Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-17240 January 31, 1962 CLEMENCIA B. VDA.

DE VILLONGCO, ET AL., petitioners-appellees, vs. HON. FLORENCIO MORENO, in his capacity as Secretary, Department of Public Works and Communications and BENIGNO MUSNI, respondents-appellants. E. Voltaire Garcia for petitioners-appellees. Office of the Solicitor General for respondents-appellants. LABRADOR, J.: The above-entitled case involves the application and interpretation of Republic Act. No. 2056, entitled "An Act to prohibit, remove and/or demolish the construction of dams, dikes or any works in public navigable waters or waterways and in communal fishing grounds, to regulate works in such waters or waterways and in communal fishing grounds, and to provide penalties for its violation, and for other purposes." The pertinent provisions thereof in issue are Section 1 and the first part of Section 2, which read as follows: Sec. 2. When it is found by the secretary of Public Works and Communications, after due notice and hearing, that any dam, dike or any other works now existing or may hereinafter be constructed encroaches into any public navigable river, stream, coastal waters and any other public navigable waters or waterways, or that they are contructed in areas declared as communal fishing grounds, he shall have the authority to order the removal of any such works and give the party concerned a period not to exceed thirty days for the removal of the same; Provide, That fishpond constructions or works on communal fishing grounds introduced in good faith before the areas were proclaimed as fishing grounds shall be exempted from the provisions of this Act, provided such constructions or works do not obstruct or impede the free passage of any navigable river, stream, or would not cause inundations of agricultural areas....". The facts involved in the case may be briefly stated as follows: On August 15, 1958, Senator Rogelio de la Rosa complained with the Secretary of Public Works and Communications against several fishpond owners in Macabebe, Pampanga, among whom is petitioner herein Clemencia B. Vda. de Villongco. The complaint charges that has appropriated a portion of the coastal waters of Pampanga, locally known as "Pantion", converting portions of the coastal areas into fishponds. Investigations were conducted under the authority of the Secretary, who thereafter rendered the following decision: . Complainants allege that the conversion of this area into a fishpond by the respondents deprived them of the uses of the area as a fishing ground and for navigation. On the other hand, the respondents contend that this area is owned by them as shown by the title above-adverted to. A relocation survey, based on the title, was made on the area in question to determine whether the fishpond constructions and/or works of the respondents are within the titled property. Said survey shows that a portion of Manila Bay covering an area of approximately 24,860 square meters was included as part of the fishpond by the respondents. The defense of respondents that the area in question being a private property, is not subject to the provisions of Republic Act 2056, deserves consideration. The area being covered by a Torrens Certificate of Title, the respondent's title thereon is indefeasible and imprescriptible. As sufficiently established, the area in question is a foreshore land and is disposable under Section 59 of the Public Land Law. However, of the enclosed portion, the area of 24,860 square meters has been conclusively shown by the relocation survey as not within the boundaries of the titled property. Be that as it may, this portion is still of public ownership and the complainants should, therefore, not be deprived of its uses as a fishing ground and passageway. PREMISES CONSIDERED, it is hereby ordered that the respondents remove their fishpond works and/or constructions insofar as it encroaches upon that portion of Manila Bay covering the area of approximately 24,860 square meters and restore the original condition of said coastal water within thirty (30) days from

receipt of this decision: otherwise, this Office or its duly authorized representative shall remove the same at the expense of the respondents within ten (10) days following the expiration of the thirty-day period, without prejudice to instituting judicial action against them under the provisions of Section 3 of R. A. 2056." (Annex "C", pp. 20-21) . Clemencia B. Vda. de Villongco filed a motion to reconsider the decision, but the same was denied by the Undersecretary in a resolution dated August 5, 1959. Thereupon, on August 20, 1959, petitioner herein filed the present suit in the Court of First Instance of Rizal, calling attention to the above proceedings, especially the decision of the Secretary and the resolution of the Undersecretary denying the motion for reconsideration, and arguing that Republic Act. No. 2056, under which the Secretary issued the order above-quoted, is null and void as to conferring upon the Secretary power to decide as to whether or not the dikes and other constructions encroach upon coastal waters, public streams, communal fishing grounds, etc.; that the Undersecretary acted without or in he excess of jurisdiction in delegating reception of evidence, in causing resurvey of the premises by a person who is not a duly licensed surveyor, in violation of the agreement to that effect, in the absence of petitioner Villongco; that the Secretary's order of demolition of the fishponds was beyond the jurisdiction of said Secretary and is unconstitutional as an encroachment upon the private rights of the petitioners, etc. Upon the presentation of the petition, the court below issued a writ of preliminary injunction against the enforcement of the Secretary's disputed order. Trial of the case was had, with the submission of a stipulation of facts, with exhibits, entered into between the parties, after which the court, through Hon. Andres Reyes, rendered a decision declaring that the Secretary of Public Works and Communications was in error in ordering the demolition of the dikes and other constructions of the petitioner Vda. de Villongco, on the ground that said dikes and other constructions fall under the exception mentioned in Section 2 of Republic Act. No. 2056. We quote the order herein:. Without the necessity of resolving the various incidental issues raised by the parties, the Court is of the opinion that the case at bar hinges on only one vital issue-that is whether the petitioners properly fall within the benefits of the exemption expressly provided for under section 2 of Republic Act 2056, to wit:. PROVIDED, That fishpond constructions on communal fishing grounds introduced in good faith before the areas were proclaimed as fishing grounds shall be exempted from the provisions of this Act, provided such constructions or works do not obstruct or impede the free passage of any navigable river, stream, or would not cause inundations of agricultural areas.. AND PROVIDED, FINALLY, that the removal of any such works shall not impair fishponds completed or about to be completed which do not encroach or obstruct any public navigable river or stream and/or which would not cause inundations of agricultural areas and which have been constructed in good faith before the area was declared communal fishing grounds.' . A perusal of the above provisions reveals that the petitioners herein would be entitled to the benefits of said exemptions provided the following requisites are present: first, that the constructions or works in question were constructed in good faith before the areas were declared communal fishing grounds; second, that said constructions or works would not impede the free passage of any navigable river or stream; and lastly, that the same would not cause inundations of agricultural areas. There is no question that the constructions of petitioners would not cause inundations of agricultural areas. This was admitted in the answer of respondent Secretary and later included in the stipulation of facts. There is also no dispute as to the fact that the same were constructed in good faith before June 13, 1958 when Republic Act No. 2056 took effect and therefore before any fishing ground could have been declared communal." (pp. 2-3, of the decision). The respondent Secretary has appealed from the above decision, alleging the following errors: . I THE LOWER COURT ERRED IN GIVING DUE COURSE TO THE INSTANT CASE FORCERTIORARI AND PROHIBITION AND IN DECIDING THE SAME WITHOUT CONSIDERING THE ISSUES INVOLVED THEREIN. II

THE LOWER COURT ERRED IN INTERPRETING THE PROVISIONS OF REPUBLIC ACT NO. 2056 WHICH, OTHERWISE, IS CLEAR AND UNAMBIGUOUS, AND IN CONSTRUING THE EXEMPTING CLAUSE PROVIDED IN SEC. 2 THEREOF TO INCLUDE FISHPOND CONSTRUCTIONS OR WORK OUTSIDE THE AREAS DECLARED AS COMMUNAL FISHING GROUNDS. III THE LOWER COURT ERRED IN HOLDING THAT THE APPELLEES FAIL WITHIN SAID EXEMPTING PROVISION OF SECTION 2 OF REPUBLIC ACT NO. 2056. IV THE LOWER COURT ERRED IN ISSUING EX-PARTE THE WRIT OF PRELIMINARY INJUNCTION, AND LATER MAKING IT PERMANENT.. V THE LOWER COURT ERRED IN GRANTING THE INSTANT PETITION FOR CERTIORARI AND PROHIBITION. An examination of the facts adduced at the trial shows that petitioner Vda. de Villongco is the owner of a fishpond situated in Macabebe, Pampanga, covered by Transfer Certificate of Title No. 7087 dated January 28, 1952, containing an area of 90 hectares, 26 ares and 54 centares, bounded on the SW and W by the Manila Bay and on the NW by the Manila Bay and the Supang Maruginas (Annex B-Stipulation). A competent surveyor in the person of the Dredge Operation Supervisor of the Department of Public Works conducted an investigation and submitted a report (Annex E of the Stipulation of Facts), with an accompanying sketch of the fishpond showing the disputed portion, included within the dike of the petitioner. The existing dike of the petitioner is a straight line from point A of Annex E1 to point D, and it includes a portion of public land indicated in red (portion B-c in said Annex E-1, containing an area of 2 hectares, 48 ares and 60 centares (24,860 square meters). The surveyor found the following: It seems that the average depth along the sea side of the dike A-D as shown in the attached plan may be about one (1) foot M. L. L. W.
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That section B-C of the dike is along the prolongation of section A-B towards point C and that no part of dike B-C protruding towards the sea. That navigation along dike A-D during low tide is limited to vessels with a draft of about one foot. That section B-C of the dike will obstruct navigation towards a public domain (shaded red in the attached plan) with an indicated area of about 24,880 square meters. In my opinion, section B-C of the dike will not obstruct navigation along or parallel to it." (Annex E Stipulation) . The court below held that said portion falls under the exception of Section 2 of Republic Act No. 2056, because it does not interfere with navigation and does not produce inundation and the dikes were constructed before the area was a fishing ground. (The parties have stipulated that there is yet no order declaring the area as a fishing ground.) A study of the provisions of Republic Act No. 2056, especially the sections we quote above disclose that the authority granted the Secretary of Public Works and Communications is to declare that the construction or building of dams, dikes or any other works encroaching on navigable rivers, streams, or any other navigable public waters or waterways is prohibited and to order their removal or demolition. The area included in the dikes of the petitioner, indicated in the red shaded portion in the Stipulation, Exh. E-1, was not a part of the land titled in the name of the petitioner, as shown by the fact that the titled land bounds on the W by a line from point 1 to point 19, point 19 to point 20 and point 20 to point 21 of Lot No. 2 indicated in the plan of the land. Said red shaded portion, which contains an area of 24,860 square meters, is clearly, therefore, a portion of the Manila Bay area or coastal area, which the petitioner has evidently included within her dikes, perhaps to straighten the same. As the shaded portion has a depth of 1 foot and low tide, it

is evidently navigable at high tide for vessels of deeper draft of 1 foot and at low tide navigable to those of 1 foot draft. It is, therefore, a part of the water ways, taking into account that the Manila Bay area, especially those bordering the fishponds in the provinces of Pampanga, Bulacan and Rizal are waterways, especially used by fishermen and fishpond owners to bring in their catch to market. The shaded area, therefore, is a public property, not susceptible to appropriation by any private individual, not only because it belongs to the State but also because it belongs to the State but also because it is used as a waterway.. Article 1. The following are part of the National domain open to public use: xxx xxx xxx 2. The coast sea, that is, the maritime zone encircling the coasts, to the full width recognized by international law. ...." (Art. 1, paragraphs 1 and 2, Spanish Law of Waters; see also Insular Government v. Aldecoa, 19 Phil. 505. 510.) . The error of the court below lies in the fact that it considered the coast sea as falling under the exception of Section 2. But an examination of Section 2 shows that coastal waters or public waterways are not included in the exception. Only those works constructed on communal fishing grounds are exempted; constructions on coastal waters or public waterways are not subject to the exception. Aside from that fact, no inundation or free passage of any navigable river can take place on the coastal waters or waterways, so coastal waters are not subject to the exception. The exception, apparently, applies only to constructions on navigable rivers, when these constructions do not impede or obstruct the passage of the river and when they do not cause inundation of agricultural areas. Coastal waters are not within the contemplation of the exception because there is no navigable river or stream in coastal waters and neither may there be an inundation therein. We, therefore, find that the court below erred in its decision that the constructions of the petitioner, subject matter of the case at bar, fall within the exception mentioned in Sec. 2 of the Act and its order in issuing the prohibition is therefore, unwarranted. The other error is the failure of the petitioner to avail of the administrative remedy, which consists in appealing from the decision of the Secretary of Public Works and Communications to the President of the Philippines. We find this assignment of error also to be well taken. We have, however, chosen to consider the merits of the issue involved for the more prompt determination of the case and for a proper understanding of the provisions of Republic Act 2056. WHEREFORE, the decision and the injunction issued by the court below are hereby set aside, and the petition against the Secretary of Public Works and Communications, dismissed, with costs against the petitioner. Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Paredes, Dizon and De Leon, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-26053 February 21, 1967 CITY OF MANILA, plaintiff-appellee, vs. GERARDO GARCIA CARMENCITA VILLANUEVA, MODESTA PARAYNO NARCISO PARAYNO, JUAN ASPERAS, MARIA TABIA SIMEON DILIMAN, AQUILINO BARRIOS LEONORA RUIZ, LAUREANO DIZO, BERNABE AYUDA LEOGARDA DE LOS SANTOS, ISABELO OBAOB ANDREA RIPARIP, JOSE BARRIENTOS, URBANO RAMOS, 1 ELENA RAMOS, ESTEFANIA NEPACINA,

