FIRST DIVISION

[G.R. No. 118114. December 7, 1995.]

TEODORO ACAP , petitioner, vs. COURT OF APPEALS and EDY DE LOS

REYES , respondents.

Francisco B. Cruz for petitioner.

Cerewarlito V. Quebrar for private respondent.

SYLLABUS

1. CIVIL LAW; PROPERTY; OWNERSHIP; MODES OF ACQUISITION THEREOF. —

The modes of acquiring ownership are generally classi ed into two (2) classes, namely,
t h e original mode (i.e., through occupation, acquisitive prescription, law or intellectual
creation) and the derivative mode (i.e., through succession mortis causa or tradition as a
result of certain contracts, such as sale, barter, donation, assignment or mutuum).
2. ID.; ID.; ID.; ID.; MERE ASSERTION OF RIGHT TO OWNERSHIP OVER A THING,
NOT SUFFICIENT TO PROVE TITLE THERETO. — An asserted right or claim to ownership or
a real right over a thing arising from a juridical act, however justified, is not per se su cient
to give rise to ownership over the res. That right or title must be completed by ful lling
certain conditions imposed by law. Hence, ownership and real rights are acquired only
pursuant to a legal mode or process. While title is the juridical justi cation, mode is the
actual process of acquisition or transfer of ownership over a thing in question. cHTCaI

3. ID.; ID.; ID.; ID.; NOT PROVED BY A NOTICE OF ADVERSE CLAIM. — A notice of
adverse claim, by its nature, does not prove ownership over a tenanted lot. "A notice of
adverse claim is nothing but a notice of a claim adverse to the registered owner, the
validity of which is yet to be established in court at some future date, and is no better than
a notice of lis pendens which is a notice of a case already pending in court."
4. ID.; ID.; ID.; ID.; ADVERSE CLAIM CANNOT CANCEL OCT IN THE ABSENCE OF
A DEED OF SALE. — It is to be noted that while the existence of the adverse claim was duly
proven, there is no evidence whatsoever that a deed of sale was executed between Cosme
Pido's heirs and private respondent transferring the rights of Pido's heirs to the land in
favor of private respondent. Private respondent's right or interest therefore in the tenanted
lot remain an adverse claim which cannot by itself be su cient to cancel the OCT to the
land and title the same in private respondent's name. Consequently, while the transaction
between Pido's heirs and private respondent may be binding on both parties, the right of
petitioner as a registered tenant to the land cannot be perfunctorily forfeited on a mere
allegation of private respondent's ownership without the corresponding proof thereof.
5. ID.; CONTRACTS; CONTRACT OF SALE AND DECLARATION OF HEIRSHIP
WITH WAIVER OF RIGHTS, DISTINGUISHED. — In a Contract of Sale, one of the contracting
parties obligates himself to transfer the ownership of and to deliver a determinate thing,
and the other party to pay a price certain in money or its equivalent. Upon the other hand, a
declaration of heirship and waiver of rights operates as a public instrument when led with
the Registry of Deeds whereby the intestate heirs adjudicate and divide the estate left by
the decedent among themselves as they see t. It is in effect an extrajudicial settlement
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 between the heirs under Rule 74 of the Rules of Court. DTAHEC

6. ID.; SUCCESSION; HEREDITARY RIGHTS; SALE AND WAIVER THEREOF,

DISTINGUISHED. — There is a marked difference between a sale of hereditary rights and a
waiver of hereditary rights. The rst presumes the existence of a contract or deed of sale
between the parties. The second is, technically speaking, a mode of extinction of
ownership where there is an abdication or intentional relinquishment of a known right with
knowledge of its existence and intention to relinquish it, in favor of other persons who are
co-heirs in the succession. Private respondent, being then a stranger to the succession of
Cosme Pido, cannot conclusively claim ownership over the subject lot on the sole basis of
the waiver document which neither recites the elements of either a sale, or a donation, or
any other derivative mode of acquiring ownership.

