G.R. No. L-11658 Case Digest

G.R. No. L-11658, February 15, 1918

Leung Yee

vs Frank L. Strong Machinery Company and J.G/ Williamson

Ponente: Carson

Facts:

"Compania Agricola Filipina" bought a quantity of rice-cleaning machinery company from Strong Machinery and executed a chattel mortgage thereon to secure payment of the purchase price. It include the building of strong materials in which the mahinery is installed without reference to the land it stood. The debt was not paid, and the mortgage property was sold by the sheriff.

Few weeks after, Compania executed a deed of slae of the land upon which the building stood but it was not registered. On the other hand, Yee, another creditor of CAF who engaged in the construction of the building, being the highest bidder in an auction conducted by the sheriff, purchased the same building where the machines were installed. Apparently CAF was also executed a chattel mortgage in favor Yee. Yee registered the sale in the registry of land. Yee was however aware that prior to his buying, the property has been sold in favor of SMCo – evidence is the chattel mortgage already registered by SMCo.

Issue: To whom the ownership of the building belongs to?

Held:

But it appearing that Yee had full knowledge of the machinery company's claim of ownership when he executed the indemnity bond and bought in the property at the sheriff's sale, and it appearing further that the machinery company's claim of ownership was well founded, he cannot be said to have been an innocent purchaser for value.

He took the risk and must stand by the consequences; and it is in this sense that we find that he was not a purchaser in good faith. One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or of an interest therein; and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor.

Art. 1473 of the New Civil Code provides the following rules on determining ownership of property which has been sold to different vendees:

If Personal Property – grant ownership to person who 1st possessed it in good faith

If Real Property – grant ownership to person who 1st recorded it in the Registry

If no entry – grant to person who 1st possessed in good faith

If no proof of possession – grant to person who presents oldest title

G.R. No. L-26278 Case Digest

G.R. No. L-26278, August 4, 1927

Leon Sibal

vs Emiliano Valdez et al.

Ponente: Johnson

Facts:

Sibal alleged that Mamawal, deputy sheriff of Tarlac attached and sold to Valdez the sugar cane planted by Sibal on several parcels of land. Valdez refused to returned the cane and money to Sibal. As 2nd cause of action, Sibal alleged that Valdez was attempting to harvest the palay planted in four of the seven parcels of land mentioned. The court after hearing both parties, issued the writ of preliminary injunction prayed for in the complaint.

The defendant Emiliano J. Valdez, in his amended answer, denied generally and specifically each and every

allegation of the complaint and step up the following defenses:

(a) That the sugar cane in question had the nature of personal property and was not, therefore, subject to redemption;

(b) That he was the owner of parcels 1, 2 and 7 described in the first cause of action of the complaint;

(c) That he was the owner of the palay in parcels 1, 2 and 7; and

(d) That he never attempted to harvest the palay in parcels 4 and 5. After hearing the evidence, Judge Lukban rendered in favor of the defendants.

Issue:

(1) Whether the sugar cane is personal or real property?

Held:

It is contended that sugar cane comes under the classification of real property as "ungathered products" in paragraph 2 of article 334 of the Civil Code. Said paragraph 2 of article 334 enumerates as real property the following: Trees, plants, and ungathered products, while they are annexed to the land or form an integral part of any immovable property." That article, however, has received in recent years an interpretation by the Tribunal Supremo de España, which holds that, under certain conditions, growing crops may be considered as personal property.

In some cases "standing crops" may be considered and dealt with as personal property. In the case of Lumber Co. vs. Sheriff and Tax Collector (106 La., 418) the Supreme Court said: "True, by article 465 of the Civil Code it is provided that 'standing crops and the fruits of trees not gathered and trees before they are cut down . . . are considered as part of the land to which they are attached, but the immovability provided for is only one in abstracto and without reference to rights on or to the crop acquired by others than the owners of the property to which the crop is attached. . . . The existence of a right on the growing crop is a mobilization by anticipation, a gathering as it were in advance, rendering the crop movable quoad the right acquired therein. Our jurisprudence recognizes the possible mobilization of the growing crop."

For the purpose of attachment and execution, and for the purposes of the Chattel Mortgage Law, "ungathered products" have the nature of personal property. SC lowered the award for damages to the defendant to 8,900.80 by acknowledging the fact that some of the sugar canes were owned by the petitioner and by reducing the calculated expected yield or profit that defendant would have made if petitioner did not judicially prevent him from planting and harvesting his lands.

G.R. No. 186639 Case Digest

G.R. No. 186639, February 5, 2014

Republic of the Philippines

vs Emmanuel Cortez

Ponente: Reyes

Facts:

This is a petition for review on certiorari seeking to annul and set aside the decision of CA.