MODESTA SANCHEZ, MARCIAL LAZARO, MARCIANA ALANO, HONORIO BERIO SEDORA ORAYLE, GLORIA VELASCO, WILARICO RICAMATA, BENEDICTO DIAZ, ANA DEQUIZ (MRS.) ALUNAN, LORENZO CARANDANG, JUAN PECAYO, FELICIDAD MIRANDA EMIGDIO EGIPTO, defendants-appellants. Mauricio Z. Alunan for defendants-appellants. City Fiscal's Office for plaintiff-appellee. SANCHEZ, J.: Plaintiff City of Manila is owner of parcels of land, forming one compact area, bordering Kansas, Vermont and Singalong streets in Malate, Manila, and covered by Torrens Titles Nos. 49763, 37082 and 37558. Shortly after liberation from 1945 to 1947, defendants entered upon these premises without plaintiff's knowledge and consent. They built houses of second-class materials, again without plaintiff's knowledge and consent, and without the necessary building permits from the city. There they lived thru the years to the present. In November, 1947, the presence of defendants having previously been discovered, defendants Felicidad Miranda (Emigdio Egipto), Modesta C. Parayno, Benedicto Diaz, Laureano Dizo, Jose Barrientos, Elena Ramos, Estefania Nepacina, Modesta Sanchez, Honorio Berio, Gloria Velasco, Ana Dequis Alunan and Benedicto Ofiaza (predecessor of defendant Carandang) were given by Mayor Valeriano E. Fugoso written permits each labeled "lease contract" to occupy specific areas in the property upon conditions therein set forth. Defendants Isabelo Obaob and Gerardo Garcia (in the name of Marta A. Villanueva) received their permits from Mayor Manuel de la Fuente on January 29 and March 18, respectively, both of 1948. The rest of the 23 defendants exhibited none. For their occupancy, defendants were charged nominal rentals. Following are the rentals due as of February, 1962: NAME 1. Gerardo Garcia 2. Modesta C. Parayno 3. Juan Asperas 4. Maria Tabia 5. Aquilino Barrios (Leonora Ruiz) 6. Laureano Dizo 7. Bernabe Ayuda 8. Isabelo Obaob 9. Jose Barrientos 10. Cecilia Manzano in lieu of Urbano Ramos (deceased) 11. Elena Ramos 12. Estefania Nepacina 13. Modesta Sanchez 14. Marcial Lazaro 15. Marciana Alano 16. Honorio Berio Area in sq.m. 66.00 87.75 39.00 35.20 54.00 35.00 39.60 75.52 39.53 46.65 34.80 41.80 33.48 22.40 25.80 24.00 Monthly Rental P7.92 10.53 4.68 5.76 4.32 2.80 3.17 9.06 4.74 5.60 2.78 3.34 2.68 1.79 2.06 1.92 Amt. due from date of delinquency to Feb. 1962 P1,628.97 379.08 9.36 570.24 99.36 22.40 323.34 208.38 744.18 Paid up to Feb. 1962. 186.26 504.34 444.88 688.32 255.44 188.16
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17. Gloria Velasco 18. Wilarico Ricamata 19. Benedicto Diaz 20. Ana Dequis Alunan 21. Lorenzo Carandang 22. Juan N. Pecayo 23. Felicidad Miranda

32.40 45.83 40.20 64.26 45.03 25.52 48.02

2.59 3.67 4.82 7.71 5.40 3.06 5.76

56.98 739.68 Paid up to March 1962. 30.84 437.40 30.60 132.48

P7,580.69 Epifanio de los Santos Elementary School is close, though not contiguous, to the property. Came the need for this school's expansion; it became pressing. On September 14, 1961, plaintiff's City Engineer, pursuant to the Mayor's directive to clear squatters' houses on city property, gave each of defendants thirty (30) days to vacate and remove his construction or improvement on the premises. This was followed by the City Treasurer's demand on each defendant, made in February and March, 1962, for the payment of the amount due by reason of the occupancy and to vacate in fifteen (15) days. Defendants refused. Hence, this suit to recover possession. 2 The judgment below directed defendants to vacate the premises; to pay the amounts heretofore indicated opposite their respective names; and to pay their monthly rentals from March, 1962, until they vacate the said premises, and the costs. Defendants appealed. 1. We are called upon to rule on the forefront question of whether the trial court properly found that the city needs the premises for school purposes. The city's evidence on this point is Exhibit E, the certification of the Chairman, Committee on Appropriations of the Municipal Board. That document recites that the amount of P100,000.00 had been set aside in Ordinance 4566, the 1962-1963 Manila City Budget, for the construction of an additional building of the Epifanio de los Santos Elementary School. It is indeed correct to say that the court below, at the hearing, ruled out the admissibility of said document. But then, in the decision under review, the trial judge obviously revised his views. He there declared that there was need for defendants to vacate the premises for school expansion; he cited the very document, Exhibit E, aforesaid. It is beyond debate that a court of justice may alter its ruling while the case is within its power, to make it conformable to law and justice.3 Such was done here. Defendants' remedy was to bring to the attention of the court its contradictory stance. Not having done so, this Court will not reopen the case solely for this purpose. 4 Anyway, elimination of the certification, Exhibit E, as evidence, would not profit defendants. For, in reversing his stand, the trial judge could well have taken because the was duty bound to take judicial notice5 of Ordinance 4566. The reason being that the city charter of Manila requires all courts sitting therein to take judicial notice of all ordinances passed by the municipal board of Manila. 6 And, Ordinance 4566 itself confirms the certification aforesaid that an appropriation of P100,000.00 was set aside for the "construction of additional building" of the Epifanio de los Santos Elementary School. Furthermore, defendants' position is vulnerable to assault from a third direction. Defendants have absolutely no right to remain in the premises. The excuse that they have permits from the mayor is at best flimsy. The permits to occupy are recoverable on thirty days' notice. They have been asked to leave; they refused to heed. It is in this factual background that we say that the city's need for the premises is unimportant. The city's right to throw defendants out of the area cannot be gainsaid. The city's dominical right to possession is paramount. If error there was in the finding that the city needs the land, such error is harmless and will not justify reversal of the judgment below.7 2. But defendants insist that they have acquired the legal status of tenants. They are wrong. They entered the land, built houses of second-class materials thereon without the knowledge and consent of

the city. Their homes were erected without city permits. These constructions are illegal. In a language familiar to all, defendants are squatters: Since the last global war, squatting on another's property in this country has become a widespread vice. It was and is a blight. Squatters' areas pose problems of health, sanitation. They are breeding places for crime. They constitute proof that respect for the law and the rights of others, even those of the government, are being flouted. Knowingly, squatters have embarked on the pernicious act of occupying property whenever and wherever convenient to their interests without as much as leave, and even against the will, of the owner. They are emboldened seemingly because of their belief that they could violate the law with impunity. The pugnaciousness of some of them has tied up the hands of legitimate owners. The latter are thus prevented from recovering possession by peaceful means. Government lands have not been spared by them. They know, of course, that intrusion into property, government or private, is wrong. But, then, the mills of justice grind slow, mainly because of lawyers who, by means, fair or foul, are quite often successful in procuring delay of the day of reckoning. Rampancy of forcible entry into government lands particularly, is abetted by the apathy of some public officials to enforce the government's rights. Obstinacy of these squatters is difficult to explain unless it is spawned by official tolerance, if not outright encouragement or protection. Said squatters have become insensible to the difference between right and wrong. To them, violation of law means nothing. With the result that squatting still exists, much to the detriment of public interest. It is high time that, in this aspect, sanity and the rule of law be restored. It is in this environment that we look into the validity of the permits granted defendants herein. These permits, erroneously labeled "lease" contracts, were issued by the mayors in 1947 and 1948 when the effects of the war had simmered down and when these defendants could have very well adjusted themselves. Two decades have now elapsed since the unlawful entry. Defendants could have, if they wanted to, located permanent premises for their abode. And yet, usurpers that they are, they preferred to remain on city property. Defendants' entry as aforesaid was illegal. Their constructions are as illegal, without permits. 8 The city charter enjoins the mayor to "safeguard all the lands" of the City of Manila.9 Surely enough, the permits granted did not "safeguard" the city's land in question. It is our considered view that the Mayor of the City of Manila cannot legalize forcible entry into public property by the simple expedient of giving permits, or, for that matter, executing leases. Squatting is unlawful and no amount of acquiescence on the part of the city officials will elevate it into a lawful act. In principle, a compound of illegal entry and official permit to stay is obnoxious to our concept of proper official norm of conduct. Because, such permit does not serve social justice; it fosters moral decadence. It does not promote public welfare; it abets disrespect for the law. It has its roots in vice; so it is an infected bargain. Official approval of squatting should not, therefore, be permitted to obtain in this country where there is an orderly form of government. We, accordingly, rule that the Manila mayors did not have authority to give permits, written or oral, to defendants, and that the permits herein granted are null and void. 3. Let us look into the houses and constructions planted by defendants on the premises. They clearly hinder and impair the use of that property for school purposes. The courts may well take judicial notice of the fact that housing school children in the elementary grades has been and still is a perennial problem in the city. The selfish interests of defendants must have to yield to the general good. The public purpose of constructing the school building annex is paramount.10 In the situation thus obtaining, the houses and constructions aforesaid constitute public nuisance per se. And this, for the reason that they hinder and impair the use of the property for a badly needed school building, to the prejudice of the education of the youth of the land. 11 They shackle the hands of the government and thus obstruct performance of its constitutionally ordained obligation to establish and maintain a complete and adequate system of public education, and more, to "provide at least free public primary instruction".12 Reason dictates that no further delay should be countenanced. The public nuisance could well have been summarily abated by the city authorities themselves, even without the aid of the courts.13 4. Defendants challenge the jurisdiction of the Court of First Instance of Manila. They say that the case should have been started in the municipal court. They prop up their position by the averment that notice for

them to vacate was only served in September, 1961, and suit was started in July, 1962. Their legal ground is Section 1, Rule 70 of the Rules of Court. We have reached the conclusion that their forcible entry dates back to the period from 1945 to 1947. That entry was not legalized by the permits. Their possession continued to remain illegal from incipiency. Suit was filed long after the one-year limitation set forth in Section 1 of Rule 70. And the Manila Court of First Instance has jurisdiction.14 Upon the premises, we vote to affirm the judgment under review. Costs against defendants-appellants. So ordered. Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar and Castro, JJ., concur.

CASE DIGEST ON BARLIN V. RAMIREZ

For more case digests visit http://www.pinaylawyer.com case digest, case digests, supreme court case digests, supreme court case digest, pinaylawyer.com, www.pinaylawyer.com, case digest, case digest of, case digest on, supreme court case digest, supreme court case digests CASE DIGEST ON BARLIN V. RAMIREZ [7 P 41] - F: The def., Ramirez, having been appointed by the pltff parish priest, took possession of the church on 7/5/01. He administered if as such under the orders of his superiors until 11/14/02. His successor having been then appointed, the latter made a demand on this def. for the delivery to him of the church, convent, and cemetery, and the sacred ornaments, books, jewels, money, and other prop. of the church. The def., by a written document of that date, refused to make such delivery, stating that "the town of Lagonoy, in conjunction w/ the parish priest of thereof, has seen fit to sever connection w/ the Pope at Rome and his representatives in these Islands, and to join the Filipino Church, the head of w/c is at Mla. In 1/4, the pltff. brought this action against def., alleging in his amended complaint that the Roman Catholic Church was the owner of the church bldg, the convent, cemetery, the books, money, and other prop. belonging thereto, and asking that it be restored to the possession thereof and that the def. render an account of the prop. w/c he had received and w/c was retained by him, and for other relief. The CFI-Ambos Camarines ruled in favor

of the pltff. HELD: It is suggested by the appellant that the Roman Catholic Church has no legal personality in the Philippine Islands. This suggestion, made with reference to an institution w/c antedates by almost a thousand years any other personality in Europe, and w/c existed "when Grecian eloquence still flourished in Antioch, and when idols were still worshipped in the temple of Mecca," does not require serious consideration.

Republic of the Philippines SUPREME COURT Manila

EN BANC G.R. No. L-17635 March 30, 1963 EDUARDO SANCHEZ, GREGORIO NUEZ, SULPICIO BANAAG, LINO BASA and RODOLPO FERNANDEZ,petitioners-appellants, vs. MUNICIPALITY OF ASINGAN, Province of Pangasinan, respondent-appellee. Castillo, Diaz, Tayabas and Torres for petitioners-appellants. Guillermo, Navarro, Rame and Venture for respondent-appellee. MAKALINTAL, J.: This case is before us on appeal by the plaintiffs from the decision of the Court of First Instance of Pangasinan. The facts as found by the trial court are as follows: The defendant municipality, appellee herein, is the owner of a triangular strip of land situated between the site of the municipal school building and the provincial road, measuring 42 x 26-1/2 x 46 meters. On that land appellants, with the knowledge and implied consent of the municipality, constructed temporary stores and buildings of light materials shortly after the end of the last war. Between 1952 and 1959 they paid rents to appellee. When a new local administration took over after the elections of November 1959 the

municipal council passed a resolution notifying the occupants of the land that the same was needed for certain public purposes, such as parking space, expansion of school grounds, widening of the road and waiting area for pedestrians. Appellants were therefore advised to vacate on or before May 15, 1960, some five (5) months after the date of notice. Instead of moving, however, appellants filed a petition for prohibition with the court a quo on May 10, 1960 to prevent the municipality from ejecting them from the land, with the alternative prayer that should they be ejected, appellee be ordered to reimburse to them the rents which they had paid, in the total sum of P1,178.20. There was also a demand for damages and attorney's fees. After trial, the court dismissed the petition and ordered appellants to vacate the land, with costs. Appellants' first contention here is that the land in question belongs to the Province of Pangasinan and therefore appellee has no right to order their ejectment. The premise of the contention is incorrect, for the clear and specific finding of the court a quo is that the said land is owned by the Municipality of Asingan. This is a factual conclusion that is no longer open to review in the present appeal. The additional statement by the court "that it is part of the broad shoulder of the provincial road" does not make the land provincial property, such statement being merely descriptive of its location and not indicative of its ownership.. The next issue raised by appellants is with reference to the sum of P1,178.20 paid by them as rents from 1952 to 1959. They claim the right to be reimbursed in case they should be ejected, and cite the case of Rojas v. Municipality of Cavite, 30 Phil. 607, where this Court, after declaring null and void the lease of a public plaza belonging to the said municipality and ordering the lessee to vacate the same, ordered the municipality to reimburse the rentals collected. It should be noted that while the property involved in that case was clearly devoted to public use, and therefore outside the commerce of man, and could not under any circumstance have been the object of a valid contract of lease, appellee's position herein is that the land in question is patrimonial character, not being included in any of the categories of municipal properties for public use enumerated in Article 424 of the Civil Code, namely: "municipal streets, squares, fountains, public waters, promenades and public works for public service in said municipality." There is indeed nothing in the decision appealed from or in the briefs of the parties to show that the land was devoted to any of those purposes when appellants began their occupancy. Consequently, the implied agreement of lease with them was not null and void, although terminable upon the notice as appellee herein elected to terminate it. That being so, there is no ground on which reimbursement of the rents may be ordered. In any event, even granting that the land in question is for public use and therefore the municipality of Asingan could not legally lease it to private parties, we see no justification for the stand maintained by appellants that after having occupied said land and derived benefits therefrom they should still be entitled to recover what they have paid as a condition for their ejectment. That would be to enrich them unduly to the prejudice of appellee. Besides, it may be said that when they built their temporary structures on the land with the latter's knowledge and implied consent they both treated it as municipal patrimonial property. Insofar as the rents already paid by them are concerned appellants are estopped from claiming otherwise in order to obtain a recovery. Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts.
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The judgment appealed from is affirmed, with cost against appellants. Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon and Regala, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC RESOLUTION July 24, 1962 G.R. No. L-16925

