G.R. No.

118114 December 7, 1995 That invoking the provision of Section

1, Rule 74 of the Rules of Court, the
TEODORO ACAP, petitioner, above-mentioned heirs do hereby
vs. declare unto [sic] ourselves the only
COURT OF APPEALS and EDY DE LOS heirs of the late Cosme Pido and that
REYES, respondents. we hereby adjudicate unto ourselves
the above-mentioned parcel of land in
equal shares.
PADILLA, J.:

Now, therefore, We LAURENCIANA3 ,

This is a petition for review on certiorari of the
ELY, ELMER, ERVIN and ELECHOR
decision1 of the Court of Appeals, 2nd Division, in CA-
all surnamed PIDO, do hereby waive,
G.R. No. 36177, which affirmed the decision 2 of the
quitclaim all our rights, interests and
Regional Trial Court of Himamaylan, Negros
participation over the said parcel of
Occidental holding that private respondent Edy de los
land in favor of EDY DE LOS REYES,
Reyes had acquired ownership of Lot No. 1130 of the
of legal age, (f)Filipino, married to
Cadastral Survey of Hinigaran, Negros Occidental
VIRGINIA DE LOS REYES, and
based on a document entitled "Declaration of Heir ship
resident of Hinigaran, Negros
and Waiver of Rights", and ordering the dispossession
Occidental, Philippines. . . .
of petitioner as leasehold tenant of the land for failure 4
 (Emphasis supplied)
to pay rentals.

The document was signed by all of Pido's heirs.

The facts of the case are as follows:
Private respondent Edy de los Reyes did not sign said
document.
The title to Lot No. 1130 of the Cadastral Survey of
Hinigaran, Negros Occidental was evidenced by OCT
It will be noted that at the time of Cosme Pido's death,
No. R-12179. The lot has an area of 13,720 sq.
title to the property continued to be registered in the
meters. The title was issued and is registered in the
name of the Vasquez spouses. Upon obtaining the
name of spouses Santiago Vasquez and Lorenza
Declaration of Heir ship with Waiver of Rights in his
Oruma. After both spouses died, their only son
favor, private respondent Edy de los Reyes filed the
Felixberto inherited the lot. In 1975, Felixberto
same with the Registry of Deeds as part of a notice of
executed a duly notarized document entitled
an adverse claim against the original certificate of title.
"Declaration of Heir ship and Deed of Absolute Sale" in
favor of Cosme Pido.
Thereafter, private respondent sought for petitioner
(Acap) to personally inform him that he (Edy) had
The evidence before the court a quo established that
become the new owner of the land and that the lease
since 1960, petitioner Teodoro Acap had been the
rentals thereon should be paid to him. Private
tenant of a portion of the said land, covering an area of
respondent further alleged that he and petitioner
nine thousand five hundred (9,500) meters. When
entered into an oral lease agreement wherein
ownership was transferred in 1975 by Felixberto to
petitioner agreed to pay ten (10) cavans of palay per
Cosme Pido, Acap continued to be the registered
annum as lease rental. In 1982, petitioner allegedly
tenant thereof and religiously paid his leasehold
complied with said obligation. In 1983, however,
rentals to Pido and thereafter, upon Pido's death, to his
petitioner refused to pay any further lease rentals on
widow Laurenciana.
the land, prompting private respondent to seek the
assistance of the then Ministry of Agrarian Reform
The controversy began when Pido died intestate and (MAR) in Hinigaran, Negros Occidental. The MAR
on 27 November 1981, his surviving heirs executed a invited petitioner to a conference scheduled on 13
notarized document denominated as "Declaration of October 1983. Petitioner did not attend the conference
Heir ship and Waiver of Rights of Lot No. 1130 but sent his wife instead to the conference. During the
Hinigaran Cadastre," wherein they declared; to quote meeting, an officer of the Ministry informed Acap's wife
its pertinent portions, that: about private respondent's ownership of the said land
but she stated that she and her husband (Teodoro) did
. . . Cosme Pido died in the not recognize private respondent's claim of ownership
Municipality of Hinigaran, Negros over the land.
Occidental, he died intestate and
without any known debts and On 28 April 1988, after the lapse of four (4) years,
obligations which the said parcel of private respondent filed a complaint for recovery of
land is (sic) held liable. possession and damages against petitioner, alleging in
the main that as his leasehold tenant, petitioner
That Cosme Pido was survived by refused and failed to pay the agreed annual rental of
his/her legitimate heirs, namely: ten (10) cavans of palay despite repeated demands.
LAURENCIANA PIDO, wife, ELY,
ERVIN, ELMER, and ELECHOR all During the trial before the court a quo, petitioner
surnamed PIDO; children; 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 hereof, plaintiff has the right to
the said land, and having been a registered tenant demand payment of rental and the
therein since 1960, he never reneged on his rental tenant is obligated to pay rentals due
obligations. When Pido died, he continued to pay from the time demand is made. . . .6
rentals to Pido's widow. When the latter left for abroad,
she instructed him to stay in the landholding and to Xxx
pay the accumulated rentals upon her demand or
return from abroad. Certainly, the sale  of the Pido family of
Lot 1130 to herein plaintiff does not of
Petitioner further claimed before the trial court that he itself extinguish the relationship. There
had no knowledge about any transfer or sale of the lot was only a change of the personality
to private respondent in 1981 and even the following of the lessor in the person of herein
year after Laurenciana's departure for abroad. He plaintiff Edy de los Reyes who being
denied having entered into a verbal lease tenancy the purchaser or transferee, assumes
contract with private respondent and that assuming the rights and obligations of the former
that the said lot was indeed sold to private respondent landowner to the tenant Teodoro
without his knowledge, R.A. 3844, as amended, grants Acap, herein defendant.7
him the right to redeem the same at a reasonable
price. Petitioner also bewailed private respondent's Aggrieved, petitioner appealed to the Court of Appeals,
ejectment action as a violation of his right to security of imputing error to the lower court when it ruled that
tenure under P.D. 27. private respondent acquired ownership of Lot No. 1130
and that he, as tenant, should pay rentals to private
On 20 August 1991, the lower court rendered a respondent and that failing to pay the same from 1983
decision in favor of private respondent, the dispositive to 1987, his right to a certificate of land transfer under
part of which reads: P.D. 27 was deemed forfeited.

