RIZAL CEMENT CO., INC. V.

VILLAREAL, 135 SCRA 15

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.
RULING: 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 1⁄2 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 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.
WONG V. CARPIO, 203 SCRA 118

Possession in good faith ceases once defects in title are made known to the possessor
by extraneous evidence or by suit for recovery by the owner; interruption takes place
upon service of summons.

FACTS: Mr. Giger sold to Plaintiff Mr. Mercado a piece of property for the price of
P3,500 under the terms of a pacto de retro.

Mr. Mercado paid land taxes and planted coconut trees but failed to erect signs of
occupancy, nor did he establish a hut. He spent much of his time away at his place of
business where he ran a store. He visited the land occasionally only to make copra.
Other than this, the place resembled a ghost town.

Mr. Wong happened to chance upon the land, and finding no one occupying the same,
purchased the property from Mr. Giger. Thereupon, he obtained a TCT, established a
hut, populated the place with laborers and fenced the property.

Mr. Mercado returned to the property and was dismayed to find his land occupied. He
had the incident blottered and filed for forcible entry against Mr. Wong. He also
demanded rentals. Unfortunately, the MTC ruled in favor of Mr. Wong, stating that the
latter was in open, actual, prior and continuous possession. On appeal, the CFI reversed
and ruled for Mr. Mercado stating that he had taken possession of the property much
earlier and that Mr. Wong is the actual intruder. Mr. Wong took the case to the CA
which ruled against him.

ISSUE: Whether Mercado was the real owner.

RULING: Yes. Art. 135 provides 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."

The law and jurisprudence indicate that the execution of a sale thru a public instrument
shall be equivalent to the delivery of the thing, unless there is stipulation to the
contrary . But there’s a catch. Even if there exists the execution of the instrument, the
purchaser cannot have the enjoyment and material tenancy of the purchased thing
when such tenancy and enjoyment is opposed by another. In this case, delivery has not
been effected.

It is crystal clear that possession passed from William Giger to Mercado by virtue of the
first sale. This being the case, , the later sale in favor of thick-faced Wong failed to pass
the possession of the property because there is an impediment — the possession
exercised by respondent Mercado.
Possession 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).
Furthermore, Wong cannot claim good faith to deny Mercado due rentals. The moment
he received the complaint of forcible entry and summons, he should have been aware
of defects in his title. He owes rentals from that point onwards.
SOMODIO V CA, GR 82680, 15 AUGUST 1954

FACTS: On 21 October 1974, Jose Ortigas executed a an instrument designated as a

Transfer of Rights, conveying to Wilfredo Mabugat the possession of an unnumbered
residential lot situated at Rajah Muda, Bula, General Santos City. Somodio, herein
petitioner contributed one-half of the purchase price. On October 22, 1974, Mabugat
executed an Affidavit of Trust expressly recognizing the right of petitioner over one-half
undivided portion of the lot. Petitioner later discovered in the District Land Office that
the lot was numbered "6328-X, Csd 2281-D." Thereafter, petitioner and Mabugat
partitioned the property into two portions, with petitioner taking the western part.
Immediately after the partition, petitioner took possession of his portion and planted
thereon ipil-ipil trees, coconut trees and other fruit-bearing trees.

Petitioner began construction of a structure in 1976 on his lot, but left the structure
unfinished due to employment in another city. In October 1977, petitioner allowed
respondent Felomino Ayco, to transfer his hut to petitioner's lot. About six years later,
petitioner demanded that Ayco vacate the premises but such demand proved futile. On
23 August 1983, a case for unlawful detainer was filed before the MTC.

Meanwhile, on June 26, 1983, respondent Ebenecer Purisima entered the land and
constructed a house thereon. Four days later, petitioner filed against respondent
Purisima a complaint for forcible entry before the same court docketed as Civil Case No.
2013-I, where it was consolidated with the first case.

The trial court rendered a Decision finding that respondent Purisima built his house
"almost on the spot where Somodio's unfinished house" stood "thru stealth and
strategy," not knowing that the house was built on Lot No. 6328-X and not on Lot No.
6328-Y.

The RTC, upon appeal, affirmed the MTC’s Decision.

The Court of Appeals held that herein petitioner had not "clearly and conclusively
established physical, prior possession over Lot No. 6328-X. Hence, the instant petition
for certiorari.

ISSUE: Whether petitioner enjoyed priority of possession over the subject lot.

RULING: Yes, petitioner enjoyed priority of possession over Lot No. 6328-X,
notwithstanding respondent Purisima's claim to the contrary. 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. Anyone of them who can prove prior possession de facto may recover such
possession even from the owner himself.
In the case at bar, even if petitioner started introducing improvements on the land only
in 1981, he still enjoyed priority of possession because respondent Purisima entered the
premises only in 1983.

Petitioner's prior possession over the property, however, is not synonymous with his
right of ownership over the same. As earlier stated, resolution of the issue of
possession is far from the resolution of the issue of ownership. Forcible entry is merely
a quieting process and never determines the actual title to an estate.

WHEREFORE, the decision of the Court of Appeals is REVERSED and SET ASIDE and
that of the trial courts REINSTATED. Costs against private respondents.
MAGLUCOT-AW V MAGLUCOT, GR 132518, 28 MARCH 2000

FACTS: In 1952, Tomas Maglucot, one of the registered owners and respondents’
predecessor-in-interest, filed a petition to subdivide a Lot. Consequently, the CFI of
Negros Oriental issued an order directing the parties to subdivide said lot into 6
portions. Sometime in 1963, Guillermo Maglucot rented a portion of subject lot.
Subsequently, Leopoldo and Severo Maglucot rented portions of subject lot in 1964 and
1965, respectively, each paying rentals therefor. Both of them built houses on their
corresponding lots and continued paying rentals to Mrs. Ruperta Salma, who
represented Roberto Maglucot, petitioner’s predecessor-in-interest. In December 1992,
however, the respondents stopped paying rentals and claimed ownership of the lot. The
lower court rendered judgment in favor of petitioners having found the existence of tax
declarations as indubitable proof that there was subdivision. It was likewise found that
Tomas Maglucot himself commenced the action for the partition. The CA revered the
decision of the RTC and declared that there was no partition as there was no conclusive
evidence of such.

ISSUE: Whether there was a valid partition in 1952.