FABIAN PUGEDA, plaintiff-appellee, vs. RAFAEL TRIAS, MIGUEL TRIAS, SOLEDAD TRIAS, assisted by her husband ANGEL SANCHEZ, CLARA TRIAS, assisted by her husband VICTORIANO SALVADOR, GABRIEL TRIAS, minors ROMULO VINIEGRA, GLORIA VINIEGRA and FERNANDO VINIEGRA, JR., assisted by guardian-adlitem, RAFAEL TRIAS, TEOFILO PUGEDA, and VIRGINIA PUGEDA, assisted by her husband RAMON PORTUGAL, defendants-appellants. Placido C. Ramos and Fortunato Jose for plaintiff-appellee. Ramon C. Aquino for defendants-appellants Teofilo Pugeda and Virginia Pugeda. Jose T. Cajulis, Miguel F. Trias and Carlos T. Viniegra for all other defendants-appellants. LABRADOR, J.: This resolution concerns a motion for the reconsideration of the decision rendered by this Court. The main argument in support of the motion is that the lots not fully paid for at the time of the death of Miguel Trias, which lots were, by provision of the Friar Lands Act ( Act No. 1120), subsequently transferred to the widows name and later paid for by her out of the proceeds of the fruits of the lands purchased, and for which titles were issued in the name of the widow, belong to the latter as her exclusive paraphernal properties, and are not conjugal properties of her deceased husband and herself. In our decision we laid down the rule that upon the issuance of a certificate of sale to the husband of a lot in a friar lands estate, purchased by the Government from the friars, the land becomes the property of the husband and the wife, and the fact that the certificate of sale is thereafter transferred to the wife does not change the status of the property so purchased as conjugal property of the deceased husband and wife. The reason for this ruling is the provision of the Civil Code to the effect that properties acquired by husband and wife are conjugal properties. (Art. 1401, Civil Code of Spain). The provision of the Friar Lands Act to the effect that upon the death of the husband the certificate of sale is transferred to the name of the wife is merely an administrative device designed to facilitate the documentation of the transaction and the collection of installments; it does not produce the effect of destroying the character as conjugal property of the lands purchased. Hence, the issuance of the title, after completion of the installments, in the name of the widow does not make the friar lands purchased her own paraphernal property. The said lands, notwithstanding a certificate of sale, continue to be the conjugal property of her deceased husband and herself. The case of Arayata vs. Joya, et al., 51 Phil. 654, cited by the movants, is not applicable to the case at bar because it refers to the superior rights of the widow recognized in Section 16 of Act No. 1120 over transfers made by the husband which have not been approved by the Director of Lands. As a matter of fact the syllabus in said case is as follows: Widows rights. The widow of a holder of a certificate of sale of friar lands acquired by the Government has an exclusive right to said lands and their fruits from her husbands death, provided that the deceased has not conveyed them to another during his lifetime and she fulfills the requirements prescribed by the law for the purchase of the same. A minor ground for the reconsideration is that the decision of Judge Lucero, having been set aside by the Court of Appeals, could not be affirmed by Us. The setting aside of the said decision was due to the fact that newly discovered evidence was found regarding the partition of the estate of the deceased. The setting aside of the decision was not aimed or directed at the judges ruling that the properties acquired by the husband during his lifetime from the friar lands estate were conjugal properties of the husband and the wife.. The third ground raised is that the lots were never partitioned as conjugal assets of Mariano Trias and Maria C. Ferrer. One of the arguments adduced in favor of the claim of the movants that the properties in question, which were acquired during the lifetime of Mariano Trias, were never partitioned is that, according to the records of the Register of Deeds and according to the friar lands agents, the alleged partition of the said properties as conjugal properties of the deceased Mariano Trias and Maria C. Ferrer had not been registered in said offices. The failure to make the registration is perhaps due to the neglect the heirs. The fact, however, remains that the exhibits presented in Court, especially Exhibit 3-Trias and Annex E, which are the project of partition and the approval thereof, cannot be ignored by this Court. The neglect of the parties in not actually partitioning the properties do not argue in favor of the fact that partition was not a actually decreed. Adjudications may be made pro indiviso without actual division or partition of the properties among the heirs. WHEREFORE, the motion for reconsideration is hereby denied and the judgment rendered declared final. So ordered. Bengzon, C.J., Padilla, Concepcion, Barrera, Paredes, and Dizon, JJ., concur. Bautista Angelo, Reyes, J.B.L., Regala and Makalintal, JJ., took no part.

Zamboang V City of Zamboanga

Facts

Prior to the incorporation as a chartered city, the Municipality of Zamboanga was the provincial capital ofZamboanga Province. By virtue of Commonwealth Act 39, section 50 providing that the buildings and other properties that the Province will abandon in view of its conversion as Zamboanga City shall be paid for by the City of Zamboanga at a price to be fixed by the Auditor General, the said properties consisting of 50 lots were identified and the price were fixed thereof. An allotment for its payment was authorized by the BIR Commissioner. In June 17, 1961, RA 3039 was approved and it amended section 50 of the Commonwealth Act 39 providing that all buildings, properties, and assets belonging to the Province of Zamboanga and located in the City of Zamboanga are transferred free of charge in favor of the City of Zamboanga. The Province of Zamboangadel Norte filed a complaint for declaratory relief with preliminary injunction contending that the RA 3039 isunconstitutional as it deprives the Province of its properties without just compensation and due process. Issue Whether or not RA 3039 is unconstitutional? Held The court held that to resolve the issue it is important to identify the nature of the properties in dispute. The properties that are devoted for public purpose are owned by the province in its governmental capacity. Those that are not devoted for public use remain as patrimonial property of the Province. The RA 3039 is held valid in so far as the properties that are devoted for public use or owned by the province in its governmental capacity and thus must retain its public purpose. Hence these governmental properties need not be paid by the City ofZamboanga. With respect to the patrimonial properties from the 50 lots in dispute, the RA 3039 cannot be applied in order to deprive the province of its own patrimonial properties that are not devoted for public use. Hence the City ofZamboanga shall pay just compensation to the Province of Zamboanga for these patrimonial properties.

PROVINCE OF ZAMBOANGA DEL NORTE VS. CITY OF ZAMBOANGA, digested

Posted by Pius Morados on

GR# L-24440 March 28, 1968 (Constitutional Law Just Compensation, Patrimonial Property) FACTS: After the incorporation of the Municipality of Zamboanga as a chartered city, petitioner province contends that facilities belonging to the latter and located within the City of Zamboanga will be acquired and paid for by the said city. However, respondent city avers that pursuant to RA No. 3039 providing for the transfer free of charge of all buildings, properties and assets belonging to the former province of Zamboanga and located within the City of Zamboanga to the said City. ISSUE: Whether or not facilities which the province shall abandon will be acquired by the city upon just compensation. HELD: Yes, If the property is owned by the municipality in its public and governmental capacity, the property is public and can be transferred free of charge. But if the property is owned in its private or proprietary capacity, then it is patrimonial and can be expropriated upon payment of just compensation.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. L-19545 April 18, 1975

PHILIPPINE SUBURBAN DEVELOPMENT CORPORATION, petitioner, vs. THE AUDITOR GENERAL, PEDRO M. GIMENEZ, respondent. Magno L. Dajao for petitioner. First Assistant Solicitor General Esmeraldo Umali and Solicitor Sumilang V. Bernardo for respondent.

ANTONIO, J.:

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Appeal by certiorari from the decision dated December 11, 1961, of then Auditor General Pedro M. Gimenez, disallowing the request of petitioner for the refund of real estate tax in the amount of P30,460.90 paid to the Provincial Treasurer of Bulacan. The facts of the case are as follows: On June 8, 1960, at a meeting with the Cabinet, the President of the Philippines, acting on the reports of the Committee created to survey suitable lots for relocating squatters in Manila and suburbs, and of the Social Welfare Administrator together with the recommendation of the Manager of the Government Service Insurance System, approved in principle the acquisition by the People's Homesite and Housing Corporation of the unoccupied portion of the Sapang Palay Estate in Sta. Maria, Bulacan for relocating the squatters who desire to settle north of Manila, and of another area either in Las Pias or Paraaque, Rizal, or Bacoor, Cavite for those who desire to settle south of Manila. The project was to be financed through the flotation of bonds under the charter of the PHHC in the amount of P4.5 million, the same to be absorbed by the Government Service Insurance System. The President, through the Executive Secretary, informed the PHHC of such approval by letter bearing the same date (Annex "B"). On June 10, 1960, the Board of Directors of the PHHC passed Resolution No. 700 (Annex "C") authorizing the purchase of the unoccupied portion of the Sapang Palay Estate at P0.45 per square meter "subject to the following conditions precedent:
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1. That the confirmation by the OEC and the President of the purchase price of P0.45 per sq. m. shall first be secured, pursuant to OEC Memorandum Circular No. 114, dated May 6, 1957. 2. That the portion of the estate to be acquired shall first be defined and delineated. 3. That the President of the Philippines shall first provide the PHHC with the necessary funds to effect the purchase and development of this property from the proposed P4.5 million bond issue to be absorbed by the GSIS. 4. That the contract of sale shall first be approved by the Auditor General pursuant to Executive Order dated February 3, 1959. 5. The vendor shall agree to the dismissal with prejudice of Civil Case No. Q-3332 C.F.I. Quezon City, entitled "Phil. Suburban Dev. Corp. V. Ortiz, et al." On July 13, 1960, the President authorized the floating of bonds under Republic Act Nos. 1000 and 1322 in the amount of P7,500,000.00 to be absorbed by the GSIS, in order to finance the acquisition by the PHHC of the entire Sapang Palay Estate at a price not to exceed P0.45 per sq. meter. On December 29,1960, after an exchange of communications, Petitioner Philippine Suburban Development Corporation, as owner of the unoccupied portion of the Sapang Palay Estate (specifically two parcels covered by TCT Nos. T-23807 and T-23808), and the People's Homesite and Housing Corporation, entered into a contract embodied in a public instrument entitled "Deed of Absolute Sale" (Annex "F") whereby the former conveyed unto the latter the two parcels of land abovementioned, under the following terms and conditions, among others:
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1. That for and in consideration of the sum of THREE MILLION THREE HUNDRED EIGHTY-SIX THOUSAND TWO HUNDRED TWENTY THREE (P3,386,223.00) PESOS, Philippine currency, to be paid by the VENDEE to the herein VENDOR in the manner outlined hereinbelow, the VENDOR by these presents does hereby sell, transfer and convey by way of absolute sale unto the VENDEE, its successors, administrators or assigns, the above described two (2) parcels of land, together with all the improvements existing thereon;

