ObliCon Cases 1106-1155

FIRST DIVISION
[G.R. No. 128991. April 12, 2000]

YOLANDA ROSELLO-BENTIR, SAMUEL PORMIDA and CHARITO
PORMIDA, petitioners, vs. HONORABLE MATEO M. LEANDA, in his capacity
as Presiding Judge of RTC, Tacloban City, Branch 8, and LEYTE GULF
TRADERS, INC.,respondents.
KAPUNAN, J.:
Reformation of an instrument is that remedy in equity by means of which a written
instrument is made or construed so as to express or conform to the real intention of
the parties when some error or mistake has been committed. [1] It is predicated on
the equitable maxim that equity treats as done that which ought to be
done.[2] The rationale of the doctrine is that it would be unjust and unequitable to
allow the enforcement of a written instrument which does not reflect or disclose the
real meeting of the minds of the parties.[3] However, an action for reformation must
be brought within the period prescribed by law, otherwise, it will be barred by the
mere lapse of time. The issue in this case is whether or not the complaint for
reformation filed by respondent Leyte Gulf Traders, Inc. has prescribed and in the
negative, whether or not it is entitled to the remedy of reformation sought. Oldmiso
On May 15, 1992, respondent Leyte Gulf Traders, Inc. (herein referred to as
respondent corporation) filed a complaint for reformation of instrument, specific
performance, annulment of conditional sale and damages with prayer for writ of
injunction against petitioners Yolanda Rosello-Bentir and the spouses Samuel and
Charito Pormida. The case was docketed as Civil Case No. 92-05-88 and raffled to
Judge Pedro S. Espina, RTC, Tacloban City, Branch 7. Respondent corporation
alleged that it entered into a contract of lease of a parcel of land with petitioner
Bentir for a period of twenty (20) years starting May 5, 1968. According to
respondent corporation, the lease was extended for another four (4) years or until
May 31, 1992. On May 5, 1989, petitioner Bentir sold the leased premises to
petitioner spouses Samuel Pormada and Charito Pormada. Respondent corporation
questioned the sale alleging that it had a right of first refusal. Rebuffed, it filed Civil
Case No. 92-05-88 seeking the reformation of the expired contract of lease on the
ground that its lawyer inadvertently omitted to incorporate in the contract of lease
executed in 1968, the verbal agreement or understanding between the parties that
in the event petitioner Bentir leases or sells the lot after the expiration of the lease,
respondent corporation has the right to equal the highest offer. Ncm
In due time, petitioners filed their answer alleging that the inadvertence of the
lawyer who prepared the lease contract is not a ground for reformation. They
further contended that respondent corporation is guilty of laches for not bringing the
case for reformation of the lease contract within the prescriptive period of ten (10)
years from its execution.
Respondent corporation then filed its reply and on November 18, 1992, filed a
motion to admit amended complaint. Said motion was granted by the lower court.[4]
Thereafter, petitioners filed a motion to dismiss reiterating that the complaint
should be dismissed on the ground of prescription.
Cases 1106-1155: Obligations and Contracts Estrellado 2014
On December 15, 1995, the trial court through Judge Pedro S. Espina issued an
order dismissing the complaint premised on its finding that the action for
reformation had already prescribed. The order reads: Scjuris
ORDER
Resolved here is the defendants MOTION TO DISMISS PLAINTIFFS
complaint on ground of prescription of action.
It is claimed by plaintiff that he and defendant Bentir entered into a
contract of lease of a parcel of land on May 5, 1968 for a period of 20 years
(and renewed for an additional 4 years thereafter) with the verbal
agreement that in case the lessor decides to sell the property after the
lease, she shall give the plaintiff the right to equal the offers of other
prospective buyers. It was claimed that the lessor violated this right of first
refusal of the plaintiff when she sureptitiously (sic) sold the land to codefendant Pormida on May 5, 1989 under a Deed of Conditional Sale.
Plaintiffs right was further violated when after discovery of the final sale,
plaintiff ordered to equal the price of co-defendant Pormida was refused
and again defendant Bentir surreptitiously executed a final deed of sale in
favor of co-defendant Pormida in December 11, 1991.
The defendant Bentir denies that she bound herself to give the plaintiff the
right of first refusal in case she sells the property. But assuming for the
sake of argument that such right of first refusal was made, it is now
contended that plaintiffs cause of action to reform the contract to reflect
such right of first refusal, has already prescribed after 10 years, counted
from May 5, 1988 when the contract of lease incepted. Counsel for
defendant cited Conde vs. Malaga, L-9405 July 31, 1956 and Ramos vs.
Court of Appeals, 180 SCRA 635, where the Supreme Court held that the
prescriptive period for reformation of a written contract is ten (10) years
under Article 1144 of the Civil Code.
This Court sustains the position of the defendants that this action for
reformation of contract has prescribed and hereby orders the dismissal of
the case.
SO ORDERED.[5]
On December 29, 1995, respondent corporation filed a motion for reconsideration of
the order dismissing the complaint. Juris
On January 11, 1996, respondent corporation filed an urgent ex-parte motion for
issuance of an order directing the petitioners, or their representatives or agents to
refrain from taking possession of the land in question.
Considering that Judge Pedro S. Espina, to whom the case was raffled for
resolution, was assigned to the RTC, Malolos, Bulacan, Branch 19, Judge Roberto A.
Navidad was designated in his place. Manikan
On March 28, 1996, upon motion of herein petitioners, Judge Navidad inhibited
himself from hearing the case. Consequently, the case was re-raffled and assigned
to RTC, Tacloban City, Branch 8, presided by herein respondent judge Mateo M.
Leanda.
On May 10, 1996, respondent judge issued an order reversing the order of dismissal
on the grounds that the action for reformation had not yet prescribed and the
dismissal was "premature and precipitate", denying respondent corporation of its
right to procedural due process. The order reads: Suprema
ORDER
Stated briefly, the principal objectives of the twin motions submitted by the
plaintiffs, for resolution are:
(1) for the reconsideration of the Order of 15 December 1995 of the Court
(RTC, Br. 7), dismissing this case, on the sole ground of prescription of one
(1) of the five (5) causes of action of plaintiff in its complaint for
"reformation" of a contract of lease; and,
(2) for issuance by this Court of an Order prohibiting the defendants and
their privies-in-interest, from taking possession of the leased premises,
until a final court order issues for their exercise of dominical or possessory
right thereto.
The records of this case reveal that co-defendant BENTER (Yolanda) and
plaintiff Leyte Gulf Traders Incorporation, represented by Chairman Benito
Ang, entered into a contract of lease of a parcel of land, denominated as
Lot No. 878-D, located at Sagkahan District, Tacloban City, on 05 May
1968, for a period of twenty (20) years, (later renewed for an additional
two (2) years). Included in said covenant of lease is the verbal
understanding and agreement between the contracting parties, that when
the defendant (as lessor) will sell the subject property, the plaintiff as
(lessee) has the "right of first refusal", that is, the right to equal the offer
of any other prospective third-party buyer. This agreement (sic) is made
apparent by paragraph 4 of the lease agreement stating:
"4. IMPROVEMENT. The lessee shall have the right to
erect on the leased premises any building or structure
that it may desire without the consent or approval of the
Lessor x x x provided that any improvements existing at
the termination of the lease shall remain as the property
of the Lessor without right to reimbursement to the
Lessee of the cost or value thereof."
That the foregoing provision has been included in the lease
agreement if only to convince the defendant-lessor that plaintiff
desired a priority right to acquire the property (ibid) by purchase,
upon expiration of the effectivity of the deed of lease.
In the course of the interplay of several procedural moves of the
parties herein, the defendants filed their motion to admit their
amended answer to plaintiffs amended complaint.
Correspondingly, the plaintiff filed its opposition to said motion.
The former court branch admitted the amended answer, to which
order of admission, the plaintiff seasonably filed its motion for
reconsideration. But, before the said motion for reconsideration
was acted upon by the court, the latter issued an Order on 15
December 1995, DISMISSING this case on the lone ground of
prescription of the cause of action of plaintiffs complaint on
"reformation" of the lease contract, without anymore considering

the remaining cause of action, viz.: (a) on Specific Performance;
(b) an Annulment of Sale and Title; (c) on Issuance of a Writ of
Injunction, and (d) on Damages.
With due respect to the judicial opinion of the Honorable Presiding
Judge of Branch 7 of this Court, the undersigned, to whom this
case was raffled to after the inhibition of Judge Roberto Navidad,
as acting magistrate of Branch 7, feels not necessary any more to
discuss at length that even the cause of action for "reformation"
has not, as yet, prescribed.
To the mind of this Court, the dismissal order adverted to above,
was obviously premature and precipitate, thus resulting denial
upon the right of plaintiff that procedural due process. The other
remaining four (4) causes of action of the complaint must have
been deliberated upon before that court acted hastily in dismissing
this case.
WHEREFORE, in the interest of substantial justice, the Order of
the court, (Branch 7, RTC) dismissing this case, is hereby ordered
RECONSIDERED and SET ASIDE.
Let, therefore, the motion of plaintiff to reconsider the Order
admitting the amended answer and the Motion to Dismiss this
case (ibid), be set for hearing on May 24, 1996, at 8:30 oclock in
the morning. Service of notices must be effected upon parties and
counsel as early as possible before said scheduled date.
Concomitantly, the defendants and their privies-in-interest or
agents, are hereby STERNLY WARNED not to enter, in the
meantime, the litigated premises, before a final court order issues
granting them dominical as well as possessory right thereto.
To the motion or petition for contempt, filed by plaintiff, thru Atty.
Bartolome C. Lawsin, the defendants may, if they so desire, file
their answer or rejoinder thereto, before the said petition will be
set for hearing. The latter are given ten (10) days to do so, from
the date of their receipt of a copy of this Order.
SO ORDERED.[6]
On June 10, 1996, respondent judge issued an order for status quo ante, enjoining
petitioners to desist from occupying the property. [7]
Aggrieved, petitioners herein filed a petition for certiorari to the Court of Appeals
seeking the annulment of the order of respondent court with prayer for issuance of
a writ of preliminary injunction and temporary restraining order to restrain
respondent judge from further hearing the case and to direct respondent
corporation to desist from further possessing the litigated premises and to turn over
possession to petitioners.
On January 17, 1997, the Court of Appeals, after finding no error in the questioned
order nor grave abuse of discretion on the part of the trial court that would amount
to lack, or in excess of jurisdiction, denied the petition and affirmed the questioned
order.[8] A reconsideration of said decision was, likewise, denied on April 16, 1997. [9]
Thus, the instant petition for review based on the following assigned errors, viz:
6.01 THE COURT OF APPEALS ERRED IN HOLDING THAT AN
ACTION FOR REFORMATION IS PROPER AND JUSTIFIED UNDER
THE CIRCUMSTANCES OF THE PRESENT CASE;
6.02 THE COURT OF APPEALS ERRED IN HOLDING THAT THE
ACTION FOR REFORMATION HAS NOT YET PRESCRIBED;
6.03 THE COURT OF APPEALS ERRED IN HOLDING THAT AN
OPTION TO BUY IN A CONTRACT OF LEASE IS REVIVED FROM THE
IMPLIED RENEWAL OF SUCH LEASE; AND,
6.04 THE COURT OF APPEALS ERRED IN HOLDING THAT A
STATUS QUO ANTE ORDER IS NOT AN INJUNCTIVE RELIEF THAT
SHOULD COMPLY WITH THE PROVISIONS OF RULE 58 OF THE
RULES OF COURT.[10]
The petition has merit. Scsdaad
The core issue that merits our consideration is whether the complaint for
reformation of instrument has prescribed. Sdaad
The remedy of reformation of an instrument is grounded on the principle of equity
where, in order to express the true intention of the contracting parties, an
instrument already executed is allowed by law to be reformed. The right of
reformation is necessarily an invasion or limitation of the parol evidence rule since,
when a writing is reformed, the result is that an oral agreement is by court decree
made legally effective.[11] Consequently, the courts, as the agencies authorized by
law to exercise the power to reform an instrument, must necessarily exercise that
power sparingly and with great caution and zealous care. Moreover, the remedy,
being an extraordinary one, must be subject to limitations as may be provided by
law. Our law and jurisprudence set such limitations, among which is laches. A suit
for reformation of an instrument may be barred by lapse of time. The prescriptive
period for actions based upon a written contract and for reformation of an
instrument is ten (10) years under Article 1144 of the Civil Code. [12] Prescription is
intended to suppress stale and fraudulent claims arising from transactions like the
one at bar which facts had become so obscure from the lapse of time or defective
memory.[13] In the case at bar, respondent corporation had ten (10) years from
1968, the time when the contract of lease was executed, to file an action for
reformation. Sadly, it did so only on May 15, 1992 or twenty-four (24) years after
the cause of action accrued, hence, its cause of action has become stale, hence,
time-barred. Sdaamiso
In holding that the action for reformation has not prescribed, the Court of Appeals
upheld the ruling of the Regional Trial Court that the 10-year prescriptive period
should be reckoned not from the execution of the contract of lease in 1968, but
from the date of the alleged 4-year extension of the lease contract after it expired in
1988. Consequently, when the action for reformation of instrument was filed in
1992 it was within ten (10) years from the extended period of the lease. Private
respondent theorized, and the Court of Appeals agreed, that the extended period of
lease was an "implied new lease" within the contemplation of Article 1670 of the
Civil Code,[14] under which provision, the other terms of the original contract were
deemed revived in the implied new lease.
We do not agree. First, if, according to respondent corporation, there was an

agreement between the parties to extend the lease contract for four (4) years after
the original contract expired in 1988, then Art. 1670 would not apply as this
provision speaks of an implied new lease (tacita reconduccion) where at the end of
the contract, the lessee continues to enjoy the thing leased "with the acquiescence
of the lessor", so that the duration of the lease is "not for the period of the original
contract, but for the time established in Article 1682 and 1687." In other words, if
the extended period of lease was expressly agreed upon by the parties, then the
term should be exactly what the parties stipulated, not more, not less. Second,
even if the supposed 4-year extended lease be considered as an implied new lease
under Art. 1670, "the other terms of the original contract" contemplated in said
provision are only those terms which are germane to the lessees right of continued
enjoyment of the property leased.[15] The prescriptive period of ten (10) years
provided for in Art. 1144[16] applies by operation of law, not by the will of the
parties. Therefore, the right of action for reformation accrued from the date of
execution of the contract of lease in 1968.
Even if we were to assume for the sake of argument that the instant action for
reformation is not time-barred, respondent corporations action will still not prosper.
Under Section 1, Rule 64 of the New Rules of Court,[17] an action for the reformation
of an instrument is instituted as a special civil action for declaratory relief. Since the
purpose of an action for declaratory relief is to secure an authoritative statement of
the rights and obligations of the parties for their guidance in the enforcement
thereof, or compliance therewith, and not to settle issues arising from an alleged
breach thereof, it may be entertained only before the breach or violation of the law
or contract to which it refers.[18]Here, respondent corporation brought the present
action for reformation after an alleged breach or violation of the contract was
already committed by petitioner Bentir. Consequently, the remedy of reformation no
longer lies. Ncmmis
We no longer find it necessary to discuss the other issues raised considering that
the same are predicated upon our affirmative resolution on the issue of the
prescription of the action for reformation.
WHEREFORE, the petition is hereby GRANTED. The Decision of the Court of
Appeals dated January 17, 1997 is REVERSED and SET ASIDE. The Order of the
Regional Trial Court of Tacloban City, Branch 7, dated December 15, 1995
dismissing the action for reformation is REINSTATED. Scncm
SO ORDERED.
FIRST DIVISION
[G.R. No. 165420. June 30, 2005]
CONCEPCION R. AINZA, substituted by her legal heirs, DR. NATIVIDAD A.
TULIAO, CORAZON A. JALECO and LILIA A. OLAYON, petitioners, vs.
SPOUSES ANTONIO PADUA and EUGENIA PADUA, respondents.
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the February 24, 2004 decision of
the Court of Appeals in CA-G.R. CV No. 70239,[1] and its September 28, 2004
resolution, denying reconsideration thereof.[2]
In her complaint for partition of real property, annulment of titles with

damages,[3] Concepcion Ainza (Concepcion) alleged that respondent-spouses
Eugenia (Eugenia) and Antonio Padua (Antonio) owned a 216.40 sq. m. lot with an
unfinished residential house located at No. 85-A Durian corner Pajo Sts., Barangay
Quirino 2-C, Project 2, Quezon City, covered by Transfer Certificate of Title No.
271935. Sometime in April 1987, she bought one-half of an undivided portion of
the property from her daughter, Eugenia and the latters husband, Antonio, for One
Hundred Thousand Pesos (P100,000.00).
No Deed of Absolute Sale was executed to evidence the transaction, but cash
payment was received by the respondents, and ownership was transferred to
Concepcion through physical delivery to her attorney-in-fact and daughter,
Natividad Tuliao (Natividad). Concepcion authorized Natividad and the latters
husband, Ceferino Tuliao (Ceferino) to occupy the premises, and make
improvements on the unfinished building.
Thereafter, Concepcion alleged that without her consent, respondents caused
the subdivision of the property into three portions and registered it in their names
under TCT Nos. N-155122, N-155123 and N-155124 in violation of the restrictions
annotated at the back of the title.
On the other hand, Antonio averred that he bought the property in 1980 and
introduced improvements thereon. Between 1989 and 1990, he and his wife,
Eugenia, allowed Natividad and Ceferino to occupy the premises temporarily. In
1994, they caused the subdivision of the property and three (3) separate titles were
issued.
Thereafter, Antonio requested Natividad to vacate the premises but the latter
refused and claimed that Concepcion owned the property. Antonio thus filed an
ejectment suit on April 1, 1999. Concepcion, represented by Natividad, also filed on
May 4, 1999 a civil case for partition of real property and annulment of titles with
damages.
Antonio claimed that his wife, Eugenia, admitted that Concepcion offered to
buy one third (1/3) of the property who gave her small amounts over several years
which totaled P100,000.00 by 1987 and for which she signed a receipt.
On January 9, 2001, the Regional Trial Court of Quezon City, Branch 85,
rendered judgment[4] in favor of Concepcion, the dispositive portion of which states:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiff and against the defendants and ordering:
1. the subdivision of the subject property between the said plaintiff and
defendants in equal shares with one-half of the property, including
the portion occupied by the spouses Severino and Natividad Tuliao to
be awarded to the plaintiff;
2. the cancellation of Transfer Certificates of Title Nos. N-155122, N155123, N-155124 of the Registry of Deeds of Quezon City;
3. the defendants to pay to the plaintiff P50,000.00 as attorneys fees.
SO ORDERED.[5]
The trial court upheld the sale between Eugenia and Concepcion. It ruled that
the sale was consummated when both contracting parties complied with their
respective obligations. Eugenia transferred possession by delivering the property to

Concepcion who in turn paid the purchase price. It also declared that the transfer
of the property did not violate the Statute of Frauds because a fully executed
contract does not fall within its coverage.
On appeal by the respondents, the Court of Appeals reversed the decision of
the trial court, and declared the sale null and void. Applying Article 124 of the
Family Code, the Court of Appeals ruled that since the subject property is conjugal,
the written consent of Antonio must be obtained for the sale to be valid. It also
ordered the spouses Padua to return the amount of P100,000.00 to petitioners plus
interest.[6]
The sole issue for resolution in this petition for review is whether there was a
valid contract of sale between Eugenia and Concepcion.
A contract of sale is perfected by mere consent, upon a meeting of the
minds on the offer and the acceptance thereof based on subject matter, price and
terms of payment.[7]
In this case, there was a perfected contract of sale between Eugenia and
Concepcion. The records show that Eugenia offered to sell a portion of the property
to Concepcion, who accepted the offer and agreed to pay P100,000.00 as
consideration. The contract of sale was consummated when both parties fully
complied with their respective obligations. Eugenia delivered the property to
Concepcion, who in turn, paid Eugenia the price of One Hundred Thousand Pesos
(P100,000.00), as evidenced by the receipt which reads:
RECEIPT
Received the amount of ONE HUNDRED THOUSAND PESOS (P100,000.00) as
payment for the lot on 85-A Durian St., Project 2, Quezon City, from Mrs.
Concepcion R. Ainza, on April, 1987.
_______(Sgd.)______
Mrs.. Eugenia A. Padua[8]
The verbal contract of sale between Eugenia and Concepcion did not violate
the provisions of the Statute of Frauds that a contract for the sale of real property
shall be unenforceable unless the contract or some note or memorandum of the sale
is in writing and subscribed by the party charged or his agent. [9] When a verbal
contract has been completed, executed or partially consummated, as in this case,
its enforceability will not be barred by the Statute of Frauds, which applies only to
an executory agreement.[10] Thus, where one party has performed his obligation,
oral evidence will be admitted to prove the agreement. [11]
In the instant case, the oral contract of sale between Eugenia and Concepcion
was evidenced by a receipt signed by Eugenia. Antonio also stated that his wife
admitted to him that she sold the property to Concepcion.
It is undisputed that the subject property was conjugal and sold by Eugenia in
April 1987 or prior to the effectivity of the Family Code on August 3, 1988, Article
254 of which repealed Title V, Book I of the Civil Code provisions on the property
relations between husband and wife. However, Article 256 thereof limited its
retroactive effect only to cases where it would not prejudice or impair vested or
acquired rights in accordance with the Civil Code or other laws. In the case at bar,
vested rights of Concepcion will be impaired or prejudiced by the application of the

