POSSESSION

1. Republic v. Imperial Credit Corp. (Types of Possession)

FACTS:

Respondent Imperial Credit Corp. purchased from a certain Jose Tajon a parcel of land situated in Barrio Colaique (now Barangay San Roque), Antipolo City, Rizal for the sum of P17,986.00 as evidenced by a Deed of Sale with Mortgage. Upon full payment of the balance through judicial consignation, ownership of the property was consolidated in the name of respondent and the mortgage was released. The property was thereafter privately surveyed under PSU-178075 and was approved. Thereafter, respondent filed at the RTC a petition for the registration of a parcel of land, it alleged in its petition that respondent “subrogated former owner Jose Tajon, who has been in open, continuous, exclusive and notorious possession and occupation of the parcel of land, being a part of the alienable and disposable lands of the public domain, under a bona fide claim of ownership since 12 June 1945, by virtue of Deed of Sale with Mortgage executed on 07 March 1966. The RTC then issued an order of general default against the whole world. Respondent’s attorney-in-fact and caretaker had testified that except for some trespassers, no one else had laid possessory claim on theproperty. The evidence submitted are the following: 1993 tax declaration, tracing cloth, survey description, a certification from the Land Management Sector in lieu of the geodetic engineer’s certificate and the report by the CENRO that the property falls within the alienable and disposable zone.

RTC- granted respondent’s application for registration

CA- affirmed RTC’s decision, respondent obtained title to the property through extraordinary acquisitive prescription.

ISSUE: W/N the respondent should be granted the application for registration.

RULING:

No. It is doctrinally settled that a person who seeks confirmation of an imperfect or incomplete tutle of a piece of land on the basis of possession by himself snd his predecessors-in-interest shoulders the burden of proving by clear and convincing evidence. The CENRO certification evidence is the alienability of the land and not the open, continuous, exclusive and notorious possession by the respondent or its predecessor-in-interest for the period

prescribe by law. Respondent’s evidence on its alleged open, continuous, exclusive and notorious possession and occupation falls short of the requirements under the law.

Possession is open when it is patent, visible, apparent, notorious and not cladestine; it is continuous when interrupted, unbroken and not intermittent or occasional, exclusive when the adverse possessor can show exclusive dominion over the land and an appropriation of it to his own use and benefit, and notorious when it is so conspicious that it is generally known and talked off by the public or the people in the neighborhood.

The openness and notoriety of respondent’s occupation could have been persuasively established by the owners of the lands adjacent to the subject property. The submission of one tax declaration belatedly by the respondent did not strengthen his bona fide claim of acquisition of ownership, although while a tax declaration by itself is not sufficient to prove ownership, it may serve as sufficient basis for inferring possession. If respondent had filed the tax declaration on time it may have been a sufficient basis.

2. Carlos vs. Republic

FACTS:

Petitioner Maria Carlos, represented by her daughter, Teresita Carlos Victoria, filed an application for registration and confirmation of title over a parcel of land. Petitioner alleged, among others, that she is the owner of said parcel of land which she openly, exclusively and notoriously possessed and occupied since July 12, 1945 or earlier under a bona fide claim of ownership; that there is no mortgage or encumbrance affecting said property, nor is it part of any military or naval reservation; that the property is being used for industrial purposes; and that there are no tenants or lessees on the property. Petitioner further claimed that she has been in possession of the subject land in the concept of an owner; that her possession has been peaceful, public, uninterrupted and continuous since 1948 or earlier; and tacking her possession with that of her predecessors-in-interest, petitioner has been in possession of the land for more than 50 years.

RTC granted the application of the petitioner based on the factual and meritorious grounds, and considering that the applicant acquired the property under registration through inheritance from her father, Jose Carlos, and considering further that her possession thereof, tacked with that of her predecessor-in-interest, is open, continuous, exclusive, notorious and undisturbed, under claim of ownership since time immemorial up to the present time; and considering further that the subject parcel of land is part of the disposable

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and alienable land (Tsn, July 3, 2002, p.6) and considering further that the realty taxes due thereon have been religiously paid (Exhs. "HH," "II," "JJ," and "JJ-1"), and considering finally that the subject parcel of land belong[s] to the applicant and that she possess[es] a perfect title.

CA reversed and set aside the decision of the trial court on the ground that the time she filed her application for registration of title was no longer in possession and occupation of the land in question since on October 16, 1996, the applicant’s mother and predecessor-in-interest sold the subject land to Ususan Development Corporation.

ISSUE:

W/N the petitioner is in possession at the time she filed the application.

HELD:

NO. Petitioner has met the first requirement but not the second.

The Court that the applicant must show that he is in actual possession of the property at the time of the application, thus, The law speaks of possession and occupation. Since these words are separated by the conjunction ["]and["], the clear intention of the law is not to make one synonymous with the other. Possession is broader than occupation because it includes constructive possession. When, therefore, the law adds the word occupation, it seeks to delimit the all-encompassing effect of constructive possession. Taken together with the words open, continuous, exclusive and notorious, the word occupation serves to highlight the fact that for an applicant to qualify, his possession must not be a mere fiction. Actual possession of a 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.

It is clear in the case at bar that the applicant, Maria Carlos, no longer had possession of the property at the time of the application for the issuance of a certificate of title. The application was filed in court on December 19, 2001. Teresita Carlos Victoria, the daughter of Maria Carlos, admitted during the hearing that her mother had sold the property to Ususan Development Corporation in 1996. They also presented as evidence the deed of absolute sale executed by and between Maria Carlos and Ususan Development Corporation on October 16, 1996.

3. Heirs of M. Cabal vs. Sps Cabal

FACTS:

Marcelino built his house on the disputed property (portion of Lot G, now the southernmost portion of Lot 1-E) in 1949 with the consent of his father. Marcelino has been in possession of the disputed lot since then with the knowledge of his co-heirs, such that even before his father died in 1954, when the co-ownership was created, his inheritance or share in the co-ownership was already particularly designated or physically segregated. Thus, even before Lot G was subdivided in 1976, Marcelino already occupied the disputed portion.

On January 13, 1982, a land survey was conducted on Lot 1 designating the shares of Carmelita, Marcela, Francia, spouses Marete and Clarita Ebue, Anacleto and Lorenzo as Lots 1-A, 1-B, 1-C, 1-D, 1-E.

Since the subdivision plan revealed that Marcelino and his son occupied and built their houses on area located on southermost portion of Lot1-E and not the adjacent lot designated as Lot G1 the spouses Lorenzo and Rosita Cabal confronted Marcelino on this matter which resulted to an agreement on March 1, 1989 to re-survey and swapping of lots for the purpose of reconstruction of land titles. However, the agreed resurvey and swapping of lots did not materialize.

Hence, on August 10, 1994, respondents filed a complint for RECOVERY OF POSSESSION WITH DAMAGES against Marcelino before the MTC of Iba, Zambales. They aledge that Marcelion introduced improvements in bad faith on their land with knowledge that the adjacent lot is titled in his name.

Marcelino filed his Answer with Counterclaim, contending that respondents have no cause of action against him because he has been in possession in good faith since 1949 with respondent's knowledge and acquiescene. He further avers that acquisitive prescription has set in.

MTC- prescription or the length of time by which Marcelion has held or possessed the property has barred the respondents from filing a claim.

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RTC- Marcelino's possession was in concept of co-owner and therefore prescription does not run in his favor; that his possession, which was tolerated by his co-owners , does not ripen into possession.

CA- Marcelino's occuption in good faith diminished after Lot G was surveyed when he was apprised of the fact that the portion he was occupying was not the same as the portion titled to him; that from the tenor of the petition for review Marcelino would like to hold on to both the lot he occupies and Lot G-1, which cannot be allowed since it will double his inheritance and detriment of his brother Lorenzo.

ISSUE:Whether or not Marcelino is a possessor in good faith?

HELD:

Marcelino's possession of the disputed lot was based on a mistake belief that Lot G-1 is the same lot on which he has built his house with the consent of his father. There is no evidence, other than bare allegations, that Marcelino was aware that he intruded on resoondents' property when he continued to occupy and possess the disputed lot after partition was affected in 1976.

Marcelino is deemed builder in good faith at least until the time he was informed by respondents of his encroachment on their property.

Article 528. Possession acquired in good faith does not lose this character except in the case and from the moment facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongfully.

Article 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay

reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

PRINCIPLE of POSSESSION IN GOOD FAITH

It has been said that good faith is always presumed, and upon him who alleges bad faith on the part of the possessor rests the burden of proof. Good faith is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage. An individual’s personal good faith is a concept of his own mind and, therefore, may not conclusively be determined by his protestations alone. It implies honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry.The essence of good faith lies in an honest belief in the validity of one’s right, ignorance of a superior claim, and absence of intention to overreach another. Applied to possession, one is considered in good faith if he is not aware that there exists in his title or mode of acquisition any flaw which invalidates it.

