescribed by law, have not been complied with, and
no proof of compliance appears in the record. The two (2) quitclaim deeds set
out the conveyance of the parcels of land by Helen in favor of David but its
acceptance by David does not appear in the deeds, nor in the Special Power of
Attorney. Further, the records reveal no other instrument that evidences such
acceptance and notice thereof to the donor in an authentic manner. It is well-
settled that if the notification and notation are not complied with, the donation
is void. Therefore, the provisions of the law not having been complied with,
there was no effective conveyance of the parcels of land by way of
donation inter vivos.17
However, the inexistence of a donation does not render the repudiation made
by Helen in favor of David valid. There is no valid repudiation of inheritance as
Helen had already accepted her share of the inheritance when she, together
with David, executed a Deed of Extrajudicial Settlement of the Estate of Simeon
Guzman on 29 December 1970 dividing and adjudicating between the two (2) of
them all the property in Simeon's estate. By virtue of such extrajudicial
settlement the parcels of land were registered in her and her son's name in
undivided equal share and for eleven (11) years they possessed the lands in the
concept of owner. Article 1056 of the Civil Code provides
The acceptance or repudiation of an inheritance, once made is irrevocable
and cannot be impugned, except when it was made through any of the
causes that vitiate consent or when an unknown will appears.
Nothing on record shows that Helen's acceptance of her inheritance from
Simeon was made through any of the causes which vitiated her consent nor is
there any proof of the existence of an unknown will executed by Simeon. Thus,
pursuant to Art. 1056, Helen cannot belatedly execute an instrument which has
the effect of revoking or impugning her previous acceptance of her one-half
(1/2) share of the subject property from Simeon's estate. Hence, the two (2)
quitclaim deeds which she executed eleven (11) years after she had accepted
the inheritance have no legal force and effect.
Nevertheless, the nullity of the repudiation does not ipso facto operate to
convert the parcels of land into res nullius18 to be escheated in favor of the
Government. The repudiation being of no effect whatsoever the parcels of land
should revert to their private owner, Helen, who, although being an American
citizen, is qualified by hereditary succession to own the property subject of the
litigation.1wphi1.nt
WHEREFORE, the assailed Decision of the Court of Appeals which sustained the
Decision of the Regional Trial Court of Malolos, Bulacan, dismissing the petition
for escheat is AFFIRMED. No costs.

Bachelor of Laws
SO ORDERED.
Art. 749. In order that the donation of an immovable may be valid, it must be
made in a public document, specifying therein the property donated and the
value of the charges which the donee must satisfy.
The acceptance may be made in the same deed of donation or in separate
public document, but it shall not take effect unless it is done during the
lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall be
notified thereof in an authentic form, and this step shall be noted in both
instrument (Civil Code).
The property of nobody. A thing which has no owner, either because a former
owner has finally abandoned it, or because it has never been appropriated by
any person, or because (in the Roman Law) it is not susceptible of private
ownership; Black's Dictionary of Law. 4th Ed., p. 1470.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 172804 January 24, 2011
GONZALO VILLANUEVA, represented by his heirs, Petitioner,
vs.
SPOUSES FROILAN and LEONILA BRANOCO, Respondents.
DECISION
CARPIO, J.:
The Case
This resolves the petition for review1 of the ruling2 of the Court of Appeals
dismissing a suit to recover a realty.
The Facts
Petitioner Gonzalo Villanueva (petitioner), here represented by his heirs,3 sued
respondents, spouses Froilan and Leonila Branoco (respondents), in the
Regional Trial Court of Naval, Biliran (trial court) to recover a 3,492 square-
meter parcel of land in Amambajag, Culaba, Leyte (Property) and collect
damages. Petitioner claimed ownership over the Property through purchase in

Bachelor of Laws
July 1971 from Casimiro Vere (Vere), who, in turn, bought the Property from
Alvegia Rodrigo (Rodrigo) in August 1970. Petitioner declared the Property in
his name for tax purposes soon after acquiring it.
In their Answer, respondents similarly claimed ownership over the Property
through purchase in July 1983 from Eufracia Rodriguez (Rodriguez) to whom
Rodrigo donated the Property in May 1965. The two-page deed of donation
(Deed), signed at the bottom by the parties and two witnesses, reads in full:
KNOW ALL MEN BY THESE PRESENTS:
That I, ALVEGIA RODRIGO, Filipino, of legal age, widow of the late Juan Arcillas,
a resident of Barrio Bool, municipality of Culaba, subprovince of Biliran, Leyte
del Norte, Philippines, hereby depose and say:
That as we live[d] together as husband and wife with Juan Arcillas, we begot
children, namely: LUCIO, VICENTA, SEGUNDINA, and ADELAIDA, all surnamed
ARCILLAS, and by reason of poverty which I suffered while our children were
still young; and because my husband Juan Arcillas aware as he was with our
destitution separated us [sic] and left for Cebu; and from then on never cared
what happened to his family; and because of that one EUFRACIA RODRIGUEZ,
one of my nieces who also suffered with our poverty, obedient as she was to all
the works in our house, and because of the love and affection which I feel [for]
her, I have one parcel of land located at Sitio Amambajag, Culaba, Leyte bearing
Tax Decl. No. 1878 declared in the name of Alvegia Rodrigo, I give (devise) said
land in favor of EUFRACIA RODRIGUEZ, her heirs, successors, and assigns
together with all the improvements existing thereon, which parcel of land is
more or less described and bounded as follows:
1. Bounded North by Amambajag River; East, Benito Picao; South, Teofilo
Uyvico; and West, by Public land; 2. It has an area of 3,492 square meters more
or less; 3. It is planted to coconuts now bearing fruits; 4. Having an assessed
value of 240.00; 5. It is now in the possession of EUFRACIA RODRIGUEZ since
May 21, 1962 in the concept of an owner, but the Deed of Donation or that
ownership be vested on her upon my demise.
That I FURTHER DECLARE, and I reiterate that the land above described, I
already devise in favor of EUFRACIA RODRIGUEZ since May 21, 1962, her heirs,
assigns, and that if the herein Donee predeceases me, the same land will not be
reverted to the Donor, but will be inherited by the heirs of EUFRACIA
RODRIGUEZ;
That I EUFRACIA RODRIGUEZ, hereby accept the land above described from
Inay Alvegia Rodrigo and I am much grateful to her and praying further for a
longer life; however, I will give one half (1/2) of the produce of the land to Apoy
Alve during her lifetime.4
Respondents entered the Property in 1983 and paid taxes afterwards.

Bachelor of Laws
The Ruling of the Trial Court
The trial court ruled for petitioner, declared him owner of the Property, and
ordered respondents to surrender possession to petitioner, and to pay
damages, the value of the Propertys produce since 1982 until petitioners
repossession and the costs.5 The trial court rejected respondents claim of
ownership after treating the Deed as a donation mortis causa which Rodrigo
effectively cancelled by selling the Property to Vere in 1970.6 Thus, by the time
Rodriguez sold the Property to respondents in 1983, she had no title to
transfer.
Respondents appealed to the Court of Appeals (CA), imputing error in the trial
courts interpretation of the Deed as a testamentary disposition instead of
an inter vivos donation, passing title to Rodriguez upon its execution.
Ruling of the Court of Appeals
The CA granted respondents appeal and set aside the trial courts ruling. While
conceding that the "language of the [Deed is] x x x confusing and which could
admit of possible different interpretations,"7 the CA found the following factors
pivotal to its reading of the Deed as donation inter vivos: (1) Rodriguez had
been in possession of the Property as owner since 21 May 1962, subject to the
delivery of part of the produce to Apoy Alve; (2) the Deeds consideration was
not Rodrigos death but her "love and affection" for Rodriguez, considering the
services the latter rendered; (3) Rodrigo waived dominion over the Property in
case Rodriguez predeceases her, implying its inclusion in Rodriguezs estate;
and (4) Rodriguez accepted the donation in the Deed itself, an act necessary to
effectuate donations inter vivos, not devises.8 Accordingly, the CA upheld the
sale between Rodriguez and respondents, and, conversely found the sale
between Rodrigo and petitioners predecessor-in-interest, Vere, void for
Rodrigos lack of title.
In this petition, petitioner seeks the reinstatement of the trial courts ruling.
Alternatively, petitioner claims ownership over the Property through acquisitive
prescription, having allegedly occupied it for more than 10 years.9
Respondents see no reversible error in the CAs ruling and pray for its
affirmance.
The Issue
The threshold question is whether petitioners title over the Property is
superior to respondents. The resolution of this issue rests, in turn, on whether
the contract between the parties predecessors-in-interest, Rodrigo and
Rodriguez, was a donation or a devise. If the former, respondents hold superior
title, having bought the Property from Rodriguez. If the latter, petitioner
prevails, having obtained title from Rodrigo under a deed of sale the execution
of which impliedly revoked the earlier devise to Rodriguez.

Bachelor of Laws
The Ruling of the Court
We find respondents title superior, and thus, affirm the CA.
Naked Title Passed from Rodrigo to Rodriguez Under a Perfected Donation
We examine the juridical nature of the Deed whether it passed title to
Rodriguez upon its execution or is effective only upon Rodrigos death using
principles distilled from relevant jurisprudence. Post-mortem dispositions
typically
(1) Convey no title or ownership to the transferee before the death of the
transferor; or, what amounts to the same thing, that the transferor
should retain the ownership (full or naked) and control of the property
while alive;
(2) That before the [donors] death, the transfer should be revocable by
the transferor at will, ad nutum; but revocability may be provided for
indirectly by means of a reserved power in the donor to dispose of the
properties conveyed;
(3) That the transfer should be void if the transferor should survive the
transferee.10
Further
[4] [T]he specification in a deed of the causes whereby the act may be
revoked by the donor indicates that the donation is inter vivos, rather
than a disposition mortis causa[;]
[5] That the designation of the donation as mortis causa, or a provision in
the deed to the effect that the donation is "to take effect at the death of
the donor" are not controlling criteria; such statements are to be
construed together with the rest of the instrument, in order to give effect
to the real intent of the transferor[;] [and]
(6) That in case of doubt, the conveyance should be deemed
donation inter vivos rather than mortis causa, in order to avoid
uncertainty as to the ownership of the property subject of the deed.11
It is immediately apparent that Rodrigo passed naked title to Rodriguez under
a perfected donation inter vivos. First. Rodrigo stipulated that "if the herein
Donee predeceases me, the [Property] will not be reverted to the Donor, but will
be inherited by the heirs of x x x Rodriguez," signaling the irrevocability of the
passage of title to Rodriguezs estate, waiving Rodrigos right to reclaim title.
This transfer of title was perfected the moment Rodrigo learned of Rodriguezs
acceptance of the disposition12 which, being reflected in the Deed, took place on
the day of its execution on 3 May 1965. Rodrigos acceptance of the transfer
underscores its essence as a gift in presenti, not in futuro, as only

Bachelor of Laws
donations inter vivos need acceptance by the recipient.13 Indeed, had Rodrigo
wished to retain full title over the Property, she could have easily stipulated, as
the testator did in another case, that "the donor, may transfer, sell, or
encumber to any person or entity the properties here donated x x x" 14 or used
words to that effect. Instead, Rodrigo expressly waived title over the Property in
case Rodriguez predeceases her.
In a bid to diffuse the non-reversion stipulations damning effect on his case,
petitioner tries to profit from it, contending it is a fideicommissary substitution
clause.15 Petitioner assumes the fact he is laboring to prove. The question of the
Deeds juridical nature, whether it is a will or a donation, is the crux of the
present controversy. By treating the clause in question as mandating
fideicommissary substitution, a mode of testamentary disposition by which the
first heir instituted is entrusted with the obligation to preserve and to transmit
to a second heir the whole or part of the inheritance,16 petitioner assumes that
the Deed is a will. Neither the Deeds text nor the import of the contested
clause supports petitioners theory.
Second. What Rodrigo reserved for herself was only the beneficial title to the
Property, evident from Rodriguezs undertaking to "give one [half] x x x of the
produce of the land to Apoy Alve during her lifetime."17 Thus, the Deeds
stipulation that "the ownership shall be vested on [Rodriguez] upon my
demise," taking into account the non-reversion clause, could only refer to
Rodrigos beneficial title. We arrived at the same conclusion in Balaqui v.
Dongso18 where, as here, the donor, while "b[inding] herself to answer to the
[donor] and her heirs x x x that none shall question or disturb [the donees]
right," also stipulated that the donation "does not pass title to [the donee]
during my lifetime; but when I die, [the donee] shall be the true owner" of the
donated parcels of land. In finding the disposition as a gift inter vivos, the
Court reasoned:
Taking the deed x x x as a whole, x x x x it is noted that in the same deed [the
donor] guaranteed to [the donee] and her heirs and successors, the right to said
property thus conferred. From the moment [the donor] guaranteed the right
granted by her to [the donee] to the two parcels of land by virtue of the deed of
gift, she surrendered such right; otherwise there would be no need to guarantee
said right. Therefore, when [the donor] used the words upon which the
appellants base their contention that the gift in question is a donation mortis
causa [that the gift "does not pass title during my lifetime; but when I die, she
shall be the true owner of the two aforementioned parcels"] the donor meant
nothing else than that she reserved of herself the possession and usufruct of
said two parcels of land until her death, at which time the donee would be
able to dispose of them freely.19 (Emphasis supplied)
Indeed, if Rodrigo still retained full ownership over the Property, it was
unnecessary for her to reserve partial usufructuary right over it.20