Family Code; hence, the provisions of the Civil Code should be applied.
In Felipe v. Heirs of Aldon, et al.,[12] the legal effect of a sale of conjugal
properties by the wife without the consent of the husband was clarified, to wit:
The legal ground which deserves attention is the legal effect of a sale of lands
belonging to the conjugal partnership made by the wife without the consent of the
husband.
It is useful at this point to re-state some elementary rules: The husband is the
administrator of the conjugal partnership. (Art. 165, Civil Code) Subject to certain
exceptions, the husband cannot alienate or encumber any real property of the
conjugal partnership without the wifes consent. (Art. 166, Idem.) And the wife
cannot bind the conjugal partnership without the husbands consent, except in cases
provided by law. (Art. 172, Idem.).
In the instant case, Gimena, the wife, sold lands belonging to the conjugal
partnership without the consent of the husband and the sale is not covered by the
phrase except in cases provided by law. The Court of Appeals described the sale
as invalid a term which is imprecise when used in relation to contracts because
the Civil Code uses specific names in designating defective contracts,
namely: rescissible (Arts. 1380 et seq.), voidable (Arts. 1390 et
seq.), unenforceable (Arts. 1403, et seq.), and void or inexistent (Arts. 1409 et
seq.).
The sale made by Gimena is certainly a defective contract but of what
category? The answer: it is a voidable contract.
According to Art. 1390 of the Civil Code, among the voidable contracts are [T]hose
where one of the parties is incapable of giving consent to the contract. (Par. 1.) In
the instant case Gimena had no capacity to give consent to the contract of sale. The
capacity to give consent belonged not even to the husband alone but to both
spouses.
The view that the contract made by Gimena is a voidable contract is
supported by the legal provision that contracts entered by the husband
without the consent of the wife when such consent is required, are
annullable at her instance during the marriage and within ten years from
the transaction questioned. (Art. 173, Civil Code).
Gimenas contract is not rescissible for in such a contract all the essential elements
are untainted but Gimenas consent was tainted. Neither can the contract be
classified as unenforceable because it does not fit any of those described in Art.
1403 of the Civil Code. And finally, the contract cannot be void or inexistent
because it is not one of those mentioned in Art. 1409 of the Civil Code. By process
of elimination, it must perforce be a voidable contract.
The voidable contract of Gimena was subject to annulment by her husband only
during the marriage because he was the victim who had an interest in the contract.
Gimena, who was the party responsible for the defect, could not ask for its
annulment. Their children could not likewise seek the annulment of the contract
while the marriage subsisted because they merely had an inchoate right to the
lands sold. (Emphasis supplied)
The consent of both Eugenia and Antonio is necessary for the sale of the
conjugal property to be valid. Antonios consent cannot be presumed.[13] Except for
the self-serving testimony of petitioner Natividad, there is no evidence that Antonio
participated or consented to the sale of the conjugal property. Eugenia alone is
incapable of giving consent to the contract. Therefore, in the absence of Antonios
consent, the disposition made by Eugenia is voidable. [14]
The contract of sale between Eugenia and Concepcion being an oral contract,
the action to annul the same must be commenced within six years from the time
the right of action accrued.[15] Eugenia sold the property in April 1987 hence Antonio
should have asked the courts to annul the sale on or before April 1993. No action
was commenced by Antonio to annul the sale, hence his right to seek its annulment
was extinguished by prescription.
Even assuming that the ten (10)-year prescriptive period under Art. 173
should apply, Antonio is still barred from instituting an action to annul the sale
because since April 1987, more than ten (10) years had already lapsed without any
such action being filed.
In sum, the sale of the conjugal property by Eugenia without the consent of
her husband is voidable. It is binding unless annulled. Antonio failed to exercise his
right to ask for the annulment within the prescribed period, hence, he is now barred
from questioning the validity of the sale between his wife and Concepcion.
WHEREFORE, the petition is GRANTED. The decision dated February 24,
2004 of the Court of Appeals in CA-G.R. CV No. 70239 and its resolution dated
September 28, 2004 are REVERSED and SET ASIDE. The decision dated January 9,
2001 of the Regional Trial Court of Quezon City, Branch 85, in Civil Case No. Q-9937529, is REINSTATED.
SO ORDERED.
THIRD DIVISION
JAIME ABALOS and SPOUSES FELIX SALAZAR and
CONSUELO SALAZAR, GLICERIO ABALOS, HEIRS OF
AQUILINO ABALOS, namely: SEGUNDA BAUTISTA,
ROGELIO ABALOS, DOLORES A. ROSARIO, FELICIDAD
ABALOS, ROBERTO ABALOS, JUANITO ABALOS, TITA
ABALOS, LITA A. DELA CRUZ AND HEIRS OF
AQUILINA ABALOS, namely: ARTURO BRAVO, PURITA
B. MENDOZA, LOURDES B. AGANON, CONSUELO B.
SALAZAR, PRIMA B. DELOS SANTOS, THELMA
APOSTOL and GLECERIO ABALOS, vs
G.R. No. 175444
Promulgated:
December 14, 2011
HEIRS OF VICENTE TORIO, namely: PUBLIO TORIO,

LIBORIO TORIO, VICTORINA TORIO, ANGEL TORIO,
LADISLAO TORIO, PRIMO TORIO and NORBERTO
TORIO,
PERALTA, J.:
Before the Court is a petition for review on certiorari seeking to set aside the
Decision1 dated June 30, 2006 and Resolution2 dated November 13, 2006 by the
Court of Appeals (CA) in CA-G.R. SP No. 91887. The assailed Decision reversed and
set aside the Decision3dated June 14, 2005 of the Regional Trial Court (RTC) of
Lingayen, Pangasinan, Branch 69, while the questioned Resolution denied
petitioners' Motion for Reconsideration.
The factual and procedural antecedents of the case are as follows:
On July 24, 1996, herein respondents filed a Complaint for Recovery of Possession
and Damages with the Municipal Trial Court (MTC) of Binmaley, Pangasinan against
Jaime Abalos (Jaime) and the spouses Felix and Consuelo Salazar. Respondents
contended that: they are the children and heirs of one Vicente Torio (Vicente) who
died intestate on September 11, 1973; at the time of the death of Vicente, he left
behind a parcel of land measuring 2,950 square meters, more or less, which is
located at San Isidro Norte, Binmaley, Pangasinan; during the lifetime of Vicente
and through his tolerance, Jaime and the Spouses Salazar were allowed to stay and
build their respective houses on the subject parcel of land; even after the death of
Vicente, herein respondents allowed Jaime and the Spouses Salazar to remain on
the disputed lot; however, in 1985, respondents asked Jaime and the Spouses
Salazar to vacate the subject lot, but they refused to heed the demand of
respondents forcing respondents to file the complaint. 4
Jaime and the Spouses Salazar filed their Answer with Counterclaim, denying the
material allegations in the Complaint and asserting in their Special and Affirmative
Defenses that: respondents' cause of action is barred by acquisitive prescription;
the court a quo has no jurisdiction over the nature of the action and the persons of
the defendants; the absolute and exclusive owners and possessors of the disputed
lot are the deceased predecessors of defendants; defendants and their
predecessors-in-interest had been in actual, continuous and peaceful possession of
the subject lot as owners since time immemorial; defendants are faithfully and
religiously paying real property taxes on the disputed lot as evidenced by Real
Property Tax Receipts; they have continuously introduced improvements on the said
land, such as houses, trees and other kinds of ornamental plants which are in
existence up to the time of the filing of their Answer. 5
On the same date as the filing of defendants' Answer with Counterclaim, herein
petitioners filed their Answer in Intervention with Counterclaim. Like the
defendants, herein petitioners claimed that their predecessors-in-interest were the
absolute and exclusive owners of the land in question; that petitioners and their
predecessors had been in possession of the subject lot since time immemorial up to
the present; they have paid real property taxes and introduced improvements
thereon.6
After the issues were joined, trial ensued.
On December 10, 2003, the MTC issued a Decision, the dispositive portion of which
reads as follows:
WHEREFORE, in view of the foregoing consideration[s], the Court
adjudged the case in favor of the plaintiffs and against the
defendants and defendants-intervenors are ordered to turn over
the land in question to the plaintiffs (Lot Nos. 869 and 870, Cad.
467-D. Binmaley Cadastre located in Brgy. San Isidro Norte,
Binmaley, Pangasinan with an area of 2,950 sq. m., more or less,
bounded and described in paragraph 3 of the Complaint[)];
ordering the defendants and defendants-intervenors to remove
their respective houses standing on the land in dispute; further

ordering the defendants and defendants-intervenors, either singly
or jointly to pay the plaintiffs land rent in the amount
of P12,000.00 per year to be reckoned starting the year 1996 until
defendants and defendants-intervenors will finally vacate the
premises; furthermore, defendants and defendants-intervenors
are also ordered to pay, either singly or jointly, the amount
of P10,000.00 as and by way of attorney's fees and costs of suit.
SO ORDERED.7
Jaime and the Spouses Salazar appealed the Decision of the MTC with the RTC of
Lingayen, Pangasinan.8 Herein petitioners, who were intervenors, did not file an
appeal.
In its Decision dated June 14, 2005, the RTC ruled in favor of Jaime and the
Spouses Salazar, holding that they have acquired the subject property through
prescription. Accordingly, the RTC dismissed herein respondents' complaint.
Aggrieved, herein respondents filed a petition for review with the CA assailing the
Decision of the RTC.
On June 30, 2006, the CA promulgated its questioned Decision, the dispositive
portion of which reads, thus:
WHEREFORE, the petition is GRANTED. The Decision dated June
14, 2005 of the Regional Trial Court, Branch 69, Lingayen,
Pangasinan is hereby REVERSED and SET ASIDE. In its stead, a
new one is entered reinstating the Decision dated December 10,
2003 of the Municipal Trial Court of Binmaley, Pangasinan.
SO ORDERED.9
Jaime and the Spouses Salazar filed a Motion for Reconsideration, but the same was
denied by the CA in its Resolution dated November 13, 2006.
Hence, the instant petition based on a sole assignment of error, to wit:
THE COURT OF APPEALS ERRED IN NOT APPRECIATING THAT THE
PETITIONERS HEREIN ARE NOW THE ABSOLUTE AND EXCLUSIVE
OWNERS OF THE LAND IN QUESTION BY VIRTUE OF ACQUISITIVE
PRESCRIPTION.10
The main issue raised by petitioners is whether they and their predecessors-ininterest possessed the disputed lot in the concept of an owner, or whether their
possession is by mere tolerance of respondents and their predecessors-in-interest.
Corollarily, petitioners claim that the due execution and authenticity of the deed of
sale upon which respondents' predecessors-in-interest derived their ownership were
not proven during trial.
The petition lacks merit.
Preliminarily, the Court agrees with the observation of respondents that some of the
petitioners in the instant petition were the intervenors 11 when the case was filed
with the MTC. Records would show that they did not appeal the Decision of the
MTC.12 The settled rule is that failure to perfect an appeal renders the judgment
final and executory.13 Hence, insofar as the intervenors in the MTC are concerned,
the judgment of the MTC had already become final and executory.
It also bears to point out that the main issue raised in the instant petition, which is
the character or nature of petitioners' possession of the subject parcel of land, is
factual in nature.
Settled is the rule that questions of fact are not reviewable in petitions for review
on certiorari under Rule 45 of the Rules of Court.14Section 1 of Rule 45 states that
petitions for review on certiorari shall raise only questions of law which must be
distinctly set forth.
Doubtless, the issue of whether petitioners possess the subject property as owners,
or whether they occupy the same by mere tolerance of respondents, is a question of
fact. Thus, it is not reviewable.
Nonetheless, the Court has, at times, allowed exceptions from the abovementioned
restriction. Among the recognized exceptions are the following:
(a) When the findings are grounded entirely on speculation,
surmises, or conjectures;
(b) When the inference made is manifestly mistaken, absurd, or
impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of facts;
(e) When the findings of facts are conflicting;
(f) When in making its findings the CA went beyond the issues of
the case, or its findings are contrary to the admissions of
both the appellant and the appellee;
(g) When the CAs findings are contrary to those by the trial court;
(h) When the findings are conclusions without citation of specific
evidence on which they are based;
(i) When the facts set forth in the petition as well as in the
petitioners main and reply briefs are not disputed by the
respondent;
(j) When the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on
record; or
(k) When the CA manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, would
justify a different conclusion.15
In the present case, the findings of fact of the MTC and the CA are in conflict with
those of the RTC.
After a review of the records, however, the Court finds that the petition must fail as
it finds no error in the findings of fact and conclusions of law of the CA and the MTC.
Petitioners claim that they have acquired ownership over the disputed lot through
ordinary acquisitive prescription.
Acquisitive prescription of dominion and other real rights may be ordinary or

extraordinary.16 Ordinary acquisitive prescription requires possession in good faith
and with just title for ten (10) years.17 Without good faith and just title, acquisitive
prescription can only be extraordinary in character which requires uninterrupted
adverse possession for thirty (30) years.18
Possession in good faith consists in the reasonable belief that the person from
whom the thing is received has been the owner thereof, and could transmit his
ownership.19 There is just title when the adverse claimant came into possession of
the property through one of the modes recognized by law for the acquisition of
ownership or other real rights, but the grantor was not the owner or could not
transmit any right.20
In the instant case, it is clear that during their possession of the property in
question, petitioners acknowledged ownership thereof by the immediate
predecessor-in-interest of respondents. This is clearly shown by the Tax Declaration
in the name of Jaime for the year 1984 wherein it contains a statement admitting
that Jaime's house was built on the land of Vicente, respondents' immediate
predecessor-in-interest. 21 Petitioners never disputed such an acknowledgment.
Thus, having knowledge that they nor their predecessors-in-interest are not the
owners of the disputed lot, petitioners' possession could not be deemed as
possession in good faith as to enable them to acquire the subject land by ordinary
prescription. In this respect, the Court agrees with the CA that petitioners'
possession of the lot in question was by mere tolerance of respondents and their
predecessors-in-interest. Acts of possessory character executed due to license or by
mere tolerance of the owner are inadequate for purposes of acquisitive
prescription. 22 Possession, to constitute the foundation of a prescriptive right, must
be en concepto de dueo, or, to use the common law equivalent of the term, that
possession should be adverse, if not, such possessory acts, no matter how long, do
not start the running of the period of prescription.23
Moreover, the CA correctly held that even if the character of petitioners' possession
of the subject property had become adverse, as evidenced by their declaration of
the same for tax purposes under the names of their predecessors-in-interest, their
possession still falls short of the required period of thirty (30) years in cases of
extraordinary acquisitive prescription. Records show that the earliest Tax
Declaration in the name of petitioners was in 1974. Reckoned from such date, the
thirty-year period was completed in 2004. However, herein respondents' complaint
was filed in 1996, effectively interrupting petitioners' possession upon service of
summons on them. 24Thus, petitioners possession also did not ripen into ownership,
because they failed to meet the required statutory period of extraordinary
prescription.
This Court has held that the evidence relative to the possession upon which the
alleged prescription is based, must be clear, complete and conclusive in order to
establish the prescription.25 In the present case, the Court finds no error on the part
of the CA in holding that petitioners failed to present competent evidence to prove
their alleged good faith in neither possessing the subject lot nor their adverse claim
thereon. Instead, the records would show that petitioners' possession was by mere
tolerance of respondents and their predecessors-in-interest.
Finally, as to the issue of whether the due execution and authenticity of the deed of
sale upon which respondents anchor their ownership were not proven, the Court
notes that petitioners did not raise this matter in their Answer as well as in their
Pre-Trial Brief. It was only in their Comment to respondents' Petition for Review filed
with the CA that they raised this issue. Settled is the rule that points of law,
theories, issues, and arguments not adequately brought to the attention of the trial
court need not be, and ordinarily will not be, considered by a reviewing
court.26 They cannot be raised for the first time on appeal. To allow this would be
offensive to the basic rules of fair play, justice and due process.27
Even granting that the issue of due execution and authenticity was properly raised,
the Court finds no cogent reason to depart from the findings of the CA, to wit:
xxxx
Based on the foregoing, respondents [Jaime Abalos and the
Spouses Felix and Consuelo Salazar] have not inherited the
disputed land because the same was shown to have already been
validly sold to Marcos Torio, who, thereupon, assigned the same
to his son Vicente, the father of petitioners [herein respondents].
A valid sale was amply established and the said validity subsists
because the deed evidencing the same was duly notarized.
There is no doubt that the deed of sale was duly acknowledged
before a notary public. As a notarized document, it has in its favor
the presumption of regularity and it carries the evidentiary weight
conferred upon it with respect to its due execution. It is admissible
in evidence without further proof of its authenticity and is entitled
to full faith and credit upon its face.28
Indeed, settled is the rule in our jurisdiction that a notarized document has in its
favor the presumption of regularity, and to overcome the same, there must be
evidence that is clear, convincing and more than merely preponderant; otherwise,
the document should be upheld.29In the instant case, petitioners' bare denials will
not suffice to overcome the presumption of regularity of the assailed deed of sale.
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 91887 are AFFIRMED.
SO ORDERED.
FIRST DIVISION
[G.R. No. 184109 : February 01, 2012]
CELERINO E. MERCADO, PETITIONER, VS. BELEN * ESPINOCILLA** AND
FERDINAND ESPINOCILLA, RESPONDENTS.
VILLARAMA, JR., J.:
The case
Petitioner Celerino E. Mercado appeals the Decision [1] dated April 28, 2008 and
Resolution[2] dated July 22, 2008 of the Court of Appeals (CA) in CA-G.R. CV No.
87480. The CA dismissed petitioner's complaint[3] for recovery of possession,
quieting of title, partial declaration of nullity of deeds and documents, and damages,
on the ground of prescription.cralaw
The antecedent facts
Doroteo Espinocilla owned a parcel of land, Lot No. 552, with an area of 570 sq. m.,
located at Magsaysay Avenue, Zone 5, Bulan, Sorsogon. After he died, his five
children, Salvacion, Aspren, Isabel, Macario, and Dionisia divided Lot No. 552
equally among themselves. Later, Dionisia died without issue ahead of her four
siblings, and Macario took possession of Dionisia's share. In an affidavit of transfer
of real property[4] dated November 1, 1948, Macario claimed that Dionisia had
donated her share to him in May 1945.
Thereafter, on August 9, 1977, Macario and his daughters Betty Gullaba and Saida
Gabelo sold[5] 225 sq. m. to his son Roger Espinocilla, husband of respondent Belen
Espinocilla and father of respondent Ferdinand Espinocilla. On March 8, 1985,
Roger Espinocilla sold[6] 114 sq. m. to Caridad Atienza. Per actual survey of Lot No.
552, respondent Belen Espinocilla occupies 109 sq. m., Caridad Atienza occupies
120 sq. m., Caroline Yu occupies 209 sq. m., and petitioner, Salvacion's son,
occupies 132 sq. m.[7]
The case for petitioner
Petitioner sued the respondents to recover two portions: an area of 28.5[8] sq. m.
which he bought from Aspren and another 28.5 sq. m. which allegedly belonged to
him but was occupied by Macario's house. [9] His claim has since been modified to
an alleged encroachment of only 39 sq. m. that he claims must be returned to him.
He avers that he is entitled to own and possess 171 sq. m. of Lot No. 552, having
inherited 142.5 sq. m. from his mother Salvacion and bought 28.5 sq. m. from his
aunt Aspren. According to him, his mother's inheritance is 142.5 sq. m., that is,
114 sq. m. from Doroteo plus 28.5 sq. m. from Dionisia. Since the area he occupies
is only 132 sq. m.,[10] he claims that respondents encroach on his share by 39 sq.
m.[11]
The case for respondents
Respondents agree that Doroteo's five children each inherited 114 sq. m. of Lot No.
552. However, Macario's share increased when he received Dionisia's share.
Macario's increased share was then sold to his son Roger, respondents' husband and
father. Respondents claim that they rightfully possess the land they occupy by
virtue of acquisitive prescription and that there is no basis for petitioner's claim of
encroachment.[12]
The trial court's decision
On May 15, 2006, the Regional Trial Court (RTC) ruled in favor of petitioner and
held that he is entitled to 171 sq. m. The RTC found that petitioner inherited 142.5
sq. m. from his mother Salvacion and bought 28.5 sq. m. from his aunt Aspren.
The RTC computed that Salvacion, Aspren, Isabel and Macario each inherited 142.5
sq. m. of Lot No. 552. Each inherited 114 sq. m. from Doroteo and 28.5 sq. m.
from Dionisia. The RTC further ruled that Macario was not entitled to 228 sq. m.
Thus, respondents must return 39 sq. m. to petitioner who occupies only 132 sq.
m.[13]
There being no public document to prove Dionisia's donation, the RTC also held that
Macario's 1948 affidavit is void and is an invalid repudiation of the shares of his
sisters Salvacion, Aspren, and Isabel in Dionisia's share. Accordingly, Macario
cannot acquire said shares by prescription. The RTC further held that the oral
partition of Lot No. 552 by Doroteo's heirs did not include Dionisia's share and that
partition should have been the main action. Thus, the RTC ordered partition and
deferred the transfer of possession of the 39 sq. m. pending partition.[14] The

dispositive portion of the RTC decision reads:
WHEREFORE, in view of the foregoing premises, the court issues the following
ORDER, thus a)
Partially declaring the nullity of the Deed of Absolute Sale of Property dated
August 9, 1977 x x x executed by Macario Espinocilla, Betty E. Gullaba and
Saida E. Gabelo in favor of Roger Espinocilla, insofar as it affects the portion or
the share belonging to Salvacion Espinocilla, mother of [petitioner,] relative to
the property left by Dionisia Espinocilla, including [Tax Declaration] No. 13667
and other documents of the same nature and character which emanated from
the said sale;
b)
To leave as is the Deeds of Absolute Sale of May 11, 1983 and March 8, 1985, it
having been determined that they did not involve the portion belonging to
[petitioner] x x x.
c)
To effect an effective and real partition among the heirs for purposes of
determining the exact location of the share (114 sq. m.) of the late Dionisia
Espinocilla together with the 28.5 sq. m. belonging to [petitioner's] mother
Salvacion, as well as, the exact location of the 39 sq. m. portion belonging to
the [petitioner] being encroached by the [respondents], with the assistance of
the Commissioner (Engr. Fundano) appointed by this court.
d)
To hold in abeyance the transfer of possession of the 39 sq. m. portion to the

[petitioner] pending the completion of the real partition above-mentioned.[15]
The CA decision
On appeal, the CA reversed the RTC decision and dismissed petitioner's complaint
on the ground that extraordinary acquisitive prescription has already set in in favor
of respondents. The CA found that Doroteo's four remaining children made an oral
partition of Lot No. 552 after Dionisia's death in 1945 and occupied specific
portions. The oral partition terminated the co-ownership of Lot No. 552 in 1945.
Said partition also included Dionisia's share because the lot was divided into four
parts only. And since petitioner's complaint was filed only on July 13, 2000, the CA
concluded that prescription has set in.[16] The CA disposed the appeal as follows:
WHEREFORE, the appeal is GRANTED. The assailed May 15, 2006 Decision of the
Regional Trial Court (RTC) of Bulan, Sorsogon is hereby REVERSED and SET ASIDE.
The Complaint of the [petitioner] is hereby DISMISSED. No costs.[17]
The instant petition
The core issue to be resolved is whether petitioner's action to recover the subject
portion is barred by prescription.
Petitioner confirms oral partition of Lot No. 552 by Doroteo's heirs, but claims that
his share increased from 114 sq. m. to 171 sq. m. and that respondents encroached
on his share by 39 sq. m. Since an oral partition is valid, the corresponding survey
ordered by the RTC to identify the 39 sq. m. that must be returned to him could be
made.[18] Petitioner also alleges that Macario committed fraud in acquiring his
share; hence, any evidence adduced by him to justify such acquisition is
inadmissible. Petitioner concludes that if a person obtains legal title to property by
fraud or concealment, courts of equity will impress upon the title a so-called
constructive trust in favor of the defrauded party.[19]
The Court's ruling

