LILIA SANCHEZ, petitioner, vs. COURT OF APPEALS, HON. VICTORINO S.
Manresa defines it as the “manifestation of the private right of ownership, which instead
ALVARO as Presiding Judge, RTC-Br. 120, Caloocan City, and VIRGINIA TERIA,
respondents.
FACTS: Special Civil Action for Certiorari under Rule 65.
Lilia Sanchez, constructed a house on a 76-square meter lot owned by her parents-in-
law. The lot was registered under TCT No. 263624 with the following co-owners: Eliseo
Sanchez married to Celia Sanchez, Marilyn Sanchez married to Nicanor Montalban,
Lilian Sanchez, widow, Nenita Sanchez, single, Susana Sanchez married to Fernando
Ramos, and Felipe Sanchez.
On 20 February 1995, the lot was registered under TCT No. 289216 in the name of
private respondent Virginia Teria by virtue of a Deed of Absolute Sale supposed to have
been executed on 23 June 1995 by all six (6) co-owners in her favor.
Lilia Sanchez claimed that she did not affix her signature on the document and
subsequently refused to vacate the lot, thus prompting Virginia Teria to file an action for
recovery of possession of the aforesaid lot with the MeTC.
MeTC decision: in favor of Teria, declaring that the sale was valid only to the extent of
5/6 of the lot and the other 1/6 remaining as the property of petitioner, on account of her
signature in the Deed of Absolute Sale having been established as a forgery.
RTC decision: affirmed the RTC, because they failed to submit their pleadings.
On 4 November 1998, the MeTC issued an order for the issuance of a writ of execution
in favor of private Virginia Teria, buyer of the property. On 4 November 1999 or a year
later, a Notice to Vacate was served by the sheriff upon petitioner who however refused
to heed the Notice.
On 28 April 1999 private respondent started demolishing petitioner’s house without any
special permit of demolition from the court.
Due to the demolition of her house which continued until 24 May 1999 petitioner was
forced to inhabit the portion of the premises that used to serve as the house’s toilet and
laundry area.
On 29 October 1999 petitioner filed her Petition for Relief from Judgment with the RTC
on the ground that she was not bound by the inaction of her counsel who failed to
submit petitioner’s appeal memorandum.
RTC decision: denied the Petition and the subsequent Motion for Reconsideration.
CA (Petition for Certiorari): dismissed the petition for lack of merit.
Held: Co-ownership; nature
Sanchez Roman defines co-ownership as “the right of common dominion which two or
more persons have in a spiritual part of a thing, not materially or physically divided.
Valdez, Jr. The action concerns a Lot in Puerto Princesa Cadastre in the name of
of being exercised by the owner in an exclusive manner over the things subject to it, is
exercised by two or more owners and the undivided thing or right to which it refers is
one and the same.”
Co-ownership; characteristics
The characteristics of co-ownership are: (a) plurality of subjects, who are the co-owners,
(b) unity of or material indivision, which means that there is a single object which is not
materially divided, and which is the element which binds the subjects, and, (c) the
recognition of ideal shares, which determines the rights and obligations of the co-
owners.
Co-ownership; relationship
In co-ownership, the relationship of such co-owner to the other co-owners is fiduciary in
character and attribute. Whether established by law or by agreement of the co-owners,
the property or thing held pro-indiviso is impressed with a fiducial nature so that each
co-owner becomes a trustee for the benefit of his co-owners and he may not do any act
prejudicial to the interest of his co-owners.
Thus, the legal effect of an agreement to preserve the properties in co-ownership is to
create an express trust among the heirs as co-owners of the properties. Co-ownership
is a form of trust and every co-owner is a trustee for the others.
Article 493 of the Civil Code gives the owner of an undivided interest in the property the
right to freely sell and dispose of it, i.e., his undivided interest. He may validly lease his
undivided interest to a third party independently of the other co-owners.
But he has no right to sell or alienate a concrete, specific or determinate part of the
thing owned in common because his right over the thing is represented by a quota or
ideal portion without any physical adjudication.
Although assigned an aliquot but abstract part of the property, the metes and bounds of
petitioner’s lot has not been designated. As she was not a party to the Deed of
Absolute Sale voluntarily entered into by the other co-owners, her right to 1/6 of the
property must be respected. Partition needs to be effected to protect her right to her
definite share and determine the boundaries of her property. Such partition must be
done without prejudice to the rights of private respondent Virginia Teria as buyer of the
5/6 portion of the lot under dispute.