4. Dizon v. Hon. Rodriguez (ART. 526)

FACTS:

Hacienda Calatagan owned by Alfonso and Jacobo Zobel covered by TCT No. T-722. The Hacienda constructed a pier, "Santiago Landing," about 600 m long from the shore into the navigable waters of the Pagaspas Bay, to be used by vessels loading sugar produced by the Hacienda sugar mill. When the sugar mill ceased its operation, the owners converted the pier into a fishpond dike and built additional strong dikes enclosing an area of about 30 hectares (of the Bay) and converted the same into a fishpond. The Hacienda owners also enclosed a similar area of about 37 hectares of the Bay on the other side of the pier, which was also converted into a fishpond. A subdivision plan was prepared and subsequently approved by the Director of Lands and the Register of Deeds issued TCT’s, wherein fishpond No. 1 was referred to as Lot No. 1 and fishpond No. 2 was referred to as Lot No. 2. Zobel sold to Dizon Lot No. 49 and Lot No. 1 was purchased by Goco, who,

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sold one-half to Sy-Juco. Tolentino applied for ordinary fishpond permit or lease for Lot No. 49 and Lot No. 1 by her daughter. The petitioners herein protested claiming that the properties are private lands, which are covered by a certificate of title. The Director of Fisheries found the areas applied for are outside the boundaries of Haciend Calatagan and that a committee created by the Sec. of Agriculture and natural Resources found that the disputed lots are not originally included within the boundaries of hacienda. Petitioners filed before the CFI an action to quiet their titles.

CFI- the subdivision plan disregarded the technical description of TCT No. T-722; the certificate of title obtained by the petitioners are not subject to registration because they are null and void; lots 1 and 49 declared properties of the public domain.

CA- affirmed; but since petitioners relied on the efficacy of their certificates of title, cannot be considered possessors in bad faith until after the legality of their said titles has been finally determined. Appellants were thus declared entitled to retention of the properties until they are reimbursed by the landowner

ISSUE:W/N petitioners are possessors in good faith.

RULING:

Petitioners are possessors in good faith. There is no showing that plaintiffs are not purchasers in good faith and for value. As such title-holders, they have reason to rely on the indefeasible character of their certificates. "The concept of possessor in good faith given in Art. 526 of the Civil Code and when said possession loses this character under Art. 528, needs to be reconciled with the doctrine of indefeasibility of a Torrens Title. Such reconciliation can only be achieved by holding that the possessor with a Torrens Title is not aware of any flaw in his title which invalidates it until his Torrens Title is declared null and void by final judgment of the Courts. such occupants in good faith, plaintiffs have the right to the retention of the property until they are reimbursed of the necessary expenses made on the lands.

5. De Vera vs. CA (Article 526)

FACTS:

On January 14, 1983, private respondent Ricardo Ramos filed a Complaint[5] against the herein petitioners for recovery of property with damages. As stated in the said complaint, the plaintiff is the legal and absolute owner of a certain parcel of

land known as Lot 2, H-4-61. The defendants are occupying a triangular portion of the above-described property containing an area of 22 square meters, more or less hat the plaintiff has demanded that the defendants remove their improvement thereon and vacate the said portion, ... but the defendants have refused and failed, without any just or lawful cause to do so.

In the answer filed by the petitioners, they theorized, inter alia, that they have been in possession not only of 22 square meters but 70 square meters of land through their predecessor-in-interest, Teodoro de la Cruz (husband of defendant-appellant Agueda De Vera and father of the rest of the defendants-appellants) and subsequently by themselves, as owners, before 1956; that said 70 square meter area occupied by them is a portion of Lot 7005, Cad 211, over which their predecessor-in-interest, Teodoro de la Cruz, had, during his lifetime, a pending Miscellaneous Sales Application which was given due course and favorably recommended by the District Land Officer for Isabela to the Director of Lands; that Teodoro de la Cruz also declared the said land for taxation purposes and after his death, by his heirs, and that plaintiff-appellee’s cause of action is already barred by prescription and/or laches.

RTC ruled in favor of the plaintiff-appellant and ordered that the defendants, their agents, representatives, or any person or persons acting on their authority, to vacate the same and to deliver the possession thereof to the plaintiff.

CA- Affirmed with modifications.

ISSUES:

W/N petitioners were not possessors in bad faith of the portions “b” and “c” of the disputed property.

HELD:

NO. In distinguishing good faith and bad faith possession, the Code refers to the manner of acquisition in general. A possessor in good faith is one who is unaware that there exists a flaw which invalidates his acquisition of the thing. Good faith consists in the possessor’s belief that the person from whom he received a thing was the owner of the same and could convey his title. It consists in an honest intention to abstain from taking any unconscientious advantage of another, and is the opposite of fraud. Since good faith is a state of the mind, and is not a visible, tangible fact that can be seen or touched, it can only be determined by outward acts and proven

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conduct. It implies freedom from knowledge and circumstances which ought to put a person on inquiry.

Further, the court reiterated also that Records disclose that prior to the construction in 1983 of petitioners’ house on the land under controversy (Portions “B” and “C”), a demand letter dated April 27, 1981 was sent by private respondent to the petitioners, informing them that the land they were possessing and occupying is within his (private respondent’s) titled property.

In the same letter, the private respondent gave petitioner Agueda de Vera the option to either pay him the value of the property or lease the same on a yearly or monthly basis. However, the contending parties failed to reach a compromise agreement. The lower court found, “that the defendants (herein petitioners) are occupying ... an area of 22 square meters (Portions “B” and “C”),..., in which land, defendants constructed a house of strong materials in 1983 after dismantling heir (sic) previous building erected thereon on or about January or February, 1970.”

The facts and circumstances aforestated are “outward acts and proven conduct” indicating bad faith of petitioners as possessor and builder.

6. DBP vs. CA

FACTS:

The records show that respondent spouses Piñeda (PIÑEDAS) are the registered owners of a parcel of land (Lot 11-14-1-14) situated at barangay Astorga Dumarao, Capiz covered by Homestead Patent No. 0844 and Original Certificate of Title No. P-1930.

On March 7, 1972, the PIÑEDAS mortgaged the above described parcel of land to petitioner, Development Bank of the Philippines (DBP) to secure their agricultural loan in the amount of P20,000.00.

The PIÑEDAS failed to comply with the terms and conditions of the mortgage compelling DBP to extrajudicially foreclose on February 2, 1977.

In the foreclosure sale, DBP was the highest bidder and a Sheriff Certificate of Sale was executed in its favor. In the corresponding Certificate of Sale, the sheriff indicated that “This property is sold subject to the redemption within five (5) years from the date of registration of this instrument and in the

manner provided for by law applicable to this case”.

On March 10, 1978, after the expiration of the one-year redemption period provided for under Section 6, ACT 3135, DBP consolidated its title over the foreclosed property by executing an Affidavit of Consolidation of Ownership. Consequently, Original Certificate of Title No. P-1930 was cancelled and TCT No. T-15559 was issued in the name of DBP. Thereafter, DBP took possession of the foreclosed property and appropriated the produce thereof.

On July 5, 1978, the Ministry of Justice issued Opinion No. 92, Series of 1978which declared that lands covered by P.D. No. 27,like the herein subject property, may not be the object of foreclosure proceedings after the promulgation of said decree on Oct. 21, 1972.

On August 24, 1981, the PIÑEDAS offered to redeem the foreclosed property by offering P10,000.00 as partial redemption payment. This amount was accepted by DBP who issued O.R. No. 1665719 and through a letter, conditionally approved the offer of redemption considering the P10,000.00 as down payment.

However, on November 11, 1981, DBP sent the PIÑEDAS another letter informing them that pursuant to P.D. 27, their offer to redeem and/or repurchase the subject property could not be favorably considered for the reason that said property was tenanted.

Meanwhile, on December 21, 1981, the PIÑEDAS filed the instant complaint against DBP for cancellation of certificate of title and/or specific performance, accounting and damages with a prayer for the issuance of a writ of preliminary injunction averring that DBP, in evident bad faith, caused the consolidation of its title to the parcel of land in question in spite of the fact that the 5-year redemption period expressly stated in the Sheriff’s Certificate of Sale had not yet lapsed and that their offer to redeem the foreclosed property was made well within said period of redemption

RTC- DBP violated the stipulation in the Sheriff’s Certificate of Sale which provided that the redemption period is five (5) years from the registration thereof in consonance with Section 119[9] of CA No. 141[10]. DBP should therefore assume liability for the fruits that said property produced from said land considering that it prematurely took possession thereof.

CA- since DBP was in evident bad faith when it unlawfully took

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possession of the property subject of the dispute and defied what was written on the Sheriff’s Certificate of Sale, the PIÑEDAS were entitled to recover the fruits produced by the property or its equivalent valued at P72,000.00 per annum or a total of P216,000.00 for the three-year period.

ISSUE:Whether DBP was in bad faith when it took possession of the disputed lot.?

HELD:We rule in the negative.

A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw, which invalidates it. Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof.It was therefore incumbent on the PIÑEDAS to prove that DBP was aware of the flaw in its title i.e. the nullity of the foreclosure. This, they failed to do.

If no redemption is made within one year, the purchaser is entitled as a matter of right to consolidate and to possess the property.Accordingly, DBP’s act of consolidating its title and taking possession of the subject property after the expiration of the period of redemption was in accordance with law.

In the case of Maneclang vs. Baun, we held that when a contract of sale is void, the possessor is entitled to keep the fruits during the period for which it held the property in good faith. Good faith of the possessor ceases when an action to recover possession of the property is filed against him and he is served summons therefore.

In the present case, DBP was served summons on June 30, 1982.By that time, it was no longer in possession of the disputed land as possession thereof was given back to the PIÑEDAS after the foreclosure of DBP was declared null and void on February 22, 1982. Therefore, any income collected by DBP after it consolidated its title and took possession of the property on May 30, 1978 up to February 22, 1982 belongs to DBP as a possessor in good faith since its possession was never legally interrupted.