DECISION

PADILLA , J : p

This is a petition for review on certiorari of the decision 1 of the Court of Appeals,
2nd Division, in CA-G.R. No. 36177, which a rmed the decision 2 of the Regional Trial
Court of Himamaylan, Negros Occidental holding that private respondent Edy de los
Reyes had acquired ownership of Lot No. 1130 of the Cadastral Survey of Hinigaran,
Negros Occidental based on a document entitled "Declaration of Heirship and Waiver of
Rights", and ordering the dispossession of petitioner as leasehold tenant of the land for
failure to pay rentals.
The facts of the case are as follows:
The title to Lot No. 1130 of the Cadastral Survey of Hinigaran, Negros Occidental
was evidenced by OCT No. R-12179. The lot has an area of 13,720 sq. meters. The title
was issued and is registered in the name of spouses Santiago Vasquez and Lorenza
Oruma. After both spouses died, their only son Felixberto inherited the lot. In 1975,
Felixberto executed a duly notarized document entitled "Declaration of Heirship and
Deed of Absolute Sale" in favor of Cosme Pido.
The evidence before the court a quo established that since 1960, petitioner
Teodoro Acap had been the tenant of a portion of the said land, covering an area of nine
thousand ve hundred (9,500) square meters. When ownership was transferred in 1975
by Felixberto to Cosme Pido, Acap continued to be the registered tenant thereof and
religiously paid his leasehold rentals to Pido and thereafter, upon Pido's death, to his
widow Laurenciana.
The controversy began when Pido died interstate and on 27 November 1981, his
surviving heirs executed a notarized document denominated as "Declaration of Heirship
and Waiver of Rights of Lot No. 1130 Hinigaran Cadastre," wherein they declared, to
quote its pertinent portions, that:
". . . Cosme Pido died in the Municipality of Hinigaran, Negros Occidental,
he died interstate and without any known debts and obligations which the said
parcel of land is (sic) held liable.

That Cosme Pido was survived by his/her legitimate heirs, namely:

LAURENCIANA PIDO, wife, ELY, ERVIN, ELMER, and ELECHOR all surnamed PIDO;
children;
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 That invoking the provisions of Sections 1, Rule 74 of the Rules of Court,
the above-mentioned heirs do hereby declare unto [sic] ourselves the only heirs of
the late Cosme Pido and that we hereby adjudicate unto ourselves the above-
mentioned parcel of land in equal shares.

Now, therefore, We LAURENCIANA, 3 ELY, ELMER, ERVIN and ELECHOR all

surnamed PIDO do hereby waive, quitclaim all our rights, interests and
participation over the said parcel of land in favor of EDY DE LOS REYES, of legal
age, (f)ilipino, married to VIRGINIA DE LOS REYES, and resident of Hinigaran,
Negros Occidental, Philippines. . . ." 4 (Emphasis supplied)

The document was signed by all of Pido's heirs. Private respondent Edy de los
Reyes did not sign said document.
It will be noted that at the time of Cosme Pido's death, title to the property
continued to be registered in the name of the Vasquez spouses. Upon obtaining the
Declaration of Heirship with Waiver of Rights in his favor, private respondent Edy de los
Reyes led the same with the Registry of Deeds as part of a notice of an adverse claim
against the original certificate of title.
Thereafter, private respondent sought for petitioner (Acap) to personally inform
him that he (Edy) had become the new owner of the land and that the lease rentals
thereon should be paid to him. Private respondent further alleged that he and petitioner
entered into an oral lease agreement wherein petitioner agreed to pay ten (10) cavans
of palay per annum as lease rental. In 1982, petitioner allegedly complied with said
obligation. In 1983, however, petitioner refused to pay any further lease rentals on the
land, prompting private respondent to seek the assistance of the then Ministry of
Agrarian Reform (MAR) in Hinigaran, Negros Occidental. The MAR invited petitioner to a
conference scheduled on 13 October 1983. Petitioner did not attend the conference
but sent his wife instead to the conference. During the meeting, an o cer of the
Ministry informed Acap's wife about private respondent's ownership of the said land
but she stated that she and her husband (Teodoro) did not recognize private
respondent's claim of ownership over the land.
On 28 April 1988, after the lapse of four (4) years, private respondent led a
complaint for recovery of possession and damages against petitioner, alleging in the
main that as his leasehold tenant, petitioner refused and failed to pay the agreed annual
rental of ten (10) cavans of palay despite repeated demands.
During the trial before court a quo, petitioner reiterated his refusal to recognize
private respondent's ownership over the subject land. He averred that he continues to
recognize Cosme Pido as the owner of the said land, and having been a registered
tenant therein since 1960, he never reneged on his rental obligations. When Pido died,
he continued to pay rentals to Pido's widow. When the latter left for abroad, she
instructed him to stay in the landholding and to pay the accumulated rentals upon her
demand or return from abroad.
Petitioner further claimed before the trial court that he had no knowledge about
any transfer or sale of the lot to private respondent in 1981 and even the following year
after Laurenciana's departure for abroad. He denied having entered into a verbal lease
tenancy contract with private respondent and that assuming that the said lot was
indeed sold to private respondent without his knowledge, R.A. 3844, as amended,
grants him the right to redeem the same at a reasonable price. Petitioner also bewailed
private respondent's ejectment action as a violation of his right to security of tenure
under P.D. 27.
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 On 20 August 1991, the lower court rendered a decision in favor of private
respondent, the dispositive part of which reads:
"WHEREFORE, premises considered, the Court renders judgment in favor of
the plaintiff, Edy de los Reyes, and against the defendant, Teodoro Acap ordering
the following, to wit:
1. Declaring forfeiture of defendant's preferred right to issuance of a
Certi cate of Land Transfer under Presidential Decree No. 27 and his
farmholdings;