JOSEFINA VALDEZ, JAIME VALDEZ, ROGELIO ALMONTE, RAQUEL ALMONTE
and RAUL ALMONTE, the latter two minors, represented in this action by their
father, FRANCISCO ALMONTE, plaintiffs-appellees vs. OLORGA
Facts:
This is an action for partition filed by the living children and grandchildren of the late
spouses Federico Valdez, Sr. and Juanita Batul against the heir and widow of Federico
Federico Valdez, Jr.
Upon the death of the spouses Federico Valdez, Sr and Juanita Batul left the following
children as their heirs: (1) Avelina Olorga, who died in 1941, leaving as her heir co-
defendant Renato Olorga; (2) Elisa Valdez-Almonte, who died in 1947, leaving Rogelio,
Raquel and Raul, all surnamed Almonte, as her heirs; (3) the plaintiff Josefina Valdez;
(4) Federico Valdez, Jr., who died in September, 1960, leaving as his heirs defendants
Teofila Olorga, his wife, and Carmen Valdez, his daughter; and (5) Jaime Valdez, co-
plaintiff herein.
In 1930, the old Valdez family, as vendees, occupied and lived in the premises of Lot
No. 18. After the death of Federico Valdez, Sr., Juanita Batul, in the year 1936,
executed a contract of lease over a portion of Lot No. 18 in favor of the protestant
church of Puerto Princesa. The same Juanita Batul leased in 1939 a portion of Lot No.
18 to Mr. Gregorio Quicho.
The transfer of the lot in the name of Federico, Sr., was never done because the
owner’s original certificate of title was lost.
Josefina Valdez and Federico Valdez, Jr. commissioned their cousin Concepcion Castro
to negotiate with the Gutierrez family in 1948 in order that the property in question may
be transferred to them. It turned out that the Gutierrez family was asking for an
additional amount of P2,500.00.
The name of Federico Valdez, Jr. appeared as the only vendee. This was done
pursuant to the wishes of Mr. Quicho who advanced the money, in order that he could
facilitate the deed of sale between him and the Valdezes, with the understanding that
Federico Valdez, Jr. will hold the same in trust for his other brother and sisters
(Testimony of Mrs. Castro).
When Federico Valdez, Jr. was still living, he never attempted to exclude the herein
plaintiffs from ownership of the land in question. Said plaintiffs have been in open
continuous and uninterrupted possession of the premises they are occupying inside the
lot in question long before the execution of the deed of sale. It was only after the death
of Federico Valdez, Jr. that the widow Teofila Olorga tried to eject the plaintiffs.
Issue: Whether or not prescription applies in the case.
Held: No. Given the antecedents of the property and the fact that its acquisition by
Federico Valdez, Jr. was for the benefit not of himself alone but also of his brother and
sisters, although for purposes of convenience he was made to appear as the sole
vendee, the juridical relation that arose among them was one of co-ownership, with the
plaintiffs-appellees actually in possession of a portion of the property.
Under Article 494 of the Civil Code, “No prescription shall run in favor of a co-owner or
co-heir against his co-owners or co-heirs so long as he expressly or impliedly
recognizes the co-ownership.”
Insofar as the aspect of extinctive prescription referred to in this article is concerned, it
is but a restatement of Article 1965 of the Spanish Civil Code, which provides: “As
between co-heirs, co-owners, or proprietors of adjacent estates, the action to demand
the partition of the inheritance or of the thing held in common, or the survey of the
adjacent properties, does not prescribe.”
And from the standpoint of acquisitive prescription, or prescription of ownership, this
Court has held in numerous decisions involving fiduciary relations such as those
occupied by a trustee with respect to the cestui que trust that as a general-rule the
former’s possession is not adverse and therefore cannot ripen into a title by
prescription.
Adverse possession in such a case requires, the concurrence of the following-
circumstances: (a) that the trustee has performed unequivocal acts of repudiation
amounting to an ouster of the cestui que trust; (b) that such, positive acts of repudiation
have been made known to the cestui que trust and (c) that the evidence thereon should
be clear and conclusive. * These circumstances are not present in this case.
MARIANO DISTRITO, LUISA DISTRITO, MARIANO CIMAFRANCA, EDUARDO
DOMICIANO DISTRITO, ELIZABETH DISTRITO and SEGUNDINO CATIPAY,
Petitioners, vs. THE HONORABLE COURT OF APPEALS, PEDRO MIQUIABAS,
PACITA MIQUIABAS, and ENRIQUE SAMSON, Respondents.
Facts This petition involves the legal redemption of real property.
Private respondents seek to redeem as co-owners from petitioners a parcel of land of
the Dumaguete Cadastre.