7. Bomedco (Bogo-Medellin Milling Co., Inc) v. CA (ART. 529)

FACTS:

Magdaleno Valdez, Sr., father of herein private respondents purchased from Santillan a parcel of unregistered land covered by Tax Declaration No. 3935 with an area of one hectare, 34 ares and 16 centares, located in Barrio Dayhagon, Medellin, Cebu. He took possession of the property and declared it for tax purposes in his name. Prior to the sale, the lot was already traversed in the middle by railroad tracks owned by petitioner Bomedco. The tracks were used for hauling sugar cane from the fields to petitioner’s sugar mill. When Magdaleno Valdez, Sr died, pricate respondents inherited to the land. Unknown to the private respondents, Bomedco was able to have the disputed middle lot which was occupied by the railroad tracks placed in its name in the Cadastral Survey of Medellin, Cebu. The entire subject land was divided into three, namely, Cadastral Lot Nos. 953, 954 and 955. Lot Nos. 953 and 955 remained in the name of private respondents. However, Lot No. 954, the narrow lot where the railroad tracks lay, was claimed by Bomedco as its own and was declared for tax purposes in its name. It was only after 41 years that they discovered such claim from Bomedco. Respondent heirs filed a "Complaint for Payment of Compensation and/or Recovery of Possession of Real Property and Damages with Application for Restraining Order/Preliminary Injunction" against Bomedco before the RTC. The respondent heirs alleged that, Santillan granted Bomedco, in 1929, a railroad right of way for a period of 30 years. The right of way expired sometime in 1959 but respondent heirs allowed Bomedco to continue using the land because one of them was then an employee of the company. They presented an original copy of the deed of sale written in Spanish to evidence the sale of the land to Magdaleno Valdez, Sr. and several original estate tax receipts. Bomedco’s defense was that it was the owner and possessor of Cadastral Lot No. 954, having allegedly bought the same from Feliciana Santillan, prior to the sale of the property by the latter to Magdaleno Valdez, Sr. Bomedco submitted in evidence a Deed of Sale and seven real estate tax receipts a 1929 Survey Plan of private land for Bogo-Medellin Milling Company; a Survey Notification Card; Lot Data Computation; a Cadastral Map for Medellin Cadastre as well as the testimonies of the Geodetic Engineer and the property custodian for Bomedco, and the Chief of the Land Management Services of the DENR.

RTC- rejected Bomedco’s defense on the basis of a prior sale, citing that its evidence — a xerox copy of the Deed of Sale was inadmissible and had no probative value; Bomedco had been in possession of Cadastral Lot No. 954 in good faith for more than 10 years, thus, it had already acquired ownership of

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the property through acquisitive prescription under Article 620 of the Civil Code

CA- reversed; Bomedco only acquired an easement of right of way by unopposed and continuous use of the land, but not ownership, under Article 620 of the Civil Code. Its possession being in bad faith, the applicable prescriptive period in order to acquire ownership over the land was 30 years under Article 1137 of the Civil Code.

ISSUE: W/N the expiration of the 30-year period of easement converted petitioner’s possession into an adverse one so as to apply his prescriptive right.

RULING:

There is no dispute that the controversial strip of land has been in the continuous possession of petitioner since 1929. But possession, to constitute the foundation of a prescriptive right, must be possession under a claim of title, that is, it must be adverse. Unless coupled with the element of hostility towards the true owner, possession, however long, will not confer title by prescription. The real estate taxreceipts showed that all petitioner had was possession by virtue of the right of way granted to it. Were it not so and petitioner really owned the land, petitioner would not have consistently used the phrases "central railroad right of way" and "sugar central railroad right of way" in its tax declarations until 1963. Certainly an owner would have found no need for these phrases. A person cannot have an easement on his own land, since all the uses of an easement are fully comprehended in his general right of ownership. While it is true that, together with a person’s actual and adverse possession of the land, tax declarations constitute strong evidence of ownership of the land occupied by him, this legal precept does not apply in cases where the property is declared to be a mere easement of right of way. Having held the property by virtue of an easement, petitioner cannot now assert that its occupancy since 1929 was in the concept of an owner. Neither can it declare that the 30-year period of extraordinary acquisitive prescription started from that year. The mere expiration of the period of easement in 1959 did not convert petitioner’s possession into an adverse one. Mere material possession of land is not adverse possession as against the owner and is insufficient to vest title, unless such possession is accompanied by the intent to possess as an owner.

8. Villarico vs. Sarmiento

FACTS:

The petitioner is the owner of a lot in La Huerta, Parañaque City, Metro Manila with an area of sixty-six (66) square meters and covered by Transfer Certificate of Title (T.C.T.) No. 95453 issued by the Registry of Deeds, same city.

Petitioner’s lot is separated from the Ninoy Aquino Avenue (highway) by a strip of land belonging to the government. As this highway was elevated by four (4) meters and therefore higher than the adjoining areas, the Department of Public Works and Highways (DPWH) constructed stairways at several portions of this strip of public land to enable the people to have access to the highway.

Sometime in 1991, the respondents had a building constructed on a portion of said government land. In November that same year, a part thereof was occupied by Andok’s Litson Corporation and Marites’ Carinderia, also impleaded as respondents.

In 1993, by means of a Deed of Exchange of Real Property, petitioner acquired a 74.30 square meter portion of the same area owned by the government.

In 1995, petitioner filed a complaint for accion publiciana against the respondents. He alleged inter alia that respondents’ structures on the government land closed his "right of way" to the Ninoy Aquino Avenue; and encroached on a portion of his lot covered by T.C.T. No. 74430.

Respondents, in their answer, specifically denied petitioner’s allegations, claiming that they have been issued licenses and permits by Parañaque City to construct their buildings on the area; and that petitioner has no right over the subject property as it belongs to the government.

RTC-the petitioner has never been in possession of any portion of the public land in question. The dependants are the ones who have actual possession of the area. Further, it stated that the petitioner was not deprived of his “right of way.”

CA- AFFIRMED IN TOTO.

ISSUES:

1. W/N the petitioners has acquired a right of way over the disputed land of the government which is between his property and the Ninoy Aquino Avenue; and

2. W/N the petitioners have a better right of possession over the subject land.

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HELD:

The SC ruled the first issue in the negative. The court reiterated that a lot on which stairways were built for the use of the people as passageway to the highway is property of public dominion; Public use is use that is not confined to privileged individuals, but is open to the indefinite public.

Further, the second issue was answered by the court stating that considering that the lot Considering that the lot on which the stairways were constructed is a property of public dominion, it cannot be burdened by a voluntary easement of right of way in favor of herein petitioner. In fact, its use by the public is by mere tolerance of the government through the DPWH. Petitioner cannot appropriate it for himself. Verily, he cannot claim any right of possession over it. This is clear from Article 530 of the Civil Code which provides: “Only things and rights which are susceptible of being appropriated may be the object of possession."

9. Asset Privatization vs. TJ Enterprises

FACTS:

Petitioner Asset Privatization Trust[5] (petitioner) was a government entity created for the purpose to conserve, to provisionally manage and to dispose assets of government institutions.[6] Petitioner had acquired from the Development Bank of the Philippines (DBP) assets consisting of machinery and refrigeration equipment which were then stored at Golden City compound, Pasay City. The compound was then leased to and in the physical possession of Creative Lines, Inc., (Creative Lines). These assets were being sold on an as-is-where-is basis.

On 7 November 1990, petitioner and respondent entered into an absolute deed of sale over certain machinery and refrigeration equipment identified as Lots Nos. 2, 3 and 5. After two (2) days, respondent demanded the delivery of the machinery it had purchased. Sometime in March 1991, petitioner issued Gate Pass No. 4955. Respondent was able to pull out from the compound the properties designated as Lots Nos. 3 and 5. However, during the hauling of Lot No. 2 consisting of sixteen (16) items, only nine (9) items were pulled out by respondent. Creative Lines’ employees prevented respondent from hauling the remaining machinery and equipment.

Respondent filed a complaint for specific performance and

damages against petitioner and Creative Lines.During the pendency of the case, respondent was able to pull out the remaining machinery and equipment. However, upon inspection it was discovered that the machinery and equipment were damaged and had missing parts.

ISSUE:

Whether there was a constructive delivery of the machinery and equipment upon the execution of the deed of absolute sale between petitioner and respondent.

HELD:The ownership of a thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof.The thing sold shall be understood as delivered when it is placed in the control and possession of the vendee.

As a general rule, when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred. And with regard to movable property, its delivery may also be made by the delivery of the keys of the place or depository where it is stored or kept.In order for the execution of a public instrument to effect tradition, the purchaser must be placed in control of the thing sold.

However, the execution of a public instrument only gives rise to a prima facie presumption of delivery. Such presumption is destroyed when the delivery is not effected because of a legal impediment.It is necessary that the vendor shall have control over the thing sold that, at the moment of sale, its material delivery could have been made. Thus, a person who does not have actual possession of the thing sold cannot transfer constructive possession by the execution and delivery of a public instrument.

In this case, there was no constructive delivery of the machinery and equipment upon the execution of the deed of absolute sale or upon the issuance of the gate pass since it was not petitioner but Creative Lines which had actual possession of the property. The presumption of constructive delivery is not applicable as it has to yield to the reality that the purchaser was not placed in possession and control of the property.