RULING: Yes. It must be noted that there was a prior oral partition in 1946. Although
the oral agreement was merely tentative, the facts subsequent thereto all point to the
confirmation of said oral partition. By virtue of that oral agreement, the parties took
possession of specific portions of the subject lot. In 1592, an order for partition was
issued by the cadastral court. There is no evidence that there has been any change in
the possession of the parties. The parties’ actual possession in accordance to the oral
agreement indicates the permanency and ratification of such. Furthermore, record show
that respondents were paying rent for the use the subject lot. Had they been of the
belief that they were co-owners of the entire lot, they would not have paid rent. Since
the possession of the respondents were found to be that of lessees of petitioners, it
goes without saying that the latter were in possession of the lot in the concept of an
owner since 1953 up to the time the present action was commenced. Finally, the Court
takes notice of the language utilized by counsel for petitioners. Thrice in the petition,
counsel made reference to the researcher of the CA. He alluded to the lack of scrutiny
and lack of study, not referring to the record and for doing a poor job in researching. A
lawyer shall abstain from scandalous, offensive, or menacing language or behaviour
before the courts.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals is SET
ASIDE and the decision of the Regional Trial Court is hereby REINSTATED.
CEQUEÑA, ET AL. V BOLANTE, GR 137944, 6 APRIL 2000

FACTS: Prior to 1954, the land having an area of 1,728 square meters and covered by
Tax Declaration No. 26-0027 situated in Binangonan, Rizal was declared for taxation
purposes in the name of Sinforoso Mendoza, the father of respondent. Sinforoso died in
1930. On the basis of an affidavit, the tax declaration in the name of Sinforoso Mendoza
of the contested lot was cancelled and subsequently declared in the name of Margarito
Mendoza, the father of the petitioners and brother of Sinforoso.

During the cadastral survey, respondent Honorata is the present occupant of the land
together with Miguel Mendoza, another brother of the petitioners. The trial court
rendered the petitioners as the lawful owner and possessors of the land. However, the
Court of Appeals reversed the decision because the genuineness and the due execution
of the affidavit. It was said to be insufficient to overcome the denial of respondent and
her mother. Moreover, the probative value of petitioners’ tax receipts and declarations
paled in comparison with respondent’s proof of ownership of the disputed parcel. The
actual, physical, exclusive and continuous possession by respondent since 1985 gave
her a better title under Article 538 of the Civil Code. The petitioners contended
otherwise that she came into possession through force and violence, contrary to Article
536 of the Civil Code.

ISSUES: 1.) Whether or not the respondent has the actual, physical, exclusive and
continuous possession of the land; and
2.) Whether or not tax declarations and receipts are conclusive evidence of ownership
or possession.

RULING: 1.) Yes. Possession by the petitioner before 1985 was not exclusive, as the
respondent also acquired it before 1985. The records show that the petitioners’ father
and brother, as well as the respondent and her mother were simultaneously in adverse
possession of the land.

Based on Article 538 of the Civil Code, the respondent is the preferred possessor
because, benefitting from her father’s tax declaration of the subject lot since 1926, she
has been in possession thereof for a longer period. On the other hand, petitioners’
father acquired joint possession only in 1952.

2.) No. Tax declarations and receipts are not conclusive evidence of ownership. At
most, they constitute mere prima facie proof of ownership or possession of the property
for which taxes have been paid. In the absence of actual public and adverse
possession, the declaration of the land for tax purposes does not prove ownership. The
petitioners’ claim of ownership of the whole parcel has no legal basis.

WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution
AFFIRMED. Costs against petitioners.
CARBONILLA V ABIERA, GR 177637, 26 JULY 2010

FACTS: Petitioner filed a complaint for ejectment against respondents alleging that he is
the registered owner of a parcel of land in Maasin City. He also alleged that he owns
the building standing on said land by virtue of a Deed of Extrajudicial settlement of
Estate with Waiver and Quitclaim of Ownership executed by the Garcianos. He
maintained that the building was being occupied by respondents by mere tolerance of
the previous owners. Petitioner asserted that he sent a demand letter to respondents
asking them to leave the premises within 15 days from receipt of the letter, but they
failed and refused to do so. The MTCC ruled that Carbonilla is the lawful owner of the
subject land. However it held that the defendants to have the better rights of (material)
possession to the assailed building and deemed as possessors in good faith and are
legally entitled to its possession and occupancy. The RTC affirmed the decision of the
MTCC with respect to the land, however it ruled that petitioner, as owner of the land,
would have every right to evict respondents from the land. The CA reversed the RTC
decision and ordered the dismissal of petitioner's complaint for failure of the plaintiff
(herein respondent) to prove that the case at bar is for unlawful detainer or forcible
entry.

ISSUE: Whether petitioner has sufficiently established his ownership of the subject
properties and has the right to recover possession thereof

RULING: No. While petitioner may have proven his ownership of the land, as there can
be no other piece of evidence more worthy of credence than a Torrens certificate of
title, he failed to present any evidence to substantiate his claim of ownership or right to
the possession of the building. The Deed of Extrajudicial Settlement of Estate
(Residential Building) with Waiver and Quitclaim of Ownership executed by the
Garcianos as proof that petitioner acquired ownership of the building cannot be
accepted by the court. There is no showing that the Garcianos were the owners of the
building or that they had any proprietary right over it. Ranged against respondents'
proof of possession of the building since 1977, petitioner's evidence pales in comparison
and leaves the court totally unconvinced. Without a doubt, the registered owner of real
property is entitled to its possession. However, the owner cannot simply wrest
possession thereof from whoever is in actual occupation of the property. To recover
possession, he must resort to the proper judicial remedy and, once he chooses what
action to file, he is required to satisfy the conditions necessary for such action to
prosper. In the present case, petitioner opted to file an ejectment case against
respondents. Ejectment cases-forcible entry and unlawful detainer-are summary
proceedings designed to provide expeditious means to protect actual possession or the
right to possession of the property involved. who is entitled to the physical possession
of the premises, that is, to the possession de facto and not to the possession de jure. It
does not even matter if a party's title to the property is questionable. For this reason,
an ejectment case will not necessarily be decided in favor of one who has presented
proof of ownership of the subject property. Key jurisdictional facts constitutive of the
particular ejectment case filed must be averred in the complaint and sufficiently proven.
The statements in the complaint that respondents' possession of the building was by
mere tolerance of petitioner clearly make out a case for unlawful detainer.Here,
petitioners failed to prove that the possession of respondents was by mere tolerance.
Petitioners must file either an action reivindicatoria, a suit to recover ownership to
property or file an accion publiciana, a plenary action to recover based on the better
right to possess.