Plaintiff-appellants evidence tend to establish that the property in question was originally
owned by Simeona Amistad now deceased, their predecessor-in-interest. The heirs of
the late Simeona Amistad are Eufrocina Potenciana, Librada, Catalina, Gabina and
Anecito all surnamed Villamil. Librada’s house was constructed in the lot, where
Librada’s husband and children are presently staying after Librada’s death. Plaintiff
Pacita Miquiabas-Samson are also living in Librada’s house. Pedro Miquiabas also
stays in the house when he visits Dumaguete City.
Appellant Pacita Miquiabas-Samson testified that she had bought the share of Librada
Villamil and agreed with the heirs of Gabina Villamil to buy their respective shares and
would like to redeem the shares of Catalina and Anecito both surnamed Villamil to
preserve the family lot for sentimental reasons.
Plaintiff-appellants claim that they only came to know about the sale of the lot in
question in July 1984, when Eduardo Distrito, one of the defendant-appellee [sic]
notified them that the defendants were constructing a building on the portion they
bought from Catalina Villamil and Anecito Villamil. However, appellant Pacita
Miquiabas-Samson refused as the shares of Catalina Villamil and Anecito Villamil has
[sic] not yet been segregated as there was no partition over the lot in question.
Plaintiffs-appellants offered to redeem the land in the amount of P4,566.00, but the
defendants-appellees refused. Hence a tender of payment was made (Exh. B), with the
court, and notice of consignation was sent to the defendants-appellees. (Exhibit C).
On the other hand, the evidence of the defendant-appellees tends to prove that the
whole lot 716 of the Dumaguete Cadastre was the subject of a civil case in the Court of
First Instance of Negros Oriental, and the said court adjudicated to the six (6 ) heirs of
Simeona Amistad Lot No. 716-B-2, the land in litigation with the one sixth (1/6) pro-
indiviso shares.
On April 16, 1976 the defendant-appellees acquired by purchase one-half (1/2) portion
pro-indiviso of Lot No. 716-B-3, from Atty. Marcelo Flores which the latter acquired as
payment of his attorney’s fees in the Civil Case. (Exhibit 3).
Subsequently, upon representation of Plaintiff-Appellant Pedro Miquiabas, who acted as
middle-man, defendant-appellant bought the shares of Catalina and Anecito Villamil. On
April 30, 1975, the instrument of sale was notarized by Juan A. Lapisan, Jr. who
testified that Pedro Miquiabas accompanied Eduardo Distrito and himself to Siaton,
Negros Oriental where Catalina Villamil is living in order for the latter to sign the
document as Catalina was too old to travel to Dumaguete City.
Appellant Pedro Miquiabas also offered to sell his share and that of his sister to the
defendant-appellee but the latter hesitated.
Appellee Eduardo Distrito testified that his co-defendant and himself also bought the
share of Eusebio Amistad who owns the adjoining lot through the representations of
appellant Pedro Miquiabas. (Exh. 4).
Issue: Whether or not the private respondents are entitled to redeem the land in
question.
Held: The complaint is dismissed as to private respondent Pedro Miquiabas who had
lost his right to redeem.
In this case, it appears that private respondent Pedro Miquiabas acted as middleman
and was present when the vendor signed the deed of sale. It is obvious that he had
actual knowledge of the sale.Thus, a written notice to him as required by Article No.
1623 of the Civil Code is not necessary. The only purpose of such written notice is to
insure that all the co-owners shall be actually notified of the sale and to remove all
doubt as to the perfection of the sale.
When as in this case the co-owner was actually present and was even an active
intermediary in the consummation of the sale of the property he is and must be
considered to have had actual notice of the sale. A written notice is no longer
necessary.
As to private respondent Pacita Miquiabas she was not present when the aforesaid sale
of the property was undertaken. There is no evidence that she was informed or that she
ever learned about the sale soon thereafter. It was only in July, 1984 that she was
notified by petitioners of their intention to construct a building on a portion of the
property in question which they bought. Within thirty (30) days thereafter, that is, on
August 3, 1984, said private respondent filed a complaint for legal redemption in court
and at the same time deposited the amount of P4,588.85 with the court as the purchase
price.
As the law requires a written notice of such sale to the co-owners, such actual notice to
private respondent Pacita Miquiabas is not sufficient compliance with the requirement.
Moreover, said respondent filed the complaint for legal redemption within thirty (30)
days from the time she was verbally notified thereof by petitioners. Hence, her right to
redeem the property as co-owner must be sustained.