We affirm the CA ruling dismissing petitioner's complaint on the ground of
prescription.
Prescription, as a mode of acquiring ownership and other real rights over immovable
property, is concerned with lapse of time in the manner and under conditions laid
down by law, namely, that the possession should be in the concept of an owner,
public, peaceful, uninterrupted, and adverse. Acquisitive prescription of real rights
may be ordinary or extraordinary. Ordinary acquisitive prescription requires
possession in good faith and with just title for 10 years. In extraordinary
prescription, ownership and other real rights over immovable property are acquired
through uninterrupted adverse possession for 30 years without need of title or of
good faith.[20]
Here, petitioner himself admits the adverse nature of respondents' possession with
his assertion that Macario's fraudulent acquisition of Dionisia's share created a
constructive trust. In a constructive trust, there is neither a promise nor any
fiduciary relation to speak of and the so-called trustee (Macario) neither accepts any
trust nor intends holding the property for the beneficiary (Salvacion, Aspren,
Isabel). The relation of trustee and cestui que trust does not in fact exist, and the
holding of a constructive trust is for the trustee himself, and therefore, at all times
adverse.[21] Prescription may supervene even if the trustee does not repudiate the
relationship.[22]
Then, too, respondents' uninterrupted adverse possession for 55 years of 109 sq.
m. of Lot No. 552 was established. Macario occupied Dionisia's share in 1945
although his claim that Dionisia donated it to him in 1945 was only made in a 1948
affidavit. We also agree with the CA that Macario's possession of Dionisia's share
was public and adverse since his other co-owners, his three other sisters, also
occupied portions of Lot No. 552. Indeed, the 1977 sale made by Macario and his
two daughters in favor of his son Roger confirms the adverse nature of Macario's
possession because said sale of 225 sq. m.[23] was an act of ownership over
Macario's original share and Dionisia's share. In 1985, Roger also exercised an act
of ownership when he sold 114 sq. m. to Caridad Atienza. It was only in the year
2000, upon receipt of the summons to answer petitioner's complaint, that
respondents' peaceful possession of the remaining portion (109 sq. m.) was
interrupted. By then, however, extraordinary acquisitive prescription has already
set in in favor of respondents. That the RTC found Macario's 1948 affidavit void is
of no moment. Extraordinary prescription is unconcerned with Macario's title or
good faith. Accordingly, the RTC erred in ruling that Macario cannot acquire by
prescription the shares of Salvacion, Aspren, and Isabel, in Dionisia's 114-sq. m.
share from Lot No. 552.
Moreover, the CA correctly dismissed petitioner's complaint as an action for
reconveyance based on an implied or constructive trust prescribes in 10 years from
the time the right of action accrues.[24] This is the other kind of prescription under
the Civil Code, called extinctive prescription, where rights and actions are lost by
the lapse of time.[25] Petitioner's action for recovery of possession having been filed
55 years after Macario occupied Dionisia's share, it is also barred by extinctive
prescription. The CA while condemning Macario's fraudulent act of depriving his
three sisters of their shares in Dionisia's share, equally emphasized the fact that
Macario's sisters wasted their opportunity to question his acts.cralaw
WHEREFORE, we DENY the petition for review on certiorari for lack of merit
and AFFIRM the assailed Decision dated April 28, 2008 and Resolution dated July
22, 2008 of the Court of Appeals in CA-G.R. CV No. 87480.

No pronouncement as to costs. SO ORDERED.
THIRD DIVISION
G.R. No. 187451
August 29, 2012
JESUS VIRTUCIO, represented by ABDON VIRTUCIO, Petitioner, vs.

JOSE ALEGARBES, Respondent.
MENDOZA, J.:
This petition for review on certiorari under Rule 45 seeks to reverse and set aside
the February 25, 2009 Decision1 of the Court of Appeals (CA), in CA-G.R. CV No.
72613, reversing and setting aside the February 19, 2001 Decision 2 of the Regional
Trial Court, Branch 1, Isabela, Basi Ian (RTC), in Civil Case No. 685-627, an action
for "Recovery of Possession and Ownership with Preliminary Injunction."
The Facts
Respondent Jose Alegarbes (Alegarbes) filed Homestead Application No. V-33203
(E-V-49150) for a 24-hectare tract of unsurveyed land situated in Baas, Lantawan,
Basilan in 1949. His application was approved on January 23, 1952. 3 In 1955,
however, the land was subdivided into three (3) lots Lot Nos. 138,139 and 140,
Pls-19 - as a consequence of a public land subdivision. Lot 139 was allocated to
Ulpiano Custodio (Custodio), who filed Homestead Application No. 18-4493 (E-182958). Lot 140 was allocated to petitioner Jesus Virtucio (Virtucio), who filed
Homestead Application No. 18-4421 (E-18-2924).4
Alegarbes opposed the homestead applications filed by Custodio and Virtucio,
claiming that his approved application covered the whole area, including Lot Nos.
139 and 140.5
On October 30, 1961, the Director of Lands rendered a decision denying Alegarbes'
protest and amending the latter's application to exclude Lots 139 and 140. Only Lot
138 was given due course. The applications of Custodio and Virtucio for Lots 139
and 140, respectively, were likewise given due course. 6
Alegarbes then appealed to the Secretary of Agriculture and Natural Resources, who
dismissed his appeal on July 28, 1967. He then sought relief from the Office of the
President (OP), which, however, affirmed the dismissal order of the Secretary of
Agriculture and Natural Resources in a decision, dated October 25, 1974. Alegarbes
moved for a reconsideration, but the motion was subsequently denied. 7
On May 11, 1989, an order of execution8 was issued by the Lands Management
Bureau of the Department of Environment and Natural Resources to enforce the
decision of the OP. It ordered Alegarbes and all those acting in his behalf to vacate
the subject lot, but he refused.
On September 26, 1997, Virtucio then filed a complaint 9 for "Recovery of Possession
and Ownership with Preliminary Injunction" before the RTC.
In his Answer,10 Alegarbes claimed that the decision of the Bureau of Lands was
void ab initio considering that the Acting Director of Lands acted without jurisdiction
and in violation of the provisions of the Public Land Act. Alegarbes argued that the
said decision conferred no rights and imposed no duties and left the parties in the
same position as they were before its issuance. He further alleged that the patent
issued in favor of Virtucio was procured through fraud and deceit, thus, void ab
initio.
Alegarbes further argued, by way of special and/or affirmative defenses, that the
approval of his homestead application on January 23, 1952 by the Bureau of Lands
had already attained finality and could not be reversed, modified or set aside. His
possession of Lot Nos. 138, 139 and 140 had been open, continuous, peaceful and
uninterrupted in the concept of an owner for more than 30 years and had acquired
such lots by acquisitive prescription.
In his Amended and Supplemental Answer, 11 Alegarbes also averred that his now
deceased brother, Alejandro Alegarbes, and the latter's family helped him develop
Lot 140 in 1955. Alejandro and his family, as well as Alegarbes' wife and children,
had been permanently occupying the said lot and, introducing permanent
improvements thereon since 1960.
The RTC Ruling
The RTC rendered its decision on February 19, 2001, favoring Virtucio. The decretal
portion of which reads:
WHEREFORE, upon the merit of this case, this court finds for the plaintiff and
against the defendant by:
1. Ordering the defendant and all those acting in his behalf to vacate Lot No. 140,
Pls-19, located at Lower Baas, Lantawan, Basilan and surrender the possession
and ownership thereof to plaintiff;
2. Ordering the defendant to pay the plaintiff the amount of Fifteen Thousand Pesos
(P 15,000.00) as attorney's fees and another Ten Thousand Pesos (P 10,000.00) as
expenses for litigation; and
3. To pay the cost of the suit in the amount of Five Hundred Pesos (500.00).
SO ORDERED.12
Not in conformity, Alegarbes appealed his case before the CA.
The CA Ruling
On February 25, 2009, the CA promulgated its decision declaring Alegarbes as the
owner of Lot No. 140, Pls-19, thereby reversing and setting aside the decision of the
RTC. The CA ruled that Alegarbes became ipso jure owner of Lot 140 and, therefore,
entitled to retain possession of it.
Consequently, the awards of attorney's fees, litigation expenses and costs of suit
were deleted.
In so ruling, the CA explained that even if the decision to approve Virtucio's
homestead application over Lot 140 had become final, Alegarbes could still acquire
the said lot by acquisitive prescription. The decisions on the issues of the approval
of Virtucio's homestead application and its validity were impertinent as Alegarbes
had earlier put in issue the matter of ownership of Lot 140 which he claimed by
virtue of adverse possession.
The CA also found reversible error on the part of the RTC in disregarding the
evidence before it and relying entirely upon the decisions of the administrative
bodies, none of which touched upon the issue of Alegarbes' open, continuous and
exclusive possession of over thirty (30) years of an alienable land. The CA held that
the Director of Lands, the Secretary of Agriculture and Natural Resources and the
OP did not determine whether Alegarbes' possession of the subject property had
ipso jure segregated Lot 140 from the mass of public land and, thus, was beyond
their jurisdiction. Aggrieved, Virtucio filed this petition.
ISSUES
Virtucio assigned the following errors in seeking the reversal of the assailed decision
of the CA, to wit:
1. The Court of Appeals erred in setting aside the judgment of the trial
court, which awarded the lot in question to the respondent by virtue of
acquisitive prescription and ordered herein petitioner to surrender the
ownership and possession of the same to them. 13
2. The Court of Appeals gravely erred in disregarding the decision in CAG.R. CV-26286 for Recovery of Possession and Ownership, Custodio vs.
Alegarbes which contains same factual circumstances as in this case and
ruled against JOSE ALEGARBES.14
3. The Court of Appeals erred in deleting the award of attorney's fees to the
petitioner.15
The lone issue in this case is whether or not Alegarbes acquired ownership over the
subject property by acquisitive prescription.
Ruling of the Court
The petition must fail.
Indeed, it is fundamental that questions of fact are not reviewable in petitions for
review on certiorari under Rule 45 of the Rules of Court. Only questions of law
distinctly set forth shall be raised in the petition.16
Here, the main issue is the alleged acquisition of ownership by Alegarbes through
acquisitive prescription and the character and length of possession of a party over a
parcel of land subject of controversy is a factual issue. 17 The Court, however, is not
precluded from reviewing facts when the case falls within the recognized exceptions,
to wit:
(a) When the findings are grounded entirely on speculation, surmises, or
conjectures;
(b) When the inference made is manifestly mistaken, absurd, or impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of facts;
(e) When the findings of facts are conflicting;
(f) When in making its findings the CA went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee;
(g) When the CAs findings are contrary to those by the trial court;
(h) When the findings are conclusions without citation of specific evidence on which
they are based;
(i) When the facts set forth in the petition as well as in the petitioners main and
reply briefs are not disputed by the respondent;
(j) When the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; or
(k) When the CA manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different
conclusion.18 [Emphasis supplied]
In the case at bench, the findings and conclusions of the CA are apparently contrary
to those of the RTC, hence, the need to review the facts in order to arrive at the
proper conclusion.
On Acquisitive Prescription
Virtucio insists that the period of acquisitive prescription was interrupted on October
30, 1961 (or in 1954 when Alegarbes filed the protest) when the Director of Lands
rendered a decision giving due course to his homestead application and that of
Ulpiano Custodio. Virtucio further claims that since 1954, several extrajudicial
demands were also made upon Alegarbes demanding that he vacate said lot. Those
demands constitute the "extrajudicial demand" contemplated in Article 1155, thus,
tolling the period of acquisitive prescription. 19
Article 1106 of the New Civil Code, in relation to its Article 712, provides that
prescription is a mode of acquiring ownership through the lapse of time in the
manner and under the conditions laid down by law. Under the same law, it states
that acquisitive prescription may either be ordinary or extraordinary. 20 Ordinary
acquisitive prescription requires possession of things in good faith and with just title
for a period of ten years,21 while extraordinary acquisitive prescription requires
uninterrupted adverse possession of thirty years, without need of title or of good
faith.22
There are two kinds of prescription provided in the Civil Code. One is acquisitive,
that is, the acquisition of a right by the lapse of time as expounded in par. 1, Article
1106. Other names for acquisitive prescription are adverse possession and
usucapcion. The other kind is extinctive prescription whereby rights and actions are
lost by the lapse of time as defined in Article 1106 and par. 2, Article 1139. Another
name for extinctive prescription is litigation of action. 23 These two kinds of
prescription should not be interchanged.
Article 1155 of the New Civil Code refers to the interruption of prescription of
actions. Interruption of acquisitive prescription, on the other hand, is found in
Articles 1120-1125 of the same Code. Thus, Virtucios reliance on Article 1155 for
purposes of tolling the period of acquisitive prescription is misplaced. The only kinds
of interruption that effectively toll the period of acquisitive prescription are natural
and civil interruption.24
Civil interruption takes place with the service of judicial summons to the
possessor.25 When no action is filed, then there is no occasion to issue a judicial
summons against the respondents. The period of acquisitive prescription continues
to run.
In this case, Virtucio claims that the protest filed by Alegarbes against his
homestead application interrupted the thirty (30)-year period of acquisitive
prescription. The law, as well as jurisprudence, however, dictates that only a judicial
summons can effectively toll the said period.
In the case of Heirs of Marcelina Azardon-Crisologo v. Raon,26 the Court ruled that
a mere Notice of Adverse Claim did not constitute an effective interruption of
possession. In the case of Heirs of Bienvenido and Araceli Tanyag v. Gabriel,27 which
also cited the Raon Case, the Court stated that the acts of declaring again the
property for tax purposes and obtaining a Torrens certificate of title in one's name
cannot defeat another's right of ownership acquired through acquisitive
prescription. 28
In the same vein, a protest filed before an administrative agency and even the
decision resulting from it cannot effectively toll the running of the period of
acquisitive prescription. In such an instance, no civil interruption can take place.
Only in cases filed before the courts may judicial summons be issued and, thus,
interrupt possession. Records show that it was only in 1997 when Virtucio filed a
case before the RTC. The CA was, therefore, correct in ruling that Alegarbesbecame
ipso jure owner of Lot 140 entitling him to retain possession of it because he was in
open, continuous and exclusive possession for over thirty (30) years of alienable
public land.Virtucio emphasizes that the CA erred in disregarding the decisions of
the administrative agencies which amended Alegarbes' homestead application
excluding Lot 140 and gave due course to his own application for the said lot, which
decisions were affirmed by the RTC.
Well-settled is the rule that factual findings of the lower courts are entitled to great
weight and respect on appeal and, in fact, are accorded finality when supported by
substantial evidence on the record.29 It appears, however, that the conclusion made
by the RTC was not substantially supported. Even the RTC itself noted in its
decision:
The approval of a Homestead Application merely authorizes the applicant to take
possession of the land so that he could comply with the requirements prescribed by
law before a final patent could be issued in his favor what divests the government
of title to the land is the issuance of a patent and its subsequent registration with
the Register of Deeds.30
In the case of Heirs of Gamos v. Heirs of Frando, 33 the Court ruled that the mere
application for a patent, coupled with the fact of exclusive, open, continuous and
notorious possession for the required period, is sufficient to vest in the applicant the
grant applied for.34 It likewise cited the cases of Susi v. Razon 35 and Pineda v.
CA,36 where the Court ruled that the possession of a parcel of agricultural land of
the public domain for the prescribed period of 30 years ipso jure converts the lot
into private property.37
In this case, Alegarbes had applied for homestead patent as early as 1949. He had
been in exclusive, open, continuous and notorious possession of Lot 140 for at least
30 years. By the time the DENR issued its order of execution in 1989, Alegarbes had
Lot 140 in his possession for more than 30 years. Even more so when Virtucio filed
the complaint before the RTC in 1997, Alegarbes was already in possession of the
subject property for forty-eight (48) years.
The CA correctly observed that the RTC erred in disregarding the evidence before it
and relying entirely upon the decisions of the Director of Lands, the Secretary of
Agriculture and Natural Resources and the OP, which never touched the issue of
whether Alegarbes open, continuous and exclusive possession of over thirty (30)
years of alienable land had ipso jure segregated Lot 140 from the mass of public
land and beyond the jurisdiction of these agencies. 38
When the CA ruled that the RTC was correct in relying on the abovementioned
decisions, it merely recognized the primary jurisdiction of these administrative
agencies. It was of the view that the RTC was not correct in the other aspects of the
case. Thus, it declared Alegarbes as owner ipso jure of Lot 140 and entitled to retain
possession of it. There is no reason for the Court to disturb these findings of the CA
as they were supported by substantial evidence, hence, are conclusive and binding
upon this Court. 39
On the CA Decision involving a similar case
Virtucio insists that the CA gravely erred in disregarding its decision in Custodio v.
Alegarbes, CA-G.R. CV 26286, for Recovery of Possession and Ownership, which
involved the same factual circumstances and ruled against Alegarbes.
A perusal of the records would reveal that there was no issuance of any patent in
favor of either parties. This simply means that the land subject of the controversy
remains to be in the name of the State. Hence, neither Virtucio nor Alegarbes can
claim ownership. There was, therefore, no substantial and legal basis for the RTC to
declare that Virtucio was entitled to possession and ownership of Lot 140.
It must be noted that the subject property in the said case was Lot 139 allocated to
Custodio and that Virtucio was not a party to that case. The latter cannot enjoy
whatever benefits said favorable judgment may have had just because it involved
similar factual circumstances. The Court also found from the records that the period
of acquisitive prescription in that case was effectively interrupted by Custodio's filing
of a complaint, which is wanting in this case.
It can be argued that the lower court had the decisions of the administrative
agencies, which ultimately attained finality, as legal bases in ruling that Virtucio had
the right of possession and ownership. In fact, the Department of Environment and
Natural Resources (DENR) even issued the Order of Execution 31 on May 11, 1989
ordering Alegarbes to vacate Lot 140 and place Virtucio in peaceful possession of it.
The CA, however, was correct in finding that:
Moreover, it is settled that a decision of the CA does not establish judicial

precedent.40 "The principle of stare decisis enjoins adherence by lower courts to
doctrinal rules established by this Court in its final decisions. It is based on the
principle that once a question of law has been examined and decided, it should be
deemed settled and closed to further argument. " 41
But appellant had earlier put in issue the matter of ownership of Lot 140 which he
claims by virtue of adverse possession. On this issue, the cited decisions are
impertinent. Even if the decision to approve appellee's homestead application over
Lot 140 had become final, appellant could still acquire the said lot by acquisitive
prescription. 32
The Court agrees with the position of Alegarbes that by Virtucio's insistence that it
was erroneous for the CA to disregard its earlier decision in CA-G.R. CV 26286, he,
in effect, calls upon this Court to adhere to that decision by invoking the stare
decisis principle, which is not legally possible because only final decisions of this
Court are considered precedents.42
In view of the foregoing, the Court need not dwell on the complaint of Virtucio with
regard to the deletion of the award of attorney's fees in his favor. It is ludicrous for
the CA to order Alegarbes to pay attorney's fees, as a measure of damages, and
costs, after finding him to have acquired ownership over the property by acquisitive
prescription.
WHEREFORE, the petition is DENIED.
SO ORDERED.
FIRST DIVISION
G.R. No. 159508
August 29, 2012
JUAN B. BANEZ, JR., Petitioner, vs. HON. CRISANTO C. CONCEPCION, IN HIS