February 2003, Cortez filed with RTC an application for judicial confirmation over a parcel of land in Manila. He submitted tax declarations from 1966 to 2005, survey plan of the property with the annotation that it is alienable and disposable and other documents.

Cortez alleged that the tax declarations were under the name of his mother from which he inherited the land. A testimony was also submitted saying that the family of Cortez have in fact occupied the land for over 60 years. RTC granted Cortez the application for registration of the title.

After its finality, RP, represented by Solicitor General appealed to the CA alleging that RTC erred in granting the application for registration. Pointing out that there was no evidence the Cortez were in possession of the subject land in open, adverse and continuous possession of the property for more than 30 years. CA dismissed the appeal and affirmed the decision of the RTC.

Issue: Whether CA erred in affirming the RTC?

Held:

Petition is meritorious.

Applicants for original registration of title to land must establish compliance with the provisions of Section 14 of

P.D. No. 1529, which pertinently provides that: Sec. 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:

(1) Those who by themselves or through their predecessors-in interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

(2) Those who have acquired ownership of private lands by prescription under the provision of existing laws.

x x x x

After a careful scrutiny of the records of this case, the Court finds that Cortez failed to comply with the legal requirements for the registration of the subject property under Section 14(1) and (2) of P.D. No. 1529.

The 1st requirement was not satisfied, the survey plan does not constitute incontrovertible evidence to overcome the presumption that the subject property remains part of the alienable public domain. To prove that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order, an administrative action, investigation reports of Bureau of Lands investigators, and a legislative act or statute. The applicant may also secure a certification from the Government that the lands applied for are alienable and disposable.

The Court nevertheless emphasized that there must be an official declaration by the State that the public dominion property is no longer intended for public use, public service, or for the development of national wealth before it can be acquired by prescription; that a mere declaration by government officials that a land of the public domain is already alienable and disposable would not suffice for purposes of registration under Section 14(2) of P.D. No. 1529. The Court further stressed that the period of acquisitive prescription would only begin to run from the time that the State officially declares that the public dominion property is no longer intended for public use, public service, or for the development of national wealth.

Note: properties classified as alienable and disposable land may be converted into private property by reason of open, continuous and exclusive possession of at least 30 years. Such property now falls within the contemplation of "private lands" under Section 14(2) of PD 1529, over which title by prescription can be acquired. Thus, under the second paragraph of Section 14 of PD 1529, those who are in possession of alienable and disposable land, and whose possession has been characterized as open, continuous and exclusive for 30 years or more, may have the right to register their title to such land despite the fact that their possession of the land commenced only after 12 June 1945.

G.R. No. L-17500 Case Digest

G.R. No. L-17500, May 16, 1967

People's Bank and Trust Co. and Atlantic Gulf and Pacific Co. of Manila

vs Dahican Lumber Company, Dahican American Lumber Corporation and Connell Bros. Co.

Ponente: Dizon

Facts:

September 1948, Atlantic, a West Virginia corporation licensed to do business in the Philippines sold and assigned all its rights in the Dahican Lumber concession to Dahican Lumber Company. To fully paid and develop the concession, DALCO obtained a loan from the bank evidence by 5 promissory notes of $50K maturing on different dates.

As security for the payment of loans, DALCO mortgage five lands in Camarines Norte together with the buildings existing thereon and other personal properties located in its place of business. Another mortgage on the same properties was made in favor of Atlantic to secure the payment of the unpaid balance.

Upon DALCO's and DAMCO's failure to pay the fifth promissory note upon its maturity, the BANK paid the same to the Export-Import Bank of Washington D.C. and the latter assigned to the former its credit and the first mortgage securing it. Subsequently, the BANK gave DALCO and DAMCO up to April 1,1953 to pay the overdue promissory note. DALCO purchased various machineries, equipment, spare parts and supplies in addition to, or in replacement of some of those already owned and used by it on the date aforesaid. Pursuant to the provision of the mortgage deeds quoted heretofore regarding "after acquired properties", the BANK requested DALCO to submit complete lists of said properties but the latter failed to do so. On December 16, 1952, the Board of Directors of DALCO in a special meeting called for the purpose, passed a resolution agreeing to rescind the alleged sales of equipment, spare parts and supplies by CONNELL and DAMCO to it.On January 23, 1953, the BANK, in its own behalf and that of ATLANTIC, demanded that said agreements be cancelled but CONNELL and DAMCO refused to do so. As a result, on February 12,1953, ATLANTIC and the BANK, commenced foreclosure proceedings in the Court of First Instance of Camarines Norte against DALCO and DAMCO.