WHEREFORE, premises considered, the petition is DENIED. The CA Decision dated

September 18, 2006 and Resolution dated April 17, 2007 are AFFIRMED.
DEPED V BANGUILAN, GR 230399, 20 JUNE 2018

FACTS: The heirs of Regino Banguilan (respondents) instituted a Complaint for recovery
of possession against the Department of Education (petitioner) with the Regional Trial
Court (RTC) of Tuguegarao City, Cagayan. Respondents claim that as the heirs of
Regino, the original registered owner, and by virtue of the Extra-Judicial Settlement and
Partition executed by and among themselves upon the latter's death, they are the
absolute owners of the subject parcel of land situated in Caritan Norte, Tuguegarao City
covered by Original Certificate of Title (OCT) No. 10728. They alleged that sometime
before the Second World War, the petitioner, through the officials of Caritan Norte
Elementary School (CNES), sought permission from Regino to build temporary
structures in the contested land to be used as classrooms for students. Since Regino did
not have any immediate need of the land, he consented to the construction of said
temporary structures and allowed the conduct of classes in the premises where it was
gradually improved overtime to concrete ones.

After Regino's death in 1961, respondents alleged that their predecessors-in-interest

demanded from the school officials that they be paid reasonable rent for the use of
their property and for the petitioner to purchase the same if it so desired. Respondents
claim that the officials of CNES assured them that they would pay reasonable rent for
occupying the subject lot and that they would eventually purchase it. However, no
purchase or payments were ever made. Respondents now claim that the petitioner's
non-adherence to the agreement prejudiced them because they were deprived of the
use and enjoyment of the subject property since 1950.
The respondents prayed for the following: (1) to declare the school's possession of the
property illegal or unlawful; (2) to order DepEd, its assigns and those acting in its
behalf, to vacate the property presently occupied by CNES and to surrender peaceful
possession thereof to the respondents; (3) to demand from DepEd for payment of
reasonable rent for the use of the property at a rate of P500.00 per month since 1950,
litigation expense of P30,000.00 and P50,000.00 as attorney's fees. The petitioner,
however admitted that sometime before the war, it had established CNES on land
located in Caritan Norte, Tuguegarao City and constructed school buildings on the said
school site. However, it denied respondents' claim of ownership and demands for
payment of reasonable rent since the school's occupation and possession over the
property was in the concept of an owner for more than fifty (50) years until 2001.

The trial court declared Regino as the undisputed owner of the contested property
where CNES was built as evidenced by OCT No. 10728. However, despite recognition of
ownership, the trial court was convinced that laches and prescription had already set in,
barring respondents from assailing the petitioner's right over subject property. The CA
reversed and set aside the decision of the court a quo ruling that prescription and
laches could not work in favor of petitioner since the subject lot was registered under
the Torren's System and because their possession was merely by tolerance.
ISSUE: Whether the CA erred in ruling that respondent's cause of action against
petitioner was not yet barred by laches.

RULING: No. The principle of laches or "stale demands" is the 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. It is based on the grounds of public
policy in order to maintain peace in the society and equity in order to avoid recognizing
a right when to do so would result in a clearly unfair situation. the Court has held that
there is no fast and hard rule as to what constitutes laches or staleness of demand; the
determination of which is addressed to the sound discretion of the court. To conclude a
sound judgment, courts are guided that laches, being an equitable doctrine, is
controlled by equitable considerations in accordance with the particular circumstances
of each case.

In the case of Phil-Air Conditioning v RCJ Lines, the following elements was prescribed:
(1) Conduct on the part of the defendant, or of one under whom he claims, giving rise
to the situation of which complaint is made for which the complaint seeks a remedy; (2)
Delay in asserting the complainant's rights, the complainant having had knowledge or
notice, of the defendant's conduct and having been afforded an opportunity to institute
a suit; (3) 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 (4) Injury or
prejudice to the defendant in the event relief is accorded to the complainant, or the suit
is not held to be barred.

In this case, petitioner contends that the government, through CNES, was in possession
of the subject property in the concept of an owner since the 1940's. However, as found
by the court a quo and the CA, the subject property was registered in the name of
Regino Banguilan under OCT. No. 10728 as early as 1929.

The Court explained in the case of Heirs of Jose Maligaso vs. Spouses Encinas that
possession over the property by anyone other than the registered owner gives rise to
the presumption that said possession is only by mere tolerance. Likewise, when faced
with unsubstantiated self-serving claims as opposed to a duly registered Torrens title,
the latter must prevail.

Considering that CNES' possession was merely being tolerated, respondents cannot be
said to have delayed in asserting their rights over the subject property. A registered
owner who is merely tolerating another's possession of his land is not required to
perform any act in order to recover it. This is because the occupation of the latter is
only through the continuing permission of the former. Consequently, once said
permission ceases, the party whose possession is merely being tolerated is bound to
vacate the subject property. Hence, until the registered owner communicates the
cessation of said permission, there is no need to do anything to recover the subject
property. Similarly, as aptly pointed out by the court a quo, Regino and his successor-
in-interests repeatedly asserted their rights over the subject property by demanding
from CNES the payment of rentals or for the latter to purchase the same. However,
once it became clear that petitioner was not going to pay rent, purchase the lot, or
vacate the premises, respondents instituted an action for recovery of possession. There
was no prolonged inaction on the part of the respondents which could bar them from
prosecuting their claims.

Notwithstanding the petitioner's failure to prove the concurrence of all the elements of
laches, jurisprudence is also replete with cases which hold that the doctrine of
prescription or laches is inapplicable to registered lands covered by the Torrens System.
As registered owners of the lots in question, the respondents have a right to eject any
person illegally occupying their property. This right is imprescriptible. Even if it be
supposed that they were aware of the petitioner's occupation of the property, and
regardless of the length of that possession, the lawful owners have a right to demand
the return of their property at any time as long as the possession was unauthorized or
merely tolerated, if at all. This right is never barred by laches.

The Court once ruled that mere material possession of the land was not adverse as
against the owner and was insufficient to vest title, unless such possession was
accompanied by the intent to possess as an owner. Being the owners of the subject
property, respondents have the right to recover possession from the petitioner because
such right is imprescriptible. Even if the Department of Education has been occupying
the subject property for a considerable length of time, respondents, as lawful owners,
have the right to demand the return of their property at any time as long as the
possession was only through mere tolerance.

As correctly ruled by the Court of Appeals, respondents may exercise their rights under
Article 448, in relation to Article 546 of the New Civil Code. Said provision provides
them with the option of either: (1) appropriating the improvements, after payment of
indemnity representing the value of the improvements introduced and the necessary
and useful expenses defrayed on the subject lots; or (2) obliging the petitioner to pay
the price of the land. However, petitioner cannot be obliged to buy the land if its value
is considerably more than that of the improvements and buildings it built. In such a
scenario, the petitioner may instead enter into a lease agreement with respondent heirs
and pay them reasonable rent. In case of disagreement, the Court shall fix the terms
thereof.