10. Ong v. Republic (ART. 531)

FACTS:Page 8 of 23

POSSESSION

Petitioner, in his behalf and as duly authorized representative of his brothers, namely, Roberto, Alberto and Cesar, filed an Application for Registration of Title over Lot 15911 situated in Barangay Anolid, Mangaldan, Pangasinan with an area of 574 square meters, more or less. They alleged that they are the co-owners of the subject lot; that the subject lot is their exclusive property having acquired the same by purchase from spouses Tony Bautista and Alicia Villamil; that the subject lot is presently unoccupied; and that they and their predecessors-in-interest have been in open, continuous and peaceful possession of the subject lot in the concept of owners for more than 30 years. Respondent, through the OSG, opposed the application for registration of title. Neither applicants nor their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of the subject lot since June 12, 1945 or earlier; applicants failed to adduce any muniment of title to prove their claims; the tax declaration does not appear genuine and merely shows pretended possession of recent vintage; the application was filed beyond the period allowed; and that the subject lot is part of the public domain which cannot be the subject of private appropriation.

RTC- in favor of petitioner

CA- reversed; the subject lot is part of the alienable and disposable lands of the public domain. Thus, it was incumbent upon petitioner to prove that they possessed the subject lot in the nature and for the duration required by law. Petitioner failed to prove his adverse possession in the concept of owner since June 12, 1945 or earlier because the earliest tax declaration presented is dated 1971. Neither was petitioner able to prove they actually occupied the subject lot prior to the filing of the application.

ISSUE:

W/N petitioner and his brothers have registrable ownership over the real property subject matter of land

RULING:

The petitioner and his brothers have no registrable ownership over the subject land. Possession alone is not sufficient to acquire title to alienable lands of the public domain because the law requires possession and occupation. And while tax declarations are not conclusive proof of ownership, they constitute good indicia of possession in the concept of owner and a claim of title over the subject property. Even if we were to tack petitioner's claim of ownership over the subject lot to that of their alleged predecessors-in-interest in 1971, still this

would fall short of the required possession from June 12, 1945 or earlier. They also failed to establish specific acts of ownership to substantiate the claim that he and his predecessors-in-interest possessed and occupied the subject lot in the nature and duration required by law. They also admitted that neither one of them actcually occupied the subject lot and there were no improvements made thereon.

11. Cequena vs. Bolante (Article 538)

FACTS:

Prior to 1954, the land was originally declared for taxation purposes in the name of Sinforoso Mendoza, father of [respondent] and married to Eduarda Apiado. Sinforoso died in 1930. [Petitioners] were the daughters of Margarito Mendoza. On the basis of an affidavit, the tax declaration in the name of Sinforoso Mendoza of the contested lot was cancelled and subsequently declared in the name of Margarito Mendoza. Margarito and Sinforoso are brothers. Respondent is the present occupant of the land. Earlier, on October 15, 1975, respondent and Miguel Mendoza, another brother of petitioner, during the cadastral survey had a dispute on the ownership of the land.

ISSUE:

W/N the petitioners are the lawful owner and possessor of the land subject of the case.

HELD:

NO. The respondent is the preferred possessor under Article 538 of the Civil Code because, benefiting from her father's tax declaration of the subject lot since 1926, she has been in possession thereof for a longer period. On the other hand, petitioners' father acquired joint possession only in 1952.

The court explicitly discussed that possession cannot be acquired through force or violence. To all intents and purposes, a possessor, even if physically ousted is still deemed the legal possessor.

12. Erickson Telecommunications Inc. vs. City of Pasig

FACTS:

Ericsson Telecommunications, Inc. (petitioner), a corporation with principal office in Pasig City, is engaged in the design,

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engineering, and marketing of telecommunication facilities/system.

In an Assessment Notice issued by the City Treasurer of Pasig City, petitioner was assessed a business tax deficiency for the years 1998 and 1999 based on its gross revenues as reported in its audited financial statements for the years 1997 and 1998.

Petitioner filed a Protest claiming that the computation of the local business tax should be based on gross receipts and not on gross revenue.

ISSUE:

the substantive issue in this case is whether the local business tax on contractors should be based on gross receipts or gross revenue.

RULING:

The law is clear. Gross receipts include money or its equivalent actually or constructively received in consideration of services rendered or articles sold, exchanged or leased, whether actual or constructive.

In Commissioner of Internal Revenue v. Bank of Commerce,17 the Court interpreted gross receipts as including those which were actually or constructively received, viz.:

Actual receipt of interest income is not limited to physical receipt. Actual receipt may either be physical receipt or constructive receipt. When the depository bank withholds the final tax to pay the tax liability of the lending bank, there is prior to the withholding a constructive receipt by the lending bank of the amount withheld. From the amount constructively received by the lending bank, the depository bank deducts the final withholding tax and remits it to the government for the account of the lending bank. Thus, the interest income actually received by the lending bank, both physically and constructively, is the net interest plus the amount withheld as final tax.

The concept of a withholding tax on income obviously and necessarily implies that the amount of the tax withheld comes from the income earned by the taxpayer. Since the amount of the tax withheld constitutes income earned by the taxpayer, then that amount manifestly forms part of the taxpayer's gross receipts. Because the amount withheld belongs to the

taxpayer, he can transfer its ownership to the government in payment of his tax liability. The amount withheld indubitably comes from income of the taxpayer, and thus forms part of his gross receipts. (Emphasis supplied)

Further elaboration was made by the Court in Commissioner of Internal Revenue v. Bank of the Philippine Islands,18 in this wise:

Receipt of income may be actual or constructive. We have held that the withholding process results in the taxpayer's constructive receipt of the income withheld, to wit:

By analogy, we apply to the receipt of income the rules on actual and constructive possession provided in Articles 531 and 532 of our Civil Code.

Under Article 531:

"Possession is acquired by the material occupation of a thing or the exercise of a right, or by the fact that it is subject to the action of our will, or by the proper acts and legal formalities established for acquiring such right."

Article 532 states:

"Possession may be acquired by the same person who is to enjoy it, by his legal representative, by his agent, or by any person without any power whatever; but in the last case, the possession shall not be considered as acquired until the person in whose name the act of possession was executed has ratified the same, without prejudice to the juridical consequences of negotiorum gestio in a proper case."

The last means of acquiring possession under Article 531 refers to juridical acts—the acquisition of possession by sufficient title—to which the law gives the force of acts of possession. Respondent argues that only items of income actually received should be included in its gross receipts. It claims that since the amount had already been withheld at source, it did not have actual receipt thereof.

We clarify. Article 531 of the Civil Code clearly provides that the acquisition of the right of possession is through the proper acts and legal formalities established therefor. The withholding process is one such act. There may not be actual receipt of the income withheld; however, as provided for in Article 532, possession by any person without any power whatsoever shall be considered as acquired when ratified by the person in

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whose name the act of possession is executed.

In our withholding tax system, possession is acquired by the payor as the withholding agent of the government, because the taxpayer ratifies the very act of possession for the government. There is thus constructive receipt. The processes of bookkeeping and accounting for interest on deposits and yield on deposit substitutes that are subjected to FWT are indeed—for legal purposes—tantamount to delivery, receipt or remittance.19

Revenue Regulations No. 16-2005 dated September 1, 200520 defined and gave examples of "constructive receipt", to wit:

SEC. 4. 108-4. Definition of Gross Receipts. -- x x x

"Constructive receipt" occurs when the money consideration or its equivalent is placed at the control of the person who rendered the service without restrictions by the payor. The following are examples of constructive receipts:

(1) deposit in banks which are made available to the seller of services without restrictions;

(2) issuance by the debtor of a notice to offset any debt or obligation and acceptance thereof by the seller as payment for services rendered; and

(3) transfer of the amounts retained by the payor to the account of the contractor.

There is, therefore, constructive receipt, when the consideration for the articles sold, exchanged or leased, or the services rendered has already been placed under the control of the person who sold the goods or rendered the services without any restriction by the payor.

In contrast, gross revenue covers money or its equivalent actually or constructively received, including the value of services rendered or articles sold, exchanged or leased, the payment of which is yet to be received. This is in consonance with the International Financial Reporting Standards,21 which defines revenue as the gross inflow of economic benefits (cash, receivables, and other assets) arising from the ordinary operating activities of an enterprise (such as sales of goods, sales of services, interest, royalties, and dividends),22 which is measured at the fair value of the consideration received or receivable.23

As aptly stated by the RTC:

"[R]evenue from services rendered is recognized when services have been performed and are billable." It is "recorded at the amount received or expected to be received." (Section E [17] of the Statements of Financial Accounting Standards No. 1).24

In petitioner's case, its audited financial statements reflect income or revenue which accrued to it during the taxable period although not yet actually or constructively received or paid. This is because petitioner uses the accrual method of accounting, where income is reportable when all the events have occurred that fix the taxpayer's right to receive the income, and the amount can be determined with reasonable accuracy; the right to receive income, and not the actual receipt, determines when to include the amount in gross income.25

The imposition of local business tax based on petitioner's gross revenue will inevitably result in the constitutionally proscribed double taxation – taxing of the same person twice by the same jurisdiction for the same thing26 – inasmuch as petitioner's revenue or income for a taxable year will definitely include its gross receipts already reported during the previous year and for which local business tax has already been paid.