2. Ordering the defendant Teodoro Acap to deliver possession of said

farm to plaintiff, and;
3. Ordering the defendant to pay P5,000.00 as attorney's fees, the sum
of P1,000.00 as expenses of litigation and the amount of P10,000.00 as actual
damages." 5

In arriving at the above-mentioned judgment, the trial court stated that the
evidence had established that the subject land was "sold" by the heirs of Cosme Pido to
private respondent. This is clear from the following disquisitions contained in the trial
court's six (6) page decisions:
"There is no doubt that defendant is a registered tenant of Cosme Pido.
However, when the latter died their tenancy relations changed since ownership of
said land was passed on to his heirs who, by executing a Deed of Sale, which
defendant admitted in his a davit, likewise passed on their ownership of Lot
1130 to herein plaintiff (private respondent). As owner hereof, plaintiff has the
right to demand payment of rental and the tenant is obligated to pay rentals due
from the time demand is made. . . . 6

xxx xxx xxx

Certainly, the sale of the Pido family of Lot 1130 to herein plaintiff does
not of itself extinguish the relationship. There was only a change of the
personality of the lessor in the person of herein plaintiff Edy de los Reyes who
being the purchaser or transferee, assumes the rights and obligations of the
former landowner to the tenant Teodoro Acap, herein defendant." 7

Aggrieved, petitioner appealed to the Court of Appeals, imputing error to the

lower court when it ruled that private respondent acquired ownership of Lot No. 1130
and that he, as tenant, should pay rentals to private respondent and that failing to pay
the same from 1983 to 1987, his right to a certi cate of land transfer under P.D. 27
was deemed forfeited.
The Court of Appeals brushed aside petitioner's argument that the Declaration of
Heirship and Waiver of Rights (Exhibit "D"), the document relied upon by private
respondent to prove his ownership to the lot, was excluded by the lower court in its
order dated 27 August 1990. The order indeed noted that the document was not
identi ed by Cosme Pido's heirs and was not registered with the Registry of Deeds of
Negros Occidental. According to respondent court, however, since the Declaration of
Heirship and Waiver of Rights appears to have been duly notarized, no further proof of
its due execution was necessary. Like the trial court, respondent court was also
convinced that the said documents stands as prima facie proof of appellee's (private
respondent's) ownership of the land in dispute.