WHEREFORE, given the foregoing disquisition, the Petition for Review on Certiorari,
dated April 26, 2017 of the Department of Education, represented by its Regional
Director, is hereby DENIED.
ARAGON V. THE INSULAR GOVERNMENT, G.R. No. L-6019, 25 March 1911

FACTS: In 1892 a possessory title to the land in question was duly registered in favor of
InocencioAragon, one of the predecessors in interest of these applicants; that for a
long period of years, the applicant and their predecessors in interest have been in
possession of the parcel of land in question, under and undisputed claim of ownership;
that formany years a house stood upon this land, and was occupied by some of
the predecessors in interest of the applicants in these proceedings; that the
adjoining lots extend toward the bay to a line formed by the extension of the outer
boundary line of the lotin question, and that these adjoining lots would be in
substantially the same physical condition, by relation to the ebb and flow of the tide, as
lot in question, but for low retaining walls which protect them against the
incoming sea; that the water which spreads over the lot in question at high tide is
of but little depth, and would be wholly excluded by a very limited amount of
"filling" materials or a low retaining wall; that there are strong reasons to believe
that the land in question was originally well above the ebb and flow of the tide;
and that only in later years have the waters risen to such a height along the
shores of the Bay of Manila at this point as to cover the land in question
completely at high tide; though it does not definitely appear whether this is
due to changes in the current and flow of the waters in the bay, or to the
gradual sinking of the land along the coast. The Government of the Philippine
Islands, through its proper representatives, objected to the application for registry
on the ground that, as it alleges, the land in question is a part of the public domain.

ISSUE: Did the owners lose their possession of the land in question as provided under
Article 555 of the New Civil Code?

RULING: NO. If the Government is justified indisturbing the possession of the

applicants, it can only be on the ground that they have abandoned their property, or
that it has been totally destroyed and has now become a part of the public
domain by the erosive action of the sea. It is quite clear that applicants have
never abandoned their possession under a claim of ownership of this land. There has
been no such destructive or total loss of the property as would justify a
holding that the owners have lost possession. Doubtless the property has been
injured by the erosive action of the sea. Doubtless the owners in order to
profitably enjoy the possession of this property will be compelled to make
some relatively small expenditure by way of a "fill" or a retaining wall. If the
applicants have not lost their right of possession, the Government's claim of
ownership, on the ground that this is a part of the playa (shore) of Manila Bay,
necessarily falls to the ground. It affirmatively appears that the owners of the land
in question have never in fact nor in intent abandoned it, and that keeping in mind its
location and actual condition it cannot be said to have been totally destroyed for the
purposes for which it was held by them, so as to have become a part of the playa
(shore) of the Bay of Manila.
CATHOLIC VICAR APOSTOLIC OF THE MOUNTAIN PROVINCE V. COURT OF APPEALS,
HEIRS OF EGMIDIO OCTAVIANO AND JUAN VALDEZ, G.R. NO. 80294-95, 21
SEPTEMBER 1988

FACTS: Catholic Vicar Apostolic of the Mountain Province (VICAR for brevity) filed an
application for registration of title over Lots 1, 2, 3, and 4, said Lots being the sites of
the Catholic Church building, convents, high school building, school gymnasium, school
dormitories, social hall, stonewalls, etc. The Heirs of Valdez and the Heirs of Octaviano
filed their Answer/Opposition on Lots Nos. 2 and 3, respectively, asserting ownership
and title thereto since their predecessors’ house was borrowed by petitioner Vicar after
the church and the convent were destroyed. After trial on the merits, the land
registration court promulgated its Decision confirming the registrable title of VICAR to
Lots 1, 2, 3, and 4.

The Heirs of Juan Valdez appealed the decision of the land registration court to the
then Court of Appeals. The Court of Appeals reversed the decision. Thereupon, the
VICAR filed with the Supreme Court a petition for review on certiorari of the decision of
the Court of Appeals dismissing his application for registration of Lots 2 and 3.

ISSUE: Whether or not the failure to return the subject matter of commodatum
constitutes an adverse possession.

RULING: No. The bailees’ failure to return the subject matter of commodatum to the
bailor did not mean adverse possession on the part of the borrower. The bailee held in
trust the property subject matter of commodatum. Catholic Vicar was in possession as
borrower in commodatum up to 1951, when it repudiated the trust by declaring the
properties in its name for taxation purposes. When he applied for registration of Lots 2
and 3 in 1962, it had been in possession in concept of owner only for eleven years.
Ordinary acquisitive prescription requires possession for ten years, but always with just
title. Extraordinary acquisitive prescription requires 30 years. The Court found that
petitioner did not meet the requirement of 30 years possession for acquisitive
prescription over Lots 2 and 3. Neither did it satisfy the requirement of 10 years
possession for ordinary acquisitive prescription because of the absence of just title.
Private respondents were able to prove that their predecessors’ house was borrowed by
petitioner Vicar after the church and the convent were destroyed. They never asked for
the return of the house, but when they allowed its free use, they became bailors in
commodatum and the petitioner the bailee. The bailees’ failure to return the subject
matter of commodatum to the bailor did not mean adverse possession on the part of
the borrower. The bailee held in trust the property subject matter of commodatum. The
adverse claim of petitioner came only in 1951 when it declared the lots for taxation
purposes. The action of petitioner Vicar by such adverse claim could not ripen into title
by way of ordinary acquisitive prescription because of the absence of just title.
SUPAPO et al vs. SPOUSES DE JESUS et al., G.R. No. 198356, 20 April 2015

FACTS: The Spouses Supapo filed a complaint for accion publiciana against Roberto and
Susan de Jesus with the MeTC of Caloocan City. The complaint sought to compel the
respondents to vacate a piece of land located in Novaliches, Quezon City, and
registered under petitioners’ name. The land has an assessed value of Php39,980.00.
Petitioners did not reside on the lot but made sure to visit at least twice a year. During
one of their visits, they saw two houses built on the lot without their knowledge and
permission. They learned that respondents occupied both houses. They demanded the
surrender of the lot by bringing the dispute before the appropriate Lupong
Tagapamayapa. The Lupon issued a certificate to file action for failure of the parties to
settle amicably. The Spouses Supapo filed a criminal case against the respondents for
violating PD No. 772 (Anti-Squatting Law). The trial court convicted the respondents.
On appeal, the CA dismissed the case because Congress enacted R.A. No. 8368
repealing the Anti-Squatting Law. Notwithstanding the dismissal, the Spouses Supapo
moved for the execution of the respondents’ civil liability, praying that the latter vacate
the subject lot. The RTC granted the motion and issued the writ of execution.
Respondents moved to quash it but the RTC denied their motion. They filed with the CA
a petition for certiorari. The CA granted it and ruled that with the repeal of the Anti-
Squatting Law, the criminal and civil liabilities of respondents were extinguished, but it
also said that recourse may be had in court by filing the proper action for recovery of
possession. Thus, the Spouses Supapo filed the complaint for accion publiciana. After
filing their Answer, the respondents moved to set their affirmative defenses for
preliminary hearing and argued that there is another action pending between the same
parties, the complaint is barred by statute of limitations, and the petitioners’ cause of
action is barred by prior judgment. The MeTC denied the motion to set the affirmative
defenses for preliminary hearing. The RTC granted the petition for certiorari of
respondents because the action has prescribed and accion publiciana falls within the
exclusive jurisdiction of the RTC. It likewise denied the motion for reconsideration of
petitioners. On appeal, the CA affirmed the RTC decision; hence, this petition.