Bachelor of Laws
Third. The existence of consideration other than the donors death, such as the
donors love and affection to the donee and the services the latter rendered,
while also true of devises, nevertheless "corroborates the express irrevocability
of x x x [inter vivos] transfers."21 Thus, the CA committed no error in giving
weight to Rodrigos statement of "love and affection" for Rodriguez, her niece,
as consideration for the gift, to underscore its finding.
It will not do, therefore, for petitioner to cherry-pick stipulations from the Deed
tending to serve his cause (e.g. "the ownership shall be vested on [Rodriguez]
upon my demise" and "devise"). Dispositions bearing contradictory stipulations
are interpreted wholistically, to give effect to the donors intent. In no less than
seven cases featuring deeds of donations styled as "mortis causa" dispositions,
the Court, after going over the deeds, eventually considered the transfers inter
vivos,22 consistent with the principle that "the designation of the donation
as mortis causa, or a provision in the deed to the effect that the donation is to
take effect at the death of the donor are not controlling criteria [but] x x x are
to be construed together with the rest of the instrument, in order to give effect
to the real intent of the transferor."23 Indeed, doubts on the nature of
dispositions are resolved to favor inter vivos transfers "to avoid uncertainty as
to the ownership of the property subject of the deed."24
Nor can petitioner capitalize on Rodrigos post-donation transfer of the
Property to Vere as proof of her retention of ownership. If such were the
barometer in interpreting deeds of donation, not only will great legal
uncertainty be visited on gratuitous dispositions, this will give license to rogue
property owners to set at naught perfected transfers of titles, which, while
founded on liberality, is a valid mode of passing ownership. The interest of
settled property dispositions counsels against licensing such practice.25
Accordingly, having irrevocably transferred naked title over the Property to
Rodriguez in 1965, Rodrigo "cannot afterwards revoke the donation nor
dispose of the said property in favor of another."26 Thus, Rodrigos post-
donation sale of the Property vested no title to Vere. As Veres successor-in-
interest, petitioner acquired no better right than him. On the other hand,
respondents bought the Property from Rodriguez, thus acquiring the latters
title which they may invoke against all adverse claimants, including petitioner.
Petitioner Acquired No Title Over the Property
Alternatively, petitioner grounds his claim of ownership over the Property
through his and Veres combined possession of the Property for more than ten
years, counted from Veres purchase of the Property from Rodrigo in 1970 until
petitioner initiated his suit in the trial court in February 1986.27 Petitioner
anchors his contention on an unfounded legal assumption. The ten year
ordinary prescriptive period to acquire title through possession of real property
in the concept of an owner requires uninterrupted possession coupled with just
title and good faith.28 There is just title when the adverse claimant came into

Bachelor of Laws
possession of the property through one of the modes recognized by law for the
acquisition of ownership or other real rights, but the grantor was not the owner
or could not transmit any right.29 Good faith, on the other hand, consists in the
reasonable belief that the person from whom the possessor received the thing
was the owner thereof, and could transmit his ownership.30
Although Vere and petitioner arguably had just title having successively
acquired the Property through sale, neither was a good faith possessor. As
Rodrigo herself disclosed in the Deed, Rodriguez already occupied and
possessed the Property "in the concept of an owner" ("como tag-iya"31) since 21
May 1962, nearly three years before Rodrigos donation in 3 May 1965 and
seven years before Vere bought the Property from Rodrigo. This admission
against interest binds Rodrigo and all those tracing title to the Property
through her, including Vere and petitioner. Indeed, petitioners insistent claim
that Rodriguez occupied the Property only in 1982, when she started paying
taxes, finds no basis in the records. In short, when Vere bought the Property
from Rodrigo in 1970, Rodriguez was in possession of the Property, a fact that
prevented Vere from being a buyer in good faith.
Lacking good faith possession, petitioners only other recourse to maintain his
claim of ownership by prescription is to show open, continuous and adverse
possession of the Property for 30 years.32 Undeniably, petitioner is unable to
meet this requirement.1avvphil
Ancillary Matters Petitioner Raises Irrelevant
Petitioner brings to the Courts attention facts which, according to him, support
his theory that Rodrigo never passed ownership over the Property to Rodriguez,
namely, that Rodriguez registered the Deed and paid taxes on the Property only
in 1982 and Rodriguez obtained from Vere in 1981 a waiver of the latters
"right of ownership" over the Property. None of these facts detract from our
conclusion that under the text of the Deed and based on the contemporaneous
acts of Rodrigo and Rodriguez, the latter, already in possession of the Property
since 1962 as Rodrigo admitted, obtained naked title over it upon the Deeds
execution in 1965. Neither registration nor tax payment is required to perfect
donations. On the relevance of the waiver agreement, suffice it to say that Vere
had nothing to waive to Rodriguez, having obtained no title from Rodrigo.
Irrespective of Rodriguezs motivation in obtaining the waiver, that document,
legally a scrap of paper, added nothing to the title Rodriguez obtained from
Rodrigo under the Deed.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 6 June
2005 and the Resolution dated 5 May 2006 of the Court of Appeals.
SO ORDERED.

Bachelor of Laws
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 112127 July 17, 1995
CENTRAL PHILIPPINE UNIVERSITY, petitioner,
vs.
COURT OF APPEALS, REMEDIOS FRANCO, FRANCISCO N. LOPEZ, CECILIA P.
VDA. DE LOPEZ, REDAN LOPEZ AND REMARENE LOPEZ, respondents.
BELLOSILLO, J.:
CENTRAL PHILIPPINE UNIVERSITY filed this petition for review on certiorari of
the decision of the Court of Appeals which reversed that of the Regional Trial
Court of Iloilo City directing petitioner to reconvey to private respondents the
property donated to it by their predecessor-in-interest.
Sometime in 1939, the late Don Ramon Lopez, Sr., who was then a member of
the Board of Trustees of the Central Philippine College (now Central Philippine
University [CPU]), executed a deed of donation in favor of the latter of a parcel
of land identified as Lot No. 3174-B-1 of the subdivision plan Psd-1144, then a
portion of Lot No. 3174-B, for which Transfer Certificate of Title No. T-3910-A
was issued in the name of the donee CPU with the following annotations copied
from the deed of donation

Bachelor of Laws
1. The land described shall be utilized by the CPU exclusively for
the establishment and use of a medical college with all its buildings
as part of the curriculum;
2. The said college shall not sell, transfer or convey to any third
party nor in any way encumber said land;
3. The said land shall be called "RAMON LOPEZ CAMPUS", and the
said college shall be under obligation to erect a cornerstone bearing
that name. Any net income from the land or any of its parks shall
be put in a fund to be known as the "RAMON LOPEZ CAMPUS
FUND" to be used for improvements of said campus and erection of
a building thereon.1
On 31 May 1989, private respondents, who are the heirs of Don Ramon Lopez,
Sr., filed an action for annulment of donation, reconveyance and damages
against CPU alleging that since 1939 up to the time the action was filed the
latter had not complied with the conditions of the donation. Private
respondents also argued that petitioner had in fact negotiated with the National
Housing Authority (NHA) to exchange the donated property with another land
owned by the latter.
In its answer petitioner alleged that the right of private respondents to file the
action had prescribed; that it did not violate any of the conditions in the deed
of donation because it never used the donated property for any other purpose
than that for which it was intended; and, that it did not sell, transfer or convey
it to any third party.
On 31 May 1991, the trial court held that petitioner failed to comply with the
conditions of the donation and declared it null and void. The court a
quo further directed petitioner to execute a deed of the reconveyance of the
property in favor of the heirs of the donor, namely, private respondents herein.
Petitioner appealed to the Court of Appeals which on 18 June 1993 ruled that
the annotations at the back of petitioner's certificate of title were resolutory
conditions breach of which should terminate the rights of the donee thus
making the donation revocable.
The appellate court also found that while the first condition mandated
petitioner to utilize the donated property for the establishment of a medical
school, the donor did not fix a period within which the condition must be
fulfilled, hence, until a period was fixed for the fulfillment of the condition,
petitioner could not be considered as having failed to comply with its part of
the bargain. Thus, the appellate court rendered its decision reversing the
appealed decision and remanding the case to the court of origin for the
determination of the time within which petitioner should comply with the first
condition annotated in the certificate of title.

Bachelor of Laws
Petitioner now alleges that the Court of Appeals erred: (a) in holding that the
quoted annotations in the certificate of title of petitioner are onerous
obligations and resolutory conditions of the donation which must be fulfilled
non-compliance of which would render the donation revocable; (b) in holding
that the issue of prescription does not deserve "disquisition;" and, (c) in
remanding the case to the trial court for the fixing of the period within which
petitioner would establish a medical college.2
We find it difficult to sustain the petition. A clear perusal of the conditions set
forth in the deed of donation executed by Don Ramon Lopez, Sr., gives us no
alternative but to conclude that his donation was onerous, one executed for a
valuable consideration which is considered the equivalent of the donation itself,
e.g., when a donation imposes a burden equivalent to the value of the donation.
A gift of land to the City of Manila requiring the latter to erect schools,
construct a children's playground and open streets on the land was considered
an onerous donation.3 Similarly, where Don Ramon Lopez donated the subject
parcel of land to petitioner but imposed an obligation upon the latter to
establish a medical college thereon, the donation must be for an onerous
consideration.
Under Art. 1181 of the Civil Code, on conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those already acquired, shall
depend upon the happening of the event which constitutes the condition. Thus,
when a person donates land to another on the condition that the latter would
build upon the land a school, the condition imposed was not a condition
precedent or a suspensive condition but a resolutory one.4 It is not correct to
say that the schoolhouse had to be constructed before the donation became
effective, that is, before the donee could become the owner of the land,
otherwise, it would be invading the property rights of the donor. The donation
had to be valid before the fulfillment of the condition.5 If there was no
fulfillment or compliance with the condition, such as what obtains in the
instant case, the donation may now be revoked and all rights which the donee
may have acquired under it shall be deemed lost and extinguished.
The claim of petitioner that prescription bars the instant action of private
respondents is unavailing.
The condition imposed by the donor, i.e., the building of a medical school
upon the land donated, depended upon the exclusive will of the donee as
to when this condition shall be fulfilled. When petitioner accepted the
donation, it bound itself to comply with the condition thereof. Since the
time within which the condition should be fulfilled depended upon the
exclusive will of the petitioner, it has been held that its absolute
acceptance and the acknowledgment of its obligation provided in the
deed of donation were sufficient to prevent the statute of limitations
from barring the action of private respondents upon the original contract
which was the deed of donation.6

Bachelor of Laws
Moreover, the time from which the cause of action accrued for the revocation of
the donation and recovery of the property donated cannot be specifically
determined in the instant case. A cause of action arises when that which should
have been done is not done, or that which should not have been done is
done.7 In cases where there is no special provision for such computation,
recourse must be had to the rule that the period must be counted from the day
on which the corresponding action could have been instituted. It is the legal
possibility of bringing the action which determines the starting point for the
computation of the period. In this case, the starting point begins with the
expiration of a reasonable period and opportunity for petitioner to fulfill what
has been charged upon it by the donor.
The period of time for the establishment of a medical college and the necessary
buildings and improvements on the property cannot be quantified in a specific
number of years because of the presence of several factors and circumstances
involved in the erection of an educational institution, such as government laws
and regulations pertaining to education, building requirements and property
restrictions which are beyond the control of the donee.
Thus, when the obligation does not fix a period but from its nature and
circumstances it can be inferred that a period was intended, the general rule
provided in Art. 1197 of the Civil Code applies, which provides that the courts
may fix the duration thereof because the fulfillment of the obligation itself
cannot be demanded until after the court has fixed the period for compliance
therewith and such period has arrived.8
This general rule however cannot be applied considering the different set of
circumstances existing in the instant case. More than a reasonable period of
fifty (50) years has already been allowed petitioner to avail of the opportunity
to comply with the condition even if it be burdensome, to make the donation in
its favor forever valid. But, unfortunately, it failed to do so. Hence, there is no
more need to fix the duration of a term of the obligation when such procedure
would be a mere technicality and formality and would serve no purpose than to
delay or lead to an unnecessary and expensive multiplication of
suits. 9 Moreover, under Art. 1191 of the Civil Code, when one of the obligors
cannot comply with what is incumbent upon him, the obligee may seek
rescission and the court shall decree the same unless there is just cause
authorizing the fixing of a period. In the absence of any just cause for the court
to determine the period of the compliance, there is no more obstacle for the
court to decree the rescission claimed.
Finally, since the questioned deed of donation herein is basically a gratuitous
one, doubts referring to incidental circumstances of a gratuitous contract
should be resolved in favor of the least transmission of rights and
interests. 10Records are clear and facts are undisputed that since the execution
of the deed of donation up to the time of filing of the instant action, petitioner
has failed to comply with its obligation as donee. Petitioner has slept on its

Bachelor of Laws
obligation for an unreasonable length of time. Hence, it is only just and
equitable now to declare the subject donation already ineffective and, for all
purposes, revoked so that petitioner as donee should now return the donated
property to the heirs of the donor, private respondents herein, by means of
reconveyance.
WHEREFORE, the decision of the Regional Trial Court of Iloilo, Br. 34, of 31 May
1991 is REINSTATED and AFFIRMED, and the decision of the Court of Appeals
of 18 June 1993 is accordingly MODIFIED. Consequently, petitioner is directed
to reconvey to private respondents Lot No. 3174-B-1 of the subdivision plan
Psd-1144 covered by Transfer Certificate of Title No. T-3910-A within thirty (30)
days from the finality of this judgment.
Costs against petitioner.
SO ORDERED.
Quiason and Kapunan, JJ., concur.
Separate Opinions
DAVIDE, JR., J., dissenting:

I agree with the view in the majority opinion that the donation in question is
onerous considering the conditions imposed by the donor on the donee which
created reciprocal obligations upon both parties. Beyond that, I beg to disagree.
First of all, may I point out an inconsistency in the majority opinion's
description of the donation in question. In one part, it says that the donation in
question is onerous. Thus, on page 4 it states:
We find it difficult to sustain the petition. A clear perusal of the
conditions set forth in the deed of donation executed by Don
Ramon Lopez, Sr., give us no alternative but to conclude that his
donation was onerous, one executed for a valuable consideration
which is considered the equivalent of the donation itself, e.g., when
a donation imposes a burden equivalent to the value of the
donation . . . . (emphasis supplied)
Yet, in the last paragraph of page 8 it states that the donation is basically
a gratuitous one. The pertinent portion thereof reads:

Bachelor of Laws
Finally, since the questioned deed of donation herein is basically a
gratuitous one, doubts referring to incidental circumstances of
a gratuitous contract should be resolved in favor of the least
transmission of rights and interest . . . (emphasis supplied)
Second, the discussion on conditional obligations is unnecessary. There is no
conditional obligation to speak of in this case. It seems that the "conditions"
imposed by the donor and as the word is used in the law of donations is
confused with "conditions" as used in the law of obligations. In his annotation
of Article 764 of the Civil Code on Donations, Arturo M. Tolentino, citing the
well-known civilists such as Castan, Perez Gonzalez and Alguer, and Colin &
Capitant, states clearly the context within which the term "conditions" is used
in the law of donations, to wit:
The word "conditions" in this article does not refer to uncertain
events on which the birth or extinguishment of a juridical relation
depends, but is used in the vulgar sense of obligations or charges
imposed by the donor on the donee. It is used, not in its technical or
strict legal sense, but in its broadest sense.1 (emphasis supplied)
Clearly then, when the law and the deed of donation speaks of "conditions" of a
donation, what are referred to are actually the obligations, charges or burdens
imposed by the donor upon the donee and which would characterize the
donation as onerous. In the present case, the donation is, quite obviously,
onerous, but it is more properly called a "modal donation." A modal donation is
one in which the donor imposes a prestation upon the donee. The
establishment of the medical college as the condition of the donation in the
present case is one such prestation.
The conditions imposed by the donor Don Ramon Lopez determines neither the
existence nor the extinguishment of the obligations of the donor and the donee
with respect to the donation. In fact, the conditions imposed by Don Ramon
Lopez upon the donee are the very obligations of the donation to build the
medical college and use the property for the purposes specified in the deed of
donation. It is very clear that those obligations are unconditional, the
fulfillment, performance, existence or extinguishment of which is not
dependent on any future or uncertain event or past and unknown event, as the
Civil Code would define a conditional obligation.2
Reliance on the case of Parks vs. Province of Tarlac3 as cited on page 5 of the
majority opinion is erroneous in so far as the latter stated that the condition
in Parks is a resolutory one and applied this to the present case. A more careful
reading of this Court's decision would reveal that nowhere did we say, whether
explicitly or impliedly, that the donation in that case, which also has a
condition imposed to build a school and a public park upon the property
donated, is a resolutory condition.4 It is incorrect to say that the "conditions" of
the donation there or in the present case are resolutory conditions because,

Bachelor of Laws
applying Article 1181 of the Civil Code, that would mean that upon fulfillment
of the conditions, the rights already acquired will be extinguished. Obviously,
that could not have been the intention of the parties.
What the majority opinion probably had in mind was that the conditions are
resolutory because if they are notcomplied with, the rights of the donee as such
will be extinguished and the donation will be revoked. To my mind, though, it is
more accurate to state that the conditions here are not resolutory conditions
but, for the reasons stated above, are the obligations imposed by the donor.
Third, I cannot subscribe to the view that the provisions of Article 1197 cannot
be applied here. The conditions/obligations imposed by the donor herein are
subject to a period. I draw this conclusion based on our previous ruling which,
although made almost 90 years ago, still finds application in the present case.
In Barretto vs. City of Manila,5 we said that when the contract of donation, as
the one involved therein, has no fixed period in which the condition should be
fulfilled, the provisions of what is now Article 1197 (then Article 1128) are
applicable and it is the duty of the court to fix a suitable time for its fulfillment.
Indeed, from the nature and circumstances of the conditions/obligations of the
present donation, it can be inferred that a period was contemplated by the
donor. Don Ramon Lopez could not have intended his property to remain idle
for a long period of time when in fact, he specifically burdened the donee with
the obligation to set up a medical college therein and thus put his property to
good use. There is a need to fix the duration of the time within which the
conditions imposed are to be fulfilled.
It is also important to fix the duration or period for the performance of the
conditions/obligations in the donation in resolving the petitioner's claim that
prescription has already barred the present action. I disagree once more with
the ruling of the majority that the action of the petitioners is not barred by the
statute of limitations. There is misplaced reliance again on a previous decision
of this Court in Osmea vs. Rama.6 That case does not speak of a deed of
donation as erroneously quoted and cited by the majority opinion. It speaks of
a contract for a sum of money where the debtor herself imposed a condition
which will determine when she will fulfill her obligation to pay the creditor,
thus, making the fulfillment of her obligation dependent upon her will. What we
have here, however, is not a contract for a sum of money but a donation where
the donee has not imposed any conditions on the fulfillment of its obligations.
Although it is admitted that the fulfillment of the conditions/obligations of the
present donation may be dependent on the will of the donee as to when it will
comply therewith, this did not arise out of a condition which the donee itself
imposed. It is believed that the donee was not meant to and does not have
absolute control over the time within which it will perform its obligations. It
must still do so within a reasonable time. What that reasonable time is, under
the circumstances, for the courts to determine. Thus, the mere fact that there is
no time fixed as to when the conditions of the donation are to be fulfilled does

Bachelor of Laws
not ipso facto mean that the statute of limitations will not apply anymore and
the action to revoke the donation becomes imprescriptible.
Admittedly, the donation now in question is an onerous donation and is
governed by the law on contracts (Article 733) and the case of Osmea, being
one involving a contract, may apply. But we must not lose sight of the fact that
it is still a donation for which this Court itself applied the pertinent law to
resolve situations such as this. That the action to revoke the donation can still
prescribe has been the pronouncement of this Court as early as 1926 in the
case of Parks which, on this point, finds relevance in this case. There, this Court
said,
[that] this action [for the revocation of the donation] is
prescriptible, there is no doubt. There is no legal provision which
excludes this class of action from the statute of limitations. And
not only this, the law itself recognizes the prescriptibility of the
action for the revocation of a donation, providing a special period
of [four] years for the revocation by the subsequent birth of
children [Art. 646, now Art. 763], and . . . by reason of ingratitude.
If no special period is provided for the prescription of the action
for revocation for noncompliance of the conditions of the donation
[Art. 647, now Art. 764], it is because in this respect the donation is
considered onerous and is governed by the law of contracts and
the general rules of prescription.7
More recently, in De Luna v. Abrigo,8 this Court reiterated the ruling
in Parks and said that:
It is true that under Article 764 of the New Civil Code, actions for
the revocation of a donation must be brought within four (4) years
from the non-compliance of the conditions of the donation.
However, it is Our opinion that said article does not apply to
onerous donations in view of the specific provision of Article 733
providing that onerous donations are governed by the rules on
contracts.
In the light of the above, the rules on contracts and the general
rules on prescription and not the rules on donations are applicable
in the case at bar.
The law applied in both cases is Article 1144(1). It refers to the prescription of
an action upon a written contract, which is what the deed of an onerous
donation is. The prescriptive period is ten years from the time the cause of
action accrues, and that is, from the expiration of the time within which the
donee must comply with the conditions/obligations of the donation. As to
when this exactly is remains to be determined, and that is for the courts to do
as reposed upon them by Article 1197.

Bachelor of Laws
For the reasons expressed above, I register my dissent. Accordingly, the
decision of the Court of Appeals must be upheld, except its ruling that the
conditions of the donation are resolutory.
Padilla, J., dissents
Separate Opinions
DAVIDE, JR., J., dissenting:
I agree with the view in the majority opinion that the donation in question is
onerous considering the conditions imposed by the donor on the donee which
created reciprocal obligations upon both parties. Beyond that, I beg to disagree.
First of all, may I point out an inconsistency in the majority opinion's
description of the donation in question. In one part, it says that the donation in
question is onerous. Thus, on page 4 it states:
We find it difficult to sustain the petition. A clear perusal of the
conditions set forth in the deed of donation executed by Don
Ramon Lopez, Sr., give us no alternative but to conclude that his
donation was onerous, one executed for a valuable consideration
which is considered the equivalent of the donation itself, e.g., when
a donation imposes a burden equivalent to the value of the
donation . . . . (emphasis supplied)
Yet, in the last paragraph of page 8 it states that the donation is basically
a gratuitous one. The pertinent portion thereof reads:
Finally, since the questioned deed of donation herein is basically a
gratuitous one, doubts referring to incidental circumstances of
a gratuitous contract should be resolved in favor of the least
transmission of rights and interest . . . (emphasis supplied)
Second, the discussion on conditional obligations is unnecessary. There is no
conditional obligation to speak of in this case. It seems that the "conditions"
imposed by the donor and as the word is used in the law of donations is
confused with "conditions" as used in the law of obligations. In his annotation
of Article 764 of the Civil Code on Donations, Arturo M. Tolentino, citing the
well-known civilists such as Castan, Perez Gonzalez and Alguer, and Colin &
Capitant, states clearly the context within which the term "conditions" is used
in the law of donations, to wit:
The word "conditions" in this article does not refer to uncertain
events on which the birth or extinguishment of a juridical relation
depends, but is used in the vulgar sense of obligations or
chargesimposed by the donor on the donee. It is used, not in its
technical or strict legal sense, but in its broadest sense. 1 (emphasis
supplied)

Bachelor of Laws
Clearly then, when the law and the deed of donation speaks of "conditions" of a
donation, what are referred to are actually the obligations, charges or burdens
imposed by the donor upon the donee and which would characterize the
donation as onerous. In the present case, the donation is, quite obviously,
onerous, but it is more properly called a "modal donation." A modal donation is
one in which the donor imposes a prestation upon the donee. The
establishment of the medical college as the condition of the donation in the
present case is one such prestation.
The conditions imposed by the donor Don Ramon Lopez determines neither the
existence nor the extinguishment of the obligations of the donor and the donee
with respect to the donation. In fact, the conditions imposed by Don Ramon
Lopez upon the donee are the very obligations of the donation to build the
medical college and use the property for the purposes specified in the deed of
donation. It is very clear that those obligations are unconditional, the
fulfillment, performance, existence or extinguishment of which is not
dependent on any future or uncertain event or past and unknown event, as the
Civil Code would define a conditional obligation.2
Reliance on the case of Parks vs. Province of Tarlac3 as cited on page 5 of the
majority opinion is erroneous in so far as the latter stated that the condition
in Parks is a resolutory one and applied this to the present case. A more careful
reading of this Court's decision would reveal that nowhere did we say, whether
explicitly or impliedly, that the donation in that case, which also has a
condition imposed to build a school and a public park upon the property
donated, is a resolutory condition.4 It is incorrect to say that the "conditions" of
the donation there or in the present case are resolutory conditions because,
applying Article 1181 of the Civil Code, that would mean that upon fulfillment
of the conditions, the rights already acquired will be extinguished. Obviously,
that could not have been the intention of the parties.
What the majority opinion probably had in mind was that the conditions are
resolutory because if they are notcomplied with, the rights of the donee as such
will be extinguished and the donation will be revoked. To my mind, though, it is
more accurate to state that the conditions here are not resolutory conditions
but, for the reasons stated above, are the obligations imposed by the donor.
Third, I cannot subscribe to the view that the provisions of Article 1197 cannot
be applied here. The conditions/obligations imposed by the donor herein are
subject to a period. I draw this conclusion based on our previous ruling which,
although made almost 90 years ago, still finds application in the present case.
In Barretto vs. City of Manila,5 we said that when the contract of donation, as
the one involved therein, has no fixed period in which the condition should be
fulfilled, the provisions of what is now Article 1197 (then Article 1128) are
applicable and it is the duty of the court to fix a suitable time for its fulfillment.
Indeed, from the nature and circumstances of the conditions/obligations of the
present donation, it can be inferred that a period was contemplated by the

Bachelor of Laws
donor. Don Ramon Lopez could not have intended his property to remain idle
for a long period of time when in fact, he specifically burdened the donee with
the obligation to set up a medical college therein and thus put his property to
good use. There is a need to fix the duration of the time within which the
conditions imposed are to be fulfilled.
It is also important to fix the duration or period for the performance of the
conditions/obligations in the donation in resolving the petitioner's claim that
prescription has already barred the present action. I disagree once more with
the ruling of the majority that the action of the petitioners is not barred by the
statute of limitations. There is misplaced reliance again on a previous decision
of this Court in Osmea vs. Rama.6 That case does not speak of a deed of
donation as erroneously quoted and cited by the majority opinion. It speaks of
a contract for a sum of money where the debtor herself imposed a condition
which will determine when she will fulfill her obligation to pay the creditor,
thus, making the fulfillment of her obligation dependent upon her will. What we
have here, however, is not a contract for a sum of money but a donation where
the donee has not imposed any conditions on the fulfillment of its obligations.
Although it is admitted that the fulfillment of the conditions/obligations of the
present donation may be dependent on the will of the donee as to when it will
comply therewith, this did not arise out of a condition which the donee itself
imposed. It is believed that the donee was not meant to and does not have
absolute control over the time within which it will perform its obligations. It
must still do so within a reasonable time. What that reasonable time is, under
the circumstances, for the courts to determine. Thus, the mere fact that there is
no time fixed as to when the conditions of the donation are to be fulfilled does
not ipso facto mean that the statute of limitations will not apply anymore and
the action to revoke the donation becomes imprescriptible.
Admittedly, the donation now in question is an onerous donation and is
governed by the law on contracts (Article 733) and the case of Osmea, being
one involving a contract, may apply. But we must not lose sight of the fact that
it is still a donation for which this Court itself applied the pertinent law to
resolve situations such as this. That the action to revoke the donation can still
prescribe has been the pronouncement of this Court as early as 1926 in the
case of Parks which, on this point, finds relevance in this case. There, this Court
said,
[that] this action [for the revocation of the donation] is
prescriptible, there is no doubt. There is no legal provision which
excludes this class of action from the statute of limitations. And
not only this, the law itself recognizes the prescriptibility of the
action for the revocation of a donation, providing a special period
of [four] years for the revocation by the subsequent birth of
children [Art. 646, now Art. 763], and . . . by reason of ingratitude.
If no special period is provided for the prescription of the action

Bachelor of Laws
for revocation for noncompliance of the conditions of the donation
[Art. 647, now Art. 764], it is because in this respect the donation is
considered onerous and is governed by the law of contracts and
the general rules of prescription.7
More recently, in De Luna v. Abrigo,8 this Court reiterated the ruling
in Parks and said that:
It is true that under Article 764 of the New Civil Code, actions for
the revocation of a donation must be brought within four (4) years
from the non-compliance of the conditions of the donation.
However, it is Our opinion that said article does not apply to
onerous donations in view of the specific provision of Article 733
providing that onerous donations are governed by the rules on
contracts.
In the light of the above, the rules on contracts and the general
rules on prescription and not the rules on donations are applicable
in the case at bar.
The law applied in both cases is Article 1144(1). It refers to the prescription of
an action upon a written contract, which is what the deed of an onerous
donation is. The prescriptive period is ten years from the time the cause of
action accrues, and that is, from the expiration of the time within which the
donee must comply with the conditions/obligations of the donation. As to
when this exactly is remains to be determined, and that is for the courts to do
as reposed upon them by Article 1197.
For the reasons expressed above, I register my dissent. Accordingly, the
decision of the Court of Appeals must be upheld, except its ruling that the
conditions of the donation are resolutory.
Padilla, J., dissents