SUNSET VIEW CONDOMINIUM CORPORATION, petitioner, vs. THE HON. JOSE C.
CAMPOS, JR. OF THE COURT OF FIRST INSTANCE, BRANCH XXX, PASAY CITY
and AGUILAR-BERNARES REALTY, respondents. (G.R. No. L-52361 April 27, 1981)
Facts: The petitioner, Sunset View Condominium Corporationis a condominium
corporation within the meaning of Republic Act No. 4726 in relation to a duly registered
Amended Master Deed with Declaration of Restrictions of the Sunset View
Condominium Project located at 2230 Roxas Boulevard, Pasay City of which said
petitioner is the Management Body holding title to all the common and limited common
areas.
The private respondent, Aguilar-Bernares Realty, a sole proprietorship owned and
operated by the spouses Emmanuel G. Aguilar and Zenaida B. Aguilar, is the assignee
of a unit, “Solana”, in the Sunset View Condominium Project with La Perla Commercial,
Incorporated, as assignor. The La Perla Commercial, Incorporated bought the “Solana”
unit on installment from the Tower Builders, Inc. The petitioner, Sunset View
Condominium Corporation, filed for the collection of assessments levied on the unit
against Aguilar-Bernares Realty.
The private respondent filed a Motion to Dismiss the complaint on the grounds (1) that
the complaint does not state a cause of action: (2) that the court has no jurisdiction over
the subject or nature other action; and (3) that there is another action pending between
the same parties for the same cause. The petitioner filed its opposition.
The motion to dismiss was granted by the respondent Judge, pursuant to Section 2 of
Republic Act No. 4726, a “holder of a separate interest” and consequently, a
shareholder of the plaintiff condominium corporation; and that “the case should be
properly filed with the Securities & Exchange Commission which has exclusive original
jurisdiction on controversies arising between shareholders of the corporation.” the
motion for reconsideration thereof having been denied, the petitioner, alleging grave
abuse of discretion on the part of respondent Judge, filed the instant petition for
certiorari praying that the said orders be set aside.
ISSUE: Whether the CFI or the City Courts have jurisdiction over the claims filed by
Sunset View, the condominium corporation.
Held: Not every purchaser of a condominium unit is a shareholder in the
corporation. The Mater Deed determines when ownership of the unit and
participation in the corporation vests in the purchaser.
The City Court and the CFI have jurisdiction.
The share of stock appurtenant to the unit win be transferred accordingly to the
purchaser of the unit only upon full payment of the purchase price at which time he will
also become the owner of the unit. Consequently, even under the contract, it is only the
owner of a unit who is a shareholder of the Condominium Corporation. Inasmuch as
owners is conveyed only upon full payment of the purchase price, it necessarily follows
that a purchaser of a unit who has not paid the full purchase price thereof is not The
owner of the unit and consequently is not a shareholder of the Condominium
Corporation.
In this case, the Master Deed provides that ownership is transferred only upon full
payment of the purchase price.
Private respondents have not yet fully paid the purchase price, hence they are not
shareholders and the SEC has no jurisdiction over the claims.
*now, special courts handle intra-corporate disputes
RIZAL CEMENT CO., INC. v. VILLAREAL
G.R. No. L- 30272. February 28,1985.
DOCTRINE: Neither tax receipts nor declaration of ownership for taxation purposes
alone constitutes sufficient evidence of ownership or of the right to possess realty. They
must be supported by other effective proofs. Neither can the survey plan or technical
descriptions prepared at the instance of the party concerned be considered in his
favour, the same being self-serving.
FACTS: Respondents are applicants for the registration of 2 agricultural lands located in
Rizal. They presented testimonial and documentary evidence appearing that the
property applied for, designated as Lots Nos. 1 and 2 of Plan Psu-147662, have a total
area of 26,015 sq.m.; that these lots originally belonged to one Maria Certeza; that upon
her death, the property was involved in a litigation between her grandchildren and
Gonzalo Certeza and that the lots were given by the latter to former Justice de Joya as
the latter's attorney's fees; that the lots were then sold by de Joya to Filomeno Sta. Ana
who, in turn sold the same to spouses Victoriano Cervo and Ignacia Guillermo in 1939;
that sometime in November 1955, the said spouses sold the said lots to the herein
applicants as shown by a duly notarized deed of sale. The spouses Cervo declared the
property for taxation purposes in the name of the wife, Ignacia Guillermo, and paid for
the realty taxes due thereon; that prior to the sale, the spouses Cervo had the two
parcels surveyed first in 1950 and then in 1955.