Issues:

(1) Whether acquired properties are covered by the subject of deeds of mortgage subject of foreclosure (2) are the mortgages valid? what is the effect?

Held:

(1) All property of every nature and description taken in exchange or replacement, as well as all buildings, machineries, fixtures, tools, equipment, and other property that the mortgagor may acquire, construct, install, attach; or use in, to upon, or in connection with the premises — that is, its lumber concession — "shall immediately be and become subject to the lien" of both mortgages in the same manner and to the same extent as if already included therein at the time of their execution.

As the language thus used leaves no room for doubt as to the intention of the parties, we see no useful purpose in discussing the matter extensively. Suffice it to say that the stipulation referred to is common, and We might say logical, in all cases where the properties given as collateral are perishable or subject to inevitable wear and tear or were intended to be sold, or to be used — thus becoming subject to the inevitable wear and tear — but with the understanding — express or implied — that they shall be replaced with others to be thereafter acquired by the mortgagor.

Article 415 does not define real property but enumerates what are considered as such, among them being machinery, receptacles, instruments or replacements intended by owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and shall tend directly to meet the needs of the said industry or works. On the strength of the above-quoted legal provisions, the lower court held that inasmuch as "the chattels were placed in the real properties mortgaged to plaintiffs, they came within the operation of Art. 415, paragraph 5 and Art. 2127 of the New Civil Code".

(2) As regard the proceeds obtained from the sale of the of after acquired properties" and the "undebated properties", it is clear, in view of our opinion sustaining the validity of the mortgages in relation thereto, that said proceeds should be awarded exclusively to the plaintiffs in payment of the money obligations secured by the mortgages under foreclosure. 

G.R. No. 191667 Case Digest

G.R. No. 191667, April 17, 2013

Land Bank of the Philippines

vs Eduardo M. Cacayuran

Ponente: Perlas-Bernabe

Facts:

This is a petition for Review on Certiorari of the CA affirming the RTC in declaring the nullity of the loan agreements entered into by Land Bank and the Municipality of Agoo, La Union.

Agoo SB passed a certain resolution to implement a redevelopment plan to redevelop the Agoo Public Plaza. To finance the plan, SB passed a resolution authorizing then Maor Eriguel to obtain a loan from Land Bank, incidental to it, mortgaged a portion of the plaza as collateral. It has also authorized the assignment of a portion if the IRA and monthly income in favor of Land Bank to secure the payment. 10 Kiosks were made at the plaza, then were rented out. Later, a commercial center on the Plaza lot was built too, with a loan from Land Bank, posting the same securities as the first loan.

The commercial loan was opposed by some residents of the municipality embodied in a manifesto launched through a signature campaign by the residents and Cacayuran. Invoking his right as taxpayer, Cacayuran filed a complaint against the officials and Land bank assailing the validity of the loans on the ground that the Plaza lot used as collateral is property of public dominion and therefore beyond the commerce of man.

RTC Ruling: declared the nullity of the subject loans, saying that the oans were passed in a highly irregular manner, as such, the Municipality is not bound by the same.

Aggrieved, Land Bank filed notice of appeal.

Ruling of CA: affirmed with modification the RTC's ruling, excluding the Vice Mayor from any personal liability arising from the subject loans. Cacayuran has locus standi as resident and taxpayer in the municipality and the issue involves public interest. The plaza cannot be a valid collateral to a loans for it is of public dominion.

Land Bank filed this instant petition.

Issues:

(1) whether Cacayuran has locus standi (2) whether the subject resolutions were validly passed and (3) whether the subject loans are ultra vires. [The doctrine in the law of corporations that holds that if a corporation enters into a contract that is beyond the scope of its corporate powers, the contract is illegal.]

SC Ruling:

(1) Taxpayer is allowed to sue if: (1) public funds derived from taxation are disbursed by a political subdivision or instrumentality and in doing so, a law is violated or some irregularity is committed; and (2) the petitioner is directly affected by the alleged act.

In the case, the proceeds from the Subject Loans had already been converted into public funds by the Municipality’s receipt thereof. Funds coming from private sources become impressed with the characteristics of public funds when they are under official custody. Public plaza belongs to public dominion, Cacayuran need not to be a privy to the loans, as long as taxes are involved, people have a right to question the contracts entered into by the government.

(2) While ordinances are laws and possess a general and permanent character, resolutions are merely declarations of the sentiment or opinion of a law making body on a specific matter and are temporary in nature. As opposed to ordinances, "no rights can be conferred by and be inferred from a resolution." In this accord, it cannot be denied that the SB violated Section 444(b)(1)(vi) of the LGC altogether. Noticeably, the passage of the Subject Resolutions was also tainted with other irregularities, such as (1) the SB’s failure to submit the Subject Resolutions to the Sangguniang Panlalawigan of La Union for its review contrary to Section 56 of the LGC; and (2) the lack of publication and posting in contravention of Section 59 of the LGC.