CAPACITY AS THE PRESIDING JUDGE OF THE RTC-BULACAN, MALOLOS
CITY, AND THE ESTATE OF THE LATE RODRIGO GOMEZ, REPRESENTED BY
ITS ADMINISTRATRIX, TSUI YUK YING, Respondents.
BERSAMIN, J.:
The petitioner has directly come to the Court via petition for certiorari 1 filed on
September 4, 2003 to assail the orders dated March 24, 2003 (reversing an earlier
order issued on February 18, 2003 granting his motion to dismiss on the ground of
the action being already barred by prescription, and reinstating the action), 2 April
21, 2003 (denying his motion for reconsideration),3and August 19, 2003 (denying
his second motion for reconsideration and ordering him to file his answer within 10
days from notice despite the principal defendant not having been yet validly served
with summons and copy of the complaint), 4 all issued by the Regional Trial Court
(RTC), Branch 12, in Malolos City in Civil Case No. 722-M-2002,5 an action for the
recovery of ownership and possession. He alleges that respondent Presiding Judge
thereby acted with grave abuse of discretion amounting to lack or excess of
jurisdiction.
Antecedents
The present controversy started almost four decades ago when Leodegario B.
Ramos (Ramos), one of the defendants in Civil Case No. 722-M-2002, discovered
that a parcel of land with an area of 1,233 square meters, more or less, which was
a portion of a bigger tract of land with an area of 3,054 square meters, more or
less, located in Meycauayan, Bulacan that he had adjudicated solely to himself upon
his mothers death on November 16, 1982 had been earlier transferred by his
mother to one Ricardo Asuncion, who had, in turn, sold it to the late Rodrigo
Gomez.
On February 1, 1990, Ramos, alleging that Gomez had induced him to sell the 1,233
square meters to Gomez on the understanding that Gomez would settle Ramos
obligation to three other persons, commenced in the RTC in Valenzuela an action
against Gomez, also known as Domingo Ng Lim, seeking the rescission of their
contract of sale and the payment of damages, docketed as Civil Case No. 3287-V-90
entitled Leodegario B. Ramos v. Rodrigo Gomez, a.k.a. Domingo Ng Lim.6
On October 9, 1990, before the Valenzuela RTC could decide Civil Case No. 3287-V90 on the merits, Ramos and Gomez entered into a compromise agreement.7 The
RTC approved their compromise agreement through its decision rendered on the
same date.8
The petitioner, being then the counsel of Ramos in Civil Case No. 3287-V-90,
assisted Ramos in entering into the compromise agreement "to finally terminate this
case." The terms and conditions of the compromise agreement were as follows:
COME NOW, the Parties, assisted by their respective counsels, and before this
Honorable Court, most respectfully submit this COMPROMISE AGREEMENT for
approval, as to finally terminate this case, the terms and conditions of which being
as follows:
1. That out of the total area of Three Thousand and Fifty Four (3,054) sq.
m., more or less, covered by formerly O.C.T. No. P-2492 (M), Registry of
Deeds of Bulacan, known as Lot No. 6821, Cad-337 Lot 4020-E, Csd-04001618-D, and now by the Reconstituted Transfer Certificate of Title No. T10179-P (M) defendant shall cause survey of said property, at its own
expense, to segregate the area of One Thousand Two Hundred ThirtyThree, (1,233) sq. m. more or less, to take along lines two (2) to three (3),
then to four (4) and up to five (5) of said plan, Csd-04-001618-D;
2. That upon completion of the technical survey and plan, defendant shall
cause the registration of the Deed of Absolute Sale executed by plaintiff
over the 1,233 sq. m. in his favor and that defendant shall deliver the
survey and plan pertaining to the 1,821 sq, m. to the plaintiff with both
parties defraying the cost of registration and titling over their respective
shares;
3. That to carry out the foregoing, plaintiff shall entrust the Owners
Duplicate of said TCT No. T-10179-P (M), Registry of Deeds of
Meycauayan, Bulacan, to the defendant, upon approval of this
COMPROMISE AGREEMENT by the Court;
4. That upon the approval of this Compromise Agreement plaintiff shall
execute a Deed of Absolute Sale in favor of defendant over the 1,233 sq.
m. surveyed and segregated from the 1,821 sq. m. which should remain
with the plaintiff and to be titled in his name;
5. That plaintiff obligates himself to return his loan obligation to the
defendant, in the principal sum of P 80,000.00 plus P 20,000.00 for the use
thereof, and an additional sum of P 10,000.00 in the concept of attorneys
fees, which sums shall be guaranteed by a post-dated check, in the
amount of P 110,000.00 in plaintiffs name with his prior endorsement,
drawn and issued by plaintiffs counsel, for a period of Sixty (60) days from
October 9, 1990;
6. That in the event the check issued pursuant to paragraph 5 hereof, is
dishonored for any reason whatsoever, upon presentment for payment,
then this Compromise Agreement, shall be considered null and void and of
no effect whatsoever;
7. That upon faithful compliance with the terms and conditions of this
COMPROMISE AGREEMENT and the Decision based thereon, the parties
hereto shall have respectively waived, conceded and abandoned all claims
and rights of action of whatever kind or nature, against each other over the
subject property.
WHEREFORE, premises considered, the parties hereto hereby jointly and severally
pray before this Honorable Court to approve this COMPROMISE AGREEMENT and
thereupon render its Decision based thereon terminating the case.
The Estate of Gomez appealed the order of dismissal to the Court of Appeals (CA),
which ruled on July 24, 2001 to affirm the Valenzuela RTC and to dismiss the appeal
(CA-G.R. CV No. 54231).
One of the stipulations of the compromise agreement was for Ramos to execute a
deed of absolute sale in favor of Gomez respecting the parcel of land with an area of
1,233 square meters, and covered by Transfer Certificate of Title (TCT) No. T-13005
P(M) in the name of Ramos.9 Another stipulation was for the petitioner to issue
post-dated checks totaling P 110,000.00 to guarantee the payment by Ramos of his
monetary obligations towards Gomez as stated in the compromise agreement
broken down as follows: (a) P 80,000.00 as Ramos loan obligation to Gomez;
(b) P 20,000.00 for the use of the loan; and (c) P 10,000.00 as attorneys fees. Of
these amounts, only P 80,000.00 was ultimately paid to Gomez, because the
petitioners check dated April 23, 1991 for the balance of P 30,000.00 was
dishonored for insufficiency of funds.
On September 20, 2002, the Estate of Gomez commenced Civil Case No. 722-M2002 in the Valenzuela RTC, ostensibly to revive the judgment by compromise
rendered on October 9, 1990 in Civil Case No. 3287-V-90, praying that Ramos be
ordered to execute the deed of absolute sale covering the 1,233 square meter lot
pursuant to the fourth stipulation of the compromise agreement of October 9, 1990.
The petitioner was impleaded as a party-defendant because of his having
guaranteed the performance by Ramos of his obligation and for having actively
participated in the transaction.
Gomez meanwhile died on November 7, 1990. He was survived by his wife Tsui Yuk
Ying and their minor children (collectively to be referred to as the Estate of Gomez).
The Estate of Gomez sued Ramos and the petitioner for specific performance in the
RTC in Caloocan City to recover the balance of P 30,000.00 (Civil Case No. C15750). On February 28, 1994, however, Civil Case No. C-15750 was amicably
settled through a compromise agreement, whereby the petitioner directly bound
himself to pay to the Estate of Gomez P 10,000.00 on or before March 15,
1994; P 10,000.00 on or before April 15, 1994; and P 10,000.00 on or before May
15, 1994.
The Estate of Gomez performed the obligations of Gomez under the first paragraph
of the compromise agreement of October 9, 1990 by causing the survey of the
bigger tract of land containing an area of 3,054 square meters, more or less, in
order to segregate the area of 1,233 square meters that should be transferred by
Ramos to Gomez in accordance with Ramos undertaking under the second
paragraph of the compromise agreement of October 9, 1990. But Ramos failed to
cause the registration of the deed of absolute sale pursuant to the second
paragraph of the compromise agreement of October 9, 1990 despite the Estate of
Gomez having already complied with Gomezs undertaking to deliver the approved
survey plan and to shoulder the expenses for that purpose. Nor did Ramos deliver
to the Estate of Gomez the owners duplicate copy of TCT No. T-10179 P(M) of the
Registry of Deeds of Meycauayan, Bulacan, as stipulated under the third paragraph
of the compromise agreement of October 9, 1990. Instead, Ramos and the
petitioner caused to be registered the 1,233 square meter portion in Ramoss name
under TCT No. T-13005-P(M) of the Registry of Deeds of Meycauayan, Bulacan.
Accordingly, on July 6, 1995, the Estate of Gomez brought a complaint for specific
performance against Ramos and the petitioner in the RTC in Valenzuela (Civil Case
No. 4679-V-95) 10 in order to recover the 1,233 square meter lot. However, the
Valenzuela RTC dismissed the complaint on April 1, 1996 upon the motion of Ramos
and the petitioner on the ground of improper venue because the objective was to
recover the ownership and possession of realty situated in Meycauayan, Bulacan,
and because the proper recourse was to enforce the judgment by compromise
Agreement rendered on October 9, 1990 through a motion for execution.
On January 8, 2003, the petitioner moved for the dismissal of Civil Case No. 722-M2002, alleging that the action was already barred by res judicata and by
prescription; that he was not a real party-in-interest; and that the amount he had
guaranteed with his personal check had already been paid by Ramos with his own
money.11
Initially, on February 18, 2003, 12 the RTC granted the petitioners motion to dismiss,
finding that the right of action had already prescribed due to more than 12 years
having elapsed from the approval of the compromise agreement on October 9,
1990, citing Article 1143 (3) of the Civil Code (which provides a 10-year period
within which a right of action based upon a judgment must be brought from).
On March 24, 2003,13 however, the RTC reversed itself upon motion of the Estate of
Gomez and set aside its order of February 18, 2003. The RTC reinstated Civil Case
No. 722-M-2002, holding that the filing of the complaint for specific performance on
July 6, 1995 in the Valenzuela RTC (Civil Case No. 4679-V-95) had interrupted the
prescriptive period pursuant to Article 1155 of the Civil Code.
The petitioner sought reconsideration, but the RTC denied his motion for that
purpose on April 21, 2003.
On May 12, 2003, the petitioner filed a second motion for reconsideration,
maintaining that the Estate of Gomezs right of action had already prescribed; and
that the judgment by compromise of October 9, 1990 had already settled the entire
controversy between the parties.
On August 19, 2003,14 the RTC denied the second motion for reconsideration for
lack of merit.
Hence, this special civil action for certiorari commenced on September 4, 2003
directly in this Court.
Issues
The petitioner insists that:
xxx the lower court acted with grave abuse of discretion, amounting to lack of, or in
excess of jurisdiction, when, after having correctly ordered the dismissal of the case
below, on the ground of prescription under Art. 1144, par. 3, of the Civil Code, it
reconsidered and set aside the same, on the factually baseless and legally untenable
Motion for Reconsideration of Private Respondent, insisting, with grave abuse of
discretion, if not bordering on ignorance of law, and too afraid to face reality, that it
is Art. 1155 of the same code, as invoked by Private Respondents, that applies, and
required herein petitioner to file his answer, despite petitioners first Motion for
Reconsideration, which it treated as a mere scrap of paper, yet, at the same [sic]
again it insisted that Article 1155 of the Civil Code should apply, and, thereafter
when, with like, if not greater grave abuse of discretion, amounting to lack, or in
excess of jurisdiction, it again denied petitioners Second Motion for Reconsideration
for lack of merit, and giving petitioner a non-extendible period of ten 10 days from
notice, to file his answer.15
The orders that the petitioner seeks to challenge and to annul are the orders
denying his motion to dismiss. It is settled, however, that an order denying a
motion to dismiss, being merely interlocutory, cannot be the basis of a petition
for certiorari. An interlocutory order is not the proper subject of
a certiorari challenge by virtue of its not terminating the proceedings in which it is
issued. To allow such order to be the subject of review by certiorari not only delays
the administration of justice, but also unduly burdens the courts. 20
In his reply to the Estate of Gomezs comment, 16 the petitioner elucidated as

follows:
But a petition for certiorari may be filed to assail an interlocutory order if it is issued
without jurisdiction, or with excess of jurisdiction, or in grave abuse of discretion
amounting to lack or excess of jurisdiction. This is because as to such order there is
no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law.
Rule 65 of the Rules of Court expressly recognizes the exception by providing as
follows:
1) Whether or not, the Honorable public respondent Judge gravely abused his
discretion, amounting to lack of, or in excess of jurisdiction, when, after ordered the
dismissal of Civil Case No. 722-M-2002, as prescription has set in, under Art. 1143
of the Civil Code, he set aside and reconsidered his said Order, on motion of
plaintiff, by thereafter denied petitioners Motion for Reconsideration, and Second
Motion for Reconsideration, insisting, despite his being presumed to know the law,
that the said action is not barred by prescription, under Art. 1145 of the Civil Code;
2) Whether or not, the present pending action, Civil Case No. 722-M-2002, before
Branch 12 of the Regional Trial Court of Malolos, Bulacan, is barred, and should be
ordered be dismissed, on the ground of prescription, under the law and the rules,
and applicable jurisprudence.
3) Whether or not, the same action may be dismissed on other valid grounds. 17
The petitioner submits that Civil Case No. 722-M-2002 was one for the revival of the
judgment upon a compromise agreement rendered in Civil Case No. 3287-V-90 that
attained finality on October 9, 1990; that considering that an action for revival must
be filed within 10 years from the date of finality, pursuant to Article 1144 of the
Civil Code,18 in relation to Section 6, Rule 39 of the Rules of Court,19 Civil Case No.
722-M-2002 was already barred by prescription, having been filed beyond the 10year prescriptive period; that the RTC gravely abused its discretion in reinstating
the complaint despite prescription having already set in; that the dismissal of Civil
Case No. 722-M-2002 was proper also because the judgment had already been fully
satisfied; that the claim relative to the 1,233 square meter lot under the
compromise agreement had been waived, abandoned, or otherwise extinguished on
account of the failure of the Estate of Gomezs counsel to move for the issuance of a
writ of execution; and that the Estate of Gomez could not rely upon the pendency
and effects of the appeal from the action for specific performance after its dismissal
had been affirmed by the CA on grounds of improper venue, the plaintiffs lack of
personality, and improper remedy (due to the proper remedy being by execution of
the judgment).
The Estate of Gomez countered that the filing on July 6, 1995 of the action for
specific performance in the RTC in Valenzuela stopped the running of the
prescriptive period; that the period commenced to run again after the CA dismissed
that action on July 24, 2001; that the total elapsed period was only five years and
11 months; and that the action for the revival of judgment filed on September 20,
2002 was within the period of 10 years to enforce a final and executory judgment
by action.
Ruling
We dismiss the petition for certiorari.
Section 1. Petition for certiorari. When any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in
the ordinary course of law, a person aggrieved thereby may file a verified petition in
the proper court, alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal, board or officer,
and granting such incidental reliefs as law and justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and
pertinent thereto, and a sworn certification of non-forum shopping as provided in
the third paragraph of section 3, Rule 46. (1a)
The exception does not apply to this challenge. The petitioner has not demonstrated
how the assailed orders could have been issued without jurisdiction, or with excess
of jurisdiction, or in grave abuse of discretion amounting to lack or excess of
jurisdiction. Nor has he convinced us that he had no plain, speedy, and adequate
remedy in the ordinary course of law. In fact and in law, he has, like filing his
answer and going to pre-trial and trial. In the end, should he still have the need to
seek the review of the decision of the RTC, he could also even appeal the denial of
the motion to dismiss. That, in reality, was his proper remedy in the ordinary course
of law.
Yet another reason to dismiss the petition for certiorari exists. Although the Court,
the CA and the RTC have concurrence of jurisdiction to issue writs of certiorari, the
petitioner had no unrestrained freedom to choose which among the several courts
might his petition for certiorari be filed in. In other words, he must observe the
hierarchy of courts, the policy in relation to which has been explicitly defined in
Section 4 of Rule 65 concerning the petitions for the extraordinary writs
of certiorari, prohibition and mandamus, to wit:
Section 4. When and where petition filed. - The petition shall be filed not later than
sixty (60) days from notice of the judgment, order or resolution. In case a motion
for reconsideration or new trial is timely filed, whether such motion is required or
not, the sixty (60) day period shall be counted from notice of the denial of the said
motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or
omissions of a lower court or of a corporation, board, officer or person, in the
Regional Trial Court exercising jurisdiction over the territorial area as defined by the
Supreme Court. It may also be filed in the Court of Appeals whether or not the
same is in the aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid
of its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial
agency, unless otherwise provided by law or these rules, the petition shall be filed in
and cognizable only by the Court of Appeals.
No extension of time to file the petition shall be granted except for compelling
reason and in no case exceeding fifteen (15) days. (4a) 21 (Emphasis supplied)
Accordingly, his direct filing of the petition for certiorari in this Court instead of in
the CA should be disallowed considering that he did not present in the petition any
special and compelling reasons to support his choice of this Court as the forum.
The Court must enjoin the observance of the policy on the hierarchy of courts, and
now affirms that the policy is not to be ignored without serious consequences. The
strictness of the policy is designed to shield the Court from having to deal with
causes that are also well within the competence of the lower courts, and thus leave
time to the Court to deal with the more fundamental and more essential tasks that
the Constitution has assigned to it. The Court may act on petitions for the
extraordinary writs of certiorari, prohibition and mandamus only when absolutely
necessary or when serious and important reasons exist to justify an exception to the
policy. This was why the Court stressed in Vergara, Sr. v. Suelto: 22
xxx. The Supreme Court is a court of last resort, and must so remain if it is to
satisfactorily perform the functions assigned to it by the fundamental charter and
immemorial tradition. It cannot and should not be burdened with the task of dealing
with causes in the first instance. Its original jurisdiction to issue the so-called
extraordinary writs should be exercised only where absolutely necessary or where
serious and important reasons exist therefor. Hence, that jurisdiction should
generally be exercised relative to actions or proceedings before the Court of
Appeals, or before constitutional or other tribunals, bodies or agencies whose acts
for some reason or another are not controllable by the Court of Appeals. Where the
issuance of an extraordinary writ is also within the competence of the Court of
Appeals or a Regional Trial Court, it is in either of these courts that the specific
action for the writs procurement must be presented. This is and should continue to
be the policy in this regard, a policy that courts and lawyers must strictly observe.
(Emphasis supplied)
In People v. Cuaresma, 23 the Court has also amplified the need for strict adherence
to the policy of hierarchy of courts. There, noting "a growing tendency on the part
of litigants and lawyers to have their applications for the so-called extraordinary
writs, and sometimes even their appeals, passed upon and adjudicated directly and
immediately by the highest tribunal of the land," the Court has cautioned lawyers
and litigants against taking a direct resort to the highest tribunal, viz:
xxx. This Courts original jurisdiction to issue writs of certiorari (as well as
prohibition, mandamus, quo warranto, habeas corpus and injunction) is not
exclusive. It is shared by this Court with Regional Trial Courts x x x, which may
issue the writ, enforceable in any part of their respective regions. It is also shared
by this Court, and by the Regional Trial Court, with the Court of Appeals x x x,
although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981,
the latter's competence to issue the extraordinary writs was restricted to those "in
aid of its appellate jurisdiction." This concurrence of jurisdiction is not, however, to
be taken as according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed. There is
after all a hierarchy of courts. That hierarchy is determinative of the venue of
appeals, and should also serve as a general determinant of the appropriate forum
for petitions for the extraordinary writs. A becoming regard for that judicial
hierarchy most certainly indicates that petitions for the issuance of extraordinary
writs against first level ("inferior") courts should be filed with the Regional Trial
Court, and those against the latter, with the Court of Appeals. A direct invocation of
the Supreme Court's original jurisdiction to issue these writs should be allowed only
when there are special and important reasons therefor, clearly and specifically set
out in the petition. This is established policy. It is a policy that is necessary to
prevent inordinate demands upon the Courts time and attention which are better
devoted to those matters within its exclusive jurisdiction, and to prevent further
over-crowding of the Court's docket. Indeed, the removal of the restriction on the
jurisdiction of the Court of Appeals in this regard, supra resulting from the
deletion of the qualifying phrase, "in aid of its appellate jurisdiction" was
evidently intended precisely to relieve this Court pro tanto of the burden of dealing
with applications for the extraordinary writs which, but for the expansion of the
Appellate Court corresponding jurisdiction, would have had to be filed with it.
xxxx
The Court therefore closes this decision with the declaration for the information and
evidence of all concerned, that it will not only continue to enforce the policy, but will
require a more strict observance thereof. (Emphasis supplied)
There being no special, important or compelling reason that justified the direct filing
of the petition for certiorari in this Court in violation of the policy on hierarchy of
courts, its outright dismissal is unavoidable.
Still, even granting that the petition for certiorari might be directly filed in this
Court, its dismissal must also follow because its consideration and resolution would
unavoidably demand the consideration and evaluation of evidentiary matters. The
Court is not a trier of facts, and cannot accept the petition for certiorari for that
reason.
Although commenced ostensibly for the recovery of possession and ownership of
real property, Civil Case No. 722-M-2002 was really an action to revive the
judgment by compromise dated October 9, 1990 because the ultimate outcome
would be no other than to order the execution of the judgment by compromise.
Indeed, it has been held that "there is no substantial difference between an action
expressly called one for revival of judgment and an action for recovery of property
under a right adjudged under and evidenced by a final judgment." 24 In addition, the
parties themselves have treated the complaint in Civil Case No. 722-M-2002 as one
for revival. Accordingly, the parties should be fully heard on their respective claims
like in any other independent action.1wphi1
The petitioners defense of prescription to bar Civil Case No. 722-M-2002 presents
another evidentiary concern. Article 1144 of the Civil Code requires, indeed, that an
action to revive a judgment must be brought before it is barred by prescription,
which was ten years from the accrual of the right of action.25 It is clear, however,
that such a defense could not be determined in the hearing of the petitioners
motion to dismiss considering that the complaint did not show on its face that the
period to bring the action to revive had already lapsed. An allegation of prescription,
as the Court put it in Pineda v. Heirs of Eliseo Guevara, 26 "can effectively be used in
a motion to dismiss only when the complaint on its face shows that indeed the
action has already prescribed, [o]therwise, the issue of prescription is one involving
evidentiary matters requiring a full blown trial on the merits and cannot be
determined in a mere motion to dismiss."
At any rate, the mere lapse of the period per se did not render the judgment stale
within the context of the law on prescription, for events that effectively suspended
the running of the period of limitation might have intervened. In other words, the
Estate of Gomez was not precluded from showing such events, if any. The Court
recognized this possibility of suspension in Lancita v. Magbanua: 27
In computing the time limited for suing out of an execution, although there is
authority to the contrary, the general rule is that there should not be included the
time when execution is stayed, either by agreement of the parties for a definite
time, by injunction, by the taking of an appeal or writ of error so as to operate as a
supersedeas, by the death of a party or otherwise. Any interruption or delay
occasioned by the debtor will extend the time within which the writ may be issued
without scire facias.
Verily, the need to prove the existence or non-existence of significant matters, like
supervening events, in order to show either that Civil Case No. 722-M-2002 was
batTed by prescription or not was present and undeniable. Moreover, the petitioner
himself raised factual issues in his motion to dismiss, like his averment of full
payment or discharge of the obligation of Ramos and the waiver or abandonment of
rights under the compromise agreement. The proof thereon cannot be received
in certiorari proceedings before the Court, but should be established in the RTC.
WHEREFORE, the Court DISMISSES the petition for certiorari; and DIRECTS the
petitioner to pay the cost of suit.
SO ORDERED
THIRD DIVISION
[G.R. No. 133317. June 29, 1999]
ANTONIO R. AGRA, CAYETANO FERRERIA, NAPOLEON M. GAMO and
VICENTE O. NOVALES, petitioners, vs.PHILIPPINE NATIONAL
BANK, respondent.
PANGANIBAN, J.:
Laches is a recourse in equity. Equity, however, is applied only in the
absence, never in contravention, of statutory law. Thus, laches cannot, as a rule,
abate a collection suit filed within the prescriptive period mandated by the Civil
Code.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the November 26, 1997 Decision of the Court of Appeals, [1] which
disposed as follows:
IN VIEW OF THE FOREGOING, the decision of the lower court is hereby AFFIRMED,
with the modification that the award of attorneys fees is hereby DELETED and the
twelve percent (12%) interest on the P2,500,000.00 the defendant-appellants are
to pay PNB should start from August 30, 1976, the date when the complaint was
filed.[2]
The decretal portion of the aforementioned trial court ruling reads:
WHEREFORE, in view of the foregoing, in the interest of justice, judgment is
rendered in favor of the plaintiff ordering all the sureties jointly and severally, to
pay PNB as follows:
a)
the amount of P2,500,000.00 plus twelve per centum (12%) accrued interest
from August 1, 1976;
b)
suit.
ten percent (10%) of the total amount due as attorneys fees and cost of the
SO ORDERED.
Also assailed by petitioners is the April 2, 1998 Resolution of the Court of
Appeals, which denied their Motion for Reconsideration. [3]
The Facts
The facts are summarized by the Court of Appeals (CA) in this wise: [4]
On August 30, 1976, an action for collection of a sum of money was filed by the
Philippine National Bank (PNB, for brevity) against Fil-Eastern Wood Industries, Inc.
(Fil-Eastern, for short) in its capacity as principal debtor and against Cayetano
Ferreria, Pedro Atienza, Vicente O. Novales, Antonio R. Agra, and Napoleon M.
Gamo in their capacity as sureties.
In its complaint, plaintiff PNB alleged that on July 17, 1967 Fil-Eastern was granted
a loan in the amount of [t]wo [m]illion [f]ive [h]undred [t]housand [p]esos
(P2,500,000.00) with interest at twelve percent (12%) per annum. Drawings from
said demand loan were made on different dates as evidenced by several promissory
notes and were credited to the account of Fil-Eastern. To secure the payment of the
said loan Fil-Eastern as principal and sureties Ferreria, Atienza, Novales, Agra, and
Gamo executed a Surety Agreement whereby the sureties, jointly and severally with
the principal, guaranteed and warranted to PNB, its successors or assigns, prompt
payment of subject obligation including notes, drafts, bills of exchange, overdrafts
and other obligations of every kind, on which Fil-Eastern was indebted or may
thereafter become indebted to PNB. It was further alleged that as of May 31, 1976
the total indebtedness of Fil-Eastern and its sureties on subject loan amounted to
[f]ive [m]illion [t]wo [h]undred [n]inety-[s]even [t]housand, [n]ine [h]undred
[s]eventy-[s]ix [p]esos and [s]eventeen [c]entavos (P5,297,976.17), excluding
attorneys fees. Notwithstanding repeated demands, the defendants refused and
failed to pay their loans.
The defendants (herein sureties) filed separate answers (pp. 49, 68, 205, 208 and
231). Collating these, We drew the following: All of them claimed that they only
signed the Surety Agreement with the understanding that the same was a mere
formality required of the officers of the corporation. They did not in any way or
manner receive a single cent from the proceeds of said loan and/or derive any profit
therefrom. Neither did they receive any consideration valuable or otherwise, from
defendant Fil-Eastern. They further claim that the loan in question was negotiated
and approved under highly irregular, anomalous and suspicious circumstances to
the point that the Surety Agreement executed thereafter is invalid, null and void
and without force and effect. The extension of time of payment of the loan in
question released and discharged the answering defendants from any liability under
the Surety Agreement. The Surety Agreement is null and void from the beginning
due to a defect in the consent of the defendants and that their liabilities under the
Surety Agreement, if any, has been extinguished by novation. The cause of action
of the complainant is barred by laches and estoppel in that the plaintiff with full
knowledge of the deteriorating financial condition of Fil-Eastern did not take steps to
collect from said defendant corporation while still solvent. They also maintained that
if anyone is liable for the payment of said loan, it is Felipe Ysmael, Jr. and not them
or it is only Fil-Eastern and the controlling officers who profited and made use of the
proceeds of the loan. Defendant Agra likewise said that he was made to sign the
Surety Agreement and he did it because of the moral influence and pressure
exerted upon him by Felipe Ysmael, Jr. (their employer at the time of signing),
thereby arousing strong fears of losing a much needed employment to support his
family should he refuse to sign as Surety.
In the order of the trial court dated October 30, 1978, defendant Fil-Eastern was
declared in default for its failure to answer the complaint within the reglementary
period and the case was scheduled for pre-trial conference. The individual
defendants with the courts approval thereafter filed an amended third-party
complaint against Felipe Ysmael, Jr.
The amended third-party complaint alleged that at the time of execution of the
alleged Surety Agreement subject matter of the principal complaint, third-party
plaintiffs were but employees of Ysmael Steel Manufacturing Co., owned by thirdparty-defendant. Third-party-plaintiffs were in no financial position to act as
sureties to a P2.5 million loan. They became incorporators of original defendant FilEastern because of fear of losing their employment brought about by the
tremendous pressure and moral influence exerted upon them by their employerthird-party-defendant. They signed the Surety Agreement upon the order of the
third-party-defendant. In signing the said document, the third-party-plaintiffs were
assured by the third-party-defendant that they had nothing to fear and worry about
because the latter will assume all liabilities as well as profits therefrom and that the
loan subject of the Surety Agreement was with the prior approval and blessing of a
high government official. They were likewise assured that the surety agreement
was but a formality and that because of such pressure, influence as well as
assurances, third-party-plaintiffs signed the Surety Agreement.
Third-party-defendant Felipe Ysmael, Jr. in his answer alleged that the Surety
Agreement was freely and voluntarily signed and executed by third-party-plaintiffs
without any intimidation, undue, improper or fraudulent representations. Further,
granting arguendo that the consent of third-party plaintiffs in signing said Surety
Agreement was vitiated with intimidation, undue influence or fraudulent
representation on the part of third-party-defendant, said Surety Agreement is only
voidable and therefore binding unless annulled by a proper action in court. The
third-party-plaintiffs did not file the proper court action for the annulment of said
agreement. They are now barred from filing an action for annulment of said
agreement, the prescriptive period therefor being only four (4) years from the time
the defect of the consent had ceased, and from the discovery of the all[e]ged
fraud. In addition, third-party plaintiffs had ratified said agreement which they
signed in July 1967 by signing their names on and execution of several promissory
thereafter.
At the pre-trial conference held on March 21, 1980, the parties failed to agree on a
possible amicable settlement hence the case was set for trial on the merits. On July
5, 1984, during the pendency of the trial, third-party defendant Felipe Ysmael, Jr.
died. He was substituted by his legal heirs Patrick Ysmael and Jeanne Ysmael as
third-party defendants. Defendant Pedro Atienza died on January 4, 1987. It
appearing that he has no legal heirs, the case against him was dismissed.
After trial, the regional trial court (RTC) ruled against herein petitioners. On
appeal, the CA modified the RTC ruling by deleting the award of attorneys
fees. Hence, this recourse to this Court.
Ruling of the Court of Appeals
In ruling that petitioners were liable under the surety agreement, the Court of
Appeals rejected their defense of laches. It held that the lapse of seven years and
eight months from December 31, 1968 until the judicial demand on August 30,
1976 cannot be considered as unreasonable delay which would necessitate the
application of laches. The action filed by the plaintiff has not yet prescribed. It is
well within the ten-year prescriptive period provided for by law wherein actions
based on written contracts can be instituted.[5]
The Court of Appeals also noted that the prescriptive period did not begin to
run from December 31, 1968 as [herein petitioners] presupposed. It was only from
the time of the judicial demand on August 30, 1976 that the cause of action
accrued. Thus, [private respondent] was well within the prescriptive period of ten
years when it instituted the case in court. The Court of Appeals further ruled that
placing the blame on [PNB] for its failure to immediately pounce upon its debtors
the moment the loan matured is grossly unfair for xxx demand upon the sureties to
pay is not necessary.
The appellate court also held that petitioners proved only the first of the
following four essential elements of laches: (1) conduct on the part of the
defendant, or one under whom he claims, giving rise to the situation of which
complaint is made and for which the complainant seeks a remedy; (2) delay in
asserting the complainants rights, the complainant having had knowledge or notice
of the defendants 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 barred.
Issues
In their Memorandum, petitioners raise the following issues: [6]
1. WHETHER OR NOT THE CLAIM OF THE PNB AGAINST THE PETITIONERS IS
ALREADY BARRED BY THE EQUITABLE DEFENSE OF LACHES?
2. WHETHER OR NOT THE RESPECTIVE CONJUGAL PARTNERSHIPS OF THE
PETITIONERS COULD BE HELD LIABLE FOR ANY LIABILITY OF THE PETITIONERS
UNDER THE SURETY AGREEMENT IN FAVOR OF THE PNB?
Under the first issue, petitioners submit four other questions:

1-a
WHETHER OR NOT THE EQUITABLE DEFENSE OF LACHES APPLIES
INDEPENDENTLY OF PRESCRIPTION?
1-b
WHETHER OR NOT THE CAUSE OF ACTION OF THE PNB AGAINST THE
PETITIONERS ACCRUED ONLY FROM THE TIME OF THE JUDICIAL DEMAND ON
AUGUST 30, 1976?
1-c
WHETHER OR NOT THE FOUR (4) WELL-SETTLED ELEMENTS OF LACHES
ARE PRESENT IN THIS CASE?
1-d
WHETHER OR NOT THE RULING IN THE CASE OF PHILIPPINE NATIONAL
BANK VS. COURT OF APPEALS, 217 SCRA 347, IS APPLICABLE IN THIS INSTANT
CASE?
In the main, the issue is whether petitioners may raise the defense of laches in
order to avoid their liability under the surety agreement. Preliminarily, we shall also
take up the question of petitioners liability as sureties.
The Courts Ruling
The appeal is not meritorious.
Preliminary Matter: Liability of Petitioners as Sureties
The present controversy began when the Philippine National Bank (PNB)
sought to enforce the Surety Agreement. The pertinent provisions of said
Agreement are as follows:
WHEREAS, FIL-EASTERN WOOD INDUSTRIES, INC. herein referred to as the
Principal, has obtained and/or desires to obtain certain credits, loans, overdrafts,
discounts, etc., from the Creditor, for all of which the Creditor requires security; and
the Surety, on account of valuable consideration received from the Principal, has
agreed and undertake to assist the principal by becoming such Surety.
NOW THEREFORE, for the purpose above mentioned, the Surety, jointly and
severally with the Principal, hereby guarantees and warrants to the Creditor, its
successors or assigns, the prompt payment at maturity of all the notes, drafts, bills
of exchange, overdrafts and other obligations of every kind, on which the Principal
may now be indebted or may hereafter become indebted to the Creditor, but the
liability of the Surety shall not at any time exceed the sum of TWO MILLION FIVE
HUNDRED THOUSAND ONLY (P2,500,000.00) (demand loan of P2,500,000.00),
Philippine Currency, plus the interest thereon at the rate of (___%) per cent per
annum, and the cost and expenses of the Creditor incurred in connection with the
granting of the credits, loans, overdrafts, etc., covered by this surety agreement,
including those for the custody, maintenance and preservation of the securities
given therefor and also for the collection thereof.
Both the Principal and the Surety shall be considered in default when they fail to
pay the obligation upon maturity with or without demand and in such case the
Surety agrees to pay to the creditor, its [successors] or assigns, all outstanding
obligations of the Principal, whether due or not due and whether held by the
Creditor as principal or agent, and it is agreed that a certified statement by the
Creditor as to the amount due from the Principal shall be accepted as correct by the
Surety without question.
The Surety expressly waives all rights to demand for payment and notice of nonpayment and protest, and agrees that the securities of every kind, that are now and
may hereafter be left with the Creditor, its successors, indorsees or assigns, as
collateral to any evidence of debt or obligations or upon which a lien may exist
thereon may be withdrawn or surrendered at any time, and the time of payment
thereof extended, without notice to, or consent by the Surety; and that the liability
on this guaranty shall be solidary, direct and immediate and not contingent upon
the pursuit by the Creditor, its successors, indorsees or assigns, of whatever
remedies it or they have against the Principal or the securities or liens it or they
may possess and the Surety will at any time, whether due or not due, pay to the
Creditor with or without demand upon the Principal, any obligation or indebtedness
of the Principal not in excess of the amount abovementioned.
This instrument is intended to be a complete and perfect indemnity to the Creditor
to the extent above stated, for any indebtedness or liability of any kind owing by
the Principal to the Creditor from time to time, and to be valid and continuous
without further notice to the Surety, and may be revoked by the Surety at any time,
but only after forty-eight hours notice in writing to the Creditor, and such revocation
shall not operate to relieve the Surety from responsibility for obligations incurred by
the Principal prior to the termination of such period. (Emphasis supplied.)
It must be stressed that petitioners, as sureties, bound
themselves solidarily for the obligation of Fil-Eastern to PNB. Petitioners admit that
they signed the Surety Agreement, but they challenge their liability thereon on the
ground that they were allegedly coerced by their employer into signing the
deed. The argument is too late at best.
As pointed out by the Court of Appeals, petitioners failed to challenge their
consent to the Agreement within the prescriptive period. Article 1391 of the Civil
Code provides that the action to annul a contract vitiated by intimidation, violence
or undue influence shall be filed within four years from the cessation of such
defects. In this case, Petitioners Agra, Gamo and Novales resigned from Fil-Eastern
in 1967, 1968 and 1969, respectively. It was only in 1976, when PNB sought to
enforce the contract, that they alleged a defect in their consent. By their inaction,
their alleged cause of action based on vitiated consent had precribed. There was no
question that petitioners, in their capacity as sureties, were answerable for the
obligations of Fil-Eastern to PNB.
We shall now go to the main issue of this case: Whether petitioners may
invoke the defense of laches, considering that PNBs claim had not yet prescribed.
Main Issue: Laches
Petitioners admit that PNBs claim, though filed more than seven years from
the maturity of the obligation, fell within the ten-year prescriptive period. They
argue, however, that the cause was already barred by laches, which is defined as
the failure or neglect for an unreasonable or unexplained length of time to do that
which by exercising due diligence, could or should have been done earlier
warranting a presumption that he has abandoned his right or declined to assert
it.[7] In arguing that the appellate court erred in rejecting the defense of laches,
petitioners cite four reasons: (1) the defense of laches applies independently of
prescription; (2) the cause of action against petitioners accrued from the maturity
of the obligation, not from the time of judicial demand; (3) the four well-settled
elements of laches were duly proven; and (4) PNB v. CA applies in the instant
case. As will be shown below, all these arguments are devoid of merit.
prescriptive period. In any event, the fact of delay, standing alone, is insufficient
to constitute laches.[11]
Application of Laches
Petitioners insist that the delay of seven years was unreasonable and
unexplained, because demand was not necessary. Again we point that, unless
reasons of inequitable proportions are adduced, a delay within the prescriptive
period is sanctioned by law and is not considered to be a delay that would bar
relief. In Chavez v. Bonto-Perez,[12] the Court reiterated an earlier holding, viz:
Assailing the CA ruling that laches was inapplicable because the claim was
brought within the ten-year prescriptive period, petitioners stress that the defense
of laches differs from and is applied independently of prescription. In support, they
cite, among others, Nielson & Co., Inc. v. Lepanto Consolidated Mining Co., [8] in
which the Supreme Court ruled:
[T]he defense of laches applies independently of prescription. Laches is different
from the statute of limitations. Prescription is concerned with the fact of delay,
whereas laches is concerned with the effect of delay. Prescription is a matter of
time; laches is principally a question of inequity of permitting a claim to be
enforced, this inequity being founded on some change in the condition of the
property or the relation of the parties. Prescription is statutory; laches is
not. Laches applies in equity; whereas prescription applies at law. Prescription is
based on fixed time, laches is not.
True, prescription is different from laches, but petitioners reliance
on Nielson is misplaced. As held in the aforecited case, laches is principally a
question of equity. Necessarily, there is no absolute rule as to what constitutes
laches or staleness of demand; each case is to be determined according to its
particular circumstances. The question of laches is addressed to the sound
discretion of the court and since laches is an equitable doctrine, its application is
controlled by equitable considerations.[9] Petitioners, however, failed to show that
the collection suit against herein sureties was inequitable. Remedies in equity
address only situations tainted with inequity, not those expressly governed by
statutes. Indeed, the petitioners failed to prove the presence of all the four
established requisites of laches, viz:
(1) conduct on the part of the defendant or one under whom he claims, giving rise
to the situation of which complaint is made and for which the complainant seeks a
remedy;
(2) delay in asserting the complainants right, the complainant having had
knowledge or notice of defendants 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 claim; and
(4) injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held barred.[10]
That the first element exists is undisputed. Neither Fil-Eastern nor the
sureties, herein petitioners, paid the obligation under the Surety Agreement.
The second element cannot be deemed to exist. Although the collection suit
was filed more than seven years after the obligation of the sureties became due, the
lapse was within the prescriptive period for filing an action. In this light, we find
immaterial petitioners insistence that the cause of action accrued on December 31,
1968, when the obligation became due, and not on August 30, 1976, when the
judicial demand was made. In either case, both submissions fell within the ten-year
Laches is a doctrine in equity while prescription is based on law. Our courts are
basically courts of law and not courts of equity. Thus, laches cannot be invoked to
resist the enforcement of an existing legal right. We have ruled in Arsenal v.
Intermediate Appellate Court x x x that it is a long standing principle that equity
follows the law. Courts exercising equity jurisdiction are bound by rules of law and
have no arbitrary discretion to disregard them. In Zabat, Jr. v. Court of Appeals x x
x, this Court was more emphatic in upholding the rules of procedure. We said
therein:
As for equity, which has been aptly described as justice outside legality, this is
applied only in the absence of, and never against, statutory law or, as in this case,
judicial rules of procedure. Aequetas nunquam contravenit legis. This pertinent
positive rules being present here, they should preempt and prevail over all abstract
arguments based only on equity.
Thus, where the claim was filed within the three-year statutory period, recovery
therefore cannot be barred by laches.
Petitioners also failed to prove the third element of laches. It is absurd to
maintain that petitioners did not know that PNB would assert its right under the
Surety Agreement. It is unnatural, if not unheard of, for banks to condone debts
without adequate recompense in some other form. Petitioners have not given us
reason why they assumed that PNB would not enforce the Agreement against them.
Finally, petitioners maintain that the fourth element is present because they
would suffer damage or injury as a result of PNBs claim. This is the crux of the
controversy. In addition to the payment of the amount stipulated in the Agreement,
other equitable grounds were enumerated by petitioners,viz:
1. Petitioners acted as sureties under pressure from Felipe Baby Ysmael, Jr., the
headman of the Ysmael Group of Companies where the petitioners were all
employed in various executive positions.
2. Petitioners did not receive a single centavo in consideration of their acting as
sureties.
3. The surety agreement was not really a requisite for the grant of the loan to FILEASTERN because the first release on the loan was made on July 17, 1967, or even
before the Surety Agreement was executed by petitioners on July 21, 1967.
4. Petitioners were assured that the Surety Agreement was merely a formality, and
they had reason to believe that assurance because the loan was principally secured
by an assignment of 15% of the proceeds of the sale of logs of FIL-EASTERN to Iwai
& Co., Ltd., and such assignment was clearly stated in PNB Board Resolution No.
407. In fact, while it was expressly stated in all of the eight (8) promissory notes
covering the releases of the loan that the said loan was secured by 15% of the
contract of sale with Iwai & Co., Ltd., only three (3) promissory notes stated that
the loan was also secured by the joint and several signatures of the officers of the
corporation. It is to be noted that no mention was even made of the joint and
several signatures of petitioners as sureties. In other words, the principal
security was the assignment of 15% of the contract for the sale of logs to Iwai &
Co., Ltd.
5. For reasons not explained by PNB, PNB did not collect the 15% of the proceeds
of the sale of the logs to Iwai & Co., Ltd., and such failure resulted in the noncollection of the P2,500,000.00 demand loan, or at least a portion of it.
6. For reasons likewise unexplained by PNB, PNB did not make any demand upon
petitioners to pay the unpaid loan of FIL-EASTERN until after FIL-EASTERN had
become bankrupt, and PNB was aware of this fact because it foreclosed the chattel
mortgages on the other loans of FIL-EASTERN which were secured by said chattel
mortgages.[13] (Emphasis found in the original.)
These circumstances do not justify the application of laches. Rather, they
disclose petitioners failure to understand the language and the nature of the Surety
Arrangement. They cannot now argue that the Surety Agreement was merely a
formality, secondary to the assignment of 15 percent of the proceeds of the sale of
Fil-Easterns logs to Iwai and Co., Ltd. Neither can they rely on PNBs failure to
collect the assigned share in the sale of the logs or to make a demand on
petitioners until after Fil-Eastern had become bankrupt. The Court stresses that the
obligation of a surety is direct, primary and absolute. Thus, the Court has held:
[A]lthough the contract of a surety is in essence secondary only to a valid principal
obligation, his liability to the creditor or promisee of the principal is said to
be direct, primary, and absolute; in other words, he is directly and equally bound
with the principal. The surety therefore becomes liable for the debt or duty of
another although he possesses no direct or personal interest over the obligations
nor does he receive any benefit therefrom. [14]
When petitioners signed as sureties, they expressly and unequivocally agreed
to the stipulation that the liability on this guaranty shall be solidary, direct and
immediate and not contingent upon the pursuit by the creditor, its successors,
indorsees or assigns, of whatever remedies it or they have against the principal or
the securities or liens it or they may possess.
If they had mistaken the import of the Surety Agreement, they could have
easily asked for its revocation. The Agreement stipulates that it may be revoked
by the Surety at any time, but only after forty-eight hours notice in writing to the
Creditor, and such revocation shall not operate to relieve the Surety from
responsibility for obligations incurred by the Principal prior to the termination of
such period. This they did not do.
Equally unavailing is petitioners allegation that the Surety Agreement was not
a requisite for the grant of the loan. Even if their assertion is true, the fact remains
that they signed the contract and voluntarily bound themselves to be solidarily liable
for the loan amounting to P2,500,000.
The other equitable circumstances above enumerated fail to support
petitioners cause. As earlier stated, petitioners are already barred from questioning
the voluntariness of their consent. Furthermore, this Court has categorically ruled
that a surety is liable for the debt of another, although he or she received no benefit
therefrom.[15]
Clearly, aside from the fact that the collection suit was filed only after the
lapse of seven years from the date the obligation became due and demandable,
petitioners failed to adduce any showing of inequity. Hence, the rules on equity
cannot protect them.
Applicability of PNB v. CA
Petitioners allege that the CA committed grave error in failing to apply PNB v.
Court of Appeals,[16] which they insist to be analogous to the present case. The
facts in said case are as follows:
Private Respondent B.P. Mata & Co. Inc. (Mata), is a private corporation engaged
in providing goods and services to shipping companies. Since 1966, it has acted as
a manning or crewing agent for several foreign firms, one of which is Star Kist
foods, Inc., USA (Star Kist). As part of their agreement, Mata makes advances for
the crews basic personal needs. Subsequently, Mata sends monthly billings to its
foreign principal Star Kist, which in turn reimburses Mata by sending a telegraphic
transfer through banks for credit to the latters account.
Against this background, on February 21, 1975, Security Pacific National Bank
(SEPAC) of Los Angeles which had an agency arrangement with Philippine National
Bank (PNB), transmitted a cable message to the International Department of PNB to
pay the amount of US$14,000 to Mata by crediting the latters account with the
Insular Bank of Asia and America (IBAA), per order of Star Kist. Upon receipt of
this cabled message on February 24, 1975, PNBs International Department noticed
an error and sent a service message to SEPAC Bank. The latter replied with the
instructions that the amount of US$14,000 should only be for US$1,400.
On the basis of the cable message dated February 24, 1975, Cashiers Check No.
269522 in the amount of US$1,400 (P9,772.96) representing reimbursement from
Star Kist, was issued by the Star Kist for the account of Mata on February 25, 1975
through the Insular Bank of Asia and America (IBAA).
However, fourteen days after or on March 11, 1975, PNB effected another payment
through Cashiers Check No. 270271 in the amount of US$14,000 (P97,878.60)
purporting to be another transmittal of reimbursement from Star Kist, private
respondents foreign principal.
Six years later, or more specifically, on May 13, 1981, PNB requested Mata for
refund of US$14,000 (P97,878.60) after it discovered its error in effecting the
second payment.
On February 4, 1982, PNB filed a civil case for collection and refund of US$14,000
against Mata arguing that based on a constructive trust under Article 1456 of the
Civil Code, it has a right to recover the said amount it erroneously credited to
respondent Mata.[17]
On the ground of laches, the Court decided against the claim of PNB, stating
that:
[i]t is amazing that it took petitioner almost seven years before it discovered that it
had erroneously paid private respondent. Petitioner would attribute its mistake to
the heavy volume of international transactions handled by the Cable and Remittance
Division of the International Department of PNB. Such specious reasoning is not
persuasive. It is unbelievable for a bank, and a government bank at that, which
regularly publishes its balanced financial statements annually or more frequently, by
the quarter, to notice its error only seven years later. As a universal bank with
worldwide operations, PNB cannot afford to commit such costly
mistakes. Moreover, as between parties where negligence is imputable to one and
not to the other, the former must perforce bear the consequences of its
neglect. Hence, petitioner should bear the cost of its own negligence.
Petitioners maintain that the delay in PNB v. CA was even shorter than that in
the present case. If the bank in the aforesaid case was negligent in not discovering
the overpayment, herein petitioners assert that the negligence was even more
culpable in the present case. They add that, given the standard practice of banks to
flag delinquent accounts, the inaction for almost seven years of herein respondent
bank was gross and inexcusable.
We are not persuaded. There are no absolute rules in the application of
equity, and each case must be examined in the light of its peculiar facts. InPNB v.
CA, there was a mistake, an inexcusable one, on the part of petitioner bank in
making an overpayment and repeating the same error fourteen days later. If the
bank could not immediately discover the mistake despite all its agents and
employees, the beneficiary of the amount could not be expected to do so. It is,
thus, inequitable to allow PNB to collect the amount, after such a long delay, from
the beneficiary who had assumed, after all those years, that the amount really
belonged to it.
In the present case, there is no showing of any mistake or any inequity. The
fact alone that seven years had lapsed before PNB filed the collection suit does not
mean that it discovered the obligation of the sureties only then. There was a Surety
Arrangement, and the law says that the said contract can be enforced by action
within ten years. The bank and the sureties all knew that the action to enforce the
contract did not have to be filed immediately. In other words, the bank committed
no mistake or inequitable conduct that needed correction, and the sureties had no
misconception about their liabilities under the contract.
Clearly, petitioners have no recourse in equity, because they failed to show
any inequity on the part of PNB.
Additional Issue: Liability of Conjugal Assets
In their Memorandum, petitioners belatedly ask the Court to rule that, in case
of a court ruling adverse to them, the conjugal properties would not be liable for the
husbands debts that did not redound to the benefit of the conjugal partnership. [18]
This issue cannot be allowed, for it is being raised for the first time only in
petitioners Memorandum. Issues, arguments, theories and causes of action not
raised below may no longer be posed on appeal. [19] Furthermore, petitioners are
asking the Court to issue a ruling on a hypothetical situation. In effect, they are
asking the Court to render an advisory opinion, a task which is beyond its
constitutional mandate.
SIMEON B. MIGUEL, ET AL., plaintiffs-appellants, vs FLORENDO