On the other hand, oppositor, (now petitioner) Rizal Cement Company, claims to be the
owner of the subject lots, having bought the same from Maria Certeza, and to have
been in continuous and adverse possession of the property since 1911. To substantiate
its claim, Rizal Cement Co. submitted documentary evidence, the most important of
which are the following: (a) Plan Psu-2260 which covers the survey of a big tract of land
for the company designated as Lots 1, 2 and 4 of the Plan with a total area of 210,644
square meters (survey made in 1911 while plan was approved in 1912); (b) A sketch
plan of the geographical position of the real pro-parties of Madrigal and Company; (c)
Tax Declaration No. 1066 secured in 1949 from the Rizal Provincial Assessor which is a
consolidation of all lands of the Rizal Cement Company located in Darangan with a total
area of 2,496,712 sq.m. and which includes the land in litigation; (d) Tax Declaration
No. 10570 which cancels Tax Declaration No. 1066; and (e) Real estate tax receipts
issued for Madrigal and Company, covering among others the land applied for.
After trial, the CFI denied the application for registration of respondents and ordered the
issuance of a decree of registration in the name of Rizal Cement Co, after finality of said
decision. Respondents appealed to the CA, which reversed and set aside the CFI’s
decision in favour of the respondents. The CA denied Rizal’s MR, hence this petition.
ISSUE: Whether the respondents had been in actual possession of the land in question.
HELD: YES. As to who had been in actual possession of the land in question, the CA
gave credence to the testimony of the witnesses for respondents applicants, namely: 1.
Santiago Picadizo (one of the tenants of the land); 2. Isaac Reyes (worked on ½ of the
2 parcels of land since 1934 to the present); 3. Mr. Valentin Marqueza (rebuttal witness
who averred that he began to live in Rizal since 1910 after buying a portion of the
property from Maria Certeza and avers that Rizal Cement intended to make a factory by
building a small house which was later on removed, and that Rizal Cement did not take
possession of the land and that it was Maria 121
Certeza who had the possession of the land until her death and that the tenants gave
the harvest of the land to Maria Certeza.
The right to possess flows from ownership. No person will suffer adverse possession by
another of what belongs to him. Were the Rizal Cement Co. the rightful owner of the
land in question, it would not have allowed the tenants to cultivate the land and give the
owner's share to appellants and/or their predecessors. It would have opposed the
survey for applicants' vendors on May 21 and 28, 1950 and July 31, 1955, but did not as
shown in the surveyor's certificate, Exhibit E. If Rizal really bought Lot 2 from Maria
Certeza in 1909 as claimed, it has not been explained how she could sell a portion
thereof to Apolonia Francisco, married to Valentin Marquez for P100.00 on April 15,
1924 by deed, Exhibit R,-an ancient document -as confirmed by the husband in his
deposition who as employee of oppositor would have known of its acquisition. On the
other hand, applicants' vendors in mortgaging the two lots to Pedro Picones in 1952,
Exhibits 0 and 01, for P11, 000.00, exercised a dominical act; and Aniano Bautista's
testimony that the Cervos were not owners of the land challenges belief since Bautista
was a witness to Exhibits 0 and 0-1, being uncle of Picones.
Very significantly petitioner Rizal Cement did not present any witness in actual
possession of the land in question. As aptly found by the appellate court, respondents
possess the property in the concept of an owner. Possession is acquired by the material
occupation of a thing or the exercise of a right or by the fact it is subject to the action of
our will, or by the proper acts and legal formalities established for acquiring such right.
Petitioner's evidence, consisting of tax receipts, tax declaration and survey plan are not
conclusive and indisputable basis of one's ownership of the property in question.
Assessment alone is of little value as proof of title. Mere tax declaration does not vest
ownership of the property upon the declarant. Settled is the rule that neither tax receipts
nor declaration of ownership for taxation purposes alone constitutes sufficient evidence
of ownership or of the right to possess realty. They must be supported by other effective
proofs. Neither can the survey plan or technical descriptions prepared at the instance of
the party concerned be considered in his favor, the same being self-serving.
The only documentary evidence which the Rizal Cement may capitalize for its claim of
ownership is the notation in applicants' plan Exhibit D that the lots in question are
portions of a previous survey made in 1911 for oppositor, Plan Psu-2260. The survey
plan however has no original record in the Bureau of Lands. Be that as it may, survey
plans merely delimit areas sought to be registered. Besides, the annotation relied upon
by the lower court in its judgment in favor of the oppositor is nothing more than what it
imports - a previous survey.