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 With respect to its non-registration, respondent court noted, that petitioner had
actual knowledge of the subject sale of the land in dispute to private respondent
because as early as 1983, he (petitioner) already knew of private respondent's claim
over the said land but which he thereafter denied, and that in 1982, he (petitioner)
actually paid rent to private respondent. Otherwise stated, respondent court
considered this fact of rental payment in 1982 as estoppel on petitioner's part to
thereafter refute private respondent's claim of ownership over the said land. Under
these circumstances, respondent court ruled that indeed there was deliberate refusal
by petitioner to pay rent for a continued period of ve years that merited forfeiture of
his otherwise preferred right to the issuance of a certificate of land transfer.
In the present, petitioner impugns the decision of the Court of Appeals as not in
accord with the law and evidence when it rules that private respondent acquired ownership
of Lot No. 1130 through the aforementioned Declaration of Heirship and Waiver of Rights.
Hence, the issues to be resolved presently are the following:
1. WHETHER OR NOT THE SUBJECT DECLARATION OF HEIRSHIP AND WAIVER
OF RIGHTS IS A RECOGNIZED MODE OF ACQUIRING OWNERSHIP BY PRIVATE
RESPONDENT OVER THE LOT IN QUESTION.
2. WHETHER OR NOT THE SAID DOCUMENT CAN BE CONSIDERED A DEED OF
SALE IN FAVOR OF PRIVATE RESPONDENT OF THE LOT IN QUESTION.
Petitioner argues that the Regional Trial Court, in its order dated 7 August 1990,
explicitly excluded the document marked as Exhibit "D" (Declaration of Heirship, etc.) as
private respondent's evidence because it was not registered with the Registry of Deeds
and was not identi ed by anyone of the heirs of Cosme Pido. The Court of Appeals,
however, held the same to be admissible, it being a notarized document, hence, a prima
facie proof of private respondent's ownership of the lot to which it refers.
Petitioner points out that the Declaration of Heirship and Waiver of Rights is not
one of the recognized modes of acquiring ownership under Article 712 of the Civil
Code. Neither can the same be considered a deed of sale so as to transfer ownership
of the land to private respondent because no consideration is stated in the contract
(assuming it is a contract or deed of sale).
Private respondent defends the decision of respondent Court of Appeals as in
accord with the evidence and the law. He posits that while it may indeed be true that the
trial court excluded his Exhibit "D" which is the Declaration of Heirship and Waiver of
Rights as part of his evidence, the trial court declared him nonetheless owner of the
subject lot based on other evidence adduced during the trial, namely the notice of
adverse claim (Exhibit "E") duly registered by him with the Registry of Deeds, which
contains the questioned Declaration of Heirship and Waiver of Rights as an integral part
thereof.
We find the petition impressed with merit.
In the rst place, an asserted right or claim to ownership or a real right over a
thing arising from a juridical act, however justi ed, is not per se su cient to give rise to
ownership over the res. That right or title must be completed by ful lling certain
conditions imposed by law. Hence, ownership and real rights are acquired only
pursuant to a legal mode or process. While title is the juridical justi cation, mode is the
actual process of acquisition transfer of ownership over a thing in question. 8
Und er Article 712 of the Civil Code, the modes of acquiring ownership are
generally classi ed into two (2) classes, namely, the original mode (i.e, through
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 occupation, acquisitive prescription, law or intellectual creation) and the derivative
mode (i.e., through succession mortis causa or tradition as a result of certain contracts,
such as sale, barter, donation, assignment or mutuum).
In the case at bench, the trial court was obviously confused as to the nature and
effect of the Declaration of Heirship and Waiver of Rights, equating the same with a
contract (deed) of sale. They are not the same.
In a Contract of Sale, one of the contracting parties obligates himself to transfer
the ownership of and to deliver a determinate thing, and the other party to pay a price
certain in money or its equivalent. 9
Upon the other hand, a declaration of heirship and waiver of rights operates as a
public instrument when led with the Registry of Deeds whereby the intestate heirs
adjudicate and divide the estate left by the decedent among themselves as they see t.
It is in effect an extrajudicial settlement between the heirs under Rule 74 of the Rules of
Court. 1 0
Hence, there is a marked difference between a sale of hereditary rights and a
waiver of hereditary rights. The rst presumes the existence of a contract or deed of
sale between the parties. 1 1 The second is, technically speaking, a mode of extinction of
ownership where there is an abdication or intentional relinquishment of a known right
with knowledge of its existence and intention to relinquish it, in favor of other persons
who are co-heirs in the succession. 1 2 Private respondent, being then a stranger to the
succession of Cosme Pido, cannot conclusively claim ownership over the subject lot on
the sole basis of the waiver document which neither recites the elements of either a
sale, 1 3 or a donation, 1 4 or any other derivative mode of acquiring ownership.
Quite surprisingly, both the trial court and public respondent Court of Appeals
concluded that a "sale" transpired between Cosme Pido's heirs and private respondent
and that petitioner acquired actual knowledge of said sale when he was summoned by
the Ministry of Agrarian Reform to discuss private respondent's claim over the lot in
question. This conclusion has no basis both in fact and in law.
On record, Exhibit "D", which is the "Declaration of Heirship and Waiver of Rights"
w a s excluded by the trial court in its order dated 27 August 1990 because the
document was neither registered with the Registry of Deeds nor identi ed by the heirs
of Cosme Pido. There is no showing that private respondent had the same document
attached to or made part of the record. What the trial court admitted was Annex "E", a
notice of adverse claim led with Registry of Deeds which contained the Declaration of
Heirship with Waiver of rights an was annotated at the back of the Original Certi cate
of Title to the land in question.
A notice of adverse claim, by its nature, does not however prove private
respondent's ownership over the tenanted lot. "A notice of adverse claim is nothing but
a notice of a claim adverse to the registered owner, the validity of which is yet to be
established in court at some future date, and is no better than a notice of lis pendens
which is a notice of a case already pending in court." 1 5
It is to be noted that while the existence of said adverse claim was duly proven,
there is no evidence whatsoever that a deed of sale was executed between Cosme
Pido's heirs and private respondent transferring the rights of Pido's heirs to the land in
favor of private respondent. Private respondent's right or interest therefore in the
tenanted lot remains an adverse claim which cannot by itself be su cient to cancel the
OCT to the land and title the same in private respondent's name.
Consequently, while the transaction between Pido's heirs and private respondent
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 may be binding on both parties, the right of petitioner as a registered tenant to the land
cannot be perfunctorily forfeited on a mere allegation of private respondent's
ownership without the corresponding proof thereof.
Petitioner had been a registered tenant in the subject land since 1960 and
religiously paid lease rentals thereon. In his mind, he continued to be the registered
tenant of Cosme Pido and his family (after Pido's death), even if in 1982, private
respondent allegedly informed petitioner that he had become the new owner of the
land.
Under the circumstances, petitioner may have, in good faith, assumed such
statement of private respondent to be true and may have in fact delivered 10 cavans of
palay as annual rental for 1982 to private respondent. But in 1983, it is clear that
petitioner had misgivings over private respondent's claim of ownership over the said
land because in the October 1983 MAR conference, his wife Laurenciana categorically
denied all of private respondent's allegations. In fact, petitioner even secured a
certi cate from the MAR dated 9 May 1988 to the effect that he continued to be the
registered tenant of Cosme Pido and not a private respondent. The reason is the
private respondent never registered the Declaration of Heirship with Waiver of Rights
with the Registry of Deeds or with the MAR. Instead, he (private respondent) sought to
do indirectly what could not be done directly, i.e., le a notice of adverse claim on the
said lot to establish ownership thereof .
It stands to reason, therefore, to hold that there was no unjusti ed or deliberate
r e f u s a l by petitioner to pay the lease rentals or amortizations to the
landowner/agricultural lessor which, in this case, private respondent failed to
established in his favor by clear and convincing evidence. 1 6
Consequently, the sanction of forfeiture of his preferred right to be issued a
Certi cate of Land Transfer under P.D. 27 and to the possession of his farmholdings
should not be applied against petitioners, since private respondent has not established
a cause of action for recovery of possession against petitioner.
WHEREFORE, premises considered, the Court hereby GRANTS, the petition and
the decision of the RTC of Himamaylan, Negros Occidental dated 20 August 1991 is
hereby SET ASIDE. The private respondent's complaint for recovery of possession and
damages against petitioner Acap is hereby DISMISSED for failure to properly state a
cause of action, without prejudice to private respondent taking the proper legal steps
to establish the legal mode by which he claims to have acquired ownership of the land
in question.
SO ORDERED.
Davide, Jr., Bellosillo, Kapunan and Hermosisima, Jr., JJ., concur.