13. Escritor v. IAC (ART. 534)

FACTS:

Lot No. 2749 was the subject of cadastral proceedings in the CFI. Miguel Escritor, as claimant, declaring his ownership over the lot alleging that he acquired it by inheritance from his deceased father. The CFI rendered a decision in favor of Escritor. Respondent Acuna filed a petition for review contending that Escritor obtained the lot through fraud and misrepresentation. Escritor died during the proceedings of the review and his heirs took possession of the lot. The petition was subsequently granted and the heirs voluntarily gave up their possession. A complaint for recovery of damages for the fruits of Lot No. 2749 was filed by Acuna because according to him, Escritor (deceased) effectuated the registration of the lot through fraud, malice and misrepresentation.

CFI- The court dismissed the complaint, petitioners enjoyed the fruits of the property, they were in good faith possessing under a just title.

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IAC- reversed; ordered the petitioners to pay Acuna the value of the fruits they have received for 13 years.

ISSUE:

W/N petitioners should be held liable for damages

RULING:

No. Escritor honestly believed that he is the legal owner of the land. With this well-grounded belief of ownership, he continued in his possession of Lot No. 2749. This cannot be categorized as possession in bad faith. As defined in the law, a possessor in bad faith is one in possession of property knowing that his title thereto is defective. In this case, there is no showing that Escritor knew of any flaw in his title. Nor was it proved that petitioners were aware that the title of their predecessor had any defect. Assuming that claimant Escritor was a possessor in bad faith, this should not prejudice his successors-in-interest, petitioners herein, as the rule is that only personal knowledge of the flaw in one's title or mode of acquisition can make him a possessor in bad faith, for bad faith is not transmissible from one person to another, not even to an heir. As Article 534 of the Civil Code explicitly provides, "one who succeeds by hereditary title shall not suffer the consequences of the wrongful possession of the decedent, if it is not shown that he was aware of the flaws affecting it; ..." The reason for this article is that bad faith is personal and intransmissible. Its effects must, therefore, be suffered only by the person who acted in bad faith; his heir should not be saddled with such consequences.

A review of the records, does not indicate the existence of any fraud. Lot No. 2749 was not awarded to Escritor on the basis of machinations. Acuna failed to prove bad faith. Under Article 527 of the Civil Code, good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. If no evidence is presented proving bad faith, like in this case, the presumption of good faith remains.

14. Cruz vs. Secretary of DENR

Facts:

Cruz, a noted constitutionalist, assailed the validity of the RA 8371 or the Indigenous People’s Rights Act on the ground that the law amount to an unlawful deprivation of the State’s ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution. The IPRA law basically enumerates the rights of the

indigenous peoples over ancestral domains which may include natural resources. Cruz et al contend that, by providing for an all-encompassing definition of “ancestral domains” and “ancestral lands” which might even include private lands found within said areas, Sections 3(a) and 3(b) of said law violate the rights of private landowners.

ISSUE: Whether or not the IPRA law is unconstitutional.

HELD: The SC deliberated upon the matter. After deliberation they voted and reached a 7-7 vote. They deliberated again and the same result transpired. Since there was no majority vote, Cruz’s petition was dismissed and the IPRA law was sustained. Hence, ancestral domains may include public domain – somehow against the regalian doctrine.

15. Banes vs. Lutheran Church of the Philippines

FACTS:

On August 16, 1990, certain members of the Lutheran Church in the Philippines (LCP) filed an action against its President, Thomas Batong, and six other members of the Board of Directors,[3] before the Securities and Exchange Commission (SEC), for accounting and damages with prayer for preliminary injunction and appointment of a management committee.

By virtue of said injunction, on August 13, 1993,herein respondents, with the aid of certain members of the Department of Interior and Local Government, the Philippine National Police, and Sheriff Primo Alimurong of the Regional Trial Court (RTC), Manila, tried to dispossess petitioners, as previous clergymen and occupants of the residential houses located at 4443 Old Sta. Mesa Street, Manila, owned by LCP and form part of the compound where the principal office of LCP is located. Petitioners however refused to leave the same. Thus, the main gate of the subject property was padlocked by respondents, preventing the petitioners and their families from going in and out of said place. Security guards were also stationed at the premises with an instruction not to allow petitioners entry and exit.

ISSUE:

Whether petitioners were removed from the premises by force, intimidation, threat, strategy or stealth.

HELD:

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Clearly, the presence of such men in the subject property restricting petitioners’ mobility constitutes force contemplated by Section 1, Rule 70 of the Rules of Court.

It is true that petitioners Bañes and Del Rosario wrote LCP expressing their willingness to voluntarily vacate the premises upon finding another place to live in, but this is after respondents had padlocked the premises and used armed men to prevent their coming to and from the premises. Otherwise stated, said letters do not negate the initial use of force by respondents which constituted forcible entry. It is undisputed that respondents owned the property occupied by petitioners, still their use of force in evicting petitioners therefrom was not justified.

Indeed, regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be thrown out by a strong hand, violence or terror.The owner who has title over the property cannot take the law into his own hands to regain possession of said property. He must go to court.

Respondents cannot justify their forcible entry in the premises occupied by petitioners by claiming that the latter have no valid right to the continued possession of the property. Respondents should have filed the appropriate unlawful detainer case against them instead of forcing them out of the premises.

However, while we find that there was forcible entry in this case, we cannot grant the prayer of petitioners-spouses Bañes that they be restored to the subject premises. It is established that they stayed on the property for free as privilege of petitioner Elmer Bañes as a clergyman of LCP and that after the initial forcible entry of respondents, petitioner Elmer Bañes expressed, through his letter, his willingness to vacate the property upon finding a new place to live in and proposed that he stay in the Caloocan property of respondent LCP. It is on record that the spouses Bañes are now staying in another property owned by the LCP in Caloocan City without paying rent. It can be said, therefore, that they have lost their cause of action to ask for restitution having transferred, as they have requested, to another property of LCP without paying any rentals.

There is forcible entry or desahucio when one is deprived of physical possession of land or building by means of force, intimidation, threat, strategy or stealth. In such cases, the

possession is illegal from the beginning and the basic inquiry centers on who has the prior possession de facto. In filing forcible entry cases, the law tells us that two allegations are mandatory for the municipal court to acquire jurisdiction: first, the plaintiff must allege prior physical possession of the property, and second, he must also allege that he was deprived of his possession by any of the means provided for in Section 1, Rule 70 of the Rules of Court i.e., by force, intimidation, threat, strategy or stealth.[48] It is also settled that in the resolution thereof, what is important is determining who is entitled to the physical possession of the property.Indeed, any of the parties who can prove prior possession de facto may recover such possession even from the owner himself since such cases proceed independently of any claim of ownership and the plaintiff needs merely to prove prior possession de facto and undue deprivation thereof.

In order to constitute force that would justify a forcible entry case, the trespasser does not have to institute a state of war. The act of going to the property and excluding the lawful possessor therefrom necessarily implies the exertion of force over the property which is all that is necessary and sufficient to show that the action is based on the provisions of Section 1, Rule 70 of the Rules of Court.

16. Serina v. Caballero (ART. 540)

FACTS:

Petitioner filed a complaint for quieting of title, recovery of possession, and damages against respondent Caballero. When petitioner died, he was substiuted by his children and they alleged that they are the absolute owners and have been in actual and constructive possession for thirty-five (35) years of a parcel of land. Sometime in 1982, they discovered that respondent was claiminh ownership over the said land and was offering it for sale to 3rd parties and caretakers and tenants have been occupying the land. Petitioners bought the lot from Marbella who inherited it from her father. They presented a deed of Sale and the Tax Declaration. The respondet alleged that he is lawful owner and had been in actual possession of the land since time immemorial, the said land is originally owned by his grandfather, Eustaqio Caballero.

The boundaries of Serina’s lot:The boundaries of Caballero’s lot:

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North- Alejo SeriñaNorth- Rustico Dablio

South- T. SabornidoSouth- Victor Obsioma

East- A. Seriña & T. SabornidoEast- J. Serina & T. Saburnido

West- F. CaballeroWest- Victorino Caballero

RTC- in favor of respondents; Caballero is the absolute and lawful owner and possessor of the land in question. It was not clearly shown that the land bought by Dr. Seriña from Marbella was the same land owned by Victor Caballero, and that the petitioners failed to show that Marbella bought the land from Eustaquio Caballero, the original owner and cadastral claimant of the land. It also noted that the deed of sale between Marbella and Dr. Seriña showed that the land had an area of 5 hectares, whereas, the petitioners only claimed 2.5 hectares. Furthermore, the boundaries of the land stated in the complaint did not coincide with what was stated in the Deed of Sale, or in Tax Declaration No. 2442 in the name of Eustaquio Caballero.

CA- affirmed

ISSUES: (1) W/N the petitioners were able to establish the identityo of the disputed land (2) W/N the acquisitive prescription should be appreciated in favor of the petitioners.

RULING:

(1) No. The CA was correct in concluding that the petitioners failed to establish that the parcel of land in the possession of the respondents is the same as that subject of their complaint. The CA noted that the land subject of the complaint has boundaries different from the land in possession of the respondents. In fact, the land described in the complaint appears to be different from the land described in the Deed of Sale which the petitioners invoke as the basis of their ownership. The complaintof the petitioners states that the property they are claiming has an area of 2.5 hectares. On the other hand, the Deed of Sale provides that the subject property has an area of 5 hectares. The complaint alleged that the property is located in “Mantadiao, Opol, Misamis Oriental,” while the Deed of Sale shows that the property purchased is located in “Puntakon, Igpit, Cagayan Or. Misamis.”