2. That the payment of the consideration mentioned in paragraph 1 above shall be made as follows: (a) The vendee is presently negotiating or securing from the GOVERNMENT SERVICE INSURANCE SYSTEM, by virtue of a directive of the President of the Philippines, a loan for the purchase of the above described two (2) parcels of land in anticipation of the purchase by the said GOVERNMENT SERVICE INSURANCE SYSTEM of the bonds to be floated by the National Government to enable the VENDEE to make this purchase, and from whatever amount may be granted as loan by the GOVERNMENT SERVICE INSURANCE SYSTEM to the VENDEE, ONE MILLION SEVEN HUNDRED TEN THOUSAND (P1,710,000.00) PESOS shall be retained by the said VENDEE for the purpose of paying and clearing the existing lien annotated at the back of the aforesaid Transfer Certificates of Title Nos. T-23807 and T-23808, said payment to be made directly to the MORTGAGEES and the difference shall be paid to the VENDOR, provided that this first payment shall not be less than ONE MILLION SEVEN HUNDRED TEN THOUSAND (P1,710,000.00) PESOS and the VENDOR is hereby constituted as Attorney-in-fact and authorized to receive from, and the GOVERNMENT SERVICE INSURANCE SYSTEM is directed to pay the balance of the loan direct to the herein VENDOR chargeable against VENDEE's loan from the GOVERNMENT SERVICE INSURANCE SYSTEM; provided, however, That should this amount be more than sufficient to cover the said mortgage lien, the VENDEE shall pay the difference to the VENDOR; and provided, further, That the VENDOR shall take charge of the preparation and registration of the documents necessary in clearing the above referred to mortgage lien, with the understanding that the expenses for preparation, notarization, registration, including documentary stamps, and other expenses for the cancellation of said mortgage lien shall be for the account of the VENDOR and shall be advanced by the VENDEE to the VENDOR; (b) That out of the sum of P1,710,000.00 to be retained by the VENDEE mentioned in the immediately preceding paragraph 2(a) for the purpose of discharging the said mortgage lien, the VENDEE shall deduct and further retain or keep as a trust fund the amount of FORTY THOUSAND (P40,000) PESOS, Philippine Currency, to answer for the remaining Notice of Lis Pendens annotated at the back of Transfer Certificate of Title Nos. T-23807 and T-23808 until such lien shall have been discharged or cancelled, the VENDEE binding itself to deliver forthwith the said amount of P40,000.00 unto the successful party involved in said Notice of Lis Pendens; (c) The remaining balance of the total consideration in the amount of ONE MILLION SIX HUNDRED SEVENTY-SIX THOUSAND TWO HUNDRED TWENTY-THREE PESOS (P1,676,223.00), Philippine Currency, or whatever amount is not paid by virtue of the first payment mentioned in paragraph (a) above, shall be paid by the VENDEE unto the VENDOR immediately upon the VENDEE's obtaining sufficient funds from proceeds of bonds floated by the VENDEE or the Government for the purchase of the properties subject of this transaction; provided, however, That full and complete payment of the balance mentioned in this particular paragraph 2(c) shall be made or paid by the VENDEE within a period of sixty (60) days from date of delivery of title by the VENDOR in the name of the VENDEE; and provided, further, That this sixty (60) days period may be extended for another period of sixty (60) days upon written request by the VENDEE at least five (5) days prior to the expiration of the said sixty (60) days period. Should there be instituted any legal action, however, for the collection of any amounts due from the VENDEE in favor of the VENDOR, the VENDEE binds itself to pay unto the VENDOR a sum equivalent to twenty-five (25%) per centum of the total balance due from the, VENDEE in favor of the VENDOR as and by way of attorney's fees, and the costs of suit; 3. That the VENDOR hereby warrants to defend the title and ownership of the VENDEE to the two (2) parcels of land above described from any claim or claims of third parties whomsoever; (4.) That all expenses for the preparation and notarization of this document shall be for the account of the VENDOR; provided, however, That registration and issuance of certificates of title in the name of the VENDEE shall be for the account of the VENDEE." (Annex "F") The above document was not registered in the Office of the Register of Deeds until March 14, 1961, due to the fact, petitioner claims, that the PHHC could not at once advance the money needed for registration expenses. In the meantime, the Auditor General, to whom a copy of the contract had been submitted for approval in conformity with Executive Order No. 290, expressed objections thereto and requested a re-examination of the contract, in view of the

fact that from 1948 to December 20, 1960, the entire hacienda was assessed at P131,590.00, and reassessed beginning December 21, 1960 in the greatly increased amount of P4,898,110.00. Said objections were embodied in a letter to the President, dated January 9, 1961, but this notwithstanding, the President, through the Executive Secretary, approved the Deed of Absolute Sale on February 1, 1961. It appears that as early as the first week of June, 1960, prior to the signing of the deed by the parties, the PHHC acquired possession of the property, with the consent of petitioner, to enable the said PHHC to proceed immediately with the construction of roads in the new settlement and to resettle the squatters and flood victims in Manila who were rendered homeless by the floods or ejected from the lots which they were then occupying (Annexes "D" and "D-1"). On April 12, 1961, the Provincial Treasurer of Bulacan requested the PHHC to withhold the amount of P30,099.79 from the purchase price to be paid by it to the Philippine Suburban Development Corporation. Said amount represented the realty tax due on the property involved for the calendar year 1961 (Annex "G"). Petitioner, through the PHHC, paid under protest the abovementioned amount to the Provincial Treasurer of Bulacan and thereafter, or on June 13, 1961, by letter, requested then Secretary of Finance Dominador Aytona to order a refund of the amount so paid. Petitioner claimed that it ceased to be the owner of the land in question upon the execution of the Deed of Absolute Sale on December 29, 1960. Upon recommendation of the Provincial Treasurer of Bulacan, said request was denied by the Secretary of Finance in a letter-decision dated August 22, 1961. Pertinent portions of this decision are quoted hereunder:
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.... the records show that the deed of sale executed on December 29, 1960 ... was approved by the President upon favorable recommendation of the Cabinet and the Committee created for the purpose of surveying suitable lots which may be acquired for relocating squatters in Manila on February 1, 1961 only and that said instrument of sale was registered with the Register of Deeds on March 14, 1961. That Corporation, as vendor, maintains that in view of the execution of the deed of sale on December 29, 1960 it ceased to be the owner of the property involved and that consequently it was under no obligation to pay the real property tax thereon effective January 1, 1961. In support of its stand, that Corporation cites Article 1498 of the New Civil Code of the Philippines which provides that "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 Article 1496 of the same Code which states that "the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee." On the other hand, the Provincial Treasurer contends that, as under the Land Registration Act (Act No. 496) the Philippine Suburban Development Corporation is still the owner of the property until the deed of sale covering the same has been actually registered, the vendor is still liable to the payment of real property tax for the calendar year 1961. It is now claimed in this appeal that the Auditor General erred in disallowing the refund of the real estate tax in the amount of P30,460.90 because aside from the presumptive delivery of the property by the execution of the deed of sale on December 29, 1960, the possession of the property was actually delivered to the vendee prior to the sale, and, therefore, by the transmission of ownership to the vendee, petitioner has ceased to be the owner of the property involved, and, consequently, under no obligation to pay the real property tax for the year 1961. Respondent, however, argues that the presumptive delivery of the property under Article 1498 of the Civil Code does not apply because of the requirement in the contract that the sale shall first be approved by the Auditor General, pursuant to the Executive Order dated February 3, 1959 and later by the President, and that the petitioner should register the deed and secure a new title in the name of the vendee before the government can be compelled to pay the balance of P1,676,223.00 of the purchase price. Respondent further contends that since the property involved is a land registered under the Land Registration Act (Act No. 496), until the deed of sale has been actually registered, the vendor remains as the owner of the said property, and, therefore, liable for the payment of real property tax. We find the petition meritorious. I. It cannot be denied that the President of the Philippines, on June 8, 1960, at his Cabinet meeting, approved and

authorized the purchase by the national government, through the PHHC, of the unoccupied portion of the property of petitioner; that on June 10, 1960, the PHHC, acting pursuant to the aforecited approval of the President, passed its Resolution No. 700 approving and authorizing the purchase of the unoccupied portion of said property; and that after the PHHC took possession of the aforementioned property on the first week of June, 1960 to use it as a resettlement area for squatters and flood victims from Manila and suburbs, the President of the Philippines at his Cabinet meeting on June 13, 1960, approved and authorized the purchase by the PHHC of the entire property consisting of 752.4940 hectares, instead of only the unoccupied portion thereof as was previously authorized. Considering the aforementioned approval and authorization by the President of the Philippines of the specific transaction in question, and the fact that the contract here involved which is for a special purpose to meet a special situation was entered into precisely to implement the Presidential directive, the prior approval by the Auditor General envisioned by Administrative Order No. 290, dated February 3, 1959, would therefore, not be necessary. As We held in Federation of the United NAMARCO Distributors v. National Marketing Corporation , 1 the approval by the Auditor General contemplated by Administrative Order No. 290 dated February 3, 1959, refers to contracts in general, ordinarily entered into by government offices and government-owned or controlled corporations, and not to a contract for a special purpose, to meet a special situation and entered into in implementation of a Presidential directive to solve and emergency. In other words, where the contract already bears the approval of the President, the action of the Auditor General would no longer be necessary because under the said Administrative Order, the President has, at any rate, the final say. II Under the civil law, delivery (tradition) as a mode of transmission of ownership maybe actual (real tradition) or constructive (constructive tradition). 2 When the sale of real property is made in a public instrument, the execution thereof is equivalent to the delivery of the thing object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred. 3 In other words, there is symbolic delivery of the property subject of the sale by the execution of the public instrument, unless from the express terms of the instrument, or by clear inference therefrom, this was not the intention of the parties. Such would be the case, for instance, when a certain date is fixed for the purchaser to take possession of the property subject of the conveyance, or where, in case of sale by installments, it is stipulated that until the last installment is made, the title to the property should remain with the vendor, or when the vendor reserves the right to use and enjoy the properties until the gathering of the pending crops, 4 or where the vendor has no control over the thing sold at the moment of the sale, and, therefore, its material delivery could not have been made. 5 In the case at bar, there is no question that the vendor had actually placed the vendee in possession and control over the thing sold, even before the date of the sale. The condition that petitioner should first register the deed of sale and secure a new title in the name of the vendee before the latter shall pay the balance of the purchase price, did not preclude the transmission of ownership. In the absence of an express stipulation to the contrary, the payment of the purchase price of the good is not a condition, precedent to the transfer of title to the buyer, but title passes by the delivery of the goods. 6 III . We fail to see the merit in respondent's insistence that, although possession was transferred to the vendee and the deed of sale was executed in a public instrument on December 29, l960, the vendor still remains as owner of the property until the deed of sale is actually registered with the Office of the Register of Deeds, because the land sold is registered under the Torrens System. In a long line of cases already decided by this Court, the constant doctrine has been that, as between the parties to a contract of sale, registration is not necessary to make it valid and effective, for actual notice is equivalent to registration. 7 Indeed, Section 50 of the Land Registration Act provides that, even without the act of registration, a deed purporting to convey or affect registered land shall operate as a contract between the parties. The registration is intended to protect the buyer against claims of third persons arising from subsequent alienations by the vendor, and is certainly not necessary to give effect to the deed of sale, as between the parties to the contract. 8 The case of Vargas v. Tancioco, 9 cited by respondent, refers to a case involving conflicting rights over registered property and those of innocent transferees who relied on the clean titles of the properties in question. It is, therefore, not relevant to the case at bar. In the case at bar, no rights of third persons are involved, much less is there any subsequent alienation of the same property. It is undisputed that the property is in the possession of the vendee, even as early as the first week of June,