MIGUEL ESCRITOR vs. IAC
FACTS
 Lot No. 2749, located at Atimonan, Quezon, was the subject of cadastral
proceedings in the Court of First Instance. Miguel Escritor, as claimant, filed
an answer thereto declaring his ownership over the lot alleging that he
acquired it by inheritance from his deceased father. The lot having become
uncontested, only Miguel Escritor appeared in order to adduce his evidence
of ownership.
 The Court rendered a decision in the abovementioned case, Cadastral Case
No. 72, adjudicating the lot with its improvements in favor of claimant Escritor
and confirming his title thereto. Immediately thereafter, Escritor took
possession of the property.
 The Court directed the Chief of the General Land Registration Office to issue
the decree of registration in favor of Escritor, the decision in Cadastral Case
No. 72 having become final.
 Simeon S. Acuna, the herein respondent, filed a petition for review of the
above-mentioned decision contending that it was obtained by claimant
Escritor through fraud and misrepresentation. The petition was granted and a
new hearing was set. While the proceedings were going on, claimant Escritor
died. His heirs, the petitioners in the case, took possession of the property.
 Thirteen years after the disputed decision was rendered, the Court
adjudicated Lot No. 2749 in favor of respondent Acuna, ordering petitioners
to vacate the land. A writ of possession was later issued and petitioners
voluntarily gave up their possession.
 More than four years later, respondent Acuna filed with the same Court a
complaint for recovery of damages against petitioners for the fruits of lot No.
2749 which was allegedly possessed by the latter unlawfully for thirteen
years. According to the respondent, the registration of the said lot was
 effectuated by the deceased claimant Escritor through fraud, malice, and
misrepresentation.
 The lower court rendered a decision dismissing Acuña's complaint for
damages, finding that though petitioners enjoyed the fruits of the property,
they were in good faith possessing under a just title, and the cause of action,
if there was any, has already prescribed.
On appeal, the Intermediate Appellate Court reversed the decision of the lower court
ordering petitioners to pay the fruits received for the 13 years they have been in
unlawful possession of the property.
ISSUE: Whether or not Escritor’s possession is not good faith or in bad faith
HELD: It should be remembered that in the first decision of the cadastral court dated
May 15, 1958, Lot No. 2749 was adjudicated in favor of claimant Escritor, petitioners'
predecessor-in-interest. In this decision, the said court found to its satisfaction that
claimant Escritor acquired the land by inheritance from his father who in turn acquired it
by purchase, and that his open, public, continuous, adverse, exclusive and notorious
possession dated back to the Filipino-Spanish Revolution. It must also be recalled that
in its Order for the issuance of decrees dated July 15, 1958, the same Court declared
that the above-mentioned decision had become final. Significantly, nowhere during the
entire cadastral proceeding did anything come up to suggest that the land belonged to
any person other than Escritor.
On the basis of the aforementioned favorable judgment which was rendered by a court
of competent jurisdiction, Escritor honestly believed that he is the legal owner of the
land. With this well-grounded belief of ownership, he continued in his possession of Lot
No. 2749. This cannot be categorized as possession in bad faith.
As defined in the law, a possessor in bad faith is one in possession of property knowing
that his title thereto is defective. Here, there is no showing that Escritor knew of any flaw
in his title. Nor was it proved that petitioners were aware that the title of their
predecessor had any defect.
Nevertheless, assuming that claimant Escritor was a possessor in bad faith, this should
not prejudice his successors-in-interest, petitioners herein, as the rule is that only
personal knowledge of the flaw in one's title or mode of acquisition can make him a
possessor in bad faith, for bad faith is not transmissible from one person to another, not
even to an heir.
Under Article 527 of the Civil Code, good faith is always presumed, and upon him who
alleges bad faith on the part of a possessor rests the burden of proof. If no evidence is
presented proving bad faith, like in this case, the presumption of good faith remains.
Respondent Acuna, on the other hand, bases his complaint for damages on the alleged
fraud on the part of the petitioners' predecessor in having the land registered under his
(the predecessor's) name. A review of the record, however, does not indicate the
existence of any such fraud. It was not proven in the cadastral court nor was it shown in
the trial court.
Lot No. 2749 was not awarded to Escritor on the basis of his machinations. What is
clear is that in the hearing of January 22, 1958, the Court permitted Escritor to adduce
his evidence of ownership without opposing evidence as the lot had become
uncontested.
IGNACIO WONG v. HON. LUCAS CARPIO and MANUEL MERCADO
G.R. No. L-50264. October 21, 1991.
Bidin, J.