(3) Generally, an ultra vires act is one committed outside the object for which a corporation is created as defined by the law of its organization and therefore beyond the powers conferred upon it by law.43 There are two (2) types of ultra vires acts. There is a distinction between an act utterly beyond the jurisdiction of a municipal corporation and the irregular exercise of a basic power under the legislative grant in matters not in themselves jurisdictional. The former are ultra vires in the primary sense and void; the latter, ultra vires only in a secondary sense which does not preclude ratification or the application of the doctrine of estoppel in the interest of equity and essential justice.

Applying these principles to the case at bar, it is clear that the Subject Loans belong to the first class of ultra vires acts deemed as void. Records disclose that the said loans were executed by the Municipality for the purpose of funding the conversion of the Agoo Plaza into a commercial center pursuant to the Redevelopment Plan. However, the conversion of the said plaza is beyond the Municipality’s jurisdiction considering the property’s nature as one for public use and thereby, forming part of the public dominion. Accordingly, it cannot be the object of appropriation either by the State or by private persons. Nor can it be the subject of lease or any other contractual undertaking.

G.R. No. 168557 Case Digest

G.R. No. 168557, February 16, 2007

FELS Energy, Inc.

vs Province of Batangas and the Office of the Provincial Assessor of Batangas

Ponente: Callejo, Sr.

Facts:

January 1993, NPC entered into a lease contract with Polar Energy over MW diesel engine power barges in Batangas for a period of 5 years. Subsequently, Polar assigned its rights under the agreement to FELS. NPC initially opposed.

August 1995, FELS received an assessment of real property taxes on the barges. FELS referred the matter to NPC reminding it of its obligation under the agreement to pay the real estate taxes. NPC sought for reconsideration of the decision but the motion was denied.

NPC filed a petition to the Local Board Assessment Appeals. The provincial Assessor averred that the barges were real property for the purpose of taxation. LBAA still denied the petition filed by NPC and ordered FELS to pay the taxes.

LBAA Ruling: power plant facilities are considered real property because they are installed at a specific location with a character of permanency. The owner of the barges-FELS is a private corporation-is the one being taxed, not NPC. The agreement will not justify the exemption of FELS.

FELS then appealed to Central BAA. CBAA rendered s decision finding the power barges exempt from real property tax.

CBAA Ruling: the power barges belong to NPC since they are actually used by it. FELS appealed before the CA but was denied as well.

Held:

YES. The CBAA and LBAA power barges are real property and are thus subject to real property tax. This is also the inevitable conclusion, considering that G.R. No. 165113 was dismissed for failure to sufficiently show any reversible error. Tax assessments by tax examiners are presumed correct and made in good faith, with the taxpayer having the burden of proving otherwise. Besides, factual findings of administrative bodies, which have acquired expertise in their field, are generally binding and conclusive upon the Court; we will not assume to interfere with the sensible exercise of the judgment of men especially trained in appraising property. Where the judicial mind is left in doubt, it is a sound policy to leave the assessment undisturbed. We find no reason to depart from this rule in this case.

Moreover, Article 415 (9) of the New Civil Code provides that “docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast” are considered immovable property. Thus, power barges are categorized as immovable property by destination, being in the nature of machinery and other implements intended by the owner for an industry or work which may be carried on in a building or on a piece of land and which tend directly to meet the needs of said industry or work.

Petitioners maintain nevertheless that the power barges are exempt from real estate tax under Section 234 (c) of R.A. No. 7160 because they are actually, directly and exclusively used by petitioner NPC, a government- owned and controlled corporation engaged in the supply, generation, and transmission of electric power.

We affirm the findings of the LBAA and CBAA that the owner of the taxable properties is petitioner FELS, which in fine, is the entity being taxed by the local government. As stipulated under Section 2.11, Article 2 of the Agreement:

“OWNERSHIP OF POWER BARGES. POLAR shall own the Power Barges and all the fixtures, fittings, machinery and equipment on the Site used in connection with the Power Barges which have been supplied by it at its own cost. POLAR shall operate, manage and maintain the Power Barges for the purpose of converting Fuel of NAPOCOR into electricity.”

It follows then that FELS cannot escape liability from the payment of realty taxes by invoking its exemption in Section 234 (c) of R.A. No. 7160. Indeed, the law states that the machinery must be actually, directly and exclusively used by the government owned or controlled corporation; nevertheless, petitioner FELS still cannot find solace.