ISSUES: 1. Whether or not the MeTC properly acquired jurisdiction.

2. Whether or not the cause of action has prescribed.
3. Whether or not the complaint for accion publiciana is barred by res judicata.

RULING: 1. YES. Under BP 129, the jurisdiction of the RTC over actions involving title to
or possession of real property is plenary. However, R.A.No. 7691 granted the MeTC,
MTC, and MCTC the exclusive original jurisdiction to hear actions where the assessed
value of the property does not exceed Php20,000 ot Php50,000 if the property is
located in Metro Manila. Jurisdiction over actions involving title to or possession of real
property is now determined by its assessed value. It is its fair market value multiplied
by the assessment level.In the present case, the Spouses Supapo alleged that the
assessed value of the subject lot located in Metro Manila is Php39,980. Thus, the MeTC
properly acquired jurisdiction over the complaint for accion publiciana.
2. NO. Lands covered by a title cannot be acquired by prescription or adverse
possession. Even it be supposed that the holders of the Torrens Title were aware of the
other persons’ occupation of the property, regardless of the length of that possession,
the lawful owners have a right to demand the return of their property at any time as
long as the possession was unauthorized or merely tolerated.

3. NO. Res judicata is not present in the case because (a) there is no identity of parties.
The criminal complaint was prosecuted in the name of the People of the Philippines.
The accion publiciana was filed in the name of the Spouses Supapo; (b) there is no
identity of subject matter. The criminal case involves the prosecution of a crime under
the Anti-Squatting Law while theaccion publiciana is an action to recover possession of
the subject property; and (c) there is no identity of causes of action. The People of the
Philippines filed the case to protect governmental interests, while the spouses filed the
accion publiciana to protect their proprietary interests.

PETITION GRANTED.
HEIRS OF CULLADO ET. AL V. GUTIERREZ, G.R. No. 212938, 30 July 2019

DOCTRINE: The grant of reconveyance pertains to an issue of ownership, which the

accion publiciana may grant provisionally in some cases but is not binding due to the
fact that what is resolved in an accion publiciana case is “who has a better right of
possession”.

FACTS: A “Katibayan ng Orihinal na Titulo” covering a parcel of land was issued in favor
of Dominic Gutierrez (Dominic) in the year of 1995. Two years thereafter, due to the
fact that Dominic was still a minor, Dominic’s father Dominador Gutierrez (Dominador)
filed before the Regional Trial Court (RTC) an action for recovery of ownership,
possession with damages with prayer for preliminary injunction against Alfredo Cullado
(Alfredo) and claims that Alfredo had been squatting on the said land since 1977 and
despite repeated demands, Alfredo refused to vacate. In his Answer, Alfredo averred
that he was in actual, continuous, adverse possession of the land. He also asked for the
reconveyance of property and claimed that Dominic and Dominador obtained the title
through fraud. During the pendency of the proceedings, Alfredo died and was
substituted by his heirs. The RTC ruled in favour of the Heirs of Cullado and ordered
Dominic to reconvey the property in favour of the Heirs. In the year 2011, Dominic filed
a petition for relief from judgment and blamed his counsel for being negligent, hence,
the belated appeals. The RTC denied such petition for being filed out of time. On the
same year, Dominic filed a petition for annulment of judgment on the ground of
extrinsic fraud and lack of jurisdiction in the Court of Appeals (CA). The CA then ruled
that the allegations constitute a collateral attack against Dominic’s title, which cannot
be allowed in an accion publiciana and that the RTC had no jurisdiction to resolve the
twin issues of reconveyance and fraud. The Heirs of Cullado filed Motion for
Reconsideration, Dominic filed an opposition and the CA once again sided with Dominic.
Hence, this petition by the Heirs of Cullado for review on certiorari under Rule 45.

ISSUE: Did the CA err in reversing the decision of the RTC and in granting Dominic’s
petition for annulment of judgment?

RULING: No. There was no error on the part of the Court of Appeals. The Court agrees
with the CA that the RTC acted without jurisdiction when it ordered the reconveyance of
such property to Heirs of Cullado. The grant of reconveyance pertains to an issue of
ownership, which the accion publiciana may grant provisionally in some cases but is not
binding due to the fact that what is resolved in an accion publiciana case is “who has a
better right of possession” Further, after establishing the fact that the RTC acted
without jurisdiction, the grant for Dominic’s petition for annulment of judgment is
proper. Section 2 of Rule 47 provides for the grounds for the petition for annulment for
judgment: extrinsic fraud and lack of jurisdiction. In extrinsic fraud, the prescriptive
period is within 4 years from discovery of fraud while Lack of jurisdiction has no
prescriptive period and it is only until laches set in when such ground will no longer be
available. In the given case, Dominic did not let time pass before asserting his rights, a
clear indication that laches have not yet set it.
EDCA PUBLISHING V SPS SANTOS, GR 80298, 26 APRIL 1990

FACTS: EDCA Publishing sold 406 books to a certain Professor Jose Cruz who ordered
these by telephone, which was agreed to be payable on delivery. The books were
subsequently delivered to him with the corresponding invoice, and he paid with a
personal check.

Cruz then sold the 120 of the books to Leonor Santos who asked for verification, and
was then showed the invoice for the books.

EDCA became suspicious when Cruz ordered another set of books even before his check
cleared. Upon investigation, EDCA found that he wasn’t the person he claimed to be
(Dean in DLSU). EDCA had the police capture Cruz, as well as seize the books from
Santos. Santos demanded the return of the books.

RTC granted the writ of preliminary attachment.

Subsequent dishonor of a check, which did not render the contract of sale void does not
amount to unlawful deprivation of property. (There was a perfected contract of sale so
the proper remedy is specific performance)

ISSUE: Whether the owner was unlawfully deprived of the property?

RULING: No. Santos was a good faith buyer after taking steps to verify the identity of
the seller. When she was showed the invoice, she reasonably believed that he was a
legitimate seller.