DOCTRINE: Possession in good faith ceases from the moment defects in the title are
made known to the possessors, by extraneous evidence or by suit for recovery of the
property by the true owner. Whatever may be the cause or the fact from which it can be
deduced that the possessor has knowledge of the defects of his title or mode of
acquisition, it must be considered sufficient to show bad faith. Such interruption takes
place upon service of summons.
FACTS: In 1972, Private respondent Manuel Mercado and William Giger executed a
deed of sale with a right to repurchase a parcel of land, LOT 3, situated in Colonga, Sta.
Maria, Davao del Sur for PHP 3,500.00. In 1973, Giger again asked an additional
amount of P2,500.00 from Mercado and so he required William Giger to sign a new
deed of Pacto de Retro Sale. Mercado began harvesting only the coconut fruits and he
paid the taxes on the land for Mr. Giger. He went periodically to the land to make copra
but he never placed any person on the land in litigation to watch it. Neither did he reside
on the land as he is a businessman and storekeeper by occupation and resides at
Lower Sta. Maria, Davao del Sur while the land in litigation is at Colongan, Sta. Maria.
Neither did he put any sign or hut to show that he is in actual possession. He knew
defendants' laborers were in the land in suit as early as August, 1976 and that they
have a hut there but he did not do anything to stop them. Instead plaintiff was happy
that there were people and a hut on the land in suit.
Before July, 1976, Petitioner Ignacio Wong went to the land in litigation to find out if
there were other people residing there or claiming it besides the owner and he found
none. So, in July, 1976, Ignacio Wong bought the parcel of land in litigation from William
Giger and his wife Cecilia Valenzuela. Wong asked for the delivery of the title to him
and so he has in his possession the TCT in the name of William Giger. Wong declared
the land in suit for taxation purposes in his name. He tried to register the pacto de retro
sale with the Register of Deeds by paying the registration fee but due to some
technicalities, the pacto de retro sale could not be registered. Wong placed laborers on
the land in suit, built a small farm house after making some clearings and fenced the
boundaries. He also placed signboards.
On September 27, 1976, Mercado again went to the land in suit to make copras. That
was the time the matter was brought to the attention of the police of Sta. Maria, Davao
del Sur and the incident entered in the police blotter. Then on November 18, 1976,
Wong ordered the hooking of the coconuts from the land in litigation and nobody
disturbed him. But on November 29, 1976, Wong received a copy of Mercado's
complaint for forcible entry with summons to answer which is the case now before the
Court. During the pendency of this instant complaint for forcible entry, spouses William
Giger and Cecilia Valenzuela filed a case for reformation of instrument with the Court of
First Instance of Digos, Davao del Sur against plaintiff Mercado. On the basis of the
aforestated undisputed facts, the Municipal found in favor of the petitioner. On appeal,
the CFI of Davao del Sur, ruled in favor of Manuel Mercado. Hence, this petition.
ISSUES:
1. Whether or not defendant Manuel Mercado established prior possession of the lot in
question.
2. Whether or not petitioner Wong is liable to pay rent.
123
HELD:
1. YES. It should be stressed that "possession is acquired by the material occupation of
a thing or the exercise of a right, or by the fact that it is subject to the action of our will,
or by the proper acts and legal formalities for acquiring such right." (Art. 531, Civil Code;
Rizal Cement Co., Inc. vs. Villareal, 135 SCRA 15 [1985]). In the instant case, it is clear
that possession passed from vendor William Giger to private respondent Manuel
Mercado by virtue of the first sale a retro. Accordingly, the later sale a retro in favor of
petitioner failed to pass the possession of the property because there is an impediment
— the possession exercised by private respondent. Possession as a fact cannot be
recognized at the same time in two different personalities except in the cases of co-
possession. Should a question arise regarding the fact of possession, the present
possessor shall be preferred; if there are two possessions, the one longer in
possession, if the dates of possession are the same, the one who presents a title; and if
these conditions are equal, the thing shall be placed in judicial deposit pending
determination of its possession or ownership through proper proceedings (Art. 538, Civil
Code).
2. YES. It should be noted that possession acquired in good faith does not lose this
character except in the case and from the moment facts exist which show that the
possessor is not unaware that he possesses the thing improperly or wrongfully. (Art.
528, Civil Code). Possession in good faith ceases from the moment defects in the title
are made known to the possessors, by extraneous evidence or by suit for recovery of
the property by the true owner. Whatever may be the cause or the fact from which it can
be deduced that the possessor has knowledge of the defects of his title or mode of
acquisition, it must be considered sufficient to show bad faith. Such interruption takes
place upon service of summons. A perusal of the records of the case shows that
petitioner received private respondent's complaint for forcible entry with summons on
November 29, 1976. His good faith therefore ceased on November 29,1976.