Footnotes
1. Penned by Purisima, J., Chairman, with Isnani, J. and Ibay-Somera, J. concurring.
2. Penned by Executive Judge Jose Aguirre, Jr.
3. The RTC decision used the name Luzviminda. The CA used the name Laudenciana.

4. Annex A, Petition; Rollo, p. 14.

5. Annex "D", Petition Rollo, p. 29.
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 6. Ibid., p. 27.
7. Ibid., p. 28.

8. Reyes, An Outline of Philippine Civil Law, Vol. II p. 20.

9. Article 1458, Civil Code.
10. Paumitos v. CA, G.R. No. 61584, Nov. 25, 1992, 215 SCRA 867, 868; Uberas v. CFI of
Negros, G.R. No. 4248, October 30, 1978, 86 SCRA 145, 147; Abrasia v. Carian, G.R. No.
9510, October 31, 1957.

11. See Aguirre v. Atienza, G.R. No. L-10665, Aug. 30, 1958; Mari v. Bonilla, G.R. No. 852,
March 19, 949; Robles v. CA, L-47494, 83 SCRA 181, 182, May 15, 1978.

12. See Borromeo Herrera v. Borromeo, G.R. No. L-41171, July 23, 1987, 152 SCRA 171.
13. See note 10 - supra.
14. Osorio v. Osorio and Ynchausti Steamship Co., No. 16544, March 20, 1921.
15. Somes v. Government of the Philippines, No. 42754, October 30, 1935. 62 Phil. 432.
16. See Laureto v. CA, G.R. No. 95838, August 7, 1992, 212 SCRA 397, Cuno v. CA, G.R. L-
62985, April 2, 1984, 128 SCRA 567.

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