With regard to unlawful deprivation, EDCA was not unlawfully deprived of the property
by mere failure of consideration. There was already a perfected contract of sale. Proof
was even substantiated when EDCA gave the invoice as proof of payment upon delivery
of the books. This did not amount to unlawful taking, because by the delivery of EDCA
to Cruz, ownership of the books already transferred to him.
DE GARCIA V. CA, 37 SCRA 129

FACTS: The plaintiff here is an owner of jewelries which was accordingly stolen from
her. Plaintiff visited a restaurant where petitioner noticed the jewelry (ring) inserted in
the finger of Mrs. De Garcia and claimed that it was her jewelry which was stolen. It
even fitted her finger when inserted but respondent claimed that it belongs to her and
bought it from one person who brought it to other person and so on.

Few days later, by request of plaintiff, they went to the shop where the contested ring
was made and Mr. Rebudilla (maker of the ring) examined it and found out that it was
the one purchased by the plaintiff in their shop few years ago based on its markings.

Respondent did not hand over the jewelry despite written demands by the plaintiff.
Plaintiff filed a case for replevin but when the sheriff is going to serve it, respondent
alleged that it was lost.

The lower court ruled in favor of the defendant. Plaintiff appealed the case. The CA
reversed the decision of the lower court and favored the plaintiff. Hence, petition for
review on certiorary by the respondent.

ISSUE: Whether plaintiff has the right of recovery.

RULING: Yes. The controlling provision is Article 559 of the Civil Code. It reads thus:
"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 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."

Respondent Angelina D. Guevara, having been unlawfully deprived of the diamond ring
in question, was entitled to recover it from petitioner Consuelo S. de Garcia who was
found in possession of the same. The only exception the law allows is when there is
acquisition in good faith of the possessor at a public sale, in which case the owner
cannot obtain its return without reimbursing the price. As authoritative interpreted in
Cruz v. Pahati,the right of the owner cannot be defeated even by proof that there was
good faith by the acquisition by the possessor.

"Suffice it to say in this regard that the right of the owner to recover personal property
acquired in good faith by another, is based on his being dispossessed without his
consent. The common law principle that where one of two innocent persons must suffer
by a fraud perpetrated by the another, the law imposes the loss upon the party who, by
his misplaced confidence, has enabled the fraud to be committed, cannot be applied in
a case which is covered by an express provision of the new Civil Code, specifically
Article 559. Between a common law principle and statutory provision, the latter must
prevail in this jurisdiction."
DIZON V. SUNTAY, 47 SCRA 160

FACTS: A diamond ring was turned over to a certain Clarita R. Sison, for sale on
commission, along with other pieces of jewelry owned by respondent Suntay. It was
then pledged to petitioner (Dominador Dizon) who is an owner of a pawnshop. Since
what was done was violative of the terms of the agreement, SUntay wanted to recover
possession thereof from petitioner (Dizon), who refused. She filed an action then for its
recovery. Suntay was successful, both in the lower court and thereafter in the Court of
Appeals.

ISSUE: Whether the owner could recover her lost property from the pawn shop.

RULING: Yes. The controlling provision is Article 559 of the Civil Code. It reads thus:
'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 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.' Respondent Angelina D. Guevara, having been unlawfully deprived of the
diamond ring in question, was entitled to recover it from petitioner Consuelo S. de
Garcia who was found in possession of the same. The only exception the law allows is
when there is acquisition in good faith of the possessor at a public sale, in which case
the owner cannot obtain its return without reimbursing the price. As authoritatively
interpreted in Cruz v. Pahati, the right of the owner cannot be defeated even by proof
that there was good faith in the acquisition by the possessor. There is a reiteration of
this principle in Aznar v. Yapdiangco. Thus: 'Suffice it to say in this regard that the right
of the owner to recover personal property acquired in good faith by another, is based
on his being dispossessed without his consent. The common law principle that were one
of two innocent persons must suffer by a fraud perpetrated by another, the law
imposes the loss upon the party who, by his misplaced confidence, has enabled the
fraud to be committed, cannot be applied in a case which is covered by an express
provision of the new Civil Code, specifically Article 559. Between a common law
principle and a statutory provision, the latter must prevail in this jurisdiction."
LEDESMA V. CA, 213 SCRA 195

FACTS: Two vehicles were purchased from City wide Motors Inc.(respondent) under a
fictitious name. The buyer posted down payment and then issued a check for its full
payment and the car was delivered to the buyer. The check was dishonored which
prompted the respondent to report the incident to the Philippine Constabulary. One of
the vehicles was recovered by the respondent while the other was in possession of
Ledesma who accordingly bought the said vehicle to the registered owner.

After posting a bond, City Wide Motors was able to recover the vehicle while the case is
pending. After trial, the lower court decided in favor of Ledes relying on Article 559 of
the civil code. Plaintiff appeal the case to the Court of Appeals but affirmed the decision
of the lower court.

ISSUE: Whether private respondent was unlawfully deprived of the vehicle so as to

make Article 559 of the Civil Code apply.

RULING: Article 559 does not apply in this case. There was a perfected unconditional
contract of sale between private respondent and the original vendee. The former
voluntarily caused the transfer of the certificate of registration of the vehicle in the
name of the first vendee — even if the said vendee was represented by someone who
used a fictitious name — and likewise voluntarily delivered the cars and the certificate
of registration to the vendee’s alleged representative Title thereto was forthwith
transferred to the vendee. The subsequent dishonor of the check because of the
alteration merely amounted to a failure of consideration which does not render the
contract of sale void, but merely allows the prejudiced party to sue for specific
performance or rescission of the contract, and to prosecute the impostor for estafa
under Article 315 of the Revised Penal Code.

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 price 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."
SUBIC BAY LEGEND RESORTS AND CASINOS, INC. V. FERNANDEZ, G.R. NO. 193426,
29 SEPTEMBER 2014

FACTS: The brother of Fernandez was a regular player at Legenda Hotel and Casino
owned and operated by the petitioner. His brother was suspected of encashing small
amount of chips that was suspected to have been stolen from the Casino. Personnel of
the Casino conducted an operation against the brother of Fernandez to caught them in
the actual encashing of chips. Eventually, they were caught and placed in a private
room for interrogation. Their chips were also confiscated by the Casino. They alleged
that the casino chips came from a chinese as payment of their car wash services.
However, they were forced to execute an affidavit and reveal their cohorts inside the
casino who is the source of their chips. They submit to the instruction of the Casino.
Two weeks later, the brother of fernandez retracted on his affidavit.

Respondent filed for recovery of sum of money with damages against petitioner, he
alleged that Legenda illegally confiscated his casino chips which belongs to them and
failed to return it despite demand.

Petitioner answered that respondent had no cause of action since the confiscated
casino chips were stolen from it, and thus it has the right to retain them.