G.R. No. L-40411 Case Digest

G.R. No. L-40411, August 7, 1935

Davao Saw Mill Co., Inc.

vs Aproniano Castillo and Davao Light and Power Co., Inc.

Ponente: Malcolm

Facts:

Davao Saw Mill is the holder of a lumber concession, it has operated a sawmill in Davao. In the contract of lease between the sawmill company and the owner of the land there appeared the following provision:

That on the expiration of the period agreed upon, all the improvements and buildings introduced and erected by the party of the second part shall pass to the exclusive ownership of the party of the first part without any obligation on its part to pay any amount for said improvements and buildings; also, in the event the party of the second part should leave or abandon the land leased before the time herein stipulated, the improvements and buildings shall likewise pass to the ownership of the party of the first part as though the time agreed upon had expired: Provided, however, That the machineries and accessories are not included in the improvements which will pass to the party of the first part on the expiration or abandonment of the land leased.

In another action, a judgment was rendered in favor Davao Light. A writ of execution issued thereon that the properties now in question were levied upon as personalty by the sheriff. The bidder, Davao Light proceeded to take possession of the machinery and other properties described in the certificate of sale.

As connecting up with the facts, it should further be explained that the Davao Saw Mill Co., Inc., has on a number of occasions treated the machinery as personal property by executing chattel mortgages in favor of third persons. One of such persons is the appellee by assignment from the original mortgages.

Article 334, paragraphs 1 and 5, of the Civil Code, is in point. According to the Code, real property consists of —

1. Land, buildings, roads and constructions of all kinds adhering to the soil;

x x x x x x x x x

5. Machinery, liquid containers, instruments or implements intended by the owner of any building or land for use in connection with any industry or trade being carried on therein and which are expressly adapted to meet the requirements of such trade of industry.

The trial judge found that those properties were personal in nature, and as a consequence absolved the defendants from the complaint, with costs against the plaintiff.

Held:

The characterization of the property as chattels by the appellant is indicative of intention and impresses upon the property the character determined by the parties. It is machinery which is involved; moreover, machinery not intended by the owner of any building or land for use in connection therewith, but intended by a lessee for use in a building erected on the land by the latter to be returned to the lessee on the expiration or abandonment of the lease.

A similar question arose in Puerto Rico, and on appeal being taken to the United States Supreme Court, it was held that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant, but not when so placed by a tenant, a usufructuary, or any person having only a temporary right, unless such person acted as the agent of the owner.

Judgment appealed from will be affirmed.

G.R. No. L-15334 Case Digest

G.R. No. L-15334, January 31, 1964

Board of Assessment Appeals

vs Manila Electronic Company

Ponente: Paredes

Facts:

October 1902, Philippine Commission enacted Act. No. 484 authorizing the Municipal Board of Manila to grant a franchise to operate an electric street railway and electric light in Manila to the most favorable bid. Swift was awarded the franchise on March 1903.

Meralco's electric power is transmitted by means of electric transmission wires which are fastened to insulators on steel towers.

November 1955, city assessor of QC declared the steel towers (Espana, Kamuning and Kamias towers) for real property tax. After the denial of Meralco's petition to cancel the declarations, an appeal was taken to the Board of Assessment Appeals of QC, which required Meralco to pay real property tax for year 1952-1956. Meralco paid the amount under protest, and filed for review in CTA which rendered a decision to cancel the tax declarations and refund Meralco. The motion for reconsideration was denied too, an instant petition for review was filed.

CTA held that: (1) the steel towers come within the term "poles" which are declared exempt from taxes under part II paragraph 9 of respondent's franchise; (2) the steel towers are personal properties and are not subject to real property tax; and (3) the City Treasurer of Quezon City is held responsible for the refund of the amount paid.

The tax exemption privilege of the petitioner is quoted hereunder:

PAR 9. The grantee shall be liable to pay the same taxes upon its real estate, buildings, plant (not including poles, wires, transformers, and insulators), machinery and personal property as other persons are or may be hereafter required by law to pay ...

It is evident, that the word "poles", as used in Act No. 484 and incorporated in the petitioner's franchise, should not be given a restrictive and narrow interpretation, as to defeat the very object for which the franchise was granted. The poles as contemplated thereon, should be understood and taken as a part of the electric power system of the respondent Meralco, for the conveyance of electric current from the source thereof to its consumers.

Issue: Whether the steel towers constitute real properties, so that they can be subject to real property tax.