Bachelor of Laws
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-44059 October 28, 1977
THE INSULAR LIFE ASSURANCE COMPANY, LTD., plaintiff-appellee,
vs.
CARPONIA T. EBRADO and PASCUALA VDA. DE EBRADO, defendants-
appellants.
MARTIN, J.:
This is a novel question in insurance law: Can a common-law wife named as
beneficiary in the life insurance policy of a legally married man claim the
proceeds thereof in case of death of the latter?
On September 1, 1968, Buenaventura Cristor Ebrado was issued by The Life
Assurance Co., Ltd., Policy No. 009929 on a whole-life for P5,882.00 with a,
rider for Accidental Death for the same amount Buenaventura C. Ebrado
designated T. Ebrado as the revocable beneficiary in his policy. He to her as his
wife.
On October 21, 1969, Buenaventura C. Ebrado died as a result of an t when he
was hit by a failing branch of a tree. As the policy was in force, The Insular Life
Assurance Co., Ltd. liable to pay the coverage in the total amount of P11,745.73,
representing the face value of the policy in the amount of P5,882.00 plus the
additional benefits for accidental death also in the amount of P5,882.00 and the
refund of P18.00 paid for the premium due November, 1969, minus the unpaid

Bachelor of Laws
premiums and interest thereon due for January and February, 1969, in the sum
of P36.27.
Carponia T. Ebrado filed with the insurer a claim for the proceeds of the Policy
as the designated beneficiary therein, although she admits that she and the
insured Buenaventura C. Ebrado were merely living as husband and wife
without the benefit of marriage.
Pascuala Vda. de Ebrado also filed her claim as the widow of the deceased
insured. She asserts that she is the one entitled to the insurance proceeds, not
the common-law wife, Carponia T. Ebrado.
In doubt as to whom the insurance proceeds shall be paid, the insurer, The
Insular Life Assurance Co., Ltd. commenced an action for Interpleader before
the Court of First Instance of Rizal on April 29, 1970.
After the issues have been joined, a pre-trial conference was held on July 8,
1972, after which, a pre-trial order was entered reading as follows: +.wph!1
During the pre-trial conference, the parties manifested to the court.
that there is no possibility of amicable settlement. Hence, the Court
proceeded to have the parties submit their evidence for the
purpose of the pre-trial and make admissions for the purpose of
pretrial. During this conference, parties Carponia T. Ebrado and
Pascuala Ebrado agreed and stipulated: 1) that the deceased
Buenaventura Ebrado was married to Pascuala Ebrado with whom
she has six (legitimate) namely; Hernando, Cresencio, Elsa,
Erlinda, Felizardo and Helen, all surnamed Ebrado; 2) that during
the lifetime of the deceased, he was insured with Insular Life
Assurance Co. Under Policy No. 009929 whole life plan, dated
September 1, 1968 for the sum of P5,882.00 with the rider for
accidental death benefit as evidenced by Exhibits A for plaintiffs
and Exhibit 1 for the defendant Pascuala and Exhibit 7 for Carponia
Ebrado; 3) that during the lifetime of Buenaventura Ebrado, he was
living with his common-wife, Carponia Ebrado, with whom she had
2 children although he was not legally separated from his legal wife;
4) that Buenaventura in accident on October 21, 1969 as evidenced
by the death Exhibit 3 and affidavit of the police report of his death
Exhibit 5; 5) that complainant Carponia Ebrado filed claim with the
Insular Life Assurance Co. which was contested by Pascuala Ebrado
who also filed claim for the proceeds of said policy 6) that in view
ofthe adverse claims the insurance company filed this action
against the two herein claimants Carponia and Pascuala Ebrado; 7)
that there is now due from the Insular Life Assurance Co. as
proceeds of the policy P11,745.73; 8) that the beneficiary
designated by the insured in the policy is Carponia Ebrado and the
insured made reservation to change the beneficiary but although

Bachelor of Laws
the insured made the option to change the beneficiary, same was
never changed up to the time of his death and the wife did not
have any opportunity to write the company that there was
reservation to change the designation of the parties agreed that a
decision be rendered based on and stipulation of facts as to who
among the two claimants is entitled to the policy.
Upon motion of the parties, they are given ten (10) days to file their
simultaneous memoranda from the receipt of this order.
SO ORDERED.
On September 25, 1972, the trial court rendered judgment declaring among
others, Carponia T. Ebrado disqualified from becoming beneficiary of the
insured Buenaventura Cristor Ebrado and directing the payment of the
insurance proceeds to the estate of the deceased insured. The trial court
held: +.wph!1
It is patent from the last paragraph of Art. 739 of the Civil Code
that a criminal conviction for adultery or concubinage is not
essential in order to establish the disqualification mentioned
therein. Neither is it also necessary that a finding of such guilt or
commission of those acts be made in a separate independent
action brought for the purpose. The guilt of the donee (beneficiary)
may be proved by preponderance of evidence in the same
proceeding (the action brought to declare the nullity of the
donation).
It is, however, essential that such adultery or concubinage exists at
the time defendant Carponia T. Ebrado was made beneficiary in the
policy in question for the disqualification and incapacity to exist
and that it is only necessary that such fact be established by
preponderance of evidence in the trial. Since it is agreed in their
stipulation above-quoted that the deceased insured and defendant
Carponia T. Ebrado were living together as husband and wife
without being legally married and that the marriage of the insured
with the other defendant Pascuala Vda. de Ebrado was valid and
still existing at the time the insurance in question was purchased
there is no question that defendant Carponia T. Ebrado is
disqualified from becoming the beneficiary of the policy in
question and as such she is not entitled to the proceeds of the
insurance upon the death of the insured.
From this judgment, Carponia T. Ebrado appealed to the Court of Appeals, but
on July 11, 1976, the Appellate Court certified the case to Us as involving only
questions of law.
We affirm the judgment of the lower court.

Bachelor of Laws
1. It is quite unfortunate that the Insurance Act (RA 2327, as amended) or even
the new Insurance Code (PD No. 612, as amended) does not contain any specific
provision grossly resolutory of the prime question at hand. Section 50 of the
Insurance Act which provides that "(t)he insurance shag be applied exclusively
to the proper interest of the person in whose name it is made" 1 cannot be
validly seized upon to hold that the mm includes the beneficiary. The word
"interest" highly suggests that the provision refers only to the "insured" and not
to the beneficiary, since a contract of insurance is personal in
character. 2 Otherwise, the prohibitory laws against illicit relationships
especially on property and descent will be rendered nugatory, as the same
could easily be circumvented by modes of insurance. Rather, the general rules
of civil law should be applied to resolve this void in the Insurance Law. Article
2011 of the New Civil Code states: "The contract of insurance is governed by
special laws. Matters not expressly provided for in such special laws shall be
regulated by this Code." When not otherwise specifically provided for by the
Insurance Law, the contract of life insurance is governed by the general rules of
the civil law regulating contracts. 3 And under Article 2012 of the same Code,
"any person who is forbidden from receiving any donation under Article 739
cannot be named beneficiary of a fife insurance policy by the person who
cannot make a donation to him. 4 Common-law spouses are, definitely, barred
from receiving donations from each other. Article 739 of the new Civil Code
provides: +.wph!1
The following donations shall be void:
1. Those made between persons who were guilty of adultery or
concubinage at the time of donation;
Those made between persons found guilty of the same criminal
offense, in consideration thereof;
3. Those made to a public officer or his wife, descendants or
ascendants by reason of his office.
In the case referred to in No. 1, the action for declaration of nullity
may be brought by the spouse of the donor or donee; and the guilt
of the donee may be proved by preponderance of evidence in the
same action.
2. In essence, a life insurance policy is no different from a civil donation insofar
as the beneficiary is concerned. Both are founded upon the same consideration:
liberality. A beneficiary is like a donee, because from the premiums of the
policy which the insured pays out of liberality, the beneficiary will receive the
proceeds or profits of said insurance. As a consequence, the proscription in
Article 739 of the new Civil Code should equally operate in life insurance
contracts. The mandate of Article 2012 cannot be laid aside: any person who
cannot receive a donation cannot be named as beneficiary in the life insurance
policy of the person who cannot make the donation. 5 Under American law, a
Bachelor of Laws
policy of life insurance is considered as a testament and in construing it, the
courts will, so far as possible treat it as a will and determine the effect of a
clause designating the beneficiary by rules under which wins are interpreted. 6
3. Policy considerations and dictates of morality rightly justify the institution of
a barrier between common law spouses in record to Property relations since
such hip ultimately encroaches upon the nuptial and filial rights of the
legitimate family There is every reason to hold that the bar in donations
between legitimate spouses and those between illegitimate ones should be
enforced in life insurance policies since the same are based on similar
consideration As above pointed out, a beneficiary in a fife insurance policy is
no different from a donee. Both are recipients of pure beneficence. So long as
manage remains the threshold of family laws, reason and morality dictate that
the impediments imposed upon married couple should likewise be imposed
upon extra-marital relationship. If legitimate relationship is circumscribed by
these legal disabilities, with more reason should an illicit relationship be
restricted by these disabilities. Thus, in Matabuena v. Cervantes, 7 this Court,
through Justice Fernando, said: +.wph!1
If the policy of the law is, in the language of the opinion of the then
Justice J.B.L. Reyes of that court (Court of Appeals), 'to prohibit
donations in favor of the other consort and his descendants
because of and undue and improper pressure and influence upon
the donor, a prejudice deeply rooted in our ancient law;" por-que
no se enganen desponjandose el uno al otro por amor que han de
consuno' (According to) the Partidas (Part IV, Tit. XI, LAW IV),
reiterating the rationale 'No Mutuato amore invicem spoliarentur'
the Pandects (Bk, 24, Titl. 1, De donat, inter virum et uxorem); then
there is very reason to apply the same prohibitive policy to persons
living together as husband and wife without the benefit of nuptials.
For it is not to be doubted that assent to such irregular connection
for thirty years bespeaks greater influence of one party over the
other, so that the danger that the law seeks to avoid is
correspondingly increased. Moreover, as already pointed out by
Ulpian (in his lib. 32 ad Sabinum, fr. 1), 'it would not be just that
such donations should subsist, lest the condition 6f those who
incurred guilt should turn out to be better.' So long as marriage
remains the cornerstone of our family law, reason and morality
alike demand that the disabilities attached to marriage should
likewise attach to concubinage.
It is hardly necessary to add that even in the absence of the above
pronouncement, any other conclusion cannot stand the test of
scrutiny. It would be to indict the frame of the Civil Code for a
failure to apply a laudable rule to a situation which in its essentials
cannot be distinguished. Moreover, if it is at all to be differentiated

Bachelor of Laws
the policy of the law which embodies a deeply rooted notion of
what is just and what is right would be nullified if such irregular
relationship instead of being visited with disabilities would be
attended with benefits. Certainly a legal norm should not be
susceptible to such a reproach. If there is every any occasion where
the principle of statutory construction that what is within the spirit
of the law is as much a part of it as what is written, this is it.
Otherwise the basic purpose discernible in such codal provision
would not be attained. Whatever omission may be apparent in an
interpretation purely literal of the language used must be remedied
by an adherence to its avowed objective.
4. We do not think that a conviction for adultery or concubinage is exacted
before the disabilities mentioned in Article 739 may effectuate. More
specifically, with record to the disability on "persons who were guilty of
adultery or concubinage at the time of the donation," Article 739 itself
provides: +.wph!1
In the case referred to in No. 1, the action for declaration of nullity
may be brought by the spouse of the donor or donee; and the guilty
of the donee may be proved by preponderance of evidence in the
same action.
The underscored clause neatly conveys that no criminal conviction for the
offense is a condition precedent. In fact, it cannot even be from the aforequoted
provision that a prosecution is needed. On the contrary, the law plainly states
that the guilt of the party may be proved "in the same acting for declaration of
nullity of donation. And, it would be sufficient if evidence preponderates upon
the guilt of the consort for the offense indicated. The quantum of proof in
criminal cases is not demanded.
In the caw before Us, the requisite proof of common-law relationship between
the insured and the beneficiary has been conveniently supplied by the
stipulations between the parties in the pre-trial conference of the case. It case
agreed upon and stipulated therein that the deceased insured Buenaventura C.
Ebrado was married to Pascuala Ebrado with whom she has six legitimate
children; that during his lifetime, the deceased insured was living with his
common-law wife, Carponia Ebrado, with whom he has two children. These
stipulations are nothing less than judicial admissions which, as a consequence,
no longer require proof and cannot be contradicted. 8 A fortiori, on the basis of
these admissions, a judgment may be validly rendered without going through
the rigors of a trial for the sole purpose of proving the illicit liaison between the
insured and the beneficiary. In fact, in that pretrial, the parties even agreed
"that a decision be rendered based on this agreement and stipulation of facts as
to who among the two claimants is entitled to the policy."

Bachelor of Laws
ACCORDINGLY, the appealed judgment of the lower court is hereby affirmed.
Carponia T. Ebrado is hereby declared disqualified to be the beneficiary of the
late Buenaventura C. Ebrado in his life insurance policy. As a consequence, the
proceeds of the policy are hereby held payable to the estate of the deceased
insured. Costs against Carponia T. Ebrado.
SO ORDERED.