1960, or six (6) months prior to the execution of the Deed of Absolute Sale on December 29, 1960. Since the delivery of possession, coupled with the execution of the Deed of Absolute Sale, had consummated the sale and transferred the title to the purchaser, 10 We, therefore, hold that the payment of the real estate tax after such transfer is the responsibility of the purchaser. However, in the case at bar, the purchaser PHHC is a government entity not subject to real property tax. 11 WHEREFORE, the appealed decision is hereby reversed, and the real property tax paid under protest to the Provincial Treasurer of Bulacan by petitioner Philippine Suburban Development Corporation, in the amount of P30,460,90, is hereby ordered refunded. Without any pronouncement as to costs. Makalintal, C.J., Fernando, Barredo and Aquino, JJ., concur. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-884 June 30, 1947 PATRICIO CONTRERAS and JERUSALEM GINGCO, petitioners, vs. ALFONSO FELIX, Judge of First Instance of Manila, and THE CHINA BANKING CORPORATION, INC.,respondents. Lucio Javillonar for petitioners. La O and Feria for respondent China Banking Corporation. Respondent Judge in his own behalf. TUASON, J.: The case concerns a proposed modification of a final judgment. The earnestness with which the petition is maintained will be our excuse for making this decision more lengthy than the nature of the case in other circumstances would warrant. Patricio Contreras and Jerusalem Gingco brought a suit against the China Banking Corporation, Inc., and Juan V. Molina and Teodora Arenas, husband and wife to annul a mortgage executed by the spouses in favor of the Bank and to recover damages. The Court of First Instance of Manila, the Honorable Jose O. Vera presiding, absolved the Bank and condemned the other two defendants to pay various amounts in various concepts with certain deductions. The lower court's judgment in full is as follows: Por los hechos y razones expuestos, se dicta decision en esta causa, declarando: (1) Que la hipoteca otorgada a favor de The China Banking Corporation es valida, pues el banco obro de buena fe; (2) Condenado a Juan V. Molina y Teodora Arenas a pagar a Jerusalem Gingco en concepto de indemnizacion de daos y perjuicios la cantidad de P2,000; (3) Obligando a los conyuges Juan V. Molina y Teodora Arenas a pagar la deudahipocateria al banco The China Banking Corporation a fin de que las accesorias y las dos puertas adicionales no tengan gravamen alguno. Si no la hacen dentro de treinta dias despues de quedar firme esta sentencia, Jerusalem Gingco puede hacer ese rescate, cargando la dueda hipotecaria a cuenta de Juan V. Molina y Teodora Arenas, pudiendo incluirse en la ejecucion que se expida en esta causa el cobro de lo que Jerusalem Gingco pague al banco por dicha hipoteca; (4) Del credito de Jerusalem Gingco contra Juan V. Molina y Teodora Arenas de P4,836.31 en la causa No. 44960, se debe deducir el exceso de lo pagado por Teodora Arenas en la subasta publica que hubo con motivo de la ejecucion expedida en la causa No. 36669. Dicho exceso es de P576.25, que se debe deducir de los P4,836.31. (5) Que los conyuges Juan V. Molina y Teodora Arenas paguen a Jerusalem Gingco P2,520 por los alquileres de las dos puertas adicionales a razon de P30 mensuales (P15 por puerta), correspondiente al periodo del 4 de
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Septiembre de 1934 al 4 de Septiembre de 1941. Desde esta ultima fecha, dichos demandados deberan pagar a Jerusalem Gingco P30 mensuales hasta que dichas puertas adicionales sean entregadas a su propietaria Jerusalem Gingco. (6) Los demandantes, tan pronto hayan cobrado algo de los demandados Juan V. Molina y Teodora Arenas, deben pagar los derechos de escribania por esta causa. (7) Se condena a Juan V. Molina y a Teodora Arenas a pagar las costas del presente juicio. From that judgment, the plaintiffs appealed, but not any of the defendants. The parts of the decision to which the plaintiffs took exception were thus specified in the notice of appeal: (a) En cuanto declara valida la hipoteca otorgada por los demandados Juan V. Molina y Teodora Arenas a favor de su codemandada The China Banking Corporation, y al no condenar a esta a pagar indemnizacion a los demandantes. (b) En cuanto declara que, si los demandados Molinas dejaren de pagar su deuda hipotecaria al Banco demandado a fin de que las accesorias en cuestion esten libres de toda carga y gravamen, la demandante Jerusalem Gingco puede hacer el rescate, pudiendo incluirse en la ejecucion que se expida en esta causa el cobro de lo que esta pague al Banco por dicha hipoteca y, (c) En cuanto declara que, el credito de Jerusalem Gingco contra los demandados Molinas a cuenta del importe de la sentencia en el asunto civil No. 44960 era solamente de P4,836.31 en vez de P6,951.31. In due time this court rendered judgment couched in these words: For all the foregoing, the deed of mortgage dated November 8, 1930 is declared null and void as to the onehalf of the mortgaged property belonging to Jerusalem Gingco and rescinded as to the remaining one-half belonging to the spouses Molina, and the appealed decision is modified by ordering all the defendants to pay Jerusalem Gingco the amount of P6,951.31, plus the additional amount of P30 monthly from September 4, 1934, to September 4, 1941, and to continue paying the same monthly amount thereafter until the two new doors of the accesoria in question are delivered to said Jerusalem Gingco. The defendants shall also pay the filing fees of the complaint in the lower court and the costs in both instances. (Contreras and Gingco vs. China Banking Corporation, 76 Phil., 709, 716, 717.) After this trial judgment was entered, the case was sent back to the lower court and execution was issued. The sheriff at first undertook to collect from the China Banking Corporation one-half of the judgment, upon the indication, it is claimed, of the plaintiffs' attorney, but objection by the bank having been filed with the court, the Honorable Alfonso Felix, judge, one of the respondents herein, ordered that the portion of the judgment due from this defendant was only one-third. The latter amount was later paid by the bank and turned over to, and receipted for by, the plaintiffs' counsel. It so happened that the other defendants were insolvent, whereupon the execution creditors asked for an alias execution against the bank for the unpaid balance of the judgment. That motion was denied and the present petition for mandamus was the off-shoot. It was contended below, and it is contended here, that the act of the bank was tortuous and falls under the provision of article 1902 of the Civil Code so that its liability is joint and several. There is no dispute, and it can be said with confidence, that the China Banking Corporation's liability under the terms of the judgment of this court is merely joint, joint in the sense in which the word is understood in the civil law. "It is already a well-established doctrine in this jurisdiction that, when it is not provided in a judgment that the defendants are liable to pay jointly and severally a certain sum of money, none of them may be compelled to satisfy in full said judgments." (Oriental Commercial Co. vs. Abeto and Mabanag, 60 Phil., 180, and Sharruf vs.Tayabas Land Co. and Ginainati, 37 Phil., 655.) That ruling is in entire harmony with articles 1137 and 1138 of the Civil Code. Under that doctrine the lower court has no legal authorities under any circumstances to make the change sought by the plaintiffs; and this court itself may not make the change after the judgment has become executory. According to that decision a mistake such as that here alleged, if it be a mistake, is not clerical; it goes to the very substance of the controversy. Only clerical errors, or mistakes or omissions plainly due to inadvertence or negligence may be corrected or supplied after the judgment has been entered. "The power of courts to correct clerical errors and misprisions and to make the record speak the truth by nunc pro atunc amendments after the term does not enable them to change their judgment in

substance or in any material respect. Consequently it is well-settled that, in the absence of statute permitting it; the law does not authorize the correction of judicial errors, however flagrant and glaring they may be, under the pretense of correcting clerical errors." (1 Freeman on Judgments, pp. 269-271.) "The general power to correct clerical errors and omissions does not authorize the court to repair its own inaction, to make the record and judgment say what the court did not adjudge, although it had a clear right to do so. The court cannot under the guise of correcting its record put upon it an order or judgment it never made or rendered, or add something to either which was not originally included although it might and should have so ordered or adjudged in the first instance. It cannot thus repair its own lapses and omissions to do what it could legally and properly have done at the right time. A Court's mistake in leaving out of its decision something which it ought to have put in, and something in issue of which it intended but failed to dispose, is a judicial error, not a mere clerical misprision, and cannot be corrected by adding to the entered judgment the omitted matter on the theory of making the entry conform to the actual judgment rendered." (Id., p. 273.) Slight reflection will show the wisdom of this rule. The necessity of giving finality to judgments that are not void is self-evident. The interests of society impose it. The opposing view might make litigation "more unendurable than the wrongs it is intended to redress." It would create doubt, real or imaginary, and controversy would constantly arise as to what the judgment or order was. As this court has announced, "public policy and sound practice demand that, at the risk of occassional errors, judgments of courts should become final at some definite date fixed by the law. The very object for which courts were instituted was to put an end to controversies." (Layda vs.Legazpi, 39 Phil., 83; Dy Cay vs. Crossfield & O'Brien, 38 Phil., 521.) We have no cause to depart from this rule. It is a rule that must be adhered to regardless of any possible injustice in a particular case. It is not a legal concept of the flexible kind, capable of being individualized to meet the needs of varying conditions. "We have to subordinate the equity of a particular situation to the overmastering need" of certainty and immutability of judicial pronouncements. The loss to the litigants in particular and to society in general "would in the long run be greater than the gain if judges were clothed with power to revise" their decisions at will. "Perhaps, with a higher conception" of the administration of justice and its needs, "the time will come when even revision will be permitted if revision is in consonance with established standards" of court functions, "but the time is not yet." It would be tedious to give illustrations of clerical mistakes, errors and omissions, correction of which might be permitted. It suffices for the purpose of this decision to say that the mistake under consideration, if it be a mistake, is not of the apparent exceptions, at least in this jurisdiction. In truth, there is no proper and sufficient showing here that the alleged mistake was due to inadvertence on the part of the court. We have been through with the decision and have not detected in it any clear purpose or intention to make the defendants jointly and severally liable. In all probability, the nature of defendants' liability (whether joint or joint and several) was not touched upon at all by the parties and was not even given thought by them or by the court. The point was involved in obscurity. As the judgment of the lower court plainly indicates, the case was very intricate, complicated by a multiplicity of claims and counterclaims arising from different juridical acts and sought from different parties who sustained diverse relationships to the plaintiffs and to each other with reference to the separate items. It is not to be wondered at if the finer point of solidarity among the defendants was swallowed up and lost in the maze of these claims and counterclaims over the validity of which the three-cornered contest was centered and bitterly waged. The uncontroverted facts alone are so complex that more than one close reading of either decision is needed to get a comprehensive grasp of them. The fact that the plaintiffs' attorney instructed the sheriff to levy execution on the bank for only one-half of the judgment, when it could have demanded the whole amount from that entity if its liability was joint and several, offers itself as possible proof that in the mind of the petitioners themselves this defendant was to bear only a pro-rata share of the indebtedness. In other words, if the bank's liability, in plaintiffs' opinion, was solidary, they had the option to exact the payment of the entire amount due from any of the defendants, subject to the right of the pay or to collect from the others their proportionate shares of the obligation. It would seem that the plaintiffs became wise to the question of solidarity among the defendants only when the matter of whether the bank should pay one-half or onethird of the judgment came before the court below. It is said that the judgment is at variance with the context of the decision. Granting this for the moment to be the case, yet the discrepancy pointed out is not of the nature that would justify modification of the judgment. The principles we have cited in the preceding paragraphs should put this matter at rest. More to the point is another well-recognized doctrine, that the final judgment as rendered is the judgment of the court irrespective of all seemingly contrary

statements in the decision. "A judgment must be distinguished from an opinion. The latter is the informal expression of the views of the court and cannot prevail against its final order or decision. While the two may be combined in one instrument, the opinion forms no part of the judgment. So, . . . there is a distinction between the findings and conclusions of a court and its judgment. While they may constitute its decision and amount to the rendition of a judgment, they are not the judgment itself. They amount to nothing more than an order for judgment, which must, of course, be distinguished from the judgement." (1 Freeman on Judgments, p. 6) At the root of the doctrine that the premises must yield to the conclusion is perhaps, side by side with the needs of writing finis to litigations, the recognition of the truth that "the trained intuition of the judge continually leads him to right results for which he is puzzled to give unimpeachable legal reasons." "It is an everyday experience of those who study judicial decisions that the results are usually sound, whether the reasoning from which the results purport to flow is sound or not." (The Theory of Judicial Decision, Pound, 36 Harv. Law Review, pp. 9, 51.) It is not infrequent that the grounds of a decision fail to reflect the exact views of the court, especially those of concurring justices in a collegiate court. We often encounter in judicial decisions, lapses, findings, loose statements and generalities which do not bear on the issues or are apparently opposed to the otherwise sound and considered result reached by the court as expressed in the dispositive part, so called, of the decision. But is there really any conflict between the considerations or findings and the judgment of this court? It appears that the sole reliance of the petitioners is on the statement in the decision, viz.: that "the assignment of error is also welltaken" and that "the China Banking Corporation must answer for the amounts above-mentioned as a consequence of our conclusion as to the nullity of the mortgage." That statement had reference to the second assignment of error which complained, in the words of this court, of the trial court's "failure to order the China Banking Corporation to indemnify Jerusalem Gingco in the amount of P6,951.31, which was adjudicated in her favor in Civil Case No. 44960 of the Court of First Instance of Manila, and which appellant failed to collect in view of the third-party claim filed by said bank, and the rents which said appellant failed to collect from accesorias Nos. 1635, 1630 (1637) and 1639 at the rate of P65 a month, beginning from September 4, 1934." That comment and the second assignment of error did not exhibit any intention, let alone plain intention, to hold the China Banking Corporation liable in solido. The idea of solidarity is no more manifest that the idea of mere joint liability among the co-obligators. If there was any intention to make the defendants' obligation under the judgment solidary, it is not apparent from the language employed. If there was inadvertence on the part of the court, the omission was not so obvious as to justify rectification. Nowhere in the decision is there any reference to article 1902 of the Civil Code, or unequivocal declaration that each of the defendants was bound to the performance or payment of the entire judgment. Even if the liability of the bank arose from tort and is in solido, it is now too late to enforce that liability in the manner specified in the applicable provisions. When a claim or demand has been put in suit and has passed on to final judgment, it is merged and swallowed up in the judgment and loses its vitality. All the particular qualities of the claim are merged in the judgment. And this rule applies to all claims or demand. (34 C.J., 752, 754.) In another connection this court has ruled: "It is of no consequence that .. the obligation contracted by the sureties was joint and several in character. The final judgment, which superseded the action brought for the enforcement of said contract, declared the obligation to be merely joint, and the same cannot be executed otherwise." (Oriental Commercial Co. vs. Abeto and Mabanag, supra.) Emphasis is also laid on the fact that the spouses Molina and Arenas did not appeal. The petitioners advance the proposition that since these defendants did not appeal they were excluded from the appellate court's jurisdiction. They go so far as to insinuate or say that the China Banking Corporation alone is answerable for the judgment rendered by this court. The position thus taken by the petitioners is highly untenable and inconsistent with their main thesis. If Molina and Arenas did not question the trial court's decision, the plaintiffs did appeal from the judgment, not as it affected the bank only but also the other defendants. The notice of appeal will show that the plaintiffs opened up, among other questions, that of the extent of Molina's and his wife's liability to the plaintiffs as well as the bank's. The bank did not appeal either, for that matter, but it was condemned nevertheless. That Molina and his wife did not appear and file a brief in this court did not operate to rule them out of the case. The best refutation of the petitioners' contention is the fact that the amounts which Molina and his wife were sentenced to pay by the court below were increased by this court. The authorities cited by the petitioners do not shed any light on this issue. It can be seen at a glance that there is no analogy between this case and the cases relied upon by counsel. There is one feature of the case affecting the question of practice and procedure which should not be allowed to escape our attention.