Article 415 of the Civil Code; the following are immovable property:

(1) Land, buildings, roads, and constructions of all kinds adhered to the soil;

x x x x x x x x x

(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated

therefrom without breaking the material or deterioration of the object;

x x x x x x x x x

(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry

or works which may be carried in a building or on a piece of land, and which tends directly to meet the needs

of the said industry or works;

Held:

The steel towers or supports in question do not come within the objects mentioned in paragraph 1, because they do not constitute buildings or constructions adhered to the soil. They are not construction analogous to buildings nor adhering to the soil. As per description, given by the lower court, they are removable and merely attached to a square metal frame by means of bolts, which when unscrewed could easily be dismantled and moved from place to place. They cannot be included under paragraph 3, as they are not attached to an immovable in a fixed manner, and they can be separated without breaking the material or causing deterioration upon the object to which they are attached.

These steel towers or supports do not also fall under paragraph 5, for they are not machineries, receptacles, instruments or implements, and even if they were, they are not intended for industry or works on the land. Petitioner is not engaged in an industry or works in the land in which the steel supports or towers are constructed.

CTA erred.

G.R. No. 189248 Case Digest

G.R. No. 189248, February 5, 2014

Teodoro S. Teodoro, substituted by his heirs Nelson Teodoro and Rolando Teodoro

vs Danilo Espino, Rosario Santiago, etc.

Ponente: Perez

Facts:

The subject property is a piece of land registered in the name of Genaro, long deceased ascendant of all the parties. Teodoro is a nephew of Petra (daughter of Genaro), while the respondents are grand nephews.

Of all Genaro's children, only Petra occupied the land and lived at their ancestral house. After Petra's death, her will was probated in RTC Bulacan, which decision on the will's extrinsic validity has become final and executory. In the will, Petra devised the property to Teodoro.

Teodoro then demolished the ancestral house to use the property for other purposes. Soon thereafter, the respondents prevented Teodoro from using the property.

After, Teodoro's demand to vacate went unheeded; he filed the complaint for forcible entry against respondents.

In their answer, the respondents asserted ownership and possession of the land.

MTC dismissed the complaint. Although it its undisputed that Petra Teodoro was in actual possession of the subject lot prior to her demise and that she left a Holographic Will wherein the subject lot was bequeathed to [Teodoro Teodoro], the probate of her last will has not finally settled the question of ownership over the subject lot. Clearly, the subject lot still forms part of the estate of the late Genaro Teodoro. In the absence of an actual and approved partition plan among his heirs, the subject lot remains part of the Genaro Teodoro’s estate. Since his children Santiago, Maria, Petra, Mariano and Ana are all deceased, their children or grandchildren by right of representation have the right to inherit from their ancestor.

A person who claims that he has a better right to real property must prove his ownership of the same x x x. Clearly, [Teodoro Teodoro] has failed to prove his ownership over the property or that of his devisee Petra Teodoro. Thus, the court is convinced that the possession of [respondents] over the subject lot should not be disturbed, until and unless the question of ownership over the same shall have been finally resolved before the appropriate court.

RTC adopted the factual findings of the MTC but reversed the ruling in favor of Teodoro. CA explained that the ancestral house was the clear share of Petra's inheritance and Teodoro claims right to possession only over the said portion, not the netire thing. Teodoro has acknowledged that the rest is occupied.

CA reversed the RTC decision. It specifically ruled that Teodoro Teodoro:

(1) Never had physical possession of the subject property, not having lived there at any time, whether while Petra was alive nor after her death;

(2) did not adduce evidence before the lower courts on proof of payment of any real property tax on the disputed vacant lot, portion of Lot No. 2476, or to the whole of Lot No. 2476;

(3) did not solely or unilaterally cause the demolition of the ancestral house such a fact equating to his exclusive ownership of the subject property and complete control and dominion over it; and

(4) Cannot tack his alleged possession of the subject property to that of Petra Teodoro simply by virtue of the latter’s holographic will, leading to the issue of ownership which is insignificant in forcible entry cases.

SC: We grant the petition. We reverse the decision of the Court of Appeals and restore the decision of the RTC on the appeal reversing the MTC.

Certainly, and as found by the trial courts, the whole of Lot No. 2476 including the portion now litigated is, owing to the fact that it has remained registered in the name of Genaro who is the common ancestor of both parties herein, co-owned property. All, or both Teodoro Teodoro and respondents are entitled to exercise the right of possession as co-owners.

Neither party can exclude the other from possession. Although the property remains unpartitioned, the respondents in fact possess specific areas. Teodoro Teodoro can likewise point to a specific area, which is that which was possessed by Petra. Teodoro Teodoro cannot be dispossessed of such area, not only by virtue of Petra's bequeathal in his favor but also because of his own right of possession that comes from his co-ownership of the property. As the RTC concluded, petitioners, as heirs substituting Teodoro

Teodoro in this suit, should be restored in the lawful possession of the disputed area.