SUPREME COURT
Manila
THIRD DIVISION
ZAMBOANGA BARTER TRADERS G.R. No. 148433
KILUSANG BAYAN, INC.
represented by its President, ATTY. Present:
HASAN G. ALAM,Petitioner, YNARES-SANTIAGO, J.,
- versus - Chairperson.
HON. JULIUS RHETT J. PLAGATA, AUSTRIA-MARTINEZ,

in his capacity as Executive Labor CHICO-NAZARIO,
Arbiter of NLRC-RAB No. IX, NACHURA, and
SHERIFF DANILO P. TEJADA of REYES, JJ.
NLRC-RAB No. IX and TEOPISTO Promulgated:
MENDOZA, Respondents. September 30, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules
of Civil Procedure which seeks to set aside the decision1 of the Court of Appeals
dated 20 November 2000 and its (2) Resolution2 dated 31 May 2001 denying
petitioners motion for reconsideration. It likewise asks that the second alias
writ of execution issued by Hon. Julius Rhett J. Plagata, Executive Labor Arbiter
of NLRC-RAB IX, be annulled and declared without any legal effect, as well as
the ensuing levy, sale on execution of the subject property and ><><="" p="">

Bachelor of Laws
The Court of Appeals dismissed petitioner Zamboanga Barter Traders Kilusang
B ayan, Inc.s (ZBTKBIs)3 petition for certiorari, which assailed public
respondent Hon. Julius Rhett J. Plagatas orders dated 5 May 2000 and 7 June
2000 and the 23 May 2000 writ of possession he issued in NLRC Case No.
RABIX-0133-81. The order dated 5 May 2000 granted private respondent
Teopisto Mendozas petition for the issuance of a writ of possession over the
parcel of land subject of this case. Pursuant to the first order, the writ of
possession was issued on 23 May 2000. The second order dated 7 June 2000
denied petitioners motion for reconsideration of the first order.
The antecedents are as follows:
On 9 January 1973, President Ferdinand E. Marcos issued Presidential Decree
No. 934 which legalized barter trading in the Sulu Archipelago and adjacent
areas, and empowered the Commander of the Southwest Command of the
Armed Forces of the Philippines (AFP) to coordinate all activities and to
undertake all measures for the implementation of said decree.
On 17 June 1981, ZBTKBI, thru its President, Atty. Hassan G. Alam, and the
Republic of the Philippines, represented by Maj. Gen. Delfin C. Castro,
Commander, Southern Command of the AFP, and Chairman, Executive
Committee for Barter Trade, entered into a Deed of Donation whereby ZBTKBI
donated to the Republic a parcel of land covered by Certificate of Title (CTC)
No. T-61,628 of the Registry of Deeds of Zamboanga City, identified as Lot No.
6 of consolidation subdivision plan Pcs-09-000184, situated in the Barrio of
Canelar, City of Zamboanga, containing an area of thirteen thousand six
hundred forty-three (13,643) square meters, more or less.5 The Republic
accepted the donation which contained the following conditions:
1. That upon the effectivity or acceptance hereof the DONEE shall, thru
the authorized agency/ministry, construct a P5 Million Barter Trade
market building at the afore-described parcel of land;
2. That the aforesaid Barter Trade Market building shall accommodate at
least 1,000 stalls, the allocation of which shall be determined by the
Executive Committee for Barter Trade in coordination with the Officers
and Board of Directors the Zamboanga Barter Traders Kilusang Bayan,
Inc., provided, however, that each member of the DONOR shall be given
priority;
3. That the said Barter Trade Market building to be constructed as above-
stated, shall be to the strict exclusion of any other building for barter
trading in Zamboanga City, Philippines;
4. That in the event barter trading shall be phased out, prohibited, or
suspended for more than one (1) year in Zamboanga City, Philippines, the
afore-described parcel of land shall revert back to the DONOR without

Bachelor of Laws
need of any further formality or documentation, and the DONOR shall
have the first option to purchase the building and improvements thereon.
5. That the DONEE hereby accepts this donation made in its favor by the
DONOR, together with the conditions therein provided.6
With the acceptance of the donation, TCT No. T-61,6287 in the name of ZBTKBI
was cancelled and, in lieu thereof, TCT. No. T-66,6968 covering the same
property was issued in the name of the Republic of the Philippines (Republic).
Pursuant to condition No. 1 of the Deed of Donation, the Government and
Regional Office No. IX of the Department of Public Works and Highways (DPWH)
constructed a Barter Trade Market Building worth P5,000,000.00 at the said Lot
No. 6. The building was completed on 30 March 1983 and was occupied by
members of ZBTKBI, as well as by other persons engaged in barter trade.9
Prior to said donation, on 16 March 1977, private respondent Teopisto
Mendoza (Mendoza) was hired by ZBTKBI as clerk. Subsequently, in a letter
dated 1 April 1981, ZBTKBI, through its President, Atty. Hasan G. Alam,
informed Mendoza that his services were being terminated on the ground of
abandonment of work.10
For this reason, Mendoza filed on 29 July 1981 before the Department of Labor
Employment (DOLE), Regional Office No. 9, Zamboanga City, a Complaint for
Illegal Dismissal with payment of backwages and separation pay. The complaint
was docketed as RDO-STF Case No. 473-81. On 23 September 1981, the case
was re-docketed as NLRC Case No. RAB IX-0133-81 and assigned to Executive
Labor Arbiter Hakim S. Abdulwahid.11
On 31 May, 1983, Executive Labor Arbiter Abdulwahid rendered his decision
finding the dismissal of Mendoza illegal and ordered ZBTKBI to reinstate
Mendoza to his former position or any equivalent position, and to pay him
backwages.12 The decretal portion of the decision reads:
Wherefore, in view of the foregoing consideration, judgment is hereby
rendered, ordering the respondent Zamboanga Barter Traders Kilusang Bayan,
Inc. thru its president or authorized representative to reinstate complainant
Teopisto Mendoza in his former position or any substantially equivalent
position without loss of seniority rights and other privileges and with
backwages to be computed at the rate of P866.00 a month from April 2, 1981
up to the time he is reinstated.
On 17 June 1983, ZBTKBI filed a Notice of Appeal13 with the National Labor
Relations Commission (NLRC). On 13 July 1983, Mendoza filed with the NLRC a
Manifestation with Motion for Execution praying that petitioners appeal not be
given due course, and that a writ of execution enforcing the decision of the
Labor Arbiter be issued.14

Bachelor of Laws
On 15 November 1983, the NLRC dismissed the appeal for lack of merit.15 The
decision, in part, reads:
It appears on record that this case had been set for hearing several times but
for many occasions, the same had been postponed upon the instance of the
respondent. On May 2, 1983, the counsel for the respondent sent a note to the
Executive Labor Arbiter requesting the cancellation of the May 2 hearing on the
ground that he is no longer the legal counsel of the respondent and that all
subsequent notices regarding the instant case should be addressed directly to
the respondent. In compliance with the said request, the Executive Labor
Arbiter sent a notice of hearing to the respondent advising the latter that the
case is set for another hearing on May 30, 1983 at 9:00 a.m. with a warning that
no postponement shall be allowed. But despite proper receipt of the notice,
respondent deliberately failed to appear. Neither did it submit any position
paper or documentary evidence to controvert the claim of the complainant.
From the foregoing set of facts, it is clear that the respondent was given all the
opportunity to be heard but deliberately chose to ignore the summons and
warning of the Executive Labor Arbiter. Respondent is now deemed to have
waived all its rights to present evidence and must now suffer the consequences
of its own acts. Its claim of lack of due process certainly fails.16
On 3 January 1984, counsel for petitioner received a copy of the NLRC
decision.17 There being no appeal therefrom, the decision became final and
executory on 18 January 1984.18
On 7 June 1984, the records of the case were returned to Executive Labor
Arbiter Abdulwahid.19
On 2 July 1984, a Writ of Execution20 was issued by Executive Labor Arbiter
Abdulwahid.21 Per Sheriffs Return,22 dated 15 October 1984, the writ of
execution was returned unsatisfied.23 The Sheriffs Return reads:
On October 9, 1984 the undersigned sheriff went to the Office of Zamboanga
Barter Traders, Kilusang Bayan, Incorporation at Pitit-Barack in this city to serve
the Writ of Execution issued in NLRC Case No. RAB IX-0133-81; entitled
Teopisto Mendoza versus Zamboanga Barter Traders, Kilusang Bayan,
Incorporation. When in the said office I handed the said writ but the personnel
refused to receive it. The undersigned proceeded to the Office of Atty. Alam,
president of said incorporation accompanied by one of the employee assigned
at Pitit-Barack Office, while in the office of the president the undersigned again
handed the writ to the secretary of the president and asked her favor to receive
the writ. She refused instead, said secretary presented the herein attached Writ
of Execution to the president, Atty. Alam. The attention of the undersigned was
called to enter the room of the president, without asking any question thrown
back to the undersigned the said writ. The undersigned told the president that
we are performing our duties and we can not deviate from doing it. Then, the
president repeatedly uttered the statement please informed Atty. Hakim S.

Bachelor of Laws
Abdulwahid to advise his sheriff when go there to the Zamboanga Barter
Traders Store and attach the goods there to cloth with an iron shirt. The
president also informed the undersigned that the incorporation has no money
or saving, even to pay the salary of their employees are not enough. The
undersigned has already done his best in order the respondent pay the award
to satisfy the judgment in the herein mentioned case but he was threatened.
NOW THEREFORE, in view of the foregoing, the Writ of Execution is hereby
returned unsatisfied.24(Emphasis supplied.)
On 25 October 1984, Mendoza filed an Ex Parte Motion for Issuance of an Alias
Writ of Execution dated 23 October 1984.25 An Alias Writ of Execution
addressed to the Commanding Officer (or his duly authorized representative) of
the Philippine Constabulary, Recom IX, Zamboanga City, was issued by
Executive Labor Arbiter Abdulwahid on 19 November 1984.26 Said writ remained
unsatisfied.
On 17 June 1988, the Office of the President issued Memorandum Circular No.
1 which totally phased out the Zamboanga City barter trade area effective 1
October 1988.27
On 18 December 1989, Mendoza filed a Motion for Issuance of (Second) Alias
Writ of Execution,28which public respondent Executive Labor Arbiter Julius
Rhett J. Plagata issued on 2 January 1990.29The Second Alias Writ of Execution
reads in part:
NOW, THEREFORE, you are hereby ordered to go to the premises of the
respondent Zamboanga Barter Traders Kilusang Bayan, Inc. located at Canelar,
Zamboanga City to reinstate complainant Teopisto Mendoza in his former
position and to collect from said respondent through its president or any
authorized representative the amount of P90,930.00 representing
complainants backwages plus additional backwages to be computed at the rate
of P866.00 per month from January 2, 1990 up to the time complainant is
reinstated in his former position and thereafter to turn over said amount to
this Regional Arbitration Branch for further disposition. Should you fail to
collect said amount in cash, you are hereby directed to cause the satisfaction of
the same on movable or immovable properties of the respondent not other (sic)
exempt from execution. You are further directed to return this writ of
execution within sixty (60) days from receipt hereof, together with your report
thereon. You may collect your legal fee from the respondent in accordance with
the Revised Rules of the NLRC.30
On 1 March 1990, in compliance with the Second Alias Writ of Execution, Sheriff
Anthony B. Gaviola levied31 whatever interest, share, right, claim and/or
participation of ZBTKBI had over a parcel of land, together with all the
buildings and improvements existing thereon, covered by Transfer Certificate
of Title (TCT) No. 66,696 (formerly TCT No. 61,628).32

Bachelor of Laws
On 13 June 1990, the afore-described property was sold at public auction
for P96,443.53, with Mendoza as the sole highest bidder.33 The property was not
redeemed. As a consequence, Sheriff Gaviola issued on 25 June 1991 a Sheriffs
Final Certificate of Sale34 in favor of Mendoza over whatever interest, share,
right, claim and/or participation ZBTKBI had over the parcel of land.
Having failed to take possession of the land in question, Mendoza filed a
Petition (for Issuance of Writ of Possession) on 14 February 2000,35 praying that
the same be issued ordering that actual possession over the real property,
together with all the buildings and improvements thereon, covered by TCT No.
66,696, be given/delivered to him; and that ZBTKBI be ordered to reimburse
and/or refund to him all rents, earnings and income from said properties from
13 June 1991 until he would be placed in actual possession thereof.36
In an Order dated 5 May 2000, Executive Labor Arbiter Plagata granted the
petition.37 The decretal portion of the order reads:
WHEREFORE, premises considered, complainants petition dated 07 February
2000 for issuance of a writ of possession is hereby granted.
Accordingly, let a writ of possession be so issued to place the complainant in
possession (of) the rights, interests, shares, claims, and participations of
Zamboanga Barter Traders Kilusan Bayan, Inc. in that parcel of land covered by
Transfer Certificate of Title No. T-66,696 of the Registry of Deeds for
Zamboanga City, which were sold on execution to the complainant on 13 June
1990, and in whose favor a final certificate of sale for such rights, interests,
shares, claims, and/or participation was executed and issued on 25 June 1991.38
Pursuant to said Order, a Writ of Possession was issued by Executive Labor
Arbiter Plagata on 23 May 2000.39
A Notice dated 1 June 2000 informing ZBTKBI of the writ of possession was
personally served by NLRC-RAB Branch No. IX Sheriff Danilo P. Tejada, but the
same was not accepted.40
ZBTKBI filed on 5 June 2000 a Motion for Reconsideration of the order granting
the writ of possession.41 The motion was denied in an order dated 7 June
2000.42
Sheriff Tejada submitted a Sheriffs Service Report dated 22 June 2000
informing Executive Labor Arbiter Plagata that the writ of possession was
returned duly served and fully satisfied.43 On the same date, Mendoza, thru a
letter, acknowledged that the writ of possession had been satisfied and
implemented.44
On 5 July 2000, ZBTKBI filed a Petition for Certiorari and Prohibition, with
Prayer for Injunction and/or Restraining Order before the Court of Appeals. 45 It
raised the following issues:

Bachelor of Laws
1. PUBLIC RESPONDENT AND SHERIFF TEJADA GRAVELY ABUSED THEIR
DISCRETION WHEN THEY CAUSED THE LEVY ON THE PARCEL OF LAND
BELONGING TO THE REPUBLIC, WITHOUT PRIOR NOTICE AND AFTER
THE LAPSE OF FIVE YEARS FROM THE FINALITY OF JUDGMENT.
2. PETITIONER RESPECTFULLY SUBMITS THAT THE PROCEEDINGS THAT
FOLLOWED THE LEVY, SUCH AS THE SALE, AUCTION AND THE ISSUANCE
OF WRIT OF POSSESSION, ARE VOID AB INITIO.
3. PETITIONER RESPECTFULLY SUBMITS THAT THERE EXISTS NO LEGAL
GROUND TO ALLOW RESPONDENT MENDOZA TO CONTINUOUSLY
POSSESS THE PROPERTY BELONGING TO THE REPUBLIC.
4. THE SALE OF THE PROPERTY TO MENDOZA BY THE NLRC-RAB 9
SHERIFF FOR P90, 930, BEING SO SCANDALOUSLY LOW AND SHOCKING
TO THE CONSCIENCE, AMOUNTED TO GRAVE ABUSE OF DISCRETION.46
On 14 August 2000, the Office of the Solicitor General manifested that it be
excused form filing a Comment on the petition.47
On 20 November 2000, the Court of Appeals promulgated a decision 48 denying
the petition of ZBTKBI. In doing so, it ruled that based on the documents, the
owner of the subject property was ZBTKBI and not the Republic. Since the
Republic was not the owner of the property involved, there was no need to give
it notice of the levy and subsequent sale. It said that the Office of the Solicitor
General had declared that the Government had no interest in the instant case. It
added that the sale of the property and the confirmation of Mendozas
ownership could not be annulled simply because the winning bid of P90,960.00
was scandalously low and shocking. It explained that it was for the benefit of
the judgment debtor that the winning bid was low, for this gives him the
opportunity to easily redeem the property.
ZBTKBI filed a Motion for Reconsideration,49 which the Court of Appeals denied
per resolution dated 31 May 2001.50
Hence, this petition for review on certiorari filed on 27 June 2001.
On 15 August 2001, this Court denied the petition for failure to show that a
reversible error had been committed by the Court of Appeals.51 Petitioner filed a
motion for reconsideration52 on 8 September 2001, which Mendoza opposed.53
On 12 November 2001, the Canelar Trading Center Stallholders,54 represented
by Atty. Amoran Batara, filed a Motion to Admit Intervention with Motion for
Reconsideration of the Courts resolution dated 15 August 2001.55 They asked
the Court to declare the levy and public sale of the land covered by TCT No. T-
66,696 as void ab initio and to allow them to pay the P96,000 plus legal interest
from 30 June 1990 to Mendoza56 to answer for the awards given him by the
NLRC, and to order the Register of Deeds of Zamboanga City to cancel TCT No.
T-66,696 and re-title the same in their names.