The failure to establish the identity of the land is obviously fatal to the petitioners’ case. Proof of ownership coupled with identity of the land is the basic rule.Corollarily, the rule is

likewise well-settled that in order that an action for recovery of possession may prosper, it is indispensable that he who brings the action fully proves not only his ownership but also the identity of the property claimed, by describing the location, area and boundaries thereof. As the appellate court succinctly stated, he who claims to have a better right to the property must clearly show that the land possessed by the other party is the very land that belongs to him.

(2) No. CA ruled that inasmuch as the petitioners failed to establish that the parcel of land in possession of the respondents is the same as the subject of their complaint, their claim of acquisitive prescription is clearly untenable. Since the property has not been clearly identified by the petitioners, their claim of acquisitive prescription cannot be considered. Insufficient identification of the portion of land claimed in absolute ownership cannot ripen into ownership. Possession as a means of acquiring ownership, while it may be constructive, is not a mere fiction.

18. Beltran vs. Soriano

FACTS:

By a notarial instrument executed and ratified on October 1911, Feliciano de la Rosa, the husband of Rosario Lim, sold outright and in perpetuity a parcel of mangrove swamp land, situated in the barrio of Santa Cruz, pueblo of Lubao, Pampanga, the situation and boundaries of which are set forth in the instrument, to Doroteo Guintu and his wife Modesta Beltran, for the sum of P2,000, the vendor transferring to the vendees the dominion, possession and ownership of the said land free of all charge and encumbrance, as shown by the records of the property registry and of the Bureau of Forestry. This instrument was presented in evidence as Exhibit A.

In the document Exhibit B it appears Feliciana Doriano, the widow of the late Francisco de la Rosa, their children Maria de la Rosa (accompanied by her husband, Leonardo Fernandez) and Feliciano de la Rosa, both of legal age, and Eugenio Fernandez, guardian of the minor Ramon de la Rosa, have declared that the said deceased, Francisco de la Rosa, husband and father of the deponents, left at his death property consisting mostly of mangrove swamp land which has not yet been judicially petitioned; but in the proceedings for the settlement of his estate, pending in the court of that province, there was presented a proposed partition which, up to the 30th of March, 1912, had not yet been approved, and which set forth that there had been awarded to Maria de la Rosa, as her share of the estate, the mangrove swamp land situated in

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Gumi or Calangain, as specifically described in the deed of sale executed by her on the same date in behalf of Modesta Beltran and ratified before the notary Esteban Victorio. In the same proposed partition there was adjudicated to Feliciano de la Rosa, likewise as a part of his share in the estate, another parcel of mangrove swamp land, the description of which is given in the deed of sale executed in turn by him in behalf of the spouses Doroteo Guintu and Modesta Beltran and ratified on October 6, 1911. The heirs of the deceased De la Rosa agreed to recognize these sales as valid and effective as though the hereditary property had been judicially partitioned and the said lands legally adjudicated to the vendors who alienated them and they furthermore waived all the rights they might have therein. The said deed was ratified before a notary by the makers of the instrument.

By the mere fact of the death of the husband, his children and heirs, together with their mother, by operation, of law succeeded him in the dominion, property and possession of the land and its improvements, for, from the moment Doroteo Guintu died, though survived by his widow, the rights to the succession of their deceased father were thereby transmitted to his children, since the latter, as his forced heirs, succeeded him in all his rights and obligations. (Arts. 657 and 661, Civil Code).

RULING:

There is no provisions of law whatever which prohibits a co-heir from selling his share of the estate, or legal portion, to a stranger, before the partition of the hereditary property is approved by the court, for article 1067 of the Civil Code prescribes: "If any of the heirs should sell his hereditary rights to a stranger before the division, all or any of the co-heirs may subrogate themselves in the place of the purchaser, reimbursing him for the value of the purchase, provided they do so within the period of a month, to be counted from the time they were informed thereof." .

Still more: section 762 of the Code of Civil Procedure contains among others the following provisions: "Such partition may be made although some of the original heirs or devisees have conveyed their shares to other persons; and such shares shall be set to the persons holding the same as they would have been to the heirs or devisees." .

In law, the rule governing property held by various co-owners in common is analogous to that which obtains where the estate of a deceased person is held pro indiviso by several co-

participants, for, pursuant to article 450 of the Civil Code, "each one of the participants in a thing possessed in common is considered as having exclusively possessed the part which may be alloted to him on the distribution for the entire period during which there is no division." .

The provisions of this article appear to be confirmed by that contained in article 1068 of the Civil Code. Feliciano de la Rosa could, therefore, lawfully sell the said land in question as a part of his share of the estate, even before the approval of the proposed partition of the property, which his father, Francisco de la Rosa, left at his death and besides, apart from this, the sale made by him appears to have been expressly recognized by himself and his co-heirs as well as by his mother, Feliciana Doriano, in Exhibit B.

As the defendants legally alienated the land by absolute sale to the plaintiffs and received the price thereof, they can never justify the seizure, made with manifest bad faith, of the products of the said land which no longer belongs to them.

For the foregoing reasons, whereby the errors assigned to the judgment appealed from are deemed to have been refuted, and holding the said judgment to be in conformity with law and the merits of the case, we must, as we do hereby, affirm the same, with the costs against the appellants. So ordered.

19. Arzadon-Crisolog v. Ranon (ART. 543)

FACTS:

According toRañon, 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 Rañon, 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 Rañon’s title and ownership over the subject property.

The spouses Montemayor, for their part, alleged that they acquired the subject lot by purchase from Leticia del Rosario

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and Bernardo Arzadon who are the heirs of its previous owners for a consideration of P100,000.00.

The Heirs of Marcelina Arzadon-Crisologo, (represented by Leticia A. Crisologo del Rosario), Mauricia Arzadon, and Bernardo Arzadon (petitioners) filed an Answer in Intervention 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 Rañon; and that no person, other than they and the spouses Montemayor, has an interest in the property as owner or otherwise.

ISSUES:

(1) W/N the Notice of Adverse Claim filed by the petitioners constitute an effective interruption since 1962 of respondents possession of the subject property; and

(2)W/N the respondents had acquired ownership over the subject property through uninterrupted and adverse possession for 30 years, without need of title or of good faith

RULING:

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.

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.They constitute at least proof that the holder has a claim of title over the property.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.

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. (Ramos v. Dir. Of Lands)

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.

Respondents occupied without interruption the subject property in the concept of an owner, thereby acquiring ownership via extraordinary acquisitive prescription.

20. Daclag vs. Macahilig-Decision (Articles 528 and 544)

FACTS:

This case pertains to the petitioners' Motion for Reconsideration on the SC’s decision dated July 28, 2008 where the court affirmed the Decision dated October 17, 2001 and the Resolution dated August 7, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 48498.

In their Motion for Reconsideration, petitioners contend that the 10-year period for reconveyance is applicable if the action is based on an implied or a constructive trust; that since respondents' action for reconveyance was based on fraud, the action must be filed within four years from the discovery of the fraud.

Petitioners next contend that they are possessors in good faith, thus, the award of damages should not have been imposed. They further contend that under Article 544, a possessor in good faith is entitled to the fruits received before the possession is legally interrupted; thus, if indeed petitioners are jointly and severally liable to respondents for the produce of the subject land, the liability should be reckoned only for 1991 and not 1984.

ISSUE:

W/N the petitioners are possessors in good faith.

HELD:

The Court find partial merit in the petitioner’s argument.

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Article 528 of the Civil Code provides that possession acquired in good faith does not lose this character, except in a case and from the moment facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongfully. Possession in good faith ceases from the moment defects in the title are made known to the possessors, by extraneous evidence or by suit for recovery of the property by the true owner. Whatever may be the cause or the fact from which it can be deduced that the possessor has knowledge of the defects of his title or mode of acquisition, it must be considered sufficient to show bad faith. Such interruption takes place upon service of summons.

Futher, the Court also cited Article 544 of the same Code provides that a possessor in good faith is entitled to the fruits only so long as his possession is not legally interrupted. Records show that petitioners received a summons together with respondents' complaint on August 5, 1991, thus, petitioners' good faith ceased on the day they received the summons. Consequently, petitioners should pay respondents 10 cavans of palay per annum beginning August 5, 1991 instead of 1984.

21. Daclag vs. Macahilig (Resolution)

Facts:

Records show that while the land was registered in the name of petitioner Rogelia in 1984, respondents’ complaint for reconveyance was filed in 1991, which was within the 10-year prescriptive period.

Petitioners contend that the 10-year period for reconveyance is applicable if the action is based on an implied or a constructive trust; that since respondents' action for reconveyance was based on fraud, the action must be filed within four years from the discovery of the fraud

Petitioners next contend that they are possessors in good faith, thus, the award of damages should not have been imposed. They further contend that under Article 544, a possessor in good faith is entitled to the fruits received before the possession is legally interrupted; thus, if indeed petitioners are jointly and severally liable to respondents for the produce of the subject land, the liability should be reckoned only for 1991 and not 1984.

Finally, petitioner would like this Court to look into the finding of the RTC that “since Maxima died in October 1993, whatever charges and claims petitioners may recover from her expired

with her”; and that the proper person to be held liable for damages to be awarded to respondents should be Maxima Divison or her estate, since she misrepresented herself to be the true owner of the subject land.