G.R. No. 189420 Case Digest

G.R. No. 189420, March 26, 2014

Raul Arambulo and Teresita Dela Cruz

vs Genaro Nolasco and Jeremy Nolasco

Ponente: Perez

                                          

Facts:

Petitioners, together with their siblings and their mother co-owned a 233sq.m. Land in Tondo, Manila. When their mother died, she was succeeded by her husband, Genero Nolasco and their children.

On January 8, 1999, petitioners filed a petition for relief alleging that all co-owners, except for Nolasco, have authorized to sell their respective shares to the properties, saying that in the Civil Code, if one or more co-owners shall withhold their consent to the alterations in the thing owned in common, the courts may afford adequate relief.

Nolasco responded that they did not know about the intention to sell, because they were not called to participate in the negotiations regarding the sale of the property.

Issue: Whether the respondents are withholding their consent and whether this withholding is prejudicial to the petitioners.

RTC: ruled in favor with petitioners and ordered Nolasco to give their consent to sale.

Nolasco filed a notice of appeal to the CA.

CA: reversed the RTc decision, saying that the petitioners cannot compel Nolasco to give their consent.

Held: CA was right.

From the foregoing, it may be deduced that since a co–owner is entitled to sell his undivided share, a sale of the entire property by one co–owner without the consent of the other co–owners is not null and void. However, only the rights of the co–owner–seller are transferred, thereby making the buyer a co–owner of the property.

To be a co–owner of a property does not mean that one is deprived of every recognition of the disposal of the thing, of the free use of his right within the circumstantial conditions of such judicial status, nor is it necessary, for the use and enjoyment, or the right of free disposal, that the previous consent of all the interested parties be obtained.

G.R. No. 183546 Case Digest

G.R. No. 183546, September 18, 2009

Wilson Go

vs Harry GO

Ponente: Ynares-Santiago

Facts:

Wilson instituted an action for partition with accounting against Harry Go in RTC Valenzuela City. Wilson alleged that they are among the five children of Spouse Sio Tong Go and they are the registered owner of a parcel of land in Valenzuela City. On the said land, there are 7 warehouses being rented by various businesses without proper authority from Wilson. He also alleges that Harry collected the rental payments for the warehouse without giving Wilson his share to the rental.

Harry countered that there was no co-ownership because he acquired the ownership of the land through extra-judicial settlement between their father and certain Wendell Simsim. That before a partition may be decided, it must be ascertain first whether there is co-ownership.

RTC: ruled in favor of Wilson and ordered Harry to deposit in court the receipt of all the amounts collected by him from the leases. Harry moved for reconsideration but was denied by the RTC. Harry filed then a petition for certiorari with CA.

CA: ruled in favor of Harry.

It was premature for the respondent court to act favorable on private respondent's motion to deposit in court all rentals collected from the date of death of the said decedent, which according to petitioner is the true owner of the property under co-ownership.

Held:

The Court emphasizes that these are preliminary findings for the sole purpose of resolving the propriety of the subject order requiring the deposit of the monthly rentals with the trial court.  The precise extent of the interest of the parties in the subject land will have to await the final determination by the trial court of the main action for partition after a trial on the merits.

WHEREFORE, the petition is PARTIALLY GRANTED.  The April 21, 2008 Decision and July 4, 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 100100 are REVERSED and SET ASIDE.  The May 4 and July 4, 2007 Orders of the Regional Trial Court of Valenzuela City, Branch 172 in Civil Case No. 179-V-06 are SET ASIDE and a new Order is entered directing private respondent to deposit 1/12 of the monthly rentals collected by him from the buildings on TCT No. V-44555 with the trial court from the finality of this Decision and every month thereafter until it is finally adjudged who is lawfully entitled thereto.

G.R. No. 152319 Case Digest

G.R. No. 152319, October 28, 2009

Heirs of Joaquin Limense

vs Rita Vda. De Ramos

Ponente: Peralta

Facts:

Lozada was the registered owner of a land in Manila, he subdivided his property into five and gave the divided lots to his daughters through a deed of donation on March 9, 1932.

In 1981, Joaquin Limense wanted to build a hollow block fence on his property but could not because a substantial portion of the respondent's building encroached upon portion of Limense property.

Limense demanded the removal of the encroached area, respondent ignored both oral and written demands.

In the RTC, the respondents averred that they are daughters of on of the Lozada daughters. .  After subdividing the said lot, Dalmacio Lozada donated Lot No. 12-C in favor of his daughters Catalina, married to Sotero Natividad; Isabel, married to Isaac Limense; and Salud, married to Francisco Ramos. Being the surviving heirs of Francisco Ramos, respondents later became co-owners of Lot No. 12-C. Lot No. 12-C has served as right of way or common alley of all the heirs of Dalmacio Lozada since 1932 up to the present. As a common alley, it could not be closed or fenced by Joaquin Limense without causing damage and prejudice to respondents.