Bachelor of Laws
On 7 December 2001, Mendoza filed his Comment on petitioners motion for
reconsideration.57
On 14 January 2002, the Court granted petitioners motion for reconsideration.
The resolution of 15 August 2001 was set aside and the petition
reinstated.58 Mendoza was required to comment on the petition.
On 6 February 2002, the Committee on Good Government of the House of
Representatives conducted a hearing regarding Hon. Benasing Macarambon,
Jr.s privilege speech concerning the alleged dubious awards of real properties
jointly owned by ZBTKBI and the Republic to Mendoza.59From said hearing, it
appeared that Executive Labor Arbiter Rhett Julius J. Plagata admitted violating
the Rules of Court and the Labor Code when he ordered the execution of his
judgment by mere motion after five years from its finality.60
On 19 March 2002, the Court received Mendozas Comment on the petition.61
On 14 March 2002, intervenors Canelar Trading Center Stallholders filed an Ex
Parte Motion to Admit Additional Evidence consisting of the testimony of
Executive Labor Arbiter Rhett Julius J. Plagata in the Congressional Hearing
held on 6 February 2002.62 ZBTKBI adopted said motion filed by the
intervenors.63
On 12 July 2002, the Office of the Solicitor General, by way of Manifestation,
declared that even assuming arguendo that the conditions for the reversion of
the parcel of land donated by ZBTKBI to the Republic may have accrued at the
time of the levy, the Republic had neither lost its title and right to the buildings
and improvements it constructed on the subject land worth P5M, nor waived its
right to exercise ownership over them.64
In a Manifestation dated 25 March 2003, intervenors informed the Court that a
case in the RTC of Zamboanga City, docketed as Civil Case No. 5232, had been
filed for the cancellation of TCT No. T-158,724 issued on 21 September 2001,
regarding the subject lot, in the name of private respondent Teopisto
Mendoza.65
The OSG was required to file its comment on the instant petition considering
that government property was involved in this case.66 It filed its Comment on 2
November 2006.
The instant petition raises the following issues:
1. THE HONORABLE COURT OF APPELAS ERRED IN NOT PASSING UPON
THE ISSUE OF THE NULLITY OF THE LEVY, IT HAVING BEEN MADE
WITHOUT PRIOR NOTICE TO THE REPUBLIC.
2. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING
THAT ALL THE PROCEEDINGS SUBSEQUENT TO THE INVALID LEVY, SUCH

Bachelor of Laws
AS THE AUCTION, THE CERTIFICATE OF SALE AND THE ISSUANCE OF
THE WRIT OF POSSESSION, ARE VOID AB INITIO.
3. THE HONORABLE COURT OF APPELAS ERRED IN NOT DECLARING THE
EXECUTION SALE OF THE SUBJECT LOT AS VOID AB INITIO CONSIDERING
THAT THE SHERIFF COMMITTED GRAVE ABUSE OF DISCRETION IN
CAUSING AN OVER-LEVY ON A P100 MILLION PROPERTY FOR A
JUDGMENT FOR SUM OF MONEY IN THE AMOUNT OF P96,433.53.
4. THE HONORABLE COURT OF APPEALS ERRED IN NOT PASSING UPON
THE ISSUE THAT THE JUDGMENT A QUO MAY NO LONGER BE EXECUTED
BY MERE MOTION UNDER SECTION 6, RULE 39 OF THE RULES OF COURT
(NOW 1997 RULES OF CIVIL PROCEDURE).
5. THE HONORABLE COURT OF APPEALS ERRED IN CONCLUDING THAT
THE DONATED PROPERTY HAS ALREADY REVERTED TO THE PETITIONER
KILUSAN.67
In resolving this case, we first rule on the issue of ownership over the 13,643
square meters of land located at Barrio Canelar, City of Zamboanga.
Petitioner argues that the Court of Appeals erred in ruling that the donated
property was no longer owned by the Republic of the Philippines because
ownership thereof had already reverted to it (petitioner).
From the records, the subject property was donated by petitioner (donor) to the
Republic (donee) with the following conditions already adverted heretofore but
are being reiterated for emphasis:
1. That upon the effectivity or acceptance hereof the DONEE shall, thru
the authorized agency/ministry, construct a P5 Million Barter Trade
market building at the afore-described parcel of land;
2. That the aforesaid Barter Trade Market building shall accommodate at
least 1,000 stalls, the allocation of which shall be determined by the
Executive Committee for Barter Trade in coordination with the Officers
and Board of Directors the Zamboanga Barter Traders Kilusang Bayan,
Inc., provided, however, that each member of the DONOR shall be given
priority;
3. That the said Barter Trade Market building to be constructed as above-
stated, shall be to the strict exclusion of any other building for barter
trading in Zamboanga City, Philippines;
4. That in the event barter trading shall be phased out, prohibited, or
suspended for more than one (1) year in Zamboanga City, Philippines, the
afore-described parcel of land shall revert back to the DONOR without
need of any further formality or documentation, and the DONOR shall
have the first option to purchase the building and improvements thereon.

Bachelor of Laws
5. That the DONEE hereby accepts this donation made in its favor by the
DONOR, together with the conditions therein provided. (Underscoring
supplied)
It is clear from condition number 4 that the property donated to the Republic,
in the event that barter trading was phased out, prohibited or suspended for
more than one year in Zamboanga City, shall revert to the donor without need
of any further formality or documentation. Effective 1 October 1988, per
Memorandum Circular No. 1 of the Office of the President dated 17 June 1988,
barter trade in Zamboanga City was totally phased out. Following the condition
contained in the Deed of Donation, the donated land shall revert to the
petitioner without further formality or documentation. It follows that upon the
phase-out of barter trade, petitioner again became the owner of the subject
land. As found by the Court of Appeals, Atty. Hasan G. Alam subscribed to the
legal reality that ZBTKBI was the owner of the subject land when he wrote Lt.
Gen. Ruperto A. Ambil, Jr. of the Southern Command on 6 February 1996,
requesting the return of the original TCT covering the property.68 Thus, when
the property was levied and sold on 1 March 1990 and 13 June 1990,
respectively, it was already petitioner that owned the same. It should be clear
that reversion applied only to the land and not to the building and
improvements made by the Republic on the land worth P5,000,000.00.
Petitioner further claims that the Court of Appeals erred in ruling that there
was automatic reversion of the land, because it put the Republic in a
disadvantageous situation when it had a P5 million building on a land owned by
another.
This claim is untenable. The Court of Appeals merely enforced or applied the
conditions contained in the deed of donation. The Republic accepted the
donation subject to conditions imposed by the donor. In condition number 4,
the Republic is given the right to sell the building it constructed on the land
and the improvements thereon. If ever such condition is disadvantageous to the
Republic, there is nothing that can be done about it, since it is one of the
conditions that are contained in the donation which it accepted. There being
nothing ambiguous in the contents of the document, there is no room for
interpretation but only simple application thereof.
We likewise find to be without basis petitioners claim that the Republic should
be reimbursed of the cost of the construction of the barter trade building
pursuant to condition number 4. There is nothing there that shows that the
Republic will be reimbursed. What is stated there is that petitioner has the first
option to purchase the buildings and improvements thereon. In other words,
the Republic can sell the buildings and improvements that it made or built.
Petitioners statement that neither party to the donation has expressly
rescinded the contract is flawed. As above ruled, the deed of donation contains
a stipulation that allows automatic reversion. Such stipulation, not being

Bachelor of Laws
contrary to law, morals, good customs, public order or public policy, is valid
and binding on the parties to the donation. As held in Dolar v. Barangay Lublub
(Now P.D. Monfort North) Municipality of Dumangas,69 citing Roman Catholic
Archbishop of Manila v. Court of Appeals70 :
The rationale for the foregoing is that in contracts providing for automatic
revocation, judicial intervention is necessary not for purposes of obtaining a
judicial declaration rescinding a contract already deemed rescinded by virtue of
an agreement providing for rescission even without judicial intervention, but in
order to determine whether or not the rescission was proper.
When a deed of donation, . . . expressly provides for automatic revocation and
reversion of the property donated, the rules on contract and the general rules
on prescription should apply, and not Article 764 of the Civil Code. Since
Article 1306 of said Code authorizes the parties to a contract to establish such
stipulations, . . . not contrary to law, . . . public order or public policy, we are of
the opinion that, at the very least, that stipulation of the parties providing for
automatic revocation of the deed of donation, without prior judicial action for
that purpose, is valid subject to the determination of the propriety of the
rescission sought. Where such propriety is sustained, the decision of the court
will be merely declaratory of the revocation, but it is not in itself the revocatory
act.
The automatic reversion of the subject land to the donor upon phase out of
barter trading in Zamboanga City cannot be doubted. Said automatic reversion
cannot be averted, merely because petitioner-donor has not yet exercised its
option to purchase the buildings and improvements made and introduced on
the land by the Republic; or because the Republic has not yet sold the same to
other interested buyers. Otherwise, there would be gross violation of the clear
import of the conditions set forth in the deed of donation.
Petitioner maintains that the Court of Appeals erred in not passing upon the
issue that the judgment a quo may no longer be executed by mere motion
under Section 6, Rule 39 of the Revised Rules of Court.
Looking over the decision of the Court of Appeals, it appears that said issue
was, indeed, skirted by the appellate court. Be that as it may, we shall rule on
the same.
Petitioner contends that the decision of the NLRC dated 15 November 1983,
which became final and executory on 18 January 1984, can no longer be
executed by mere motion beyond five years after its finality during the first
week of December 1983, but by independent action. It adds that the levy, which
was made on the strength of a (second alias) writ of execution that was issued
upon a mere motion by Mendoza filed after five years from the finality of the
NLRC decision, was invalid. This being so, all proceedings subsequent to the
levy, petitioner claims, are likewise void. To further support its contention, it
submitted to the Court the transcript of stenographic notes of the

Bachelor of Laws
Congressional Hearing of the Committee on Good Government of the House of
Representatives wherein Executive Labor Arbiter Rhett Julius J. Plagata allegedly
admitted that he violated the Rules of Court and the Labor Code when he
ordered the execution of his judgment by mere motion after five years from its
finality.
Was public respondent Labor Arbiter justified in issuing the second alias writ of
execution when the motion asking for the same was filed on 18 December 1989
beyond five years after the decision of the NLRC became final and executory on
18 January 1984?
We believe so.
We find that private respondent Mendoza need not file an independent action
to enforce the NLRC decision. The motion he filed on 18 December 1989 to
execute the judgment is sufficient in light of his two prior motions71 filed within
the five-year period and the non-satisfaction of the judgment for causes beyond
his control.
Section 6 of Rule 3972 of the Rules of Court provides:
Sec. 6. Execution by motion or by independent action. A judgment may be
executed on motion within five (5) years from the date of its entry or from the
date it becomes final and executory. After the lapse of such time, and before it
is barred by the statute of limitations, a judgment may be enforced by action.
The purpose of the law (or rule) in prescribing time limitations for enforcing
judgments or actions is to prevent obligors from sleeping on their rights.73
It is clear from the above rule that a judgment may be executed on motion
within five years from the date of its entry or from the date it becomes final
and executory. After the lapse of such time, and before it is barred by the
statute of limitations, a judgment may be enforced by action.74 If the prevailing
party fails to have the decision enforced by a mere motion after the lapse of
five years from the date of its entry (or from the date it becomes final and
executory), the said judgment is reduced to a mere right of action in favor of
the person whom it favors and must be enforced, as are all ordinary actions, by
the institution of a complaint in a regular form.75 However, there are instances
in which this Court allowed execution by motion even after the lapse of five
years upon meritorious grounds.76In Lancita v. Magbanua,77 the Court declared:
In computing the time limited for suing out an execution, although there is
authority to the contrary, the general rule is that there should not be included
the time when execution is stayed, either by agreement of the parties for a
definite time, by injunction, by the taking of an appeal or writ of error so as to
operate as a supersedeas, by the death of a party, or otherwise. Any
interruption or delay occasioned by the debtor will extend the time within which
the writ may be issued without scire facias.