CATALINO, defendant-appellee.
REYES, J.B.L., J.:
Direct appeal from the judgment in Civil Case No. 1090 of the Court of First
Instance of Baguio, dismissing the plaintiffs' complaint for recovery of possession of
a parcel of land, registered under Act 496, in the name of one Bacaquio, 1 a longdeceased illiterate non-Christian resident of Mountain Province, and declaring the
defendant to be the true owner thereof.
On January 22, 1962, appellants Simeon, Emilia and Marcelina Miguel, and
appellant Grace Ventura brought suit in the Court below against Florendo Catalino
for the recovery of the land above-described, plaintiffs claiming to be the children
and heirs of the original registered owner, and averred that defendant, without their
knowledge or consent, had unlawfully taken possession of the land, gathered its
produce and unlawfully excluded plaintiffs therefrom. Defendant answered pleading
ownership and adverse possession for 30 years, and counterclaimed for attorney's
fees. After trial the Court dismissed the complaint, declared defendant to be the
rightful owner, and ordered the Register of Deeds to issue a transfer certificate in
lieu of the original. Plaintiffs appealed directly to this Court, assailing the trial
Court's findings of fact and law.
As found by the trial Court, the land in dispute is situated in the Barrio of San
Pascual, Municipality of Tuba, Benguet, Mountain Province and contains an area of
39,446 square meters, more or less. It is covered by Original Certificate of Title No.
31, which was issued on 28 December 1927 in the name of Bacaquio (or Bakakew),
a widower. No encumbrance or sale has ever been annotated in the certificate of
title.
The plaintiff-appellant Grace Ventura2 is the only child of Bacaquio by his first wife,
Debsay, and the other plaintiffs-appellants, Simeon, Emilia and Marcelina, all
surnamed "Miguel", are his children by his third wife, Cosamang. He begot no issue
with his second wife, Dobaney. The three successive wives have all died.
Bacaquio, who died in 1943, acquired the land when his second wife died and sold it
to Catalino Agyapao, father of the defendant Florendo Catalino, for P300.00 in
1928. Of the purchase price P100.00 was paid and receipted for when the land was
surveyed, but the receipt was lost; the balance was paid after the certificate of title
was issued. No formal deed of sale was executed, but since the sale in 1928, or for
more than 30 years, vendee Catalino Agyapao and his son, defendant-appellee
Florendo Catalino, had been in possession of the land, in the concept of owner,
paying the taxes thereon and introducing improvements.
On 1 February 1949, Grace Ventura, by herself alone, "sold" (as per her
Transferor's Affidavit, Exhibit "6") anew the same land for P300.00 to defendant
Florendo Catalino.
WHEREFORE, the petition is hereby DENIED and the assailed Decision of the
Court of Appeals is AFFIRMED. Costs against petitioners. SO ORDERED.
In 1961, Catalino Agyapao in turn sold the land to his son, the defendant Florendo
Catalino.
EN BANC
This being a direct appeal from the trial court, where the value of the property
involved does not exceed P200,000.00, only the issues of law are reviewable by the
Supreme Court, the findings of fact of the court a quobeing deemed conceded by
the appellant (Jacinto v. Jacinto, 105 Phil. 1218; Del Castillo v. Guerro, L-11994, 25
G.R. No. L-23072
November 29, 1968
July 1960; Abuyo, et al. v. De Suazo, L-21202, 29 Oct. 1966; 18 SCRA 600, 601).
We are thus constrained to discard appellant's second and third assignments of
error.
In their first assignment, appellants assail the admission in evidence over the
objection of the appellant of Exhibit "3". This exhibit is a decision in favor of the
defendant-appellee against herein plaintiff-appellant Grace Ventura, by the council
of Barrio of San Pascual, Tuba, Benguet, in its Administrative Case No. 4, for the
settlement of ownership and possession of the land. The decision is ultra
vires because barrio councils, which are not courts, have no judicial powers (Sec. 1,
Art. VIII, Constitution; see Sec. 12, Rep. Act 2370, otherwise known as the Barrio
Charter). Therefore, as contended by appellants, the exhibit is not admissible in a
judicial proceeding as evidence for ascertaining the truth respecting the fact of
ownership and possession (Sec. 1, Rule 128, Rules of Court).
Appellants are likewise correct in claiming that the sale of the land in 1928 by
Bacaquio to Catalino Agyapao, defendant's father, is null and void ab initio, for lack
of executive approval (Mangayao et al. vs. Lasud, et al., L-19252, 29 May 1964).
However, it is not the provisions of the Public Land Act (particularly Section 118 of
Act 2874 and Section 120 of Commonwealth Act 141) that nullify the transaction,
for the reason that there is no finding, and the contending parties have not shown,
that the land titled in the name of Bacaquio was acquired from the public domain
(Palad vs. Saito, 55 Phil. 831). The laws applicable to the said sale are: Section
145(b) of the Administrative Code of Mindanao and Sulu, providing that no
conveyance or encumbrance of real property shall be made in that department by
any non-christian inhabitant of the same, unless, among other requirements, the
deed shall bear indorsed upon it the approval of the provincial governor or his
representative duly authorized in writing for the purpose; Section 146 of the same
Code, declaring that every contract or agreement made in violation of Section 145
"shall be null and void"; and Act 2798, as amended by Act 2913, extending the
application of the above provisions to Mountain Province and Nueva Vizcaya.
Since the 1928 sale is technically invalid, Bacaquio remained, in law, the owner of
the land until his death in 1943, when his title passed on, by the law on succession,
to his heirs, the plaintiffs-appellants.
Notwithstanding the errors aforementioned in the appealed decision, we are of the
opinion that the judgment in favor of defendant-appellee Florendo Catalino must be
sustained. For despite the invalidity of his sale to Catalino Agyapao, father of
defendant-appellee, the vendor Bacaquio suffered the latter to enter, possess and
enjoy the land in question without protest, from 1928 to 1943, when the seller died;
and the appellants, in turn, while succeeding the deceased, also remained inactive,
without taking any step to reivindicate the lot from 1944 to 1962, when the present
suit was commenced in court. Even granting appellants' proposition that no
prescription lies against their father's recorded title, their passivity and inaction for
more than 34 years (1928-1962) justifies the defendant-appellee in setting up the
equitable defense of laches in his own behalf. As a result, the action of plaintiffsappellants must be considered barred and the Court below correctly so held. Courts
can not look with favor at parties who, by their silence, delay and inaction,
knowingly induce another to spend time, effort and expense in cultivating the land,
paying taxes and making improvements thereon for 30 long years, only to spring
from ambush and claim title when the possessor's efforts and the rise of land values
offer an opportunity to make easy profit at his expense. In Mejia de Lucas vs.
Gamponia, 100 Phil. 277, 281, this Court laid down a rule that is here squarely
applicable:
Upon a careful consideration of the facts and circumstances, we are
constrained to find, however, that while no legal defense to the action lies,
an equitable one lies in favor of the defendant and that is, the equitable
defense of laches. We hold that the defense of prescription or adverse
possession in derogation of the title of the registered owner Domingo Mejia
does not lie, but that of the equitable defense of laches. Otherwise stated,
we hold that while defendant may not be considered as having acquired
title by virtue of his and his predecessors' long continued possession for 37
years, the original owner's right to recover back the possession of the
property and title thereto from the defendant has, by the long period of 37
years and by patentee's inaction and neglect, been converted into a stale
demand.
As in the Gamponia case, the four elements of laches are present in the case at bar,
namely: (a) conduct on the part of the defendant, or of one under whom he claims,
giving rise to the situation of which complaint is made and for which the complaint
seeks a remedy; (b) 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; (c) lack of knowledge or notice on the
part of the defendant that the complainant would assert the right on which he bases
his suit; and (d) injury or prejudice to the defendant in the event relief is accorded
to the complainant, or the suit is not held to be barred. In the case at bar, Bacaquio
sold the land in 1928 but the sale is void for lack of the governor's approval. The
vendor, and also his heirs after him, could have instituted an action to annul the
sale from that time, since they knew of the invalidity of the sale, which is a matter
of law; they did not have to wait for 34 years to institute suit. The defendant was
made to feel secure in the belief that no action would be filed against him by such
passivity, and also because he "bought" again the land in 1949 from Grace Ventura
who alone tried to question his ownership; so that the defendant will be plainly
prejudiced in the event the present action is not held to be barred.
The difference between prescription and laches was elaborated in Nielsen & Co., Inc.
vs. Lepanto Consolidated Mining Co., L-21601, 17 December 1966, 18 SCRA p.
1040, as follows:
Appellee is correct in its contention that the defense of laches applies
independently of prescription. Laches is different from the statute of
limitations. Prescription is concerned with the fact of delay, whereas laches
is concerned with the effect of delay. Prescription is a matter of time;
laches is principally a question of inequity of permitting a claim to be
enforced, this inequity being founded on some change in the condition of
the property or the relation of the parties. Prescription is statutory; laches
is not. Laches applies in equity, whereas prescription applies at law.
Prescription is based on fixed time laches is not, (30 C.J.S., p. 522.See
also Pomeroy's Equity Jurisprudence, Vol. 2, 5th ed., p. 177) (18 SCRA
1053).
With reference to appellant Grace Ventura, it is well to remark that her situation is
even worse than that of her co-heirs and co-plaintiffs, in view of her executing an
affidavit of transfer (Exh. 6) attesting under oath to her having sold the land in
controversy to herein defendant-appellee, and the lower Court's finding that in 1949
she was paid P300.00 for it, because she, "being a smart woman of enterprise,
threatened to cause trouble if the defendant failed to give her P300.00 more,
because her stand (of being the owner of the land) was buttressed by the fact that
Original Certificate of Title No. 31 is still in the name of her father, Bacaquio"
(Decision, Record on Appeal, p. 24). This sale, that was in fact a quitclaim, may not
be contested as needing executive approval; for it has not been shown that Grace
Ventura is a non-christian inhabitant like her father, an essential fact that cannot be
assumed (Sale de Porkan vs. Yatco, 70 Phil. 161, 175).
Since the plaintiffs-appellants are barred from recovery, their divestiture of all the
elements of ownership in the land is complete; and the Court a quo was justified in
ordering that Bacaquio's original certificate be cancelled, and a new transfer
certificate in the name of Florendo Catalino be issued in lieu thereof by the Register
of Deeds.
FOR THE FOREGOING REASONS, the appealed decision is hereby affirmed, with
costs against the plaintiffs-appellants.
THIRD DIVISION
HEIRS OF MARCELINA
ARZADON-CRISOLOGO,
represented by Leticia C. del
Rosario, MAURICIA ARZADON
and BERNARDO ARZADON,
G.R. No. 171068

Promulgated:
September 5, 2007
Vs.
AGRIFINA RAON, substituted
by SUZIMA RAON-DUTERTE
and OTHELO RAON,
CHICO-NAZARIO, J.:
This is a Petition for Certiorari under Rule 45 of the Rules of Court of the
Decision[1] and Resolution[2] of the Court of Appeals in CA-G.R. SP No. 72552, dated
10 November 2005 and 12 January 2006, respectively, which affirmed in toto the
Decision[3] dated 8 August 2002 of the Regional Trial Court (RTC) of Batac, Ilocos
Norte, Branch 18, in Civil Case No. 3875-18. The RTC reversed the 11 December
2001 Decision[4] of the Municipal Circuit Trial Court (MCTC) of Badoc-Pinili, Badoc,
Ilocos Norte, in Civil Case No. 141-B.
Records show that on 18 October 1995, Agrifina Raon [5] filed a
Complaint[6] against spouses Conrado and Mila Montemayor (spouses Montemayor)
with the MCTC of Badoc, Ilocos Norte, claiming ownership over an unregistered
residential lot (subject property) situated at Brgy. No. 2 Badoc, Ilocos Norte,
covered by Tax Declaration No. 420809, more particularly described as follows:
RESIDENTIAL with an area of 472 sq. ms. (sic) Bounded on the
North by Ladera St.; on the East by Dionisio Ladera; on the South
by Buenaventura Arzadon; and on the West by Rafael Ladera;
Assessed at P1700.00 under Tax Dec. No. 420809.[7]
According to Agrifina Raon, her family had enjoyed continuous, peaceful
and uninterrupted possession and ownership over the subject property since 1962,
and had religiously paid the taxes thereon. They had built a house on the subject
property where she and her family had resided. Unfortunately, in 1986, when her
family was already residing in Metro Manila, fire razed and destroyed the said
house. Nonetheless, they continued to visit the subject property, as well as pay the
real estate taxes thereon. However, in August of 1986, her daughter, Zosie Raon,
discovered that the subject property was already in the name of the spouses
Montemayor under Tax Declaration No. 0010563 which was purportedly issued in
their favor by virtue of an Affidavit of Ownership and Possession which the spouses
Montemayor executed themselves. The Affidavit was alleged to have created a cloud
of doubt over Raons title and ownership over the subject property.
Hence, Agrifina Raon sought a Writ of Preliminary Injunction [8] against the
spouses Montemayor commanding them to cease and desist from further exercising
any right of ownership or possession over the subject property. She further prayed
that she be finally declared the true and lawful owner of the subject property.
The spouses Montemayor, for their part, alleged that they acquired the
subject lot by purchase from Leticia del Rosario and Bernardo Arzadon who are the
heirs of its previous owners for a consideration of P100,000.00.[9]
On 22 July 1996, the Heirs of Marcelina Arzadon-Crisologo, (represented by
Leticia A. Crisologo del Rosario), Mauricia Arzadon, and Bernardo Arzadon
(petitioners) filed an Answer in Intervention [10] claiming, inter alia, that they are
the rightful owners of the subject property, having acquired the same from their
predecessors-in-interest. They averred that there existed no liens or encumbrances
on the subject property in favor of Agrifina Raon; and that no person, other than
they and the spouses Montemayor, has an interest in the property as owner or
otherwise.
Per petitioners allegations, their predecessors-in-interest, spouses Timoteo
and Modesta Alcantara (spouses Alcantara) bought the subject property from its
owner, Rafael Ladera, on 2 May 1936. The spouses Alcantara then built a house of
strong materials on the subject property which served as their conjugal
home. Residing with them was Timoteo Alcantaras sister, Augustina AlcantaraArzadon. As the spouses Alcantara died without issue, their properties were left to
Timoteo Alcantaras nearest of kin, Augustina Alcantara-Arzadon and Tiburcio
Alcantara, sister and brother, respectively, of Timoteo Alcantara. Tiburcio Alcantara
also died without any known heir; thus, leaving the subject property in Augustina
Alcantara-Arzadons sole favor. Augustina Alcantara-Arzadon is the mother of
petitioners Marcelina Arzadon-Crisologo (now deceased and whose heirs are
represented by Leticia del Rosario) and Mauricia Arzadon. Bernardo Arzadon is the
son of Mauricia Arzadon.
Petitioners asseverated further that Bernardo Arzadon had lived in the
house constructed on the subject property until 1985 when it was gutted by fire. To
further support their claims, petitioners averred that they had religiously paid the
real estate taxes on the subject property. Finally, by way of a counterclaim,
petitioners sought compensation for the damages which they allegedly suffered by
reason of the baseless filing of the instant suit.
On 22 October 1999, the MCTC issued an Order[11] dropping the name of
the spouses Montemayor from the caption of the case on the ground that sometime
in 1996, Leticia del Rosario and Bernardo Arzadon had repurchased the subject
property from the spouses Montemayor for the consideration of P100,000.00. As a
result, the spouses Montemayor had no more interest or claim whatsoever on the
property in litigation.
On 11 December 2001, the MCTC rendered a Decision in favor of the
petitioners. The decretal portion thereof reads, thus:
WHEREFORE, in view of all the foregoing, judgment is hereby
rendered:
1. Declaring the [petitioners] to be the true and lawful
owners of one-half (1/2) portion of the undivided whole
of the lot-in-suit by mode of succession pursuant to
[A]rticle 1001 of the [C]ivil [C]ode of the Philippines;
2. Declaring the [petitioners] to have the better right
over the other half of the undivided whole of the lot-insuit by mode of prescription pursuant to [A]rticle 1137 of
the Civil Code of the Philippines;
3. Dismissing the counter-claim of the [petitioners]
against the [respondents];
4. Ordering [petitioners] to pay the cost of the suit. [12]
First, the MCTC ruled that while the adverse claims of Agrifina Raon on
the subject lot against the spouses Alcantara may have started in 1962, this
adverse possession was interrupted in the year 1977 due to the filing of an adverse
claim by petitioner Marcelina Arzadon-Crisologo with the Office of the Assessor. In
1977, the tax declaration in the name of Valentin Raon, Agrifina Raons husband,
was cancelled and a new tax declaration was issued in Marcelina ArzadonCrisologos name. The MCTC said that the period of possession of the spouses
Raon in the concept of an owner from 1962 to 1977 did not ripen into ownership
because their occupation was in bad faith. The Civil Code requires, for acquisitive
prescription of real property, 30 years of uninterrupted possession if the same is
wanting in good faith and without a just title.
Second, the MCTC held that by virtue of succession, petitioners are entitled
to one-half of the subject property. This is because according to Article 1001[13] of
the Civil Code, should brothers and sisters or their children survive with the widow
or the widower (who are without issue), the latter shall be entitled to one-half of the
inheritance and the brothers and sisters or their children to the other half. The
spouses Alcantara died without issue. As between Timoteo Alcantara and Modesta
Alcantara, the former predeceased the latter. Timoteo Alcantara was survived by
(1) his brother Tiburcio Alcantara, who also died without any known heir; and (2)
his sister Augustina Alcantara. Thus, following the death of the spouses Alcantara,
only the children of Augustina Alcantara, namely Marcelina Arzadon-Crisologo and
Mauricia Arzadon, stand to inherit Timoteo Alcantaras share in the subject property.
Moreover, the MCTC declared that for the part of Modesta Alcantara, there
was no legal heir who claimed the other half of the property which she [14] inherited
from her husband, Timoteo Alcantara who predeceased her. On this portion, the
MCTC held that petitioners exercised rights of ownership and dominion over the
same by periodically visiting the lot and cleaning it.[15] It also held that from 31
August 1977, when petitioners predecessor-in-interest Marcelina Arzadon-Crisologo
filed an adverse claim for herself and for her brothers and sisters which led to the
issuance of Tax Declaration No. 44120 in her name, to 11 December 2001, [16] there
is a total of 33 years, three months and 10 days which is sufficient to claim
ownership over the subject property by adverse possession under Article 1137 [17] of
the Civil Code.
On appeal, the RTC reversed and set aside the Decision of the MCTC.
The RTC declared that the respondent Raons who are heirs of the original
plaintiff had acquired the subject property by virtue of acquisitive prescription, and
therefore adjudged respondents to be the absolute owners thereof; thus, in the 8
August 2002Decision of the RTC, it held:
WHEREFORE, in view of the foregoing, the Decision of the
trial [c]ourt is hereby REVERSED and SET ASIDE, and judgment is
hereby rendered:
1)
Declaring the [respondents] as the absolute owners of the

parcel of land in suit, having acquired the same through
extraordinary acquisitive prescription.
No costs.[18]
In its findings, the RTC declared that a more circumspect scrutiny of the
evidence showed that for a long time from the death of the spouses Alcantara, no
one adjudicated the subject property unto themselves. Although petitioners and
their predecessors-in-interest claimed to have successional rights over the subject
property, they did not take action to have the same adjudicated to themselves or,
at least, to have the same declared for taxation purposes. The RTC ruled that
petitioners had slept on their rights. On the part of the respondent Raons, in
1962, Valentin Raon, respondents father, declared the subject property in his
name for taxation purposes and paid the corresponding taxes thereon. In the years
that followed, his wife, Agrifina Raon, declared the same in her name for taxation
purposes, as well as paid the real estate taxes on the subject property. In 1977,
the latter even mortgaged the subject property with the Philippine National Bank. It
was only in 1977 when petitioners predecessor-in-interest Marcelina ArzadonCrisologo executed an Adverse Claim and Notice of Ownership and declared the
subject property in her name and paid its taxes.
The RTC elucidated in this wise, to wit:
It bears to note that since the death of Timoteo Alcantara
until the year 1977, [petitioners], as well as their predecessors-ininterests (sic) had not taken any concrete step in exercising their
supposed successional rights over the parcel of land in suit, or at
least, the Intervenors should have always [stayed] on their guard
or especially vigilant against anyone who would secure a claim to
the said parcel of land, more so that Valentin Raon and plaintiff
Agrifina Raon were then living with them. It is very unfortunate
that it was only in 1977 that the Intervenors made known to
others of their supposed successional rights over the parcel of
land in suit. Relief is denied to a claimant whose right has
become stale for a long time, considering that some other persons
like [respondents] had wayback (sic) taken the necessary action
in claiming the parcel of land in suit. It is the vigilant and not the
sleepy that is being assisted by the laws. (Ledita Burce Jacob v.