A motion for reconsideration styled "Motion for Clarification" was presented in this court before the present petition was docketed. That motion was denied on the grounds that clarification was unnecessary and that the judgment had become final. (This, by way of parenthesis, may be said to mirror the concept which this court had of the alleged error; namely, that the error, if it be error, was of judicial and not clerical character.) By the motion for an alias execution the petitioners were after exactly the same thing that we had refused to grant them. They simply turned around and took a circuitous and narrower path that led to the same goal. By appealing from the lower court's denial to issue an alias execution, the plaintiffs now try to obtain by indirection what they failed to get directly. The procedure is indeed anomalous and success of the petition would lead to anomalous consequences. How? 1. "It is well-settled that a decision concurred in by the entire bench cannot be modified, except on regular reconsideration." (5 C.J.S., 1485.)The change the petitioners would have us make would constitute modification of the judgment; they would have a new matter of substance inserted therein. This matter that the bank's liability is not joint but solidary was not put in issue in the original case and there does not appear to have been any hearing or voting on this specific point. This matter goes to the merits, and hearing and voting thereon can properly be had only by going into the whole record of the main case. On the other hand, adequate study of the whole case can not be accomplished except on a regular motion for reconsideration such as the one we dismissed. In other words, for the purpose of modifying the judgment the proceeding must be direct and not, like the present proceeding, collateral. Direct proceeding on a regular motion for reconsideration would be all the more necessary, if the motion for amendment were to be entertained, because some of the justices who signed the decision have resigned and the new members who have taken their places did not have the benefit of hearing the arguments and going over the pleadings and evidence. The scope of our authority on a petition for mandamus, which is a special proceeding, is limited to an examination of the allegations therein and in the answer, and perhaps of the decision of this court, which was not attached to as part of the petition. Under such petition the pleadings, the evidence and the briefs in the main cause are not legally brought before us. Quite apart from this technical barrier, the record of the case has actually been returned to the court of origin. 2. Granting of the petition for mandamus would not be an amendment by this court of its decision. In form, it would be a command to the court below to do as the petitioners asked. In its implications, it would be a sanction for inferior courts, in the process of execution, to change judgments of courts of superior jurisdiction in the light of what they believe is the intention of the higher court as gathered from statements in the body of the decision. It would be taken as a green-light signal for inferior courts to probe into the decisions of superior courts to verify if the judgment conforms to the text. The result of such practice would be intolerable. That the lower court's decision might be appealable would not remedy the situation greatly. In the present case there would be the added paradox that we would reverse the lower court for refusing to allow precisely what this court itself the author of the decision which was in the best position to say what the decision meant denied because the judgment was clear and had acquired finality. For the foregoing considerations, the petition is denied without costs. Moran, C.J., Paras, Hilado, Bengzon, and Hontiveros, JJ., concur.

Republic of the Philippines SUPREME COURT

Manila

EN BANC G.R. No. L-6364 January 11, 1912 JUAN GUMIRAN, EUSEBIO GUMIRAN, and SALVADOR GUMIRAN, plaintiffs-appellants, vs. PIO GUMIRAN, defendant-appellee McDougall & Concepcion and Buencamino and Son & Lontok, for appellants. No appearance for appellee. JOHNSON, J.: On the 18th of February, 1909, the plaintiffs commenced an action in the Court of First Instance of the Province of Isabela, relating to the possession of a certain parcel of land, described in paragraph 2 of said complaint. The plaintiffs alleged that they were the absolute owners and entitled to the possession of said land; that upon the 6th day of May, 1908, they were in possession of said land and had been from time immemorial, and that, without any right or title, the defendant deprived them of the possession of the same, that the defendant was still in possession of said land and that the plaintiffs, by reason of such wrongly dispossession, had suffered damages in the sum of P500. The prayer of the petition of the plaintiffs was a follows: Therefore the plaintiffs through their counsel pray the court to render judgment: (1) Sentencing the defendant to restore the property described in paragraph 3 of this complaint; (2) Declaring that the plaintiffs are entitled to possession and ownership of the said property and imposing perpetual silence upon the defendant with reference to his claims of ownership of said property; (3) To payment of P500 damages; (4) To pay the costs of this case; and (5) Any other relief and compensation that the court may consider just and equitable. To the foregoing complaint the defendant presented a demurrer, based upon the ground that the Court of First Instance did not have jurisdiction of said cause that the action was one over which the courts of justice of the peace had exclusive jurisdiction. After hearing the evidence adduced during the trial of he cause, the honorable Richard Campbell, judge, rendered the following decision: On March 20, 1909, the defendant filed in this case a demurrer to the complaint on the ground that the allegations of the plaintiff, as set forth in said complaint, brought this matter within the purview of the provisions of section 80 of the Code of Civil Procedure; and that therefore the action is for detainer; that this court accordingly lacks jurisdiction to try this case, for the reason that the facts set forth in the complaint demonstrate that the true detainer alleged by the plaintiff occurred within a year from the date when the cause of action arose, and that therefore it should have been instituted in the justice of the peace court. The case was called for trial on January 12, 1910, the attorneys Messrs. MacDougall and Concepcion appearing for the plaintiff and Messrs. Hawkins and Harvey for the defendant. After earning the argument of counsel for both parties and having carefully considered the law application to the questions raised by the defendant in his demurrer, as well as legal precedents cited by both parties, the court is of the opinion that the demurrer should be sustained. The allegation of the plaintiff's counsel that this is an action for recovery, and not an action for forcible entry, seems to be the base solely on the fact that in drawing up the complaint the phraseology of section 80 of the Code of Civil Procedure was not used; but this court believes that the complaint very clearly brings this matter under the provisions of section 80, and, according to the decision of the Supreme Court in the case of Ledesma vs. Marcos (9 Phil. Rep., 618), which is one of the precedents cited by the plaintiff's in support of his contention, an action for recovery based on any of the provisions of section 80 of the Code of Civil Procedure can not be instituted in the Court of First Instance within one year from the time when the cause of action arose. Even though it is possible to conceive that an action for recovery may be outside the provisions

of section 80 of the Code of Civil Procedure, if such is the case, the plaintiff should be adduced in his complaint facts sufficient to demonstrates thereby that this action the legal provisions governing an action for illegal detainer. Since the plaintiff preferred to exercise together in a single complaint of action for recovery the action for possession and the action of recovering title, he should have waited for the period of one year to elapse from the date when the cause of action arose before filing his complaint in this court, because the Court of First Instance has no jurisdiction over an action for recovery until after the expiration of the time prescribed by section 80 of the Code of Civil Procedure. (Archbishop of Manila vs. Municipality of Rosario, 14 Phil. Rep., 176; Bishop of Cebu vs. Mangaron, 6 Phil. Rep., 286; Ledesma vs. Marcos, 9 Phil. Rep., 618.) Therefore, the court sustains the demurrer and declares this cause dismissed. From the decision the plaintiffs appealed and made the following assignments of error: I. The court erred in declaring that the complaint filed in this case constitutes a summary action for possession included within the provisions of section 80 of the code of Civil Procedure in force in the Philippine Islands, Act No. 190, wherefore the Court of First Instance lacks original jurisdiction over the matter in litigation. II. The court erred in declaring that the action for recovery as well as the action for restitution of possession of a parcel of real estate can not be instituted in the Court of First Instance within one year from the time when the cause of action arose. III. The court erred in sustaining the defendant's demurrer and in dismissing the plaintiffs' complaint. By reference to the complaint, it will be noted that the present action was commenced on the 18th of February, 1909, and that the alleged dispossession of the plaintiffs took place on the 6th of May, 1908. The action, therefore, was commenced within one year from the time of the alleged dispossession. We are of the opinion that the only question presented in this appeal is whether or not the present action can be maintained in the Court of First Instance, in view of the provisions of section 80 of the Code of Procedure in Civil Actions, as amended by Act No. 1778. Said section 80 provides for a special remedy for the purpose of recovering the possession of land under the special facts and gives justice of the peace original jurisdiction in such cases. The facts upon which said action (forcible entry and detainer) can be brought, are specially mentioned in said section. They are: "That the person has been deprived of the possession of his lands by force, intimidation, threat, strategy, or stealth," etc. Of course we do not mean to decide that the complaint must allege, in the language of the statute, that the person has been deprived of his possession by force, intimidation, threat, strategy, or stealth. The plaintiff in an action of desahucio must set up in his complaint facts which show that the dispossession took place by reason of force, intimidation, etc. In the present case the allegation in the complaint is simply that the plaintiff has been "deprived" of the land of which he is and has been the legal owner for a long period. This allegation is not sufficient to show that the action is based upon the provisions of said section 80. Moreover, upon an examination of the prayer of the complaint, it is seen that the plaintiff is not only seeking to be repossessed of the land but desires also a declaration that he is the owner of the same. It is quite clear, from an examination of the complaint, that, had the same been presented in the court of the justice of the peace, it would have been demurrable, for the reason that the facts alleged fail to show that the plaintiff had been dispossessed by any of the methods mentioned in said section 80. It is a general rule of pleading and practice that in all pleading filed in courts of special jurisdiction, the special facts giving the court jurisdiction must be specially alleged and set out. Unless these special jurisdictional facts are alleged, the complaint was demurrable. The complaint in the present case not containing allegations showing the special jurisdiction of the justice of the peace, the same would have been demurrable had it been filed in the court of a justice of the peace. Said section 80 does not cover all of the cases of dispossession of lands. Whenever the owner is dispossessed by any other means than those mentioned in said section, he may mantained his action in a Court of First Instance, and it is not necessary for him to wait until the expiration of twelve months before commencing an action to be repossessed and to be declared to be the owner of said land. The summary action before a justice of the peace is given only for the special circumstances mentioned in said section (80). In all other cases Courts of First Instance have jurisdiction, even though the twelve months have not elapsed. (Alonso vs. Municipality of Placer, 5 Phil. Rep., 71; Roman Catholic Church vs. Familiar, 11 Phil. Rep., 310; Gutierrez vs. Rosario, 15 Phil. Rep., 116.) Prior to the existence of Act No. 2041, justice of the peace could try to questions of title to land. In an action of

forcible entry and detainer, therefore, the question of ownership can not be tried. (Bishop of Cebu vs. Mangaron, 6 Phil. Rep., 286; Barlin vs. Ramirez, 7 Phil. Rep., 41; Evangelista vs. Tabayuyong, 7 Phil. Rep., 607; Ty Laco Cioco vs. Muro et al. 9 Phil. Rep., 100.) It is not believed that it was the intention of the legislature in giving justices of the peace original, exclusive jurisdiction in the cases mentioned in the section 80, to thereby deprive the Courts of First Instance of original jurisdiction in other cases of dispossession, where the plaintiff desires to have the question of his title determined at the same time, even thought the action should be commenced in the Court of First Instance within the year. For all of the foregoing reasons, we are of the opinion and so decide that, under the facts alleged in the complaint in the present case, the Court of First Instance had jurisdiction and therefore the demurrer presented by the defendant should have been overruled. The judgment of the lower court, sustaining the demurrer, is hereby reversed, and the case is hereby remanded to the lower court, with direction that the defendant be permitted to file his answer within the time specified by law; and without any finding as costs, it so ordered.
Republic of the Philippines SUPREME COURT Manila

EN BANC G.R. No. L-43304 October 21, 1936 ANTONIO F. AQUINO, special administrator of the testate estate of the deceased Mariano Aquino, plaintiffappellee, vs. TOMAS DEALA, defendant-appellant. Bernardo Fabian for appellant. M. A. Ferrer for appellee.

RECTO, J.: The questions raised in this appeal may be summarized into two: (1) Whether the contract evidenced by the documents Exhibits 1, 3, 4 and 5 is a sale with right of repurchase or a simple loan secured by real property, and (2) whether or not, as the question of ownership of the real property referred to in the complaint has been raised in the municipal court of Manila where this case originated, and later in the Court of First Instance of Manila, where it was brought on appeal, said courts had jurisdiction to continue hearing it. The other questions are incidental and subordinate and the resolution thereof will depend upon that of the former ones. The following facts have been established by the evidence of the case: The defendant approached Mariano Aquino, the plaintiff's father, to solicit a loan for a certain amount secured by the real property described in original certificate of title No. 5014, on which a house of strong materials designated by No. 670, Tanduay Street, was built. Mariano Aquino acceded to the defendant's proposition on condition that the transaction be evidenced by a deed in the form and under the conditions of Exhibit 1. The defendant accepted the conditions imposed because otherwise he would not have obtained the sum needed by him, and to that effect Exhibit 1 was executed, the principal clauses of which read as follows: 2. In consideration of the sum of four thousand pesos (P4,000) actually received by Tomas Deala and paid by Mariano Aquino, said Tomas Deala sells, cedes and transfers to said Mariano Aquino the real property described in paragraph 1 of this deed, free from all liens and incumbrances, subject to the resolutory condition hereinafter stated. 3. It is hereby agreed and stipulated between Tomas and the latter Mariano Aquino that the latter hereafter becomes the owner of the property sold, the vendor being liable for eviction and warranty in the present sale. 4. It is likewise stipulated that the vendor Tomas Deala shall be entitled to repurchase the property sold, provided he pays the selling price within the period of four (4) years from this date, plus any other sum for the

payment of which be may be liable under the terms of this document. 5. It is likewise stipulated that Tomas Deala binds himself to construct a two-story house of strong materials on the vacant lot of the parcels of land described in paragraph 1 of this deed, within the period of six (6) months from this date. 6. It is also stipulated that said Tomas Deala binds himself to insure against fire the buildings on the parcel of land above-stated for not less than three thousand pesos (P3,000), the premiums thereon to be paid by said Tomas Deala who will immediately indorse the policy to the purchaser Mariano Aquino after the property is insured. 7. It is likewise stipulated that should the period for the repurchase elapse and the vendor fails to make use of such right, this sale will become final and irrevocable without the necessity of executing any other document therefore. 8. It is likewise stipulated that Tomas Deala will defray the expenses for the execution of this deed and that of the repurchase, as the case may be, as well as the registration of both documents in the registry of deeds. 9. Mariano Aquino, as purchaser, states his acceptance of and conformity to the sale executed by Tomas Deala. 10. Upon the consummation of the sale under the above stated terms, it is now stipulated and agreed that Mariano Aquino cedes and Tomas Deala receives, under lease, the property described in paragraph 1 this deed as well as the house which said Deala binds himself to build, on the following conditions: (a) The term of the lease is four (4) years, from this date. (b) The lease will be for the sum of forty pesos (P40) a month, payable in advance within the first five days every month, at the residence of the lessor. (c) Failure to pay the lease for three (3) consecutive months will entitle the lessor to eject the lessee from the property leased.
lwphi1.nt