RULING:

1.) In Caro v. Court of Appeals,[3] we have explicitly held that “the prescriptive period for the reconveyance of fraudulently registered real property is 10 years reckoned from the date of the issuance of the certificate of title x x x.”[4]

However, notwithstanding petitioners' unmeritorious argument, the Court deems it necessary to make certain clarifications. We have earlier ruled that respondents' action for reconveyance had not prescribed, since it was filed within the 10-year prescriptive period.

However, a review of the factual antecedents of the case shows that respondents' action for reconveyance was not even subject to prescription.

2.) Article 528 of the Civil Code provides that possession acquired in good faith does not lose this character, except in a case and from the moment facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongfully. Possession in good faith ceases from the moment defects in the title are made known to the possessors, by extraneous evidence or by suit for recovery of the property by the true owner. Whatever may be the cause or the fact from which it can be deduced that the possessor has knowledge of the defects of his title or mode of acquisition, it must be considered sufficient to show bad faith.[8] Such interruption takes place upon service of summons.[9]

Article 544 of the same Code provides that a possessor in good faith is entitled to the fruits only so long as his possession is not legally interrupted. Records show that petitioners received a summons together with respondents' complaint on August 5, 1991;[10] thus, petitioners' good faith ceased on the day they received the summons. Consequently, petitioners should pay respondents 10 cavans of palay per annum beginning August 5, 1991 instead of 1984.

3.) Notably, petitioners never raised this issue in their appellants' brief or in their motion for reconsideration filed before the CA. In fact, they never raised this matter before us when they filed their petition for review. Thus, petitioners cannot raise the same in this motion for reconsideration

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without offending the basic rules of fair play, justice and due process, specially since Maxima was not substituted at all by her heirs after the promulgation of the RTC Decision.

WHEREFORE, petitioners’ Motion for Reconsideration is PARTLY GRANTED. The Decision of the Court of Appeals dated July 28, 2008 is MODIFIED only with respect to prescription as discussed in the text of herein Resolution, and the dispositive portion of the Decision is MODIFIED to the effect that petitioners are ordered to pay respondents 10 cavans of palay per annum beginning August 5, 1991 instead of 1984.

22. Florentino v. Supervalue (ART. 546)

FACTS:

Petitioner is doing business under the business name “Empanada Royale,” a sole proprietorship engaged in the retail of empanada with outlets in different malls and business establishments within Metro Manila. While Respondent, on the other hand, is a domestic corporation engaged in the business of leasing stalls and commercial store spaces located inside SM Malls found all throughout the country. On 1999, they executed 3 Contracts of Lease for cart- type stalls in SM North Edsa and SM Southmall and a store space in SM Megamall. The period of the contract is 4 months and may be renewed upon their agreement. Petitioner received two letters from the respondent, in the first letter, was charged with violating the Contracts of Lease by not opening their stalls and store space in two days, selling a new variety of empanada called “mini-embutido” and of increasing the price of her merchandise without prior approval of the respondent and also, that petitioner was frequently closing earlier than the usual mall hours. While on the 2nd letter, it informed the petitioner that it will no longer renew the Contracts of Lease upon expiration.

Petitioner explained that the mini embutido is not a new variety of empanada, only its size was reduced. Notwithstanding petitioner’s explanation, respondent took possession of the store space in SM Megamall and confiscated the equipment and personal belongings of the petitioner found therein after the expiration of the lease contract. Petitioner demanded the return of the seized equipment and personal belongings and to return the security deposits. Petitioner then filed an action for Specific Performance against the respondent before the RTC.

Petitioner alleged that the respondent made verbal

representations that the Contracts of Lease will be renewed from time to time and, through the said representations, the petitioner was induced to introduce improvements upon the store space at SM Megamall in the sum of P200k. Respondent claimed that the seizure of petitioner’s personal belongings and equipment was in the exercise of its retaining lien, considering that the petitioner failed to settle the said obligations up to the time the complaint was filed.

RTC- in favor of petitioner; physical takeover and the seizure of the equipment and personal belongings withour prior notice was illegal.

CA- modified; the respondent was justified in forfeiting the security deposits and was not liable to reimburse the value of the improvements introduced; but maintaned to return to petitioner her properties after she has settled her obligations to the respondent.

ISSUE:

W/N respondent is liable to reimburse the petitioner for the sum of the improvements she introduced in the leased premises.

RULING:

No. The Contract of Lease executed by the parties, it mandated that before the petitioner can introduce any improvement on the leased premises, she should first obtain respondent’s consent. In the case at bar, it was not shown that petitioner previously secured the consent of the respondent before she made the improvements on the leased space in SM Megamall.

To be entitled to reimbursement for improvements introduced on the property, the petitioner must be considered a builder in good faith. Further, Articles 448 and 546 of the Civil Code, which allow full reimbursement of useful improvements and retention of the premises until reimbursement is made, apply only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. A builder in good faith is one who is unaware of any flaw in his title to the land at the time he builds on it. In this case, the petitioner cannot claim that she was not aware of any flaw in her title or was under the belief that she is the owner of the subject premises for it is a settled fact that she is merely a lessee thereof.

Being mere lessees, the private respondents knew that their occupation of the premises would continue only for the life of the lease. Plainly, they

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cannot be considered as possessors nor builders in good faith.

In a plethora of cases, this Court has held that Article 448 of the Civil Code, in relation to Article 546 of the same Code, which allows full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. It does not apply where one's only interest is that of a lessee under a rental contract; otherwise, it would always be in the power of the tenant to "improve" his landlord out of his property. (Geminiano v. Court of Appeal)

23. Ramel vs. Aquino (Articles 546 and 547)

FACTS:

Daniel Aquino is the registered owner of Lot No. 2080. On October 21, 1975, Aquino mortgaged the property to the Development Bank of the Philippines (DBP). In 1983, the property was in danger of being foreclosed as respondents had no means to pay for the loan. Thus, on August 7, 1983, they offered to sell to petitioners 8.2030 hectares of the mortgaged property.

Petitioners agreed to purchase the property but the agreement was not reduced into writing. Petitioners were to buy the 8.2030 hectares at P13,500.00 per hectare or at a total sum of around P110,700.00. Petitioners would assume the remaining mortgage obligation of respondents with DBP as of July 31, 1983 in the amount ofP85,543.00 and the balance of about P25,000.00 shall be paid to respondents on installment.

Respondents also sold to petitioners 2,484 square meters of the southern portion of the mortgaged property for P2,700.00. Petitioners paid the full amount on September 7, 1983. On even date, petitioners were allowed by respondents to take possession of the parcels of land sold. Since then, they allegedly introduced improvements to the property, such as rice paddies, drainage canal, fence and a house.

RTC ruled that both parties failed to prove their claims through any receipt or document. Despite the lack of proof, the trial court ordered that whatever improvements spent on the land shall be offset from the fruits derived therefrom.

CA- Affirmed.

On appeal, the petitioners claim that the offsetting of claims is erroneous citing Articles 546 and 547 of the Civil Code. Under these provisions, petitioners argue that as possessors in good faith and in the concept of an owner, they are entitled to the fruits received before possession was legally interrupted and they must be reimbursed for their expenses or for the increase in the value the subject property may have acquired by reason thereof.

ISSUE:

Whether or not there is a legal ground to order the offsetting of the claim of improvements by petitioners to the claim of fruits derived from the land by respondents.

HELD:

NO. The court ruled that it cannot order an offsetting of the claims. The evidence show that both parties failed to prove their respective claims. In the absence of evidence from both parties on their claims, offsetting is improper. The right to offset may exist but the question of how much is to be offset is factual in nature and needs to be proved by proper evidence.

24. Cosio vs. Palileo

FACTS:

Plaintiff obtained from defendant a loan in the sum of P12,000.

To secure the payment of the aforesaid loan, defendant required plaintiff to sign a document known as “Conditional Sale of Residential Building”, purporting to convey to defendant, with right to repurchase, a two-story building of strong materials belonging to plaintiff. This document did not express the true intention of the parties which was merely to place said property as security for the payment of the loan.

After the execution of the aforesaid document, defendant insured the building against fire for the sum of P15,000, the insurance policy having been issued in the name of defendant. The building was partly destroyed by fire and, after proper demand, defendant collected from the insurance company an indemnity of P13,107.00. Plaintiff demanded from defendant that she be credited with the necessary amount to pay her obligation out of the insurance proceeds but defendant refused to do so.

ISSUE: WON a mortgagor is entitled to the insurance proceeds of the mortgaged property independently insured by the mortgagee? What is the effect of the insurance?

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HELD: NO. The rule is that “where a mortgagee, independently of the mortgagor, insures the mortgaged property in his own name and for his own interest, he is entitled to the insurance proceeds in case of loss, but in such case, he is not allowed to retain his claim against the mortgagor, but is passed by subrogation to the insurer to the extent of the money paid.” (Vance on Insurance, 2d ed., p. 654) Or, stated in another way, “the mortgagee may insure his interest in the property independently of the mortgagor. In that event, upon the destruction of the property the insurance money paid to the mortgagee will not inure to the benefit of the mortgagor, and the amount due under the mortgage debt remains unchanged. The mortgagee, however, is not allowed to retain his claim against the mortgagor, but it passes by subrogation to the insurer, to the extent of the insurance money paid.”