Court of Appeals, et al., G.R. No. 92159, July 1, 1993).
On review before the Court of Appeals, the Decision of the RTC was
affirmed in toto.
It stands to reason, therefore, to hold that because of the

claim of the [respondents] to have acquired the parcel of land in
suit by acquisitive prescription, the Intervenors who belatedly
claimed to be the legal and compulsory heirs of the late Timoteo
Alcantara, as ruled by the trial court, had regrettably forfeited
their such (sic) successional rights, simply due to their inaction
for a long period of time. Hence, contrary to the findings of the
trial court, the [petitioners] are not entitled to the one-half (1/2)
portion of the parcel of land in suit.[19]
The Court of Appeals held that when Valentin Raon executed the affidavit
declaring himself to be the true and lawful owner of the subject property in 1962,
the same was a repudiation of petitioners legal title over it. The repudiation,
coupled with the payment of realty taxes, was made with the knowledge of
petitioners, who failed to act against it. Thus, from 1962 up to the filing of the
action in 1995, respondents continued to adversely occupy the property. In the
assailed 10 November 2005 Decision of the Court of Appeals, it ruled:
Likewise, the RTC reasoned that the Notice of Adverse Claim executed by
petitioners predecessor-in-interest Marcelina Arzadon-Crisologo against the Raons
in 1977 implied that respondents have been in possession of the subject
property. On this matter, the RTC said, viz:
Evidently, the trial court considered by implication that the
execution by Marcelina Arzadon Crisologo of said Adverse Claim
and Notice of Ownership in 1977 to have interrupted the running
of the prescriptive period on the possession by the [respondents]
of the parcel of land in suit. It bears to stress on (sic) this point,
that the Adverse Claim and Notice of Ownership executed by
Marcelina Arzadon Crisologo is nothing but a notice of a claim
adverse to the [respondents]. By its nature, its implication is that
the [respondents] have been in possession of the parcel of land in
suit in some concept. But definitely, said Adverse Claim does not,
upon its execution, operate to toll or interrupt the running of the
prescriptive period because there is a necessity to determine the
validity of the same. And this could only be done by the filing of
the necessary action in court such [as] contemplated in the
provisions of Article 1123 of the Civil Code. It is only on (sic) such
instance that the prescriptive period should be deemed
interrupted. And undisputedly, nothing had been done by the
Intervenors after the execution of said Adverse Claim by Marcelina
Crisologo, except of course as they claimed, and as held by the
trial court, they started to possess the parcel of land in
suit. Regretably (sic), however, such possession by the
Intervenors of the parcel of land in suit does not benefit them for
purposes of prescription.[20]
The RTC also declared that the Raons have been in possession of the parcel
of land in the concept of an owner since 1962. Even as they had gone to live
in Manila following the burning of the house on the subject property, they continued
to exercise acts of dominion over the same by visiting and looking after the
property. The RTC also considered in favor of the respondents, the admission of
petitioner Bernardo Arzadon and the petitioners witnesses that Valentin Raon and
Agrifina Raon had been staying in the house on the subject lot since 1947, which
shows that they had been in possession of the subject property for a period of more
than 50 years.
Moreover, respondents payment of realty taxes made

with the knowledge and consent of petitioners and went
unchallenged for a number of years, indubitably show their
positive claim as owners of the property. While it is true that by
themselves tax receipts and declarations of ownership for taxation
purposes are not incontrovertible evidence of ownership, they
become strong evidence of ownership acquired by prescription
when accompanied by proof of actual possession of the
property. It is only where payment of taxes is accompanied by
actual possession of the land covered by the tax declaration that
such circumstance may be material in supporting a claim of
ownership.
Needless to state, from 1962 onwards, prescription begun
to run against petitioners and was not in any way interrupted from
their mere execution of the Notice of Adverse Claim since the
notice of adverse claim cannot take the place of judicial summons
which produces the civil interruption provided for under the
law. And even if We are to eliminate the question of good faith in
determining the prescriptive period, evidence are (sic) still
abundant to substantiate respondents thirty years of possession
in the concept of owner commencing from 1962 until 1995 when
the complaint below was filed.[21]
Petitioners filed a Motion for Reconsideration thereon which was denied by
the Court of Appeals in the following manner, to wit:
After a careful study of the grounds relied upon by
petitioners We find no new matters raised to justify a modification
much less, a reversal of the Decision sought to be
reconsidered. To reiterate, even assuming ex gratia
argumenti that petitioner merely tolerated the Raons (sic)
occupancy of the subject property, it must be stressed that the
execution in 1962 of Valentin Raons Affidavit, the corresponding
payment of realty taxes and other acts of dominion which went
unchallenged by the petitioners, had effectively severed their
alleged juridical relation. Suffice it to state that these acts, taken
as a whole, vest upon the Raons the right to claim ownership
over the subject property irrespective of whether the nature of
their occupation was rooted from the mere tolerance of the
Arzadons or from a bona fide sale between Agrifina Raon and
Rafael Ladera.[22]
Hence, the instant Petition.

The primordial issue in the case at bar is whether the Court of Appeals
erred in declaring that respondents had acquired ownership over the subject
property through uninterrupted and adverse possession thereof for thirty years,
without need of title or of good faith. Petitioners dispute the findings of the Court of
Appeals and the RTC in declaring that acquisitive prescription has set in against
them and in favor of the respondents. They claim that the evidence does not
support respondents contention that they have been in public, notorious, and
uninterrupted possession over the subject property in the concept of an owner since
1962 as alleged in their Complaint. Instead, petitioners rely on the finding of the
MCTC that respondents were not able to prove their adverse claim for an
uninterrupted period of thirty years.
At this juncture, we take an opportune look at the applicable rules on the
acquisition of ownership through prescription.
Prescription is another mode of acquiring ownership and other real rights
over immovable property.[23] It is concerned with lapse of time in the manner and
under conditions laid down by law, namely, that the possession should be in the
concept of an owner, public, peaceful, uninterrupted and adverse.[24] Possession is
open when it is patent, visible, apparent, notorious and not clandestine. [25] It is
continuous when uninterrupted, unbroken and not intermittent or
occasional;[26] exclusive when the adverse possessor can show exclusive dominion
over the land and an appropriation of it to his own use and benefit; [27] and notorious
when it is so conspicuous that it is generally known and talked of by the public or
the people in the neighborhood.[28] The party who asserts ownership by adverse
possession must prove the presence of the essential elements of acquisitive
prescription.
Article 1117 of the Civil Code is instructive:
Art. 1117. Acquisitive prescription of dominion and other
real rights may be ordinary or extraordinary.
Articles 1134 and 1137 of the Civil Code fix the periods of
possession,[29] which provide:
Art. 1134. Ownership and other real rights over
immovable property are acquired by ordinary prescription through
possession of ten years.
Art. 1137. Ownership and other real rights over
immovables also prescribe through uninterrupted adverse
possession thereof for thirty years, without need of title or of good
faith.
From the foregoing, it can be gleaned that acquisitive prescription of real
rights may be ordinary or extraordinary.[30] Ordinary acquisitive prescription
requires possession of things in good faith and with just title for the time fixed by
law; without good faith and just title, acquisitive prescription can only be
extraordinary in character.[31] Regarding real or immovable property, ordinary
acquisitive prescription requires a period of possession of ten years, while
extraordinary acquisitive prescription requires an uninterrupted adverse possession
of thirty years.[32]
Were respondents able to sufficiently satisfy the legal requirements to prove

prescription?
To recapitulate, respondents traced their claim of ownership from the year
1962 until the filing of their Complaint for Ownership before the MCTC on 18
October 1995. To support their possession, they rely on an Affidavit executed on 19
October 1962 by Valentin Raon claiming ownership over the subject property by
virtue of an alleged sale. The MCTC, the RTC and the Court of Appeals were
unanimous in declaring that the execution by Valentin Raon of the Affidavit in 1962
was an express repudiation of petitioners claim over the property. By virtue of
such Affidavit, respondents were able to cancel Tax Declaration No. 02853 in the
name of petitioners predecessor-in-interest Timoteo Alcantara who was shown to
have paid taxes on the subject property in 1950. Hence, in 1962, Tax Declaration
No. 033062 was issued in the name of Valentin Raon. The same was subsequently
cancelled by Tax Declaration No. 033106, which was in the name of his wife,
Agrifina Raon. The same was likewise cancelled in 1967 by Tax Declaration No.
420809, similarly under the name of Agrifina Raon. In 1977, however, petitioners
predecessor-in-interest Marcelina Arzadon-Crisologo filed an Adverse Claim and a
Notice of Ownership claiming that the subject property which is not yet registered in
the Office of the Register of Deeds of Laoag City is declared under Tax Declaration
No. 420809 in the name of Valentin Raon for taxation purposes only; but that they
have been in possession of the said land publicly, peacefully and continuously
without any intervention or interruption for more than 15 years.
However, a question must be asked: did the Notice of Adverse Claim filed
by petitioners constitute an effective interruption since 1962 of respondents
possession of the subject property?
The answer is in the negative.
Article 1123[33] of the Civil Code is categorical. Civil interruption is produced
by judicial summons to the possessor. Moreover, even with the presence of judicial
summons, Article 1124[34] sets limitations as to when such summons shall not be
deemed to have been issued and shall not give rise to interruption, to wit: 1) if it
should be void for lack of legal solemnities; 2) if the plaintiff should desist from the
complaint or should allow the proceedings to lapse; or 3) if the possessor should be
absolved from the complaint.
Both Article 1123 and Article 1124 of the Civil Code underscore the judicial
character of civil interruption. For civil interruption to take place, the possessor
must have received judicial summons. None appears in the case at bar. The Notice
of Adverse Claim which was filed by petitioners in 1977 is nothing more than a
notice of claim which did not effectively interrupt respondents possession. Such a
notice could not have produced civil interruption. We agree in the conclusion of the
RTC, which was affirmed by the Court of Appeals, that the execution of the Notice of
Adverse Claim in 1977 did not toll or interrupt the running of the prescriptive period
because there remains, as yet, a necessity for a judicial determination of its judicial
validity. What existed was merely a notice. There was no compliance with Article
1123 of the Civil Code. What is striking is that no action was, in fact, filed by
petitioners against respondents. As a consequence, no judicial summons was
received by respondents. As aptly held by the Court of Appeals in its affirmance of
the RTCs ruling, the Notice of Adverse Claim cannot take the place of judicial
summons which produces the civil interruption provided for under the law. [35] In the
instant case, petitioners were not able to interrupt respondents adverse possession
since 1962. The period of acquisitive prescription from 1962 continued to run in
respondents favor despite the Notice of Adverse Claim.
From another angle, we find that, quite clearly, questions of fact exist
before us. There is a question of fact when the doubt or difference arises as to the
truth or falsehood of facts or when the query invites calibration of the whole
evidence considering mainly the credibility of the witnesses, the existence and
relevancy of specific surrounding circumstances as well as their relation to each
other and to the whole, and the probability of the situation. [36]
Thus, we find proper the application of the doctrine that findings of facts of
the Court of Appeals upholding those of the trial court are binding upon this
Court.[37] Even though the rule is subject to exceptions,[38] we do not find them
applicable in the instant case.
As found by the RTC and affirmed by the Court of Appeals, nothing was
done by petitioners to claim possession over the subject property from the time
their predecessors-in-interest had lost possession of the property due to their
deaths. Plainly, petitioners slept on their rights. Vigilantibus sed non dormientibus
jura subveniunt. The law comes to the succor only to aid the vigilant, not those
who slumber on their rights. It was only in 1977 when they attempted to call the
attention of respondents, which as earlier discussed, did not even operate as an
interruption on the latters possession. The RTC and the Court of Appeals held that
from 1962 to the time they filed their Complaint before the MCTC and until the
present time, respondents occupied without interruption the subject property in the
concept of an owner, thereby acquiring ownership via extraordinary acquisitive
prescription. To reiterate, the RTCs factual findings based on the evidence on
record were manifestly in favor of respondents, to wit:
Thus, by preponderance of evidence, it has been
established preponderantly that the [respondents] have been in
possession of the parcel of land in suit continuously, peacefully,
publicly, notoriously, uninterrupted and in the concept of an owner
since 1962 to the present. The fact that the [respondents] have
gone to live in Manila right after the house built in the parcel of
land in suit was burned in 1988, they, however, then and
thereafter intermittently come to Badoc, Ilocos Norte purposely to
look after and to visit the parcel of land in suit. Actual possession
of land consists in the manifestation of acts of dominion over it of
such a nature as a party would naturally exercise over his own
property. One needs (sic) not to (sic) stay on it. The acts
exercised by the [respondents] over the parcel of land in suit are
consistent with ownership. Possession in the eyes of the law does
not mean that a man has to have his feet on every square meter
of the ground before it can be said that he is in possession
[thereof]. (Ramos v. Director of Lands, 39 Phil. 175, cited in the
case of Somodio v. Court of Appeals, et al., 235 SCRA 307). It is
sufficient that the [respondents] were able to subject the parcel of
land to the action of their will.
Furthermore, the Court finds it (sic) significant the
testimonies of [petitioner] Bernardo Arzadon and his witnesses
Leonila Arzadon and Elpidio Evangelista who categorically testified

to the effect that Valentin Raon and [respondent] Agrifina Raon
had been staying in the house standing on the parcel of land in
suit since 1947. Basically, the defendants are bound by their
admissions and also bound by the testimonies of the witnesses
they presented. And going along with their respective
testimonies, from 1947 to 1977 or for [a] period of thirty (30)
years the [respondents] have been in possession of the parcel of
land in suit enough to invoke extraordinary acquisitive
prescription, pursuant to the provisions of Article 1134 [39] (sic) of
the New (sic) Civil Code. However, as earlier stated, the
[respondents], contrary to the claim of the [petitioners] and
findings of the trial court, have been in possession of the parcel of
land in suit continuously and uninterrupted from 1962 to the
present but because of the admissions of the [petitioners], the
[respondents] have been in possession of the same from 1947 to
the present or for more than fifty (50) years now. [40]
The open, continuous, exclusive and notorious possession by respondents
of the subject property for a period of more than 30 years in repudiation of
petitioners ownership had been established. During such length of time,
respondents had exercised acts of dominion over the subject property, and paid
taxes in their name. Jurisprudence is clear that although tax declarations or realty
tax payments of property are not conclusive evidence of ownership, nevertheless,
they are good indicia of possession in the concept of owner for no one in his right
mind would be paying taxes for a property that is not in his actual or at least
constructive possession.[41] They constitute at least proof that the holder has a
claim of title over the property.[42] As is well known, the payment of taxes coupled
with actual possession of the land covered by the tax declaration strongly supports
a claim of ownership.[43] The Court of Appeals did not err in affirming the factual
findings of the RTC that respondents had validly established their claim of ownership
over the subject property through acquisitive prescription.
WHEREFORE, the Petition is DENIED. The Decision of the Court of
Appeals dated 10 November 2005 and the Resolution dated 12 January 2006 in CAG.R. SP No. 72552 are AFFIRMED. No costs.
SO ORDERED.
SECOND DIVISION
[G.R. No. 144103. August 31, 2005]
AGUEDA DE VERA-CRUZ, MARIO, EVANGELINE, EDRONEL, ANGELITO,
TEODORO JR. and FERNANDO, all surnamed DELA CRUZ, petitioners, vs.
SABINA MIGUEL, respondent.
CHICO-NAZARIO, J.:
Assailed in a Petition for Review on Certiorari under Rule 45 of the Rules of
Court is the decision[1] of the Court of Appeals dated 12 July 2000 that reversed and
set aside the decision of the Regional Trial Court (RTC) of Cauayay, Isabela, Branch
20, in Civil Case No. 20-235, for Recovery of Possession with Damages, ordering
respondent Sabina Miguel to vacate the land, subject matter of this case, to remove
her house and/or whatever improvements she introduced thereon, to pay rent, and
to pay costs of suit.
Petitioners Agueda de Vera-Cruz, Mario, Evangeline, Edronel, Angelito,
Teodoro, Jr., and Fernando, all surnamed Dela Cruz, are the registered owners of a
parcel of land situated at the Municipality of San Mateo, Isabela, described as Lot
7035-A-8-B-5 containing an area of 17,796 square meters covered by Transfer
Certificate of Title (TCT) No. T-70778 of the Registry of Deeds of Isabela which was
issued on 17 January 1974.[2]
The origin[3] of Lot 7035-A-8-B-5 is as follows:
Lot 7035-A-8-B-5 is a subdivided portion of Lot 7035-A which was formerly
part of a homestead applied for in 1921 by Angel Madrid over lands situated in
Santiago, Isabela. The application was approved in 1935. On 08 August 1947, the
Bureau of Lands found him to be in exclusive occupation of the lands subject of the
homestead. On 11 July 1950, an order for the issuance of the patent was entered,
and Patent V-5993 was issued on 27 September 1950. Pursuant thereto, the
Register of Deeds issued Original Certificate of Title (OCT) No. P-1267 on 2 October
1950. Since the homestead consisted of three lots, upon petition of Madrid, the
OCT was substituted with TCTs No. T-2385 for Lot 7035-A, No. T-2386 for Lot 7036B and No. T-2387 for Lot 7036-A.
After the death of Angel Madrid on 23 April 1955, his widow, Cipriana Madrid,
and his children extrajudicially partitioned his estate wherein Lot 7035-A and a
portion of Lot 7036-B were adjudicated to the widow, while Lot 7036-A and the
remainder of Lot 7036-B were given to the children. On 30 September 1955,
Cipriana Madrid sold the entire Lot 7035-A to spouses Teodoro Dela Cruz and
Agueda de Vera for P18,000.00. On 04 January 1956 and 21 April 1956, Cipriana
Madrid and the other heirs sold two portions of Lot 7036-B with an aggregate area
of 10,200 square meters to Teodoro Dela Cruz. New TCTs were issued in the names
of the vendees.
On 01 June 1956, Teodoro Dela Cruz commenced an accion
publiciana docketed as Civil Case No. BR. II-79 (CA-31309-R) in the Court of First
Instance (CFI) of Isabela against Silverio Corpus and twenty-three (23) others for
alleged illegal occupation of Lot 7035-A.
On 18 January 1957, the Republic of the Philippines, through the Office of the
Solicitor General, filed Civil Case No. BR. II-141 (CA-31252) in the CFI of Isabela for
reversion of homestead consisting of Lots 7035-A, 7036-A and 7036-B of the
Santiago, Isabela Cadastre, against the widow and heirs of homesteader Angel
Madrid, Agueda de Vera, Teodoro Dela Cruz and others.
Teodoro Dela Cruz likewise filed an accion publiciana (BR. II-79) with the CFI
of Isabela and forcible entry and detainer cases with the Justice of the Peace Court
of San Mateo, Isabela (110 and 111) against other occupants of the lots he bought.
Some of the defendants in said cases and the defendants in BR. II-79, totaling 38,
filed a complaint-in-intervention in the reversion case (BR. II-141).
In the reversion case, the CFI dismissed the amended complaint and amended
complaint-in-intervention and, among other things, ordered the thirty-eight
intervenors to surrender the material and peaceful possession of the portions they
are occupying, together with their buildings and improvements within Lot 7035-A,
to Teodoro Dela Cruz.
As to BR. II-79, the CFI rendered judgment declaring Teodoro Dela Cruz the
absolute owner of Lot 7035-A. It forfeited in favor of Teodoro Dela Cruz all the
buildings and improvements of the defendants and ordered the latter to vacate and
surrender the material and peaceful possession of the portions they are occupying
to the former, and to pay rentals or damages.
Only BR. II-141 and BR. II-79 were appealed to the Court of Appeals which
promulgated its decision on 23 July 1965, affirming in all respects the judgments of
the CFI. The decision was appealed to the Supreme Court in a petition
for certiorari which was denied for lack of merit.
Subsequently, the Municipality of San Mateo, Isabela, filed an action for the
declaration of nullity of contracts of sale, annulment of TCT and reconveyance of
property described as Lot 7035-A before Branch 3 of the CFI of Isabela which was
docketed as Civil Case No. 1913.[4] Said court dismissed the complaint on 28
September 1967.
On 30 June 1987, petitioners filed a complaint before the RTC of Cauayay,
Isabela, for Recovery of Possession with Damages against respondent for allegedly
occupying two hundred (200) square meters, more or less, of Lot 7035-A-8-B-5
without any legal right to do so, much less their consent or permission, and has
failed and refused to vacate the premises despite repeated demands. They prayed
that respondent be ordered to vacate the land, and to pay them P10,000.00 as
attorneys fees, P500.00 a month as rental, and moral and exemplary damages as
the court may find just and reasonable.[5] The case was raffled to Branch 20 and
was docketed as Civil Case No. 20-235.
On 04 August 1987, respondent filed her answer with counterclaim alleging
that the land being claimed by petitioners is different from the land where her house
is standing and that the land was given or awarded to her by the Municipal
Government of San Mateo, Isabela. She added that she has been occupying the
land since February 1946 and no one molested her in her actual possession and use
thereof except the claims of petitioners which she came to know only on 04 July
1987 when she received the summons.[6]
In their answer to counterclaim dated 14 August 1987, petitioners denied the
allegations in the counterclaim and asserted that respondents claim is an utter and
gross falsity because the land is part of a registered land duly titled in their names
and, previously, in their predecessors-in-interest.[7]
On 29 January 1988, the court terminated the pre-trial and set the case for
hearing after counsel, instead of moving that respondent be declared as in default,
moved for its termination due to the latters absence despite notice. [8]
Before the case can be heard, petitioners filed a Motion for Summary
Judgment on the ground that respondent has not raised any genuine issue except
as to the question of damages. They said that in a decision rendered by the CFI of
Isabela in Civil Case No. 1913[9]entitled, The Municipality of San Mateo v. Teodoro
Dela Cruz, et al., it was adjudged that the land occupied by respondent belonged
exclusively to Teodoro Dela Cruz, their predecessor, and that said decision has long
become final and is res judicata as to the ownership of the land in question. They
said that since their predecessor-in-interest was declared as the true and legal
owner, the municipality had no power or authority to dispose or award any portion
of the land in favor of third parties.[10]
On 29 February 1988, respondent filed her opposition to the Motion for