The RTC ruled in favor of the Plaintiff. Defendant appeal the case but CA affirmed the
decision of the RTC which accordingly,respondent had the legal presumption of title to
or ownership of the casino chips.

ISSUE: Whether Art. 559 applies if loss was not proven.

RULING: No. Though casino chips do not constitute legal tender, there is no law which
prohibits their use or trade outside of the casino which issues them. In any case, it is
not unusual nor is it unlikely that respondent could be paid by his Chinese client at the
former’s car shop with the casino chips in question; said transaction, if not common, is
nonetheless not unlawful. These chips are paid for anyway; petitioner would not have
parted with the same if their corresponding representative equivalent in legal tender,
goodwill, or otherwise was not received by it in return or exchange. Given this premise
that casino chips are considered to have been exchanged with their corresponding
representative value it is with more reason that this Court should require petitioner to
prove convincingly and persuasively that the chips it confiscated from Ludwin and
Deoven were indeed stolen from it; if so, any Tom, Dick or Harry in possession of
genuine casino chips is presumed to have paid for their representative value in
exchange therefor. If petitioner cannot prove its loss, then Article 559 cannot apply; the
presumption that the chips were exchanged for value remains.
AZARCON V EUSEBIO, GR L-11977, 29 APRIL 1959

FACTS: This is an appeal from an order of the Court of Appeals finding Leonardo
Azarcon, Manuel Azarcon and Esteban Abobo guilty of contempt of court. Victor Eusebio
had filed a lease application, No. V-79, for a parcel of land known as lot No. 3807,
containing an area of about 349 hectares. A portion of more or less 6 hectares thereof
was occupied by Azarcon and his companions, under a homestead application. Before
the dispute could be settled, Eusebio filed a complaint in the Court of First Instance of
Nueva Ecija. Azarcon answered alleging that he is in actual possession of a portion of
24 hectares since 1941 by virtue of a homestead application, No. V-42995, with
interruption during the war and again in 1950 up to the time of the filing of the action.
Having failed to obtain a reconsideration of the court’s decision, defendants appealed to
the Court of Appeals. CA denied a petition of defendants-appellants to reconsider order
authorizing the stay of execution on the ground that the writ of execution issued had
already been executed.

ISSUE: Whether or not the defendant is justified in harvesting his pending fruits upon
the court order of execution

RULING: YES. While the court order ordered the defendants to move out from the
premises, it did not prohibit them from gathering the crop then existing thereon. Under
the law, a person who is in possession and who is being ordered to leave a parcel of
land while products thereon are pending harvest, has the right to a part of the net
harvest, as expressly provided by Article 545 of the Civil Code: If at the time the good
faith ceases, there should be any natural or industrial fruits, the possessor shall have a
right to a part of the expenses of cultivation, and to a part of the net harvest, both in
proportion to the time of the possession. As the order of execution did not expressly
prohibit the defendants-appellants from gathering the pending fruits, which fruits were
the result of their possession and cultivation of the land, it cannot be said that they
committed an act which is clear violation of the court’s order. Besides, the defendants-
appellants had presented, after receipt of the order of execution, a motion to set aside
the said order, and this motion to stay execution was granted. They further presented a
bond in accordance with the order of the court and had it approved by the Court of
First Instance. It was perhaps in expectation of this resolution of the court setting aside
the order of execution that defendants-appellants may have felt justified in entering the
land and harvesting the fruits existing thereon.
CORDERO V CABRAL, GR L-36789, 25 JULY 1983

FACTS: A parcel of land was originally registered in the name of Gregorio Ocampo.
After his death, the plaintiffs took possession of the properties, among which is a
riceland where the southern part was possessed by defendants Cabral. The plaintiffs
demanded to surrender possession of the said land, but defendants refused to do so.
Cabral alleged that she and her predecessors-in-interest are the real owners and that
they have been in actual, adverse, peaceful, and continuous possession of the property
as approved by the Director of lands on 21 December 1935. They further claim that
Ocampo openly admitted and recognized Cabral as the real owners of said portion of
land.

The Trial Court dismissed the complaint, and likewise dismissed the counterclaim of the
defendants.

The CA found out that there was an oral sale between Cabral and Mr. Ocampo but did
not materialize and was never discussed in the trial court.

ISSUE: Whether possession through oral sale is valid.

RULING: No. The defendants, by their own admission, are in possession of the disputed
land. There is no evidence that they were possessors in bad faith. However, their good
faith ceased when they were served with summons to answer the complaint. As
possessors in bad faith from the service of the summons they shall reimburse the fruits
received and those which the legitimate possessor could have received, x xx. (Art. 549,
Civil Code.

The fact is that the defendant Victoria P. Cabral or any of her predecessors in interest
did not sincerely and honestly believe that they were the owners of this portion of
property. In fact they did not have and do not have any kind of title or any kind of
document, either public or private, over this property and they did not even have this
property declared in their names for taxation purposes. Granting, but without admitting,
that the title to this property was obtained either by error or fraud yet the defendant
Victoria P. Cabral can have no valid claim against the plaintiffs because she has never
been the owner of said property and also because the plaintiffs’ predecessor, Mr.
Gregorio Z. Ocampo, acquired this property as ‘an innocent purchaser, in good faith and
for value.’
MENDOZA V DE GUZMAN, GR L-2721, 5 OCTOBER 1928

FACTS: A judgment was rendered in favor of Mendoza on a previous case which was
instituted on 6 November 1916 for recovery of a piece of land filed by spouses Solis.
The said case was remanded to the Court of origin and placed Mendoza as de facto in
possession of the property.

In a decision rendered in the cadastral case, the lot was adjudicated in favor of
Mendoza and Enriquez in equal parts pro indiviso subject to the right of retention on
the part of de Guzman until he shall have been indemnified for the improvements
existing on the land. By virtue of this judgment, De Guzman presented a motion
requesting the issuance of a writ of possession for said piece of land in his favor which
was granted on June 25, 1924. From the time Leandra Solis and Bernardo Solis, as well
as Manuel de Guzman who was working on the land, were ejected therefrom, Martin
Mendoza possessed it until June 25, 1924, when de Guzman obtained the writ of
possession above- mentioned. Since then De Guzman has had dominion over the land.

Being unable to come to an agreement as to the amount which should be allowed for
the improvements made on the land, Martin Mendoza and Natalio Enriquez began an
action requesting the court to (a) fix the value of the necessary and useful expenses
incurred by Manuel de Guzman in introducing the improvements; (b) require the
defendant to render an accounting of the fruits received by him and order that the
value of the fruits be applied to the payment of the necessary and useful expenses; and
(c) decree the restitution of the possession to the plaintiffs.