Accordingly, the computation of the payment of monthly rental should start from
December, 1976.
G.R. No. L-39044 January 3, 1985
MANOTOK REALTY, INC. vs. THE HON. COURT OF APPEALS and FELIPE
CARILLO, respondents.
FACTS:
 Manotok Realty is the registered owner of a parcel of land covered by Tax
Declaration Nos. 2455 and 2456 issued by the City Assessor's Office of
 Manila with a total assessed value of P3,059,180.00 and by TCT 55125
(Exh. A) and TCT No. 76130 of the Register of Deeds of the City of Manila. It
acquired the aforementioned property from the Testate Estate of Clara
Tambunting de Legarda, being the highest bidder in a sale conducted by the
Probate Court
 After having acquired said property, the Manotok Realty subdivided it, but
could not take possession thereof because the whole area is occupied by
several houses among which is the one belonging to the herein appellant
Felipe Carillo, Lot 143, Block 2 of the subdivision plan.
 Demands to vacate and to surrender possession of the property were made
by Manotok Realty verbally and by publication and by circulars served to the
appellant. In spite of such demands, the appellant continued to occupy the
disputed lot and refused to surrender possession thereof to the appellee.
 After the petitioner failed in its attempts to take possession of the lot, it filed
the reivindicatory action against the respondent.
 The trial court decided the case in favor of the petitioner, ordering Felipe
Carino to vacate and/or surrender possession of the subject land to Manotok
Realty; and to pay the latter the sum pf P75.50 per month from January 21,
1961 up to the time he actually surrenders possession of the said parcel to
the plaintiff, plus costs and atty’s fees.
 The CA reversed the trial court’s decision, and declared that Felipe Carino is
a builder in good faith with the right to remain in the questioned premises,
free of rent, until reimbursed by the petitioner for the necessary and useful
expenses introduced to the land.
 Hence, this petition.
 The petitioner argues that at the time of the execution of the deed of
assignment in favor of the respondent, the land was already registered in its
name; and that if the respondent were really acting in good faith, he should
have verified from the Register of Deeds of Manila who was the registered
owner of the land in question.
ISSUE: WON Felipe Carino is a possessor in good faith
HELD: No. CA decision set aside; CFI decision affirmed
 A possessor in good faith is one who is not aware that there exists in his title
or mode of acquisition any flaw which invalidates it. (Caram v. Laureta, 103
SCRA 7, Art. 526, Civil Code).
 One who acquires real estate with knowledge of a defect or lack of title in his
vendor cannot claim that he has acquired title thereto in good faith as against
the true owner of the land or of an interest therein; and the same rule must
be applied to one who has knowledge of facts which should put a reasonable
man upon his guard, and then claims that he acted in good faith under the
belief that there was no defect in the title of the vendor. (See Leung Yee v.
FL Strong Machinery Co., 37 Phil. 644).
 The records show that when Dayrit executed the deed of' assignment in
favor of the respondent, the disputed lot was already registered and titled in
the name of the petitioner. Such an act of registration served as a
constructive notice to the whole world and the title issued in favor of
petitioner made his ownership conclusive upon and against all persons
including Dayrit and. herein respondent, although no personal notice was
served on either of the latter. (See Garcia v. Bello, 13 SCRA 769;
Demontano v. Court of Appeals, 81 SCRA 286).
 Therefore, the presumption of good faith in favor of the respondent cannot
apply because as far as the law is concerned, he had notice of the ownership
by the petitioner over said lot.
 Furthermore, the respondent did not even bother to inquire about the
certificate of title covering the lot in question to verify who was the real owner
thereof, despite the fact that his transferor, Dayrit, never showed him any title
thereto; a circumstance which should have put him upon such inquiry or
investigation. His failure to exercise that measure of precaution which was
reasonably required of a prudent man in order to acquaint him with the
defects in the title of his vendor precludes him from claiming possession in
good faith.
 Justice Guillermo S. Santos:
o Article 256 of the Civil Code defines a possessor in good faith as
one who is not aware that there exists in his title or mode of
acquisition any flaw which invalidates it.
o It was incumbent on appellant to inquire into the title of his vendor
over the property.
o A purchaser cannot close his eyes to facts which should put a
reasonable man upon his guard and then claim that he acted in
good faith under the behef that there was no defect in the title of
the vendor
o Consequently, appellant cannot be deemed a possessor in good
faith and is not, therefore, entitled to reimbursement for the
improvements he had introduced in the property in question.