WHEREFORE, premises considered, The Court of Appeals brushed aside petitioner's

the Court renders judgment in favor of argument that the Declaration of Heir ship and Waiver
the plaintiff, Edy de los Reyes, and of Rights (Exhibit "D"), the document relied upon by
against the defendant, Teodoro Acap, private respondent to prove his ownership to the lot,
ordering the following, to wit: was excluded by the lower court in its order dated 27
August 1990. The order indeed noted that the
1. Declaring forfeiture of defendant's document was not identified by Cosme Pido's heirs
preferred right to issuance of a and was not registered with the Registry of Deeds of
Certificate of Land Transfer under Negros Occidental. According to respondent court,
Presidential Decree No. 27 and his however, since the Declaration of Heir ship and Waiver
farm holdings; of Rights appears to have been duly notarized, no
further proof of its due execution was necessary. Like
2. Ordering the defendant Teodoro the trial court, respondent court was also convinced
Acap to deliver possession of said that the said document stands as  prima facie proof of
farm to plaintiff, and; appellee's (private respondent's) ownership  of the land
in dispute.
3. Ordering the defendant to pay P5,
000.00 as attorney's fees, the sum of With respect to its non-registration, respondent court
P1, 000.00 as expenses of litigation noted that petitioner had actual knowledge of the
and the amount of P10, 000.00 as subject sale of the land in dispute to private
actual damages.5 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
In arriving at the above-mentioned judgment, the trial
1982, he (petitioner) actually paid rent to private
court stated that the evidence had established that the
respondent. Otherwise stated, respondent court
subject land was "sold" by the heirs of Cosme Pido to
considered this fact of rental payment in 1982 as
private respondent. This is clear from the following
estoppel on petitioner's part to thereafter refute private
disquisitions contained in the trial court's six (6) page
respondent's claim of ownership over the said land.
decision:
Under these circumstances, respondent court ruled
that indeed there was deliberate refusal by petitioner to
There is no doubt that defendant is a pay rent for a continued period of five years that
registered tenant of Cosme Pido. merited forfeiture of his otherwise preferred right to the
However, when the latter died their issuance of a certificate of land transfer.
tenancy relations changed since
ownership of said land was passed on
In the present petition, petitioner impugns the decision
to his heirs who, by executing a Deed
of the Court of Appeals as not in accord with the law
of Sale, which defendant admitted in
and evidence when it rules that private respondent
his affidavit, likewise passed on their
acquired ownership of Lot No. 1130 through the
ownership of Lot 1130 to herein
plaintiff (private respondent). As owner
aforementioned Declaration of Heir ship and Waiver of Under Article 712 of the Civil Code, the modes of
Rights. acquiring ownership are generally classified into two
(2) classes, namely, the original mode (i.e., through
Hence, the issues to be resolved presently are the occupation, acquisitive prescription, law or intellectual
following: creation) and the derivative mode  (i.e., through
succession mortis causa or tradition as a result of
certain contracts, such as sale, barter, donation,
1. WHETHER OR NOT THE
assignment or mutuum).
SUBJECT DECLARATION OF
HEIRSHIP AND WAIVER OF RIGHTS
IS A RECOGNIZED MODE OF In the case at bench, the trial court was obviously
ACQUIRING OWNERSHIP BY confused as to the nature and effect of the Declaration
PRIVATE RESPONDENT OVER THE of Heir ship and Waiver of Rights, equating the same
LOT IN QUESTION. with a contract (deed) of sale. They are not the same.