Bachelor of Laws
In Republic v. Court of Appeals,78 we ruled:
To be sure, there had been many instances where this Court allowed execution
by motion even after the lapse of five years, upon meritorious grounds. These
exceptions have one common denominator, and that is: the delay is caused or
occasioned by actions of the judgment debtor and/or is incurred for his benefit
or advantage.
In Gonzales v. Court of Appeals,79 we emphasized that if the delays were
through no fault of the prevailing party, the same should not be included in
computing the 5-year period to execute a judgment by motion.
In the case under consideration, the decision of the NLRC was promulgated on
15 November 1983, and it became final and executory on 18 January
1984 (not December 1983 as ruled by the Court of Appeals). On 2 July 1984, a
writ of execution was issued by Executive Labor Arbiter Abdulwahid. Said writ
was returned unsatisfied. From the return of the sheriff, there is no doubt that
he was threatened by Atty. Hasan G. Alam, President of ZBTKBI, who told him
to "clad himself with iron dress" if he would enforce the writ Thereafter a
motion for issuance of an alias writ of execution dated 23 October 1984 was
filed by Mendoza, because the lifespan of the first writ of execution expired
without being satisfied. Consequently, an Alias Writ of Execution was issued on
19 November 1984. The writ remained unsatisfied. At this point, two writs of
execution were already issued but were not satisfied. On 18 December 1989,
Mendoza filed a Motion for Issuance of (Second) Alias Writ of
Execution, which public respondent Executive Labor Arbiter Rhett Julius J.
Plagata issued on 2 January 1990.
It cannot be disputed that Mendoza had not slept on his rights. In fact, he filed
three motions so that the judgment in his favor could be executed and
satisfied. The judgment was satisfied by virtue of the second alias writ of
execution, which was issued upon a motion filed beyond the five-year period.
The satisfaction of the judgment was not successful during the first two writs
of execution. The delay in the enforcement of the two writs was clearly caused
by petitioner through its President, Atty. Alam. Said delay was indeed beneficial
and advantageous to petitioner, because the judgment against it, at that time,
was yet to be implemented. It is very clear that if not for the threats received by
the sheriff tasked to implement the writs of execution, the satisfaction of
judgment would not have been delayed.
Under the circumstances obtaining, we hold that the five-year period allowed
for enforcement of a judgment by motion was deemed to have been interrupted
by petitioner. The prevention of the satisfaction of the judgment on the first
two writs of execution cannot be blamed on Mendoza. The satisfaction of the
judgment was already beyond his control. He did what he was supposed to do
file the requisite motions so that writs of execution would be issued. In view of
the foregoing and for reasons of equity, we deem that the Motion for Issuance

Bachelor of Laws
of Alias Writ of Execution filed by Mendoza on 18 December 1989 has been
filed within the five-year period.
Petitioner argues that the levy made by Sheriff Anthony B. Gaviola on 1 March
1990 over the land subject of this case was void, there being no notice to its
owner the Republic. As a result, the Republic was deprived of its property
without due process. It further argues that since the levy was invalid, all
proceedings subsequent thereto -- such as the auction, the Final Certificate of
Sale, and the issuance of the Writ of Possession -- are void ab initio.
We are not persuaded. The arguments advanced by petitioner, which are all
premised on the assumption that the Republic was still the owner of the land
when the levy was made, have no leg to stand on. As ruled above, the land
reverted to petitioner without need of any further formality or documentation
when barter trading was phased out in Zamboanga City. Not being the owner of
the land when the levy was made, the Republic need not have been notified
anymore. It cannot be deprived of a piece of land of which it is no longer the
owner. If the Republic is still in possession of the TCT over the subject land, it
must surrender the same to the proper authorities. The fact that the Republic is
no longer the owner of the subject land does not mean that it no longer owns
the buildings, structures and improvements it made and introduced on the
subject land. Control and possession over said buildings, structures and
improvements shall be returned to the Republic. The Republic, pursuant to
condition No. 4 of the Deed of Donation, can sell the buildings, structures and
improvements to interested buyers, with petitioner being the first in line.
Petitioner claims that the execution/auction sale of the subject land was
void ab initio, considering that the sheriff made an over-levy when he levied the
subject property allegedly worth P100 million pesos for a judgment claim
worth P96, 433.53. It added that the price for which the subject land was sold
at the auction sale was so scandalously low and shocking to the conscience.
Moreover, it said that it should not be faulted for not redeeming the property
within the allowable period.
The relevant section as to what a sheriff should levy upon in the enforcement
of an execution of a money judgment is Section 15,80 Rule 39 of the Rules of
Court which provides:
Sec. 15. Execution of money judgments. The officer must enforce an execution
of a money judgment by levying on all the property, real and personal of every
name and nature whatsoever, and which may be disposed of for value, of the
judgment debtor not exempt from execution, or on a sufficient amount of such
property, if there be sufficient, and selling the same, and paying to the
judgment creditor, or his attorney, so much of the proceeds as will satisfy the
judgment. Any excess in the proceeds over the judgment and accruing costs
must be delivered to the judgment debtor, unless otherwise directed by the
judgment or order of the court. When there is more property of the judgment

Bachelor of Laws
debtor than is sufficient to satisfy the judgment and accruing costs, within the
view of the officer, he must levy only on such part of the property as is amply
sufficient to satisfy the judgment and costs.
Real property, stocks, shares, debts, credits, and other personal property, or
any interest in either real or personal property may be levied on in like manner
and with like effect as under a writ of attachment.
From said section, it is clear that a sheriff must levy upon and sell only such
property, personal or real, as is amply sufficient to satisfy the judgment and
costs. Petitioner faults the sheriff for levying on the subject property, the value
of which is so much more than the money judgment.
Can the sheriff be faulted for levying on the subject land?
The answer is no. It must be remembered that the sheriff tried to satisfy the
money judgment when he went to Atty. Alam, President of ZBTKBI. Instead of
cooperating and satisfying the judgment, Atty. Alam did not comply with the
money judgment. Instead, he threatened the sheriff, saying that if the latter
insisted on enforcing the writ of execution, he should wear an iron dress. The
actuation of Atty. Alam was clear defiance of the executory judgment.
Petitioner had no intention of satisfying the judgment. Two writs of execution
were issued, but they were not satisfied. If petitioner were truly willing to
cooperate in the satisfaction of the judgment, the levy of the subject property
could have been prevented if only petitioner handed over to, or informed, the
sheriff any of its properties sufficient to satisfy the judgment. It did not.
Knowing the risk and difficulty of levying on any of the properties of petitioner,
the sheriff thus levied upon any property that he could get hold of the subject
property.
Petitioner insists that the auction sale of the subject property should be voided,
because the winning bid was so scandalously low and shocking to the
conscience.
We do not agree. It is settled that when there is a right to redeem, inadequacy
of price is of no moment, for the reason that the judgment debtor always has
the chance to redeem and reacquire the property. In fact, the property may be
sold for less than its fair market value, precisely because the lesser the price,
the easier for the owner to effect a redemption.81 In Hulst v. PR Builders,
Inc., 82 the Court ruled:
[G]ross inadequacy of price does not nullify an execution sale. In an ordinary
sale, for reason of equity, a transaction may be invalidated on the ground of
inadequacy of price, or when such inadequacy shocks ones conscience as to
justify the courts to interfere; such does not follow when the law gives the
owner the right to redeem as when a sale is made at public auction, upon the
theory that the lesser the price, the easier it is for the owner to effect
redemption. When there is a right to redeem, inadequacy of price should not be

Bachelor of Laws
material because the judgment debtor may re-acquire the property or else sell
his right to redeem and thus recover any loss he claims to have suffered by
reason of the price obtained at the execution sale. Thus, respondent stood to
gain rather than be harmed by the low sale value of the auctioned properties
because it possesses the right of redemption. x x x.
In the instant case, as stated in the Sheriffs Final Certificate of Sale, petitioner
had the right to redeem, but it failed to exercise such right. In ruling on this
matter, the Court of Appeals explained:
It works naturally for the benefit of the judgment debtor that the winning bid
was low, for this gives him the opportunity to easily redeem his property
through means easily within his grasp, provided he exercises a minimum of
effort. When he foregoes such opportunity to redeem, he runs the risk of totally
losing his property to the judgment creditor. He cannot later be heard in
objection to the sale, claiming that the winning bid was too low. x x x
Furthermore, it appears that petitioner was never deprived of its opportunity to
recover the property it claims to have been unlawfully sold. It cannot claim that
it is the Republic that is the real owner and was deprived of due process, it
appearing that such is not the case, as previously explained.83
To show that it should not be faulted for its failure to exercise its right to
redeem, petitioner explains as follows:
5.1. True, petitioner may have failed to redeem the property sold on execution
within the allowable period, on the assumption that the prior levy and the
auction sale were valid. The failure of the petitioner to do so, however, is not
deliberate and made without any compelling reason. It appears that from the
2nd quarter of 1989 up to December 1995, the administration and operation of
the petitioner-cooperative were entrusted by its President, Atty. Hasan G. Alam,
to Treasurer, Mr. Hadji Muhaimin Alshibli, for reasons apparently personal to
the president. It likewise appears that during the period when Mr. Alshibli was
the caretaker of the petitioner-cooperative, he never convened or called the
board to any meeting.
5.2. For reasons personal to him, he opted to administer and operate the
cooperative in his own way. Admittedly, no member of the cooperative ever
questioned the manner with which Mr. Alshibli was running the petitioner-
cooperative. This being the case, neither the president nor any member of the
board was aware that the land used by the cooperative had been accordingly
sold on execution and that the period to redeem it had already lapsed. Viewed
in the light of this factual consideration, it would be highly prejudicial to the
majority of the cooperative members if they are deemed to have permanently
lost their own property just because of the failure of Mr. Alshibli to redeem the
property for reasons purely personal to him.84
The foregoing explanation will not help petitioner escape the predicament it is
in. It cannot pass the blame to others for having failed to exercise its right of

Bachelor of Laws
redemption. Petitioner has no one to blame but its officers who failed to look
after its interests and members. It could have redeemed the property but it
failed to do so. It is now too late in the day for petitioner, considering that the
ownership of the subject property was validly and legally transferred to
Teopisto Mendoza when he bought said land at the auction sale without
petitioner redeeming the same at the proper time.
WHEREFORE, all the foregoing considered, the instant petition is DENIED. The
decision of the Court of Appeals dated 20 November 2000 in CA-G.R. SP No.
59520 is AFFIRMED.
SO ORDERED.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 126444 December 4, 1998

ALFONSO QUIJADA, CRESENTE QUIJADA, REYNELDA QUIJADA, DEMETRIO
QUIJADA, ELIUTERIA QUIJADA, EULALIO QUIJADA, and WARLITO
QUIJADA, petitioners,
vs.
COURT OF APPEALS, REGALADO MONDEJAR, RODULFO GOLORAN,
ALBERTO ASIS, SEGUNDINO RAS, ERNESTO GOLORAN, CELSO ABISO,
FERNANDO BAUTISTA, ANTONIO MACASERO, and NESTOR
MAGUINSAY, respondents.
MARTINEZ, J.:
Petitioners, as heirs of the late Trinidad Quijada, filed a complaint against
private respondents for quieting of title, recovery of possession and ownership
of parcels of land with claim for attorney's fees and damages. The suit was
premised on the following facts found by the court of Appeals which is
materially the same as that found by the trial court:
Plaintiffs-appellees (petitioners) are the children of the late
Trinidad Corvera Vda, de Quijada. Trinidad was one of the heirs of
the late Pedro Corvera and inherited from the latter the two-hectare
parcel of land subject of the case, situated in the barrio of San
Agustin, Talacogon, Agusan del Sur. On April 5, 1956, Trinidad
Quijada together with her sisters Leonila Corvera Vda. de Sequea
and Paz Corvera Cabiltes and brother Epapiadito Corvera executed

Bachelor of Laws
a conditional deed of donation (Exh. C) of the two-hectare parcel of
land subject of the case in favor of the Municipality of Talacogon,
the condition being that the parcel of land shall be used solely and
exclusively as part of the campus of the proposed provincial high
school in Talacogon. Apparently, Trinidad remained in possession
of the parcel of land despite the donation. On July 29, 1962,
Trinidad sold one (1) hectare of the subject parcel of land to
defendant-appellant Regalado Mondejar (Exh. 1). Subsequently,
Trinidad verbally sold the remaining one (1) hectare to defendant-
appellant (respondent) Regalado Mondejar without the benefit of a
written deed of sale and evidenced solely by receipts of payment.
In 1980, the heirs of Trinidad, who at that time was already dead,
filed a complaint for forcible entry (Exh. E) against defendant-
appellant (respondent) Regalado Mondejar, which complaint was,
however, dismissed for failure to prosecute (Exh. F). In 1987, the
proposed provincial high school having failed to materialize, the
Sangguniang Bayan of the municipality of Talacogon enacted a
resolution reverting the two (2) hectares of land donated back to
the donors (Exh. D). In the meantime, defendant-appellant
(respondent) Regalado Mondejar sold portions of the land to
defendants-appellants (respondents) Fernando Bautista (Exh. 5),
Rodolfo Goloran (Exh. 6), Efren Guden (Exh. 7) and Ernesto Goloran
(Exh. 8).
On July 5, 1988, plaintiffs-appellees (petitioners) filed this action
against defendants-appellants (respondents). In the complaint,
plaintiffs-appellees (petitioners) alleged that their deceased mother
never sold, conveyed, transferred or disposed of the property in
question to any person or entity much less to Regalado Mondejar
save the donation made to the Municipality of Talacogon in 1956;
that at the time of the alleged sale to Regalado Mondejar by
Trinidad Quijada, the land still belongs to the Municipality of
Talacogon, hence, the supposed sale is null and void.
Defendants-appellants (respondents), on the other hand, in their
answer claimed that the land in dispute was sold to Regalado
Mondejar, the one (1) hectare on July 29, 1962, and the remaining
one (1) hectare on installment basis until fully paid. As affirmative
and/or special defense, defendants-appellants (respondents)
alleged that plaintiffs action is barred by laches or has prescribed.
The court a quo rendered judgment in favor of plaintiffs-appellees
(petitioners): firstly because "Trinidad Quijada had no legal title or
right to sell the land to defendant Mondejar in 1962, 1966, 1967
and 1968, the same not being hers to dispose of because ownership
belongs to the Municipality of Talacogon (Decision, p. 4; Rollo, p.