25. Castellano v. Francisco (ART. 555)

FACTS:

Spouses (Sps.) Francisco had been in possession of the disputed land herein since 1955. Pursuant to PD No. 27, Respondent Francisco was issued a Certificate of Land Transfer. Sps. Francisco borrowed P50k from petitioner Castellano, in return, Castellano would cultivate and possess the property until full payment of the loan, and this agreement was not reduced in writing. According to sps. Francisco, when they offered to pay, petitioner refused to accept the payment. Sps. Francisco later learned that Castellano was able to secure an Emancipation Patent and a TCT in the name of Erlaine, Castellano's son.

Sps. Francisco filed a petition for cancellation of Erlaine's emancipation patent before the DARAB. Sps. Francisco claimed that ownership of the lot was transferred in Erlaine's name without their knowledge and consent. In their answer, the Castellanos stated that spouses Francisco later informed them that they would no longer redeem the land.

Regional Adjudicator- in favor of Castellano, Sps. Francisco committed a breach of obligation when they sold their tenancy rights to the Castellanos. They abandoned their land.

DARAB- affirmed; sps. Francisco surrendered their possessory right over the land in exchange for P50k and physically abandoned the land. With the issuance of Erlaine's emancipation patent, Erlaine had a superior right over spouses Francisco, who were mere holders of a certificate of land transfer.

CA- reversed DARAB’s ruling; spouses Francisco did not abandon the property. The Court of Appeals said that spouses Francisco only surrendered possession of the property to the Castellanos during the period of the loan, on the condition that upon extinguishment of the obligation, possession shall revert back to spouses Francisco.

ISSUE:

W/N Sps. Francisco abandoned their rights over the land.

RULING:

Sps. Francisco did not abandon the land. The Court of Appeals stated that abandonment requires (1) a clear and absolute intention to renounce a right or a claim or to abandon a right or property; and (2) an external act by which that intention is expressed or carried into effect. The intention to abandon implies a departure, with the avowed intent of never returning, resuming or claiming the right and the interest that have been abandoned.

In this case, there was no showing that spouses Francisco had a clear, absolute or irrevocable intent to abandon the land. Spouses Francisco's surrender of possession did not amount to abandonment because there was an obligation on the part of Eugenia to return possession of the land to spouses Francisco upon full payment of the loan.

26. EDCA Publishing & Distributing Corporation vs. Sps Santos (Article 559)

FACTS:

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

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

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

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

ISSUE:

Whether or not the EDCA was unlawfully deprived of the property?

HELD:

NO. With regard to unlawful deprivation, EDCA was not unlawfully deprived of the property by mere failure of consideration. There was already a perfected contract of sale. Proof was even substantiated when EDCA gave the invoice as proof of payment upon delivery of the books. This did not amount to unlawful taking, because by the delivery of EDCA to Cruz, ownership of the books already transferred to him.

On the petitioner’s contention that the private respondents have not established their ownership of the disputed books because they have not even produced a receipt to prove they had bought the stock. The Supreme Court cited Article 559 of the Civil Code which provides that “possession of movable property acquired in good faith is equivalent to title, “thus dispensing with further proof.

27. Edu vs. Gomez

FACTS:

The car in question legally belongs to Lt. Walter A. Bala under whose name it is originally registered at Angeles City Land Transportation Commission Agency; that it was stolen from him and, upon receipt by the Land Transportation Commissioner of the report on the theft case and that the car upon being recognized by the agents of the ANCAR in the possession of private respondent Lucila Abello, said agents seized the car and impounded it as stolen vehicle.

On February 15, 1971, herein private respondent Lucila Abello filed a complaint for replevin with damages.

HELD:

There is no merit in the petition considering that the acquirer or the purchaser in good faith of a chattel of movable property is entitled to be respected and protected in his possession as if he were the true owner thereof until a competent court rules otherwise. In the meantime, as the true owner, the possessor

in good faith cannot be compelled to surrender possession nor to be required to institute an action for the recovery of the chattel, whether or not an indemnity bond is issued in his favor. The filing of an information charging that the chattel was illegally obtained through estafa from its true owner by the transferor of the bona fide possessor does not warrant disturbing the possession of the chattel against the will of the possessor.

Finally, the claim of petitioners that the Commission has the right to seize and impound the car under Section 60 of Republic Act 4136 which reads:

Sec. 60. The lien upon motor vehicles. Any balance of fees for registration, re-registration or delinquent registration of a motor vehicle, remaining unpaid and all fines imposed upon any vehicle owner, shall constitute a first lien upon the motor vehicle concerned.

is untenable. it is clear from the provision of said Section 60 of Republic Act 4136 that the Commissioner's right to seize and impound subject property is only good for the proper enforcement of lien upon motor vehicles. The Land Transportation Commission may issue a warrant of constructive or actual distraint against motor vehicle for collection of unpaid fees for registration, re-registration or delinquent registration of vehicles.

28. Dizon- Pamintuan v. People (ART. 559)

FACTS:

A crime of robbery has been committed on February 12, 1988. The robbers took away jewelries and other personal properties including cash. The owner, Encarnacion, immediately reported the matter to the police. He was later told that some of the lost items were in Chinatown area as tipped by the informer the police had dispatched. That an entrapment would be made with their participation, on February 14, 1988. As such, they went to Camp Crame at around 9:00 a.m. and arrived at the vicinity of 733 Florentino Torres Street, Sta. Cruz, Manila at about 10:00 a.m.; that he is with his wife posed as a buyer and were able to recognize items of the jewelry stolen displayed at the stall being tended by Norma Dizon Pamintuan; the pieces were: 1 earring and ring studded with diamonds worth P75,000 bought from estimator Nancy Bacud (Exh. "C-2"), 1 set of earring diamond worth P15,000 (Exh. "C-3") and 1 gold chain with crucifix worth P3,000 (Exh. "C-4").

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ISSUE:

W/N Dizon-Pamintuan knew or should have known that the items recovered frm her were the proceeds of the crime of robbery or theft

RULING:

Yes. One is deemed to know a particular fact if he has the cognizance, consciousness or awareness thereof, or is aware of the existence of something, or has the acquaintance with facts, or if he has something within the mind's grasp with certitude and clarity.When knowledge of the existence of a particular fact is an element of an offense, such knowledge is established if a person is aware of a high probability of its existence unless he actually believes that it does not exist.On the other hand, the words "should know" denote the fact that a person of reasonable prudence and intelligence would ascertain the fact in performance of his duty to another or would govern his conduct upon assumption that such fact exists.Knowledge refers to a mental state of awareness about a fact. Since the court cannot penetrate the mind of an accused and state with certainty what is contained therein, it must determine such knowledge with care from the overt acts of that person. And given two equally plausible states of cognition or mental awareness, the court should choose the one which sustains the constitutional presumption of innocence.

Since Section 5 of P.D. No. 1612 expressly provides that "[m]ere possession of any good, article, item, object, or anything of value which has been the subject of robbery or thievery shall be prima facie evidence of fencing," it follows that the petitioner is presumed to have knowledge of the fact that the items found in her possession were the proceeds of robbery or theft. The presumption is reasonable for no other natural or logical inference can arise from the established fact of her possession of the proceeds of the crime of robbery or theft.

29. Rivera vs. Vargas (Articles 527 and 539)

FACTS:

Respondent Vargas filed a complaint against petitioner and several John Does for the recovery of a 150 T/H rock crushing plant located in Sariaya, Quezon. Vargas claims ownership of the said equipment, having purchased and imported the same directly from Hyun Dae Trading Co. The equipment was allegedly entrusted to petitioner’s husband, Jan T. Rivera, who

died sometime in late 2002, as caretaker of respondent’s construction aggregates business in Batangas. According to Vargas, petitioner failed to return the said equipment after her husband’s death despite his repeated demands, thus forcing him to resort to court action.The complaint was accompanied by a prayer for the issuance of a writ of replevin and the necessary bond amounting to P2,400,000.00.

The writ of replevin was served upon and signed by a certain Joseph Rejumo, the security guard on duty in petitioner’s crushing plant in Sariaya, Quezon on April 29, 2003, contrary to the sheriff’s return stating that the writ was served upon Rivera.

Petitioner countered that the rock-crushing plant was ceded in favor of her husband as his share following the dissolution of the partnership formed between Jan Rivera and respondent’s wife, Iluminada Vargas (Iluminada), on May 28, 1998, while the partnership’s second rock-crushing plant in Cagayan was ceded in favor of Iluminada. She further averred that from the time that the partnership was dissolved sometime in 2000 until Jan Rivera’s death in late 2002, it was petitioner’s husband who exercised ownership over the said equipment without any disturbance from respondent.

ISSUE:

Whether or not the writ of replevin is improperly served.

HELD:

YES. Replevin is both a form of principal remedy and of provisional relief. It may refer either to the action itself, i.e., to regain the possession of personal chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and to hold it pendente lite. The action is primarily possessory in nature and generally determines nothing more than the right of possession.

The law presumes that every possessor is a possessor in good faith. He is entitled to be respected and protected in his possession as if he were the true owner thereof until a competent court rules otherwise. Before a final judgment, property cannot be seized unless by virtue of some provision of law. The Rules of Court, under Rule 60, authorizes such seizure in cases of replevin. However, a person seeking a remedy in an action for replevin must follow the course laid down in the statute, since the remedy is penal in

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nature.34 When no attempt is made to comply with the provisions of the law relating to seizure in this kind of action, the writ or order allowing the seizure is erroneous and may be set aside on motion by the adverse party.

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