(d) Payment of the land tax on the property leased as well as any other tax actually imposed or hereafter to be imposed thereon, will be charged to the account of the lessee. (e) Expenses for the conservation and hygienization of the leased property as well as those in compliance with all orders issued by any office or dependency of the government in connection with said property, will also be charged to the account of the lessee. (f ) Payment of the electric current, gas consumption, water and sewer service of the leased property will likewise be charged to the account of the lessee. 11. Lastly, it is stipulated that in the event Mariano Aquino has to resort to an attorney or the courts of justice to enforce the stipulations of this contract, Tomas Deala will pay to said Mariano Aquino damages in the sum of three hundred pesos (P300), which will have to be added to the repurchase price agreed upon in case the right of repurchase above-stated is exercised. Exhibit 1 was novated on December 26, 1926, the only alteration made being in the clause referring to the price and the rent which were increased to P4,500 and P45, respectively (Exhibit 3). It was renovated on May 31, 1927, by increasing said price and rent to P5,200 and P52, respectively (Exhibit 4), and on April 20, 1933, it was finally renovated by increasing the price to P6,600, reducing the rent to P49.50 a month and extending the period of repurchase to April 20, 1933, the original period of four years agreed upon in Exhibit I having expired some months before. With the exception of the amount of the price and the rent and the extension of the period repurchase, the stipulations of the original deed (Exhibit 1) were left intact in the subsequent novations (Exhibits 3, 4 and 5). On November 4, 1926, the defendant obtained permission from the department of engineering and public work to construct a two-story house of strong materials on the vacant part of the lot in question, the work having been finished about June 23, 1928. On June 9, 1933, Mariano Aquino had the consolidation of his ownership of the property referred to in said documents registered in the registry of deeds and transfer certificate of title No. 42982 (Exhibit B) was issued to him. He died sometime later and his son Antonio F. Aquino, who instituted the present ejectment proceedings in the

municipal court of Manila, was appointed special administrator of his testate estate. The defendant timely raised the question of ownership both in the court of origin and in the Court of First Instance. The municipal court ordered the defendant to vacate the property in question and to pay the plaintiff the unpaid rents at the rate of P50 a month, plus the costs. The Court of First Instance, on appeal, substantially affirmed the appealed judgment, overruling the defenses set up by the defendant. We are of the opinion that the defendant's contention regarding the nature of the contract Exhibit I and the novations thereof is meritorious. Although from the defendant's testimony that Mariano Aquino refused to give him the sum of P4,000 if the contract was not executed under the conditions of Exhibit 1, it may be inferred that the parties entered, with reluctance on the part of the defendant, into a contract of sale with pacto de retro and not of simple loan, the very terms of the stipulations of Exhibit 1, the subsequent conduct of the parties and other circumstances of the case warrant the conclusion that the true intention of the parties was the granting of a loan in a certain amount to the defendant with interest at 12 per cent per annum which, in view of the defendant's precarious situation, was later reduced to 9 per cent so that he could build another house on the vacant part of the lot in question, the loan being secured by said lot, the house already built thereon at the time of the execution of the contract and that which the defendant intended to build with the money received from Mariano Aquino. If the words "sale with right of repurchase", "price", "repurchase", "right of redemption", "lease", "rent", "purchaser", "vendor", and other similar words used according to custom in the deed Exhibit 1, the other stipulations contained herein and the other circumstances of the case are incompatible with the idea that it was the intention of the assignor to transfer the ownership of the property in question to the purchaser at a certain price, the vendor reserving for himself only the right to repurchase it within a certain period. Let us begin with the stipulations of the original contract Exhibit 1. Those contained in paragraphs 5, 6, 10 and 11 thereof are, in our opinion, incompatible with the theory that the contract was one of purchase and sale as claimed by the plaintiff. We should not lose sight of the fact, that between an absolute sale and a sale with right of repurchase, no difference exists except that in the latter the ownership of the purchaser is subject to the resolutory condition that the vendor exercises his right of repurchase within the time agreed upon. Under paragraph 5 of Exhibit 1, the so-called vendor found himself to construct a two-story house of strong materials within six months on the vacant part of the lot referred to in the contract. If the contract were truly of purchase and sale, it is not explained why the vendor should have to assume said obligation and spend the money received from the purchaser in compliance therewith. The act which the defendant bound himself to execute by virtue of the contractual clause under consideration was an act of ownership and the performance thereof devolved upon the purchaser-owner, not upon the vendor-lessee. Said clause indicates that Mariano Aquino, in granting the loan of P4,000 to the defendant, considered the security offered insufficient and therefore required the debtor to amplify it by constructing another additional house on the lot given as security. Had it been the intention of the parties to make this new house, upon construction, a part of the subject matter of the said sale, a stipulation regarding payment of additional rent would have been inserted in the contract inasmuch as a rental of P40 a month was fixed for the use and occupation of the house already existing on the property which is the subject matter of the contract. It is true that under paragraph 10 this sum of P40 was for the rent not only of the house already existing but also of that which the defendant undertook to construct, but this part of the contract is clearly fictitious, because if the rent of P40 covered the two houses, it is not explained why the lessee should agree to pay rent for the occupation of an inexistent house which he himself was to construct with his own money and how the lessor should accept rent of only P40 for two houses of strong materials, one of which consists of two stories. Paragraph 6 and paragraph 10, subparagraph ( d), of Exhibit 1 imposed upon the vendor the obligation to in sure against fire the buildings constructed on the property which is the subject matter of the contract, for not less than P3,000, the payment of the premiums thereof being to the account of said vendor who was obliged to indorse the policy immediately to the purchaser and to pay, also for his own account and responsibility, the land tax and any other taxes imposed or that might thereafter be imposed upon the property. When a property is insured, the indemnity, in case of loss, is paid to the owner because the insurable interest is his. This being so, the correlative obligation, to pay for the insurance premiums should devolve upon the owner and not upon the lessee or vendor with right of repurchase who, with the exception of his right of redemption, should have considered all other juridical relations with the property sold extinguished after the contract. The same is true with respect to the payment of the land tax. This lien should have been shouldered by the owner and not by the lessee. Under paragraph 10, subparagraph (e), the expenses for the conservation of the property should likewise be for

the account of the defendant. However, these expenses are ordinarily for the account of the lessor (article 1554, Civil Code). It appears that Mariano Aquino desired to obtain a net income of 12 per cent per annum from his investment and for this reason he caused the defendant to assume the obligation to pay not only the land tax and insurance of the property but also the expenses for its conservation. If Mariano Aquino had assumed these obligations which strictly belong to the owner of the property, instead of imposing them upon the defendant, he would not have been able to realize said net income of 12 per cent per annum on his capital, because he would have had to deduct therefrom the sum represented by the insurance, the land tax and the expenses for the conservation of the property. On the other hand, had he assumed such obligations and compensated these liens by charging interest in excess of 12 per cent he would have openly violated the Usury Law. The other facts of the case showing that the contract in question was a simple loan with interest at 12 per cent which was later reduced to 9 per cent are as follows: (a) When the alleged sale price was increased to P4,500 in the first novation of the contract on December 26, 1926, the rent of the property was increased to P45, in spite of the fact that said property had suffered no change, in order to maintain the rate of interest at 12 per cent. When the contract was novated for the second time on May 31, 1927, by increasing the so-called selling price to P5,200, the rent was likewise increased to P52 in order to continue maintaining the rate of interest at 12 per cent. It was only when said contract was novated for the last time on April 20, 1931, and the so-called selling price was increased to P6,600 that the rent was reduced to P49.50 a month because Mariano Aquino had acceded to reduce the rate of interest to 9 per cent. The new house on the lot in question had just been finished about June 23, 1928, and it is strange that the fluctuations of the amount of the rent had nothing to do with the construction of said new house but with the successive increases of the so-called selling price, or the amount of the loan. In other words, the rent went up or down not because of the improvement or amplification of the leased property but because of the increase of the amount of the loan and the rate of the interest agreed upon by the parties. (b) The term of the right of redemption, under the original deed, was supposed to expire and it expired on September 25, 1930. However, the so-called purchaser, far from having the consolidation of his ownership registered in the registry of deeds, executed Exhibit 5, on April 20, 1931, "extending" the already expired original, term of four years stipulated in Exhibit 1 to April 20, 1933. This shows that, notwithstanding the form of the contract, Mariano Aquino always considered the transaction as a simple loan. The affirmation made in paragraph 3 of the deed Exhibit 5 that "as the term of the contract had expired on September 25, 1930, the same remaining in status quo, etc." excludes every idea that the parties intended to enter into a contract of sale. In fact, once the period for the right of redemption has expired without the right having been exercised, it could not be said, if the contract were one of sale with pacto de retro, that the contract has remained in status quo", because failure to exercise the right of redemption, in such contract, automatically produce the effect of consolidating the ownership was temporarily conditioned not having been realized. In Padilla vs. Linsangan (19 Phil., 65), we stated that "the court will not construe an instrument to be one of a sale con pacto de retro, with the stringent and onerous effects that follow, unless the terms of the instrument and all the circumstances positively require it. Whenever, under the terms of the writing, any other construction can fairly and reasonably be made, such construction will be adopted. Sales with a right to repurchase, as defined by the Civil Code, are not favored, and the contract will be construed as a mere loan unless the court can see that, if enforced according to its terms, it is not an unconscionable one." We consider the following provisions of the Civil Code in matters of interpretation of contracts pertinent to the case: If the words appear to be contrary to the evident intention of the contracting parties, the intention shall prevail. (Art. 1281.) In order to judge as to the intention of the contracting parties, attention must be paid principally to their conduct at the time of making the contract and subsequently thereto. (Art. 1282.) It may be contended that "the contracting parties may establish any agreements terms and conditions that may deem advisable, provided they are not contrary to law, morals, or public order." (Art. 1255, Civil Code.) However, we do not declare herein the nullity of the agreements contained in Exhibit 1 and its various novations. None of said

agreements is contrary to law, morals, or public order, and all of them should therefore be maintained out of respect to the will of the contracting parties. The validity of these agreements, however, is one thing, while the juridical qualification of the contract resulting therefrom is very distinctly another. Such agreements, in our opinion, change the status of the sale with pacto de retro and give rise to juridical relations of a different nature. Similar thereto is a contract of commodatum wherein payment of compensation by the person acquiring the use of the thing is stipulated. This stipulation is valid but the commodatum, although so termed, ceases to exist and is converted into another contract with different effects (art. 1741). The same thing happens with the contract of depositum. Although it would seem that article 1760 of the Civil Code indirectly authorizes the constitution of an onerous deposit, when there is an express stipulation to that effect, this court has repeatedly held that the deposit should be considered a loan when it contains a stipulation for payment of interest. (Garcia Gavieres vs. Pardo de Tavera, 1 Phil., 71; Barretto vs. Reyes, 10 Phil., 489: In re Guardianship of the minors Tamboco, 36 Phil., 939, 941.) In order not to multiply the examples, we shall cite the cases of use and habitation wherein the usuary who consumes all the fruits of the thing subject to use, and the person having the right of habitation who occupies the whole house, are considered usufructuaries (art. 527). The other point to be resolved is whether or not the municipal court had jurisdiction to proceed with the trial of the case after the defendant had raised the question of ownership therein. We have repeatedly held that the mere fact that the defendant, in his answer, claims to be the owner of the property from which the plaintiff seeks to eject him is not sufficient to divest a justice of the peace court of its summary jurisdiction in actions of forcible entry and detainer, because were the principles otherwise, the ends of justice would be frustrated by making the efficacy of this kind of action depend upon the defendant in all cases. However, we have also held (Supia and Batioco vs. Quintero and Ayala, 59 Phil., 312), favorably citing Petit vs. Black (13 Neb., 142, 154), and Green vs.Morse (57 Neb., 391), that the foregoing rule does not hold when the evidence shows that the question of title is actually involved in the litigation and that the defendant's contention, according to said evidence, is meritorious. In this case the records do not disclose the nature of the evidence presented in the municipal court of origin in connection with the question of ownership raised by the defendant and, therefore, we are not in a position to rule that said court was without jurisdiction to proceed with the trial the case. We find, however, that the evidence presented in the Court of First Instance of Manila, where the case was brought on appeal, shows that the title to the disputed property was correctly questioned. Therefore the Court of First Instance should have declared itself without jurisdiction to proceed with the trial of the case on appeal after examining said evidence, and ordered the dismissal thereof. Wherefore, we are of the opinion and so hold that the case should be dismissed without prejudice to any other action compatible with the pronouncements contained in this decision, which the parties or any of them might desire to bring, without costs. Avancea, C. J., Villa-Real, Abad Santos, Imperial, Diaz, and Laurel, JJ., concur.
Republic of the Philippines SUPREME COURT Manila

SECOND DIVISION G.R. No. L-53788 October 17, 1980 PHARMA INDUSTRIES, INC., petitioner, vs. HONORABLE MELITON PAJARILLAGA OF THE CITY COURT OF CABANATUAN CITY, NUEVA ECIJA, BRANCH II, SERGIA A. DEL ROSARIO AND "JOHN DOE/S", respondents.