Bachelor of Laws
39) and, secondly, that the deed of sale executed by Trinidad
Quijada in favor of Mondejar did not carry with it the conformity
and acquiescence of her children, more so that she was already 63
years old at the time, and a widow (Decision, p. 6; Rollo, p. 41)."1
The dispositive portion of the trial court's decision reads:
WHEREFORE, viewed from the above perceptions, the scale of
justice having tilted in favor of the plaintiffs, judgment is, as it is
hereby rendered:
1) ordering the Defendants to return and vacate the two (2) hectares of land to
Plaintiffs as described in Tax Declaration No. 1209 in the name of Trinidad
Quijada;
2) ordering any person acting in Defendants' behalf to vacate and restore the
peaceful possession of the land in question to Plaintiffs;
3) ordering the cancellation of the Deed of Sale executed by the late Trinidad
Quijada in favor of Defendant Regalado Mondejar as well as the Deeds of
Sale/Relinquishments executed by Mondejar in favor of the other Defendants;
4) ordering Defendants to remove their improvements constructed on the
questioned lot;
5) ordering the Defendants to pay Plaintiffs, jointly and severally, the amount
of P10,000.00 representing attorney's fees;
6) ordering Defendants to pays the amount of P8,000.00 as expenses of
litigation; and
7) ordering Defendants to pay the sum of P30,000.00 representing moral
damages.
SO ORDERED.2
On appeal, the Court of Appeals reversed and set aside the judgment a
quo3 ruling that the sale made by Trinidad Quijada to respondent Mondejar was
valid as the former retained an inchoate interest on the lots by virtue of the
automatic reversion clause in the deed of donation.4 Thereafter, petitioners
filed a motion for reconsideration. When the CA denied their
motion,5 petitioners instituted a petition for review to this Court arguing
principally that the sale of the subject property made by Trinidad Quijada to
respondent Mondejar is void, considering that at that time, ownership was
already transferred to the Municipality of Talacogon. On the contrary, private
respondents contend that the sale was valid, that they are buyers in good faith,
and that petitioners' case is barred by laches. 6
We affirm the decision of the respondent court.

Bachelor of Laws
The donation made on April 5, 1956 by Trinidad Quijada and her brother and
sisters7 was subject to the condition that the donated property shall be "used
solely and exclusively as a part of the campus of the proposed Provincial High
School in Talacogon."8 The donation further provides that should "the proposed
Provincial High School be discontinued or if the same shall be opened but for
some reason or another, the same may in the future be closed" the donated
property shall automatically revert to the donor.9 Such condition, not being
contrary to law, morals, good customs, public order or public policy was validly
imposed in the donation. 10
When the Municipality's acceptance of the donation was made known to the
donor, the former became the new owner of the donated property donation
being a mode of acquiring and transmitting ownership 11 notwithstanding the
condition imposed by the donee. The donation is perfected once the acceptance
by the donee is made known to the donor.12 According, ownership is
immediately transferred to the latter and that ownership will only revert to the
donor if the resolutory condition is not fulfilled.
In this case, that resolutory condition is the construction of the school. It has
been ruled that when a person donates land to another on the condition that
the latter would build upon the land a school, the condition imposed is not a
condition precedent or a suspensive condition but a resolutory one. 13 Thus, at
the time of the sales made in 1962 towards 1968, the alleged seller (Trinidad)
could not have sold the lots since she had earlier transferred ownership thereof
by virtue of the deed of donation. So long as the resolutory condition subsists
and is capable of fulfillment, the donation remains effective and the donee
continues to be the owner subject only to the rights of the donor or his
successors-in-interest under the deed of donation. Since no period was imposed
by the donor on when must the donee comply with the condition, the latter
remains the owner so long as he has tried to comply with the condition within a
reasonable period. Such period, however, became irrelevant herein when the
donee-Municipality manifested through a resolution that it cannot comply with
the condition of building a school and the same was made known to the donor.
Only then when the non-fulfillment of the resolutory condition was brought
to the donor's knowledge that ownership of the donated property reverted to
the donor as provided in the automatic reversion clause of the deed of
donation.
The donor may have an inchoate interest in the donated property during the
time that ownership of the land has not reverted to her. Such inchoate interest
may be the subject of contracts including a contract of sale. In this case,
however, what the donor sold was the land itself which she no longer owns. It
would have been different if the donor-seller sold her interests over the
property under the deed of donation which is subject to the possibility of
reversion of ownership arising from the non-fulfillment of the resolutory
condition.

Bachelor of Laws
As to laches, petitioners' action is not yet barred thereby. Laches presupposes
failure or neglect for an unreasonable and unexplained length of time, to do
that which, by exercising due diligence, could or should have been done
earlier; 14 "it is negligence or omission to assert a right within a reasonable time,
thus, giving rise to a presumption that the party entitled to assert it either has
abandoned or declined to assert it." 15 Its essential elements of:
a) Conduct on the part of the defendant, or of one under whom he claims,
giving rise to the situation complained of;
b) Delay in asserting complainant's right after he had knowledge of the
defendant's conduct and after he has an opportunity to sue;
c) Lack of knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his suit; and,
d) Injury or prejudice to the defendant in the event relief is accorded to the
complainant. 16
are absent in this case. Petioners' cause of action to quiet title commenced only
when the property reverted to the donor and/or his successors-in-interest in
1987. Certainly, when the suit was initiated the following year, it cannot be said
that petioners had slept on their rights for a long time. The 1960's sales made
by Trinidad Quijada cannot be the reckoning point as to when petitioners'
cause of action arose. They had no interest over the property at that time
except under the deed of donation to which private respondents were not privy.
Moreover, petitioners had previously filed an ejectment suit against private
respondents only that it did not prosper on a technicality.
Be that at it may, there is one thing which militates against the claim of
petitioners. Sale, being a consensual contract, is perfected by mere consent,
which is manifested the moment there is a meeting of the minds17 as to the
offer and acceptance thereof on three (3) elements: subject matter, price and
terms of payment of the price. 18 Ownership by the seller on the thing sold at
the time of the perfection of the contract of sale is not an element for its
perfection. What the law requires is that the seller has the right to transfer
ownership at the time the thing sold is delivered. 19 Perfection per se does not
transfer ownership which occurs upon the actual or constructive delivery of the
thing sold. 20 A perfected contract of sale cannot be challenged on the ground of
non-ownership on the part of the seller at the time of its perfection; hence, the
sale is still valid.
The consummation, however, of the perfected contract is another matter. It
occurs upon the constructive or actual delivery of the subject matter to the
buyer when the seller or her successors-in-interest subsequently acquires
ownership thereof. Such circumstance happened in this case when petitioners
who are Trinidad Quijada's heirs and successors-in-interest became the
owners of the subject property upon the reversion of the ownership of the land

Bachelor of Laws
to them. Consequently, ownership is transferred to respondent Mondejar and
those who claim their right from him. Article 1434 of the New Civil Code
supports the ruling that the seller's "title passes by operation of law to the
buyer." 21 This rule applies not only when the subject matter of the contract of
sale is goods,22 but also to other kinds of property, including real property. 23
There is also no merit in petitioners' contention that since the lots were owned
by the municipality at the time of the sale, they were outside the commerce of
men under Article 1409 (4) of the NCC;24 thus, the contract involving the same
is inexistent and void from the beginning. However, nowhere in Article 1409 (4)
is it provided that the properties of a municipality, whether it be those for
public use or its patrimonial property 25 are outside the commerce of men.
Besides, the lots in this case were conditionally owned by the municipality. To
rule that the donated properties are outside the commerce of men would
render nugatory the unchallenged reasonableness and justness of the condition
which the donor has the right to impose as owner thereof. Moreover, the
objects referred to as outsides the commerce of man are those which cannot be
appropriated, such as the open seas and the heavenly bodies.
With respect to the trial court's award of attorney's fees, litigation expenses and
moral damages, there is neither factual nor legal basis thereof. Attorney's fees
and expenses of litigation cannot, following the general rule in Article 2208 of
the New Civil Code, be recovered in this case, there being no stipulation to that
effect and the case does not fall under any of the
exceptions. It cannot be said that private respondents had compelled
26
petitioners to litigate with third persons. Neither can it be ruled that the former
acted in "gross and evident bad faith" in refusing to satisfy the latter's claims
considering that private respondents were under an honest belief that they
have a legal right over the property by virtue of the deed of sale. Moral damages
cannot likewise be justified as none of the circumstances enumerated under
Articles 2219. 27 and 2220 28 of the New Civil Code concur in this case
WHEREFORE, by virtue of the foregoing, the assailed decision of the Court of
Appeals is AFFIRMED.
SO ORDERED.
Melo, Puno and Mendoza, JJ., concur.
Footnotes
1 Decision of Court of Appeals in CA-G.R. CV No. 44016
promulgated on May 31, 1996. pp. 2-5; Rollo, pp. 41-44.
2 Regional Trial Court (Bayugan, Agusan del Sur) Decision dated
July 16, 1993 penned by Judge Zenaida Placer, p. 6; Annex "A" of
Petition; Rollo, p. 21.

Bachelor of Laws
3 The decretal portion of the CA's decision states: "WHEREFORE,
premises considered, the decision appealed from is hereby
REVERSE and SET ASIDE, and judgment rendered declaring the
defendants-appellants as the rightful and lawful owners and
possessors of the subject land. There is no pronouncement as to
costs."
4 CA Decision, pp. 6-7; Rollo, pp. 45-16.
5 CA Resolution promulgated August 26, 1996; Rollo, p. 55.
6 Comment of Private Respondents, pp. 7-8: Rollo, pp. 67-68.
7 Her sisters were Leonila Corvera Vda. de Sequea and Paz
Corvera Cabiltes and the brother was Epapiadito Corvera.
8 RTC Decision, p. 1; Rollo, p. 16.
9 CA Decision. pp. 5-6; Rollo, pp. 44-45.
10 City of Angeles v. CA, 261 SCRA 90.
11 Art. 712, New Civil Code provides: "Ownership is acquired by
occupation and by intellectual creation.
"Ownership and other real rights over property are acquired and
transmitted by law, by donation, by testate and instate succession,
and in consequence of certain contracts, by tradition.
"They may also be acquired by means of prescription." (Emphasis
supplied).
12 Art. 734, New Civil Code (NCC) reads: "The donation is perfected
from the moment the donor knows of the acceptance by the
donee."
13 Central Philippine University v. CA, 246 SCRA 511.
14 Reyes v. CA, 264 SCRA 35; Republic v. Sandiganbayan, 255 SCRA
438; PAL Employees Savings & Loan Association, Inc. v. NLRC, 260
SCRA 758.
15 Catholic Bishop of Balanga v. CA, 264 SCRA 181; Chavez v.
Bonto-Perez, 242 SCRA 73; Rivera v. CA, 244 SCRA 218; Cormero v.
CA, 317 Phil. 348.
16 Santiago v. CA, 278 SCRA 98 (1997); Catholic Bishop of Balanga
v. CA, 264 SCRA 181; Claveria v. Quinco, 207 SCRA 66 (1992); Perez
v. Ong Cho, 116 SCRA 732 (1982); Yusingco v. Ong Hing Lian, 42
SCRA 589 (1971); LE Lotho, Inc. v. Ice and cold Storage Industries,
Inc., 3 SCRA 744; Go Chi Gun, et. al. v. Co Cho, et. al., 96 Phil. 622.

Bachelor of Laws
17 Art. 1475, New Civil Code (NCC). "The contact of sale is
perfected at the moment there is a meeting of the minds upon the
thing which is the object of the contract and upon the price. . . ."
18 Leabres v. CA, 146 SCRA 158 (1986); See also Navarro v. Sugar
Producer's Corporation, 1. SCRA 1180.
19 Art. 1459, NCC "The thing must be licit and the vendor must
have a right to transfer the ownership thereof at the time it is
delivered."
20 Art. 712, NCC. ". . . . Ownership and other real rights over
property are acquired and transmitted . . . in consequence of certain
contracts, by tradition."
21 Art. 1431, NCC provides: "When a person who is not the owner
of a thing sells or alienates and delivers it, and later the seller or
grantor acquires title thereto, such title passes by operation of law
to the buyer or grantee".
22 Art. 1505 of the NCC provides: "Subject to the provisions of this
Title, where goods are sold by a person who is not the owner
thereof, and who does not sell them under authority or with the
consent of the owner, the buyer acquires no better title to the
goods than the seller had, unless the owner of the goods is by his
conduct precluded from denying the seller's authority to sell.
xxx xxx xxx (Emphasis supplied)
Other exceptions to the foregoing includes: (a) when the contrary is
provided in recording laws, (b) sales made under statutory power
of sale or pursuant to a valid order from a court of competent
jurisdiction, and (c) sales made in a merchant's store in accordance
with the Code of commerce and special laws.
23 See Articles 1434, NCC, supra.; Estoque v. Pajimula, 133 Phil. 55;
24 SCRA 59 (1968); Bucton v. Gabar, 55 SCRA 499.
24 Art. 1409 (4), NCC: "The following contracts are inexistent and
void from the beginning:
xxx xxx xxx
(4) Those whose object is outside the commerce of men;
xxx xxx xxx
25 Art. 423, NCC: "The properties of provinces, cities and
municipalities, is divided into properties for public use and
patrimonial properties."

Bachelor of Laws
Art. 424 provides: "Property for public use, in the provinces, cities
and municipalities, consist of the provincial roads, city streets,
municipal streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said
provinces, cities, or municipalities.
"All other property possessed by any of them is patrimonial and
shall be governed by this Code, without prejudice to the provisions
of special laws."
26 In the absence of stipulation, attorney's fees and expenses of
litigation, other than judicial costs, cannot be recovered except:
xxx xxx xxx
(2) when the defendant's act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses to
protect his interest.
xxx xxx xxx
(5) where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiff's plainly valid, just and demandable
claim.
xxx xxx xxx
27 Moral damages may be recovered in the following and
analogous cases:
(1) a criminal offense resulting in physical
injuries;
(2) quasi-delicts causing physical injuries;
(3) seduction, abduction, rape or other lascivious
acts;
(4) adultery or concubinage;
(5) illegal or arbitrary detention or arrests;
(6) illegal search;
(7) libel, slander or any other form or
defamation;
(8) malicious prosecution;
(9) acts mentioned in Article 309;

Bachelor of Laws
(10) acts and actions referred to in Articles 21,
26, 27, 28, 29, 30, 32, 34 and 35.
The parents of the female seduced, abducted, raped or
abused referred to in no. 3 of this Article, may also recover
moral damages.
The spouse, ascendants, descendants and brothers and sisters may
bring the action mentioned in no. 9 of this Article, in the order
named.
29 Art. 2220. Willful injury to property may be a legal ground for
awarding moral damages if the court should find that, under the
circumstances, such damages are justly due. The same rule applies
to breaches of contracts where the defendant acted fraudulently or
in bad faith.

Bachelor of Laws

Mixed Cases

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mixed Cases

Uploaded by

Copyright:

Available Formats

FIRST DIVISION

[G.R. No. 149295. September 23, 2003]

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

relating to useful improvements introduced by a lessee on leased premises, viz:

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

PRECY BUNYI and MILA BUNYI, G.R. No. 172547

- versus - QUISUMBING, J., Chairperson,

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Republic of the Philippines

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Republic of the Philippines

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon

Ma. Tiffany T. Cabigon