RTC: dismissed the complaint of Limense ruling that an apparent easement of right of way existed in favor of respondents. The Court also finds that when plaintiff acquired the lot (12-C) which forms the alley, he knew that said lot could serve no other purpose than as an alley.

Joaquin filed a notice of appeal but during the pendency of the appeal with the CA, Joaquin died. His heirs then elevated the case to the SC via petition for review on certiorari.

Issue: Whether CA committed a grave abuse amounting to lack of jurisdiction in holding that respondent's ot has an easement of right of way.

Held: In the case at bar, the action filed before the RTC against respondents was an action for removal of obstruction and damages.  Respondents raised the defense that Joaquin Limense's title could have been obtained through fraud and misrepresentation in the trial proceedings before the RTC. Such defense is in the nature of a collateral attack, which is not allowed by law.

]  As with the present case, the CA's observation that TCT No. 96886 is of dubious origin, as TCT No. 40043 does not appear to have been disposed of by Catalina, Isabel and Salud Lozada, is improper and constitutes an indirect attack on TCT No. 96886.  As we see it, TCT No. 96886, at present, is the best proof of Joaquin Limense’s ownership over Lot No. 12-C.  Thus, the CA erred in ruling that respondents and petitioners co-owned Lot No. 12-C, as said lot is now registered exclusively in the name of Joaquin Limense.

Due to the foregoing, Joaquin Limense, as the registered owner of Lot 12-C, and his successors-in-interest, may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon.

Joaquin Limense and his successors-in-interests are fully aware that Lot No. 12-C has been continuously used and utilized as an alley by respondents and residents in the area for a long period of time.

The portions of Lot No. 12-D, particularly the overhang, covering 1 meter in width and 17 meters in length; the stairs; and the concrete structures are all within the 1/3 share allotted to them by their donor Dalmacio Lozada and, hence, there was absence of a showing that respondents acted in bad faith when they built portions of their house on Lot No. 12-C.

WHEREFORE, the petition is DENIED, the Decision of the Court of Appeals dated December 20, 2001 in CA-G.R. CV No. 33589 is AFFIRMED with the following MODIFICATIONS:

1. No co-ownership exists over Lot No. 12-C, covered by TCT No. 96886, between petitioners and respondents. 

2. The case is REMANDED to the Regional Trial Court, Branch 15, Manila, for further proceedings without further delay to determine the facts essential to the proper application of Articles 448 and 546 of the Civil Code.

G.R. No. 166519 Case Digest

G.R. No. 166519, March 31, 2009

Nieves Plasabas and Marcos Malazarte

vs Court of Appeals, Dominador Lumen and Aurora Aunzo

Ponente: Nachura

Facts:

In 1074, Plasabas and Malazarte filed a complaint for recovery of title to property with damages before CFI Maasin, Leyte. The subject property was a parcel of coconut land declared in the name of Plasabas. They pray for their rights over the land be confirmed and for Lumen and Aunzo to vacate the land.

Aunzo and Lumen interposed that they inherited the land from their common ancestor, Francisco Plasabas. In the course of trial, it was found out that Nieves was not the absolute owner of the land.

Aunzo and Lumen then raised the argument that the case should have been terminated at inception for petitioner's failure to implead indispensable parties (Jose, Victor and Victoria).

CFI dismissed the case. The instant case should have been dismissed without prejudice a long time ago for lack of cause of action as the plaintiffs spouses Marcos Malazarte and Nieves Plasabas Malazarte have no complete legal personality to sue by themselves alone without joining the brothers and sisters of Nieves who are as INDISPENSABLE as the latter in the final determination of the case. Not impleading them, any judgment would have no effectiveness.

Petitioners then elevated the case to the CA. CA affirmed the ruling of the CFI. CA declared that the non-joinder of the indispensable parties would violate the principle of due process, and that Article 487 of the Civil Code could not be applied considering that the complaint was not for ejectment, but for recovery of title or a reivindicatory action.

Held:

With a motion to reconsider, SC grants the petition and remands the case to the CFI for disposition on the merits, citing Article 487 that provides any one of the co-owners may bring an action for ejectment.

In any event, the trial and appellate courts committed reversible error when they summarily dismissed the case, after both parties had rested their cases following a protracted trial commencing in 1974, on the sole ground of failure to implead indispensable parties. The rule is settled that the non-joinder of indispensable parties is not a ground for the dismissal of an action. The remedy is to implead the non-party claimed to be indispensable.