Summary Judgment on the ground that the pre-trial was terminated without the
issues being simplified, nor stipulations or admissions being made on facts and
documents.[11] Petitioners filed a rejoinder dated 17 March 1988. [12]
On 27 April 1988, the RTC rendered a summary judgment declaring petitioners
the owners of the land in question and ordered respondent to vacate the same and
to remove whatever improvement she has introduced on the lot. The court set the
case for hearing with respect to petitioners claim for damages. [13]
On 12 May 1988, respondent filed a notice of appeal from the summary
judgment.[14]
On 25 May 1988, petitioners filed an Omnibus Motion for Execution Pending
Appeal and to Set for Reception of Evidence on the Damages [15] which respondent
opposed.[16]
In an order dated 07 June 1988, the court denied the motion to execute the
decision pending appeal, but granted the motion to set the case for hearing for the
reception of the evidence on damages. To avoid multiplicity of appeal, it held in
abeyance the transmittal of the records to the Court of Appeals until after the
rendition of the decision on the issue of damages. [17]
[18]
Petitioners filed a Motion for Reconsideration

which respondent
opposed.[19] On 24 June 1988, the court denied the motion.
On 22 July 1988, the court rendered its decision on petitioners claim for
damages,[20] ordering respondent to pay petitioners P146.66 a month beginning July
1987, and every month thereafter until the former shall have vacated the
premises. On 05 August 1988, respondent filed a Notice of Appeal. [21] Petitioners,
on the other hand, filed a Motion for Reconsideration praying that the decision be
reconsidered, amended or modified to include the award of attorneys fees,
expenses of litigation and exemplary damages in their favor. [22] The court denied
the motion on 11 August 1988. Thus, petitioners filed a Notice of Appeal.[23]
On 16 February 1990, the Court of Appeals rendered a decision, [24] setting
aside the summary judgment dated 27 April 1988 and the judgment on the rental
value dated 22 July 1988. The dispositive portion reads:
WHEREFORE, the summary judgment of April 27, 1988 and the judgment on rental
value dated July 22, 1988 are SET ASIDE and the trial court is directed to conduct
further proceedings in accordance with the guidelines set forth above, and
thereafter to render the proper decision.
On 22 June 1990, pre-trial was conducted and terminated with the parties
manifesting that they cannot settle the case and that they failed to enter into a
stipulation of facts. The parties agreed to litigate the case on only one issue
whether or not respondent Sabina Miguel is inside or outside the land of the
petitioners which is covered by TCT No. T-70778.[25]
After trial, on 08 January 1991, the court rendered a decision [26] in this wise:
The court resolves the issue in favor of the plaintiffs. The evidence is overwhelming
that defendant is occupying an area within the titled land of the plaintiffs. This is
established by the testimony of Angelito dela Cruz and the Sketch Plan marked as
Exhibit D and D-1 showing that the land occupied by the defendant is inside the
titled land of the plaintiffs. Furthermore, defendant admitted that the area she is
occupying is a part of the land bounded on the North by Mabini St., East by
Magsaysay St., West by Quezon St., and South by Bonifacio St. This is the
description of the entire land, consisting of one block, owned and titled in the name
of the plaintiffs.
...
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendant Sabina Miguel ordering said defendant to vacate the premises of the land
in question described in paragraph 2 of the complaint and covered by Transfer
Certificate of Title No. T-70778 and to remove her house and/or whatever
improvements she introduced on the land, and to pay the plaintiffs P15,000.00
representing the rental value of the land occupied by her at the rate of P500.00
from the time the complaint was filed on July 30, 1987. Costs against the
defendant.
Respondent appealed the decision to the Court of Appeals. [27] On 12 July 2000,
the latter reversed and set aside the decision of the RTC. The decision[28] partly
reads as follows:
After a thorough and careful evaluation of the records hereof and the evidence
submitted by the parties, the Court finds that the parcel of land which is registered
in the name of plaintiffs-appellees includes the land being occupied by defendantappellant. However, as the Court go deeper into the peculiar circumstances hereof,
one important question surfaces: Can plaintiffs-appellees recover the said land
from defendant-appellant who has been in peaceful possession thereof for more
than 40 years and has performed all acts consistent with her claim of ownership?
...
The Court rules that plaintiffs-appellees are guilty of laches for their unexplained
and unreasonable delay in asserting their right to the subject land and instituting
action to recover the same from defendant-appellant who has been in possession
thereof for more than forty years (40). The records show that the complaint for
recovery of possession was filed only on June 30, 1987 despite the fact that
defendant-appellant has occupied the subject land since February 14, 1946 up to
the present.
...
There is no doubt that the plaintiffs-appellees long inaction in asserting their right
to the subject land bar them from recovering the same from defendant-appellant
under the equitable principle of laches. The law serves those who are vigilant and
diligent and not those who sleep when the law requires them to act.
The Court further notes that plaintiffs-appellants did not object to nor complained of
the acts of ownership being exercised by defendant-appellant over the subject
land. It is apparent from the records that in 1946, the latter, together with her
husband (who was already deceased at the time the instant case was initiated), has
built a hut on the subject land to serve as their dwelling. In 1954, another one of
strong material was constructed, which defendant-appellant still occupies to date.
Defendant-Appellant has never been asked to vacate. Neither was she evicted
therefrom despite the fact that plaintiffs-appellees were also residing in the same
municipality where the subject land is located. Much to this, as early as September
30, 1955, when the parcel of land now covered by TCT No. T-70778 was purchased
by plaintiff-appellee Agueda de Vera-Cruz and her husband, from Cipriano Gamino,
they knew that some other persons, like defendant-appellant, were in possession of
the other parts thereof.
...
Thus, the Court cannot look with favor at plaintiffs-appellees who, by their delay
and inaction, knowingly induce defendant-appellant to spend time and effort over
the subject land, and thereafter, claim title after more than 40 years of silence.
...
WHEREFORE, in view of the foregoing, the decision, dated February 8, 1991, of the
court a quo is hereby REVERSED and SET ASIDE and a new one is entered ordering
plaintiffs-appellees to cause the segregation of the 600 square meters parcel of
land, forming part of Lot 7035-A-8-B-5, LRC-Psd 60052, under TCT No. T-70778,
presently occupied by defendant-appellant Sabrina Miguel, and to convey the same
to said defendant-appellant. After the segregation shall have been accomplished,
the Register of Deeds of Isabela is hereby ordered to issue a new certificate of title
covering the portion of the land pertaining to plaintiffs-appellees and another
certificate of title in favor of defendant-appellant Sabrina Miguel covering the 600
square meters which she occupies.
Petitioners now assail the decision before this Court via a Petition for Review
on Certiorari advancing the following arguments:
I THE COURT OF APPEALS ERRED IN NOT RECOGNIZING THE ESTABLISHED
PRINCIPLE IN LAW THAT A TORRENS TITLE IS INDEFEASIBLE
II THE COURT OF APPEALS ERRED IN FINDING THAT THE EQUITABLE DOCTRINE OF
LACHES APPLIES TO THE PRESENT CASE
A) THE DOCTRINE OF LACHES IS A REMEDY WHICH IS GROUNDED IN
EQUITY AND IT IS TO BE APPLIED IF AND ONLY IF THE
CIRCUMSTANCES OF A PARTICULAR CASE WARRANT IT[29]
Petitioners contend that when the Court of Appeals ruled that they were guilty
of laches because they supposedly did not protest respondents long and continuous
occupancy of the lot in question, it was in effect saying that the land subject of the
present controversy has been acquired by acquisitive prescription which is contrary
to law and jurisprudence that the owner of a land registered under the Torrens
system cannot lose it by prescription.
A reading of the decision of the Court of Appeals clearly shows that
prescription was not the basis of the decision. Nowhere in said decision did it say
that respondent acquired the property occupied by her through prescription. In
fact, the Court of Appeals was fully aware that adverse, notorious and continuous
possession under claim of ownership for the period fixed by law is ineffective
against a Torrens title, and that title to a registered land in derogation of that of the
registered owner may not be acquired by prescription or adverse possession
because the efficacy and integrity of the Torrens system must be protected. What it
used in reaching its conclusion was the exception LACHES.
The law[30] provides that no title to registered land in derogation of that of the
registered owner can be acquired by prescription or adverse possession.
Nonetheless, while it is true that a Torrens Title is indefeasible and imprescriptible,

the registered landowner may lose his right to recover the possession of his
registered property by reason of laches. [31]
Laches has been defined as such neglect or omission to assert a right, taken in
conjunction with lapse of time and other circumstances causing prejudice to an
adverse party, as will operate as a bar in equity. It is a delay in the assertion of a
right which works disadvantage to another because of the inequity founded on some
change in the condition or relations of the property or parties. It is based on public
policy which, for the peace of society, ordains that relief will be denied to a stale
demand which otherwise could be a valid claim. It is different from and applies
independently of prescription. While prescription is concerned with the fact of
delay, laches is concerned with the effect of delay. Prescription is a matter of time;
laches is principally a question of inequity of permitting a claim to be enforced, this
inequity being founded on some change in the condition of the property or the
relation of the parties. Prescription is statutory; laches is not. Laches applies in
equity, whereas prescription applies at law. Prescription is based on a fixed time,
laches is not.[32] Laches means 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 negligence or omission to assert a right within a
reasonable time, warranting the presumption that the party entitled to assert it
either has abandoned or declined to assert it. [33]
Petitioners maintain that the Court of Appeals erred in applying the equitable
doctrine of laches in the case at bar. They argue that they and their predecessorin-interest, Teodoro Dela Cruz, were never remiss, and have not delayed, in
asserting their ownership over the property subject of the present case because
they have been litigating this issue as far back as 1956 and lasting over ten years,
and successfully warding off the respective claims of the illegal occupants, the
Republic of the Philippines and the Municipality of San Mateo, Isabela. [34]
Now, the question is: Should laches be applied in the case before us knowing
that petitioners after purchasing Lot 7035-A on 30 September 1955 engaged in
court battles against illegal occupants thereof, the Republic of the Philippines and
the Municipality of San Mateo, Isabela, for more than ten years resulting in the
upholding by the courts of their ownership over the land in question?
There is no absolute rule as to what constitutes laches or staleness of demand;
each case is to be determined according to its particular circumstances. The
question of laches is addressed to the sound discretion of the court, and since
laches is an equitable doctrine, its application is controlled by equitable
considerations. It cannot work to defeat justice or to perpetrate fraud and
injustice.[35]
Having filed accion publiciana and forcible entry and detainer cases in the
1950s against the illegal occupants of Lot 7035-A, though not against respondent,
and having successfully overcome the reversion case filed by the Republic and the
Reconveyance case filed by the Municipality of San Mateo, Isabela, it cannot be said
that petitioners slept on their rights in asserting their ownership over Lot 7035-A.
How then can petitioners be said to have failed or neglected to assert their right on
the land when they have been judicially fighting to be recognized as the legal owner
of Lot 7035-A?
The Court of Appeals ruled that since respondent has been in peaceful and
unmolested possession of the subject land since 1946, petitioners are barred from
recovering the same under the principle of laches. In support thereof, it cited the
cases of Ching v. Court of Appeals,[36] Caragay-Layno v. Court of Appeals,[37] Heirs
of Batiog Lacamen v. Heirs of Laruan,[38] Tambot v. Court of Appeals,[39]Wright, Jr.
v. Lepanto Consolidated Mining Co.[40] and Vda. de Delima v. Tio.[41]
From the records, it appears that respondent cannot have entered and
possessed the land under litigation in 1946. The Court of Appeals in its decision in
the consolidated cases of Republic of the Philippines v. Marita Madrid, et
al. and Teodoro de la Cruz v. Silverio Corpuz, et al.[42] made a factual finding that
the land was in the exclusive possession of Angel Madrid, the homestead applicant
in 1947. This notwithstanding, and regardless of whether respondent entered the
lot in 1946 or in 1954, the application of laches, as stated above, should be
determined in accordance with the circumstances present in a particular case.
The cases cited by the Court of Appeals are not on all fours with the case on
hand. The case of Ching v. Court of Appeals involves a landowners property which
was wrongfully or erroneously registered in anothers name. In Caragay-Layno v.
Court of Appeals, the issue was the fraudulent or mistaken inclusion of property in a
certificate of title. In Heirs of Batiog Lacamen v. Heirs of Laruan, the subject matter
was the sale of land without the required approval of the executive authority. The
case of Tambot v. Court of Appeals likewise involves a conveyance of land via a
deed of sale. In Wright, Jr. v. Lepanto Consolidated Mining Co., what was
questioned was the acquisition and ownership of mining claims which were covered
by reconstituted certificates of title. In Vda. de Delima v. Tio, what was questioned
was the selling by a husband of the wifes paraphernal property without the latters
consent.
In all these cases, the parties in possession of the properties under litigation
had titles thereto or had documents showing that the ownership over these
properties was transferred to them. In the case before us, respondent is not the
registered owner of the lot she is occupying and she has failed to adduce evidence
showing that the property has been conveyed to her by the petitioners or by the
original owner thereof. Respondent has no evidence of her ownership over the lot
where her house is erected. Her allegation[43] that the lot was awarded or given
through a resolution by the Municipal Government of San Mateo, Isabela, cannot be
given credence. She did not even produce a copy of said resolution. Even if
respondent were able to produce a copy thereof, the same will be of no use since it
has been judicially nullified. Furthermore, as admitted by respondent, she and her
husband tried to procure ownership papers over the land, but to no
avail.[44] Petitioners, on the other hand, have shown that the courts have upheld
their ownership over Lot 7035-A, and have ruled in their favor and against the
reversion case[45] filed by the Republic and on the case for reconveyance [46] of Lot
7035-A filed by the Municipality of San Mateo, Isabela.
We are not unmindful of the Tax Declarations[47] held by respondent but same
are not proofs of ownership. A tax declaration does not prove ownership. It is
merely an indicium of a claim of ownership.[48] Payment of taxes is not proof of
ownership, it is, at best, an indicium of possession in the concept of
ownership.[49] Neither tax receipts nor declaration of ownership for taxation
purposes are evidence of ownership or of the right to possess realty when not
supported by other effective proofs.[50]
An examination of the tax declarations reveals that the property covered is not
even specified and described with particularity -- the exact location and borders
were not mentioned. Respondent utterly failed to show her ownership of the land in
question. In fact, the RTC and the Court of Appeals have declared that the land
being occupied by respondent is within the land registered in the names of
petitioners.[51] With this finding, respondents claim that the land she is occupying is
different from the land being claimed by petitioners completely crumbles. Thus, it is
clear that respondent, without any authority or right, is occupying petitioners land.
Having no title or document to overcome petitioners ownership over the land
in question, respondent is therefore an intruder or squatter whose occupation of the
land is merely being tolerated. A squatter has no possessory rights over the land
intruded upon.[52] As such, her occupancy of the land is only at the owners
sufferance, her acts are merely tolerated and cannot affect the owners possession.
She is necessarily bound to an implied promise that she will vacate upon
demand.[53]
Respondent argues that petitioners, despite all the opportunity they had to
implead respondent in the cases they filed in 1956 against those occupying Lot
7035-A, deliberately ignored and failed to do so. In doing so, petitioners slept on
their rights and practically allowed laches to set in.
We find this feeble. Assuming for the sake of argument that respondent
already occupied the lot in question in 1956, we cannot put all the blame on
petitioners if respondent and her husband were not impleaded. It must be
remembered that there were many people who occupied the subject land. If
petitioners committed an oversight in not impleading respondent, she, having an
interest on the land, should have intervened in the cases just like what the other
occupants did. This, she did not do. It is simply impossible for her not to know that
there were on-going court cases involving the land she is occupying. She testified
that the lot she is occupying is bounded on the east by the lot of one Wenceslao
Urmaneta.[54] As can be gleaned from the decision of the Court of Appeals in the
consolidated cases[55] ofRepublic of the Philippines v. Marita Madrid, et al.,
and Teodoro de la Cruz v. Silverio Corpuz, et al., this Urmaneta was one of the
defendants in the accion publiciana case and was an intervenor in the reversion
case filed by the Republic. Contrary to the posture of an adjacent neighbor,
respondent exhibited a lethargic stance. Her failure to join and to get involved in
the proceedings in order to protect her rights, if there were any, over the land
shows her apathy on the matter. This lack of concern and inaction on her part show
that she failed to protect any right she had on the land. The laches of one nullifies
the laches of the other. One who seeks equity must himself be deserving of
equity.[56] While all the people around her were fighting tooth and nail over Lot
7035-A, respondent simply watched on the sidelines, oblivious of what the courts
will pronounce on the matter. Acting the way she did, she does not deserve equity.
This Court has ruled that unless there are intervening rights of third persons
which may be affected or prejudiced by a decision directing the return of the lot to
petitioners, the equitable defense of laches will not apply as against the registered
owners.[57] In the case at bar, there being no intervening third persons whose rights
will be affected or prejudiced if possession of the subject lot is restored to the
petitioners, the return of the same is in order.
Under the circumstances obtaining in this case, the equitable doctrine of laches
shall not apply.
WHEREFORE, the petition for review is GRANTED. The decision of the Court
of Appeals dated 12 July 2000 is REVERSED and SET ASIDE, and the decision of the
Regional Trial Court dated 08 January 1991 is REINSTATED. Costs against the
respondent.
SO ORDERED.

ObliCon Cases 1106-1155

Uploaded by

Copyright:

Available Formats

ObliCon Cases 1106-1155

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ObliCon Cases 1106-1155

Uploaded by

Copyright:

Available Formats

FIRST DIVISION

[G.R. No. 128991. April 12, 2000]

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

"reformation" of the lease contract, without anymore considering

Cases 1106-1155: Obligations and Contracts Estrellado 2014

We do not agree. First, if, according to respondent corporation, there was an

In her complaint for partition of real property, annulment of titles with

Cases 1106-1155: Obligations and Contracts Estrellado 2014

respective obligations. Eugenia transferred possession by delivering the property to

vested rights of Concepcion will be impaired or prejudiced by the application of the

Cases 1106-1155: Obligations and Contracts Estrellado 2014

G.R. No. 175444

HEIRS OF VICENTE TORIO, namely: PUBLIO TORIO,

Cases 1106-1155: Obligations and Contracts Estrellado 2014

their respective houses standing on the land in dispute; further

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Acquisitive prescription of dominion and other real rights may be ordinary or

Cases 1106-1155: Obligations and Contracts Estrellado 2014

deferred the transfer of possession of the 39 sq. m. pending partition.[14] The

To hold in abeyance the transfer of possession of the 39 sq. m. portion to the

Cases 1106-1155: Obligations and Contracts Estrellado 2014

The Court's ruling

22, 2008 of the Court of Appeals in CA-G.R. CV No. 87480.

August 29, 2012

JESUS VIRTUCIO, represented by ABDON VIRTUCIO, Petitioner, vs.

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Moreover, it is settled that a decision of the CA does not establish judicial

Cases 1106-1155: Obligations and Contracts Estrellado 2014

August 29, 2012

JUAN B. BANEZ, JR., Petitioner, vs. HON. CRISANTO C. CONCEPCION, IN HIS

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

In his reply to the Estate of Gomezs comment, 16 the petitioner elucidated as

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Under the first issue, petitioners submit four other questions:

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

SIMEON B. MIGUEL, ET AL., plaintiffs-appellants, vs FLORENDO

G.R. No. L-23072

November 29, 1968

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

G.R. No. 171068

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Declaring the [respondents] as the absolute owners of the

sleepy that is being assisted by the laws. (Ledita Burce Jacob v.

It stands to reason, therefore, to hold that because of the

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Moreover, respondents payment of realty taxes made

Hence, the instant Petition.

Cases 1106-1155: Obligations and Contracts Estrellado 2014

Were respondents able to sufficiently satisfy the legal requirements to prove