2. WHETHER OR NOT THE SAID In a Contract of Sale, one of the contracting parties
DOCUMENT CAN BE CONSIDERED obligates himself to transfer the ownership of and to
A DEED OF SALE IN FAVOR OF deliver a determinate thing, and the other party to pay
PRIVATE RESPONDENT OF THE a price certain in money or its equivalent.9
LOT IN QUESTION.
Upon the other hand, a declaration of heir ship and
Petitioner argues that the Regional Trial Court, in its waiver of rights operates as a public instrument when
order dated 7 August 1990, explicitly excluded the filed with the Registry of Deeds whereby the intestate
document marked as Exhibit "D" (Declaration of Heir heirs adjudicate and divide the estate left by the
ship, etc.) as private respondent's evidence because it decedent among themselves as they see fit. It is in
was not registered with the Registry of Deeds and was effect an extrajudicial settlement between the heirs
not identified by anyone of the heirs of Cosme Pido. under Rule 74 of the Rules of Court.10
The Court of Appeals, however, held the same to be
admissible, it being a notarized document, hence, Hence, there is a marked difference between a sale of
a prima facie  proof of private respondents' ownership hereditary rights and a waiver  of hereditary rights. The
of the lot to which it refers. first presumes the existence of a contract or deed of
sale between the parties.11 The second is, technically
Petitioner points out that the Declaration of Heir ship speaking, a mode of extinction of ownership where
and Waiver of Rights is not one of the recognized there is an abdication or intentional relinquishment of a
modes of acquiring ownership under Article 712 of the known right with knowledge of its existence and
Civil Code. Neither can the same be considered a intention to relinquish it, in favor of other persons who
deed of sale so as to transfer ownership of the land to are co-heirs in the succession.12 Private respondent,
private respondent because no consideration is stated being then a stranger to the succession of Cosme
in the contract (assuming it is a contract or deed of Pido, cannot conclusively claim ownership over the
sale). subject lot on the sole basis of the waiver document
which neither recites the elements of either a sale, 13 or
a donation,14 or any other derivative mode of acquiring
Private respondent defends the decision of respondent
ownership.
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 Quite surprisingly, both the trial court and public
Declaration of Heir ship and Waiver of Rights as part respondent Court of Appeals concluded that a "sale"
of his evidence, the trial court declared him transpired between Cosme Pido's heirs and private
nonetheless owner of the subject lot based on other respondent and that petitioner acquired actual
evidence adduced during the trial, namely, the notice knowledge of said sale when he was summoned by
of adverse claim (Exhibit "E") duly registered by him the Ministry of Agrarian Reform to discuss private
with the Registry of Deeds, which contains the respondent's claim over the lot in question. This
questioned Declaration of Heir ship and Waiver of conclusion has no basis both in fact and in law.
Rights as an integral part thereof.
On record, Exhibit "D", which is the "Declaration of
We find the petition impressed with merit. Heir ship and Waiver of Rights" was excluded by the
trial court in its order dated 27 August 1990 because
the document was neither registered with the Registry
In the first place, an asserted right or claim to
of Deeds nor identified by the heirs of Cosme Pido.
ownership or a real right over a thing arising from a
There is no showing that private respondent had the
juridical act, however justified, is not per se sufficient
same document attached to or made part of the
to give rise to ownership over the res. That right or title
record. What the trial court admitted was Annex "E", a
must be completed by fulfilling certain conditions
notice of adverse claim filed with the Registry of Deeds
imposed by law. Hence, ownership and real rights are
which contained the Declaration of Heir ship with
acquired only pursuant to a legal mode or process.
Waiver of rights and was annotated at the back of the
While title is the juridical justification, mode is the
Original Certificate of Title to the land in question.
actual process of acquisition or transfer of ownership
over a thing in question.8
A notice of adverse claim, by its nature, does not Transfer under P.D. 27 and to the possession of his
however prove private respondent's ownership over farm holdings should not be applied against
the tenanted lot. "A notice of adverse claim is nothing petitioners, since private respondent has not
but a notice of a claim adverse to the registered owner, established a cause of action for recovery of
the validity of which is yet to be established in court at possession against petitioner.
some future date, and is no better than a notice of lis
pendens which is a notice of a case already pending in WHEREFORE, premises considered, the Court hereby
court."15 GRANTS the petition and the decision of the Court of
Appeals dated 1 May 1994 which affirmed the decision
It is to be noted that while the existence of said of the RTC of Himamaylan, Negros Occidental dated
adverse claim was duly proven, there is no evidence 20 August 1991 is hereby SET ASIDE. The private
whatsoever that a deed of sale was executed between respondent's complaint for recovery of possession and
Cosme Pido's heirs and private respondent damages against petitioner Acap is hereby
transferring the rights of Pido's heirs to the land in DISMISSED for failure to properly state a cause of
favor of private respondent. Private respondent's right action, without prejudice to private respondent taking
or interest therefore in the tenanted lot remains an the proper legal steps to establish the legal mode by
adverse claim which cannot by itself be sufficient to which he claims to have acquired ownership of the
cancel the OCT to the land and title the same in land in question.
private respondent's name.
SO ORDERED.
Consequently, while the transaction between
Pido's heirs and private respondent may be Davide, Jr., Bellosillo, Kapunan and Hermosisima, Jr.,
binding on both parties, the right of petitioner JJ., concur.
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.
CASE DIGEST:

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 G.R. No. 118114 December 7, 1995
death), even if in 1982, private respondent allegedly TEODORO ACAP, petitioner,
informed petitioner that he had become the new owner vs.
of the land. COURT OF APPEALS

Under the circumstances, petitioner may have, in good FACTS:

faith, assumed such statement of private respondent to
be true and may have in fact delivered 10 cavans of Felixberto Oruma sold his inherited land to Cosme
palay as annual rental for 1982 to private respondent. Pido, which land is rented by petitioner Teodoro Acap.
But in 1983, it is clear that petitioner had misgivings When Cosme died intestate, his heirs executed a
over private respondent's claim of ownership over the “Declaration of Heir ship and Waiver of Rights” in favor
said land because in the October 1983 MAR of private respondent Edy delos Reyes. Respondent
conference, his wife Laurenciana categorically denied informed petitioner of his claim over the land, and
all of private respondent's allegations. In fact, petitioner petitioner paid the rental to him in 1982.
even secured a certificate from the MAR dated 9 May
1988 to the effect that he continued to be the However in subsequent years, petitioner refused to
registered tenant of Cosme Pido and not of private pay the rental, which prompted respondent to file a
respondent. The reason is that private complaint for the recovery of possession and
respondent never registered the Declaration of Heir damages. Petitioner averred that he continues to
ship with Waiver of Rights with the Registry of Deeds recognize Pido as the owner of the land, and that he
or with the MAR. Instead, he (private respondent) will pay the accumulated rentals to Pido’s widow upon
sought to do indirectly what could not be done her return from abroad. The lower court ruled in favor
directly, i.e., file a notice of adverse claim on the said of private respondent.
lot to establish ownership there over.
ISSUES:
It stands to reason, therefore, to hold that there was (1) Whether the “Declaration of Heir ship and
no unjustified or deliberate refusal by petitioner to pay Waiver of Rights” is a recognized mode of
the lease rentals or amortizations to the acquiring ownership by private respondent
landowner/agricultural lessor which, in this case,
private respondent failed to establish in his favor by (2) Whether the said document can be considered
clear and convincing evidence.16 a deed of sale in favor of private respondent

Consequently, the sanction of forfeiture of his

preferred right to be issued a Certificate of Land
 .
HELD: .

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 sufficient to give rise to
ownership over the res. That right or title must be
completed by fulfilling 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 justification, mode is the actual process of
acquisition or transfer of ownership over a thing in
question.

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 heir ship and waiver of
rights operates as a public instrument when filed with
the Registry of Deeds whereby the intestate heirs
adjudicate and divide the estate left by the decedent
among themselves as they see fit. It is in effect an
extrajudicial settlement between the heirs under Rule
74 of the Rules of Court.

Hence, there is a marked difference between a sale of

hereditary rights and a waiver of hereditary rights. The
first 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.

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. 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 sufficient 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..