The trial court held that (1) that in accordance with the provisions of articles 435 and
454 in relation with article 361 of the Civil Code, the value of the "indemnization" to be
paid to the defendant should be fixed according to the necessary and useful expenses
incurred by him in introducing "las plantaciones en cuestion"; (2) that the plaintiffs as
the owner of the property have the right to make their own "las plantaciones hechas
por el demandado" upon payment in the form indicated in No. 1, the defendant having
the right to retain the land until the expenditures have been refunded; (3) that the
defendant is obliged to render a detail and just account of the fruits and other profits
received by him from the property for their due application; and (4) that the value of
the fruits received by the defendant should first be applied to the payment of the
"indemnizacion," and in that it exceeds the value of the "indemnizacion," the excess
shall be returned to the plaintiffs.

On 23 September 1927, the amount that the plaintiffs were required to pay to the
respondents exceeded the amount that was required to pay. The defendant and
intervenor were ordered to deliver the land and its improvements as soon as the
plaintiffs have paid the difference, without special pronouncement as to costs.

ISSUE: Whether the excess of the indemnification should be returned to the petitioners.
RULING: As described by the Spanish commentators, necessary expenses are those
made for the preservation of the thing, as those without which the thing would
deteriorate or be lost; as those that augment the income of the things upon which they
are expanded. Among the necessary expenditures are those incurred for cultivation,
production, upkeep, and others.

The Court resolved the issue which held that once the owner elects to appropriate the
improvements, the builder, planter, or sower cannot exactly be considered to be a
possessor in good faith. Hence, whatever fruit he receives during the pendency of
retention must be deducted from whatever indemnity is due to him; and in case it
exceeds the value of the indemnity, the excess shall be returned to the owner of the
land.
ROBLES V. LIZARRAGA HERMANOS, GR NO. L-26173, 13 JULY 1927

FACTS: Hacienda Nahalinan was originally owned by Zacarias Robles, Sr. and Anastacia
de la Rama, the plaintiff’s parents. When Robles Sr. died, de la Rama became the
administatrix and leased the hacienda to her son, Zacarias Robles. The lease was to run
from May 1915 to May 1920. It was stipulated that any permanent improvements
necessary for the cultivation and exploitation to the hacienda should be made at the
expense of the lessee without right to indemnity at the end of the term.

Three years before the lease was to expire, de la Rama dies, leaving as heirs Zacarias,
Jose, Evarista, Magdalena, and Felix. Jose and Evarista acquired by purchase the shares
of their coheirs in the entire inheritance.

Lizarraga Hermanos, a mercantile partnership, proposed to buy all other properties

belonging to the Robles estate. It was also proposed that Zacarias would surrender the
lst two years of his lease and permit Lizarraga to take possession as purchases in June
1918. In consideration of shortening the lease term, Lizarraga agreed to pay Zacarias
the value of all betterments that he had made on the hacienda and to purchase from
him all that belonged to him personally on the hacienda.

No reference in the conveyance was made as to the surrender of Zacarias’ rights as

lessee except in fixing the date when the lease would end. Zacarias pointed out upon
reading the instrument that it was declared that the lease will subsist only up to June
30, 1918 instead of May 1920 and at the same time, there was nothing in the
instrument about the promise of Lizarraga to compensate him for the improvements
and to purchase the existing crops.

When Zacarias pointed this out, Lizarraga’s representative said that it was unnecessary
to do so because of the confidence existing between the parties.

Zacarias did not contract any plans for his sugarcane because he relied on the
defendant’s promise to buy the crops from him. Lizarraga later on said that they would
not be buying the crops, which caused the plaintiff to lose money by virtue of the delay.
During the trial, Lizarraga contended that they had not come into an agreement
regarding the crops.

ISSUES: (1) Can the contract be proved by oral evidence?

(2) Is the sale enforceable?

RULING: (1) Yes. While it is true that the execution of a contract in writing is deemed
to superseded all oral negotiations or stipulations concerning its terms and the subject-
matter which preceded the execution of the instrument, in the absence of accident
fraud, or mistake of fact, this rule should be taken with proper qualifications.
It is agreed that proof is admissible of any collateral, parol agreement that is not
inconsistent with the terms of the written contract, though it may relate to the same
subject-matter.

It has accordingly been held that in case of a written contract of elase, the lessee may
prove an independent verbal agreement of the part of the landlord to put the leased
premises in a safe condition and a vendor of realty may show by parol evidence that
crops growing on the land were reserved, though no such reservation was made in the
deed of conveyance.

The verbal contract which the plaintiff has established in this case is therefore clearly
independent of the main contract of conveyance and evidence of such verbal contract is
admissible under the doctrine above stated.

(2) Yes. The defendant invoked Article 335 of the Code of Civil Procedure, which states
that a contract for the sale of goods, chattels, or things in action at a price not less than
P100, shall be unenforceable unless the contract shall be in writing and subscribed by
the parties charged or by his agent. But the Court notes that the section contains a
qualification, which is thus stated: “unless the buyer accepts and receives part of such
goods and chattels.

It was found by the trial court that the personal property such as farming implements,
were used by Lizarraga in the cultivation of the hacienda.
MWSS V CA, GR L-54526, 25 AUGUST 1986

FACTS: The City of Dagupan filed a Complaint against the former National Waterworks
and Sewarage authority (NAWASA) now the Metropolitan Waterworks and Sewarage
System (MWSS)for recovery of ownership and possession of the Dagupan Waterworks
System.

NAWASA interposed as one of its special defenses RA 1382 which vested upon it the
ownership, possession, and control of all waterworks systems throughout the
Philippines and as one of its counterclaims, the reimbursement of the expenses it had
incurred for the necessary and useful improvements.

Judgment was rendered by the trial court in favor of Dagupan City and found NAWASA
to be in bad faith and not entitled to their reimbursement claims. The CA affirmed the
judgment of the trial Court.

ISSUE: Whether a possessor in bad faith has the right to remove all the useful
improvements.

RULING: No. Article 449 of the Civil Code provides that “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.”

Under Article 546 of the Civil Code, only a possessor in good faith shall be refunded for
the useful expenses with the right of retention until reimbursed; and under Article 547,
only a possessor in good faith may remove useful improvements if it can be done
without damage to the principal thing and if the person who recovers the possession
does not exercise the option of reimbursing the useful expenses. The right given a
possessor in bad faith to remove improvements applies only to improvements for pure
luxury or mere pleasure, provided that the thing suffers no injury thereby and the
lawful possessor does not prefer to retain them by paying the value they have at the
time he enters into possession. As a builder in bad faith, NAWASA lost whatever useful
improvements it had made without right to indemnity.

The Decision appealed from is hereby AFFIRMED.