ABAD SANTOS, J.: Certiorari to review the actuations of the respondent judge in Civil Case No. 8126 of the City Court of Cabanatuan which the plaintiff, the petitioner herein, initiated for the purpose of ejecting the private respondents from a piece of land. In a "Decision" dated January 7, 1980, the respondent judge dismissed the case for lack of jurisdiction. A motion to reconsider the dismissal was denied, hence the present petition. The facts and the law as understood by the respondent judge are set forth in his "Decision" which is hereby

reproduced in full: This is a complaint for Ejectment filed by the plaintiff against the defendant. The plaintiff in its complaint alleges that on November 12, 1977, the defendant Sergia A. del Rosario executed in favor of the plaintiff a Deed of Sale with Right to repurchase over a piece of land duly registered and situated at Cabanatuan City, together with all improvements and which land is covered with TCT No. 12481, now TCT No. 35940, that the defendant Sergia del Rosario executed to exercise her right of redemption in accordance with the Provision of Annex A, Deed of Sale with Right to Repurchase, which expired November 12, 1978, and despite notice to her, the plaintiff was constrained to file a petition for consolidation of ownership, Annex B; that on April 3, 1979, the Honorable Virgilio D. Pobre-Yigo, promulgated a decision in favor of the plaintiff and against the defendant, declaring the plaintiff to be the full owner of the property and ordering the Register of Deeds of Cabanatuan City, to cancel the old title; and issue a new title, TCT No. L-35940 in the name of the plaintiff; that on June 8, 1979, the plaintiff sent a letter to the defendant and all person claiming ownership, to vacate the premises in question; that despite receipt of Annex E, by the defendant on June 13, 1979, she failed and refused and still fails to vacate the premises without justification. The defendant filed her answer, admitting the allegations on Par. 1, 2, & 3, and denied the allegation in Par. 4, alleging that the defendant thru her representative Alfredo del Rosario verbally agreed to the counsel of the plaintiff, that after recomputation of the amount demanded being enormous and unconscionable, the latter should pay her obligation but contrary to the agreement to plaintiff thru counsel, did not honor the same and still continued the prosecution in this case, until the decision was rendered by this Court, to the damage and prejudice of the defendant, who is ready and able to pay her obligation; that defendant admitted the allegation in Par. 5 of the answer of the complaint, as far as the decision rendered for consolidation, but denies the rest of the allegations, because of the agreement which was dishonored by the plaintiff; that defendant also admitted the allegations in Par. 6, 7 & 8, but denies the allegation in Par. 9. On November 28, 1979, the plaintiff filed a motion for judgment on the pleading, on the ground that the defendant admitted all the material averments of the complaint and does not tender at all an issue. The defendant filed an opposition to the motion of judgment on the pleading, and a motion to dismiss, on the ground that this Court has no jurisdiction, and that it is the Court of First Instance, which has jurisdiction over the action, (Roman Catholic Bishop of Cebu versus Mangaron, 6 Philippines 286, 291). The complaint filed by the plaintiff is for ejectment. There are three kinds of action in ejecting a person from the land. It is clear in the complaint that the plaintiff is intending to eject the defendant from the land under the kind of ejectment, forcible entry or detainer, but it must be alleged in the complaint prior possession of the land by the plaintiff. But in the complaint it is alleged that the defendant is in possession of the land and not the plaintiff, and therefore the complaint should be for recovery of the right to possess the land, and the action should be filed in the Court of First Instance and not in this Court. The three kinds of action are the following: (1) The summary action for forcible entry or detainer by denominated action interdictal, under the former law of procedure (Ley de Enjuiciamiento Civil) which seeks the recovery of only physical possession, and is brought within one year in the Justice of the Peace Court; (2) The accion publiciana which is intended for the recovery of the right to possess and is a plenary action in an ordinary civil proceeding, before the Court of First Instance and (3) Action de revindication which seeks the recovery of ownership which of course included the Jus utendi and jus fruendi also brought in the Court of First Instance. Of these three kinds of action should be brought under No. 2 which is accion publiciana intended to recovery of the right to possess possession from the defendant, because it is the defendant who is in possession of the premises. The Court in its opinion, held that the complaint must be filed with the Court of First Instance of Nueva Ecija, because it is for a recovery of possession which is under the law, belong to the jurisdiction of the Court of First Instance of Nueva Ecija. WHEREFORE, judgement is hereby rendered, dismissing this case. We have to grant the petition. The proper remedy is ejectment under Rule 70 of the Rules of Court and not accion publiciana. Sec. 1 of said Rule provides: SECTION 1. Who may institute proceedings, and when. Subject to the provisions of the next succeeding section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a landlord, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld, after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such landlord, vendor, vendee, or other persons, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper inferior court against the person or persons unlawfully withholding or depriving of possession, or any

person or persons claiming under them, for the restitution of such possession, together with damages and costs. The complaint must be verified. It should be noted that the summary action provided above is one to obtain possession only, filed in a municipal court within one year after the unlawful deprivation or withholding of possession complained of has taken place. It should also be noted that the remedy provides for two distinct causes of action: (1) forcible entry in which the defendant's possession of the property is illegal ab initio, and (2) unlawful detainer wherein the defendant's possession was originally lawful but ceased to be so by the expiration of his right to possess. The present case which is to obtain possession only is one for unlawful detainer because Sergia A. del Rosario, the vendor a retro, failed to repurchase the property and after the consolidation of title in favor of the vendee a retro had been confirmed, she refused to vacate the property upon demand and after her right to possess it had ceased to be lawful. That a demand to vacate was made on Sergia A. del Rosario on June 13, 1979, and the action to eject was filed on October 22, 1979, well within the one-year period, are borne by the record. The mistake of the respondent judge in his belief that the cause of action is forcible entry wherein it is necessary to alleged prior possession and forcible deprivation thereof. But as stated above, the cause of action in this case is for unlawful detainer and it is sufficient to allege, as was done, that the defendant was unlawfully withholding possession from the plaintiff. (See 3 Moran, Comments on the Rules of Court, 302 [1970].) Where the cause of action is unlawful detainer, prior possession is not always a condition sine qua non. This is especially so where a vendee seeks to obtain possession of the thing sold to him from the vendor. But if prior possession be insisted upon, Pharma Industries, Inc. had it before the suit for unlawful detainer was filed. Art. 531 of the Civil Code provides: "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. (438a)" And according to Tolentino, "proper acts and formalities" refer "to judicial acts, or the acquisition of possession by sufficient title, Inter vivos or mortis causa, onerous, or lucrative. These are acts to which the law gives the force of acts of possession. Examples of these are donations, succession, whether intestate or intestate, contracts, such a sale with right of repurchase, judicial possession, execution of judgments, such as when a sheriff, pursuant to a decision or order of the court, places certain parties in possession of property, execution and registration of public instruments, and the inscription of possessory information titles." (II Civil Code of the Philippines, 246-247 [1972],) Pharma Industries, Inc. acquired possession when Sergia A. del Rosario executed in its favor on November 12, 1977, the deed of sale with right to repurchase over the land in question and the vendee's title was confirmed upon failure of the vendor to repurchase the property. (Annexes A-1, A-2, and A-3, Petition.) Private respondent states that subsequently on August 25, 1980, Civil Case No. 7326 was filed in the Court of First Instance of Nueva Ecija to declare the deed of sale with the right to repurchase executed by Sergia A. del Rosario in favor of Pharma Industries, Inc. as an equitable mortgage. Such a suit, however, is not a bar to the ejectment suit. WHEREFORE, finding the petition to be meritorious, it is hereby granted and, as prayed for, the respondent judge is hereby ordered to take cognizance of Civil Case No. 8126 in his court and to resolve the petitioner's Motion for Judgment on the Pleadings. No special pronouncement as to costs. SO ORDERED. Barredo, Fernandez, and De Castro, JJ., concur.
Republic of the Philippines SUPREME COURT Manila

EN BANC G.R. No. L-8139 October 24, 1955 BELEN UY TAYAG and JESUS B. TAYAG, petitioners, vs. ROSARIO YUSECO, JOAQUIN C. YUSECO and THE COURT OF APPEALS, respondents.

Pelaez and Jalandoni for petitioners. Yuseco, Abdon, Yuseco and Narvasa for respondents. MONTEMAYOR, J.: This is an appeal by certiorari by petitioners Belen Uy Tayag and her husband Jesus B. Tayag from the decision of the Court of Appeals of April 23, 1954, affirming the decision of the Court of First Instance of Manila. The facts in this case as may be gathered from the records and as found by the Court of Appeals may be briefly stated as follows. In and prior to the year 1930 Atty. Joaquin C. Yuseco had been rendering professional services to Maria Lim, owner of lots 11-A and 11-B, block 2251 of the Government Subdivision known as Hacienda de San Lazaro covered by transfer certificates of title Nos. 36400 and 36401 of the Register of Deeds of Manila. To show her appreciation of the service rendered to her Maria offered the two lots to Atty. Yuseco and his wife Rosario Yuseco for them to build on, and accepting the offer, the Yusecos built a house and an annex for servants quarters on the two lots which improvements at present may be reasonably valued at P50,000. Although Atty. Yuseco claims that the two lots were donated to him, he could exhibit no evidence of said donation and the certificates of title already mentioned remained in the name of Maria. There is reason to believe that at least during her lifetime and while she remained owner of the two lots, it was her desire to have the Yusecos occupy the land free. But to go through the formalities and to legalize the possession of the two lots, after the house and the annex were built, there was executed a lease contract to the effect that the lease was to run for a period of five years, with a rental of P120 a year; that the owner of the lots was to pay all land taxes, and that failure to pay the rent when due would be sufficient cause for the recission of the contract. This agreement was noted on the certificates of title. On November 29, 1945, a few days before her death, Maria sold the two lots to her daughter Belen Uy married to Jesus B. Tayag for and in consideration of the sum of P4,000. The new owners in 1946 asked the Yusecos to remove their houses from the land because Belen and her husband planned to build their own house on the two lots, or else pay a monthly rent of P120. Because of the failure of the Yusecos to comply with the demand, Belen assisted by her husband filed an action of ejectment in the Municipal Court of Manila which later rendered judgment for the plaintiffs and against the defendants "for the restitution of the premises described in the complaint and for the recovery of a monthly rental of P100 from November 30, 1945, up to the date of restitution, and for cost." On appeal by the defendants to the Court of First Instance of Manila, the latter rendered judgment, the dispositive part of which reads as follows: Wherefore judgment is hereby rendered declaring the plaintiff, Belen Uy Tayag, to be entitled to the possession of the two parcels of land described in the complaint upon payment by her to the defendants of the sum of P50,000, which is the value of the two houses they had built thereon; but in the event said plaintiff shall not be in a position to pay said amount within 90 days from the date this decision shall become final, the defendants are hereby declared to be entitled to purchase the two parcels of land in question for the sum P10,000, within 90 days from the date the defendants shall have failed to buy the house. In the meantime, the two parcels of land without any obligation thereof. No pronouncement is hereby made as to costs. On appeal by the plaintiffs to the Court of Appeals said court found that the Yusecos were builders in good faith under article 448 of the new Civil Code; and that as such builders in good faith, they cannot be required to remove their house and the annex unless they were paid the value thereof. The Court of Appeals further approved P50,000 and P10,000 as the reasonable values of the house and the two lots, respectively, as found by the Court of First Instance and that the Yusecos as builders in good faith will begin to pay rent only when the plaintiffs as owners of the land are unable or choose not to exercise their right to purchase the land, but in the present case, neither partly has expressed his willingness or inability to exercise the right corresponding to him under article 448 of the new Civil Code, hence the payment of rent is not in order. The Court of Appeals affirmed the decision of the Court of First Instance. Appellants Belen and her husband Jesus Tayag filed the present petition for review of the decision of the Court of Appeals, and in their brief assign the following errors: I The Court of Appeals committed a grave error of law when it decided an issue foreign to that raised in an ejectment case, for in so doing it acted without jurisdiction over the subject matter. II Granting, arguendo, that there was jurisdiction to determine an issue other than that raised in an ejectment case, the Court of Appeals committed a grave error of law in holding that the rights of Belen Uy Tayag and

Jesus B. Tayag, owners of the land, and those of Rosario Yuseco and Joaquin C. Yuseco, owner of the building, should be resolved in accordance with the provisions of Article 448 (formerly Article 361) of the Civil Code of the Philippines. III Granting, further, for the sake of argument only, that Article 448 of the Civil Code of the Philippines should govern the rights of the parties herein, the Court of Appeals gravely abused its discretion and committed a serious error of law when it affirmed the judgment of the trial court which, in effect, compels the owner of the land to sell it to the owner of the building. IV The Court of Appeals gravely erred in holding that the petitioners Belen Uy Tayag and Jesus B. Tayag shall be entitled to the possession of the land described in the complaint upon payment of the sum of P50,000 but in the event that they are not in a position to pay said amount within 90 days from the date the decision shall have become final, the respondents Rosario Yuseco and Joaquin C. Yuseco shall be entitled to purchase the land in question for the sum of P10,000. Petitioners claim that the Court of First Instance and the Court of Appeals lacked jurisdiction to decide the case as they did for the reason that the only issue involved in an ejectment case is actual possession and that under Rule 72, section 6, the only judgment that may be rendered in such a case is for the defendant to recover costs in the event that the court find that the complaint is not true, or if it finds the complaint to be true to render judgment for the plaintiff for the restitution of the premises, for the sum justly due as arrears of rent or as reasonable compensation for the use and occupation of the premises, and for costs. But according to petitioners, in spite of this legal provision both courts went further and applied the provision of article 448 of the new Civil Code. In theory, and speaking of ordinary ejectment cases, petitioners may be right; that is to say, if the lessee or occupant has not built anything on the premises, payment of rent would be a valid and satisfactory solution of the problem; but where the occupant has built on the land, especially where said building is substantial and valuable, the courts even in ejectment cases are bound to take cognizance of said fact and when they find that the construction or planting had been effected in good faith, instead of dismissing the complaint and suggesting to the parties to observe and follow the provisions of article 361 or article 448 of the old and the new Civil Code of the Philippines, respectively, and if they cannot agree, to file a new action, not only to enforce or defend the respective rights of the parties but to assess the value of the land and of the improvement as well, the courts in order to avoid multiplicity of actions and to administer practical and speedy justice may, as was done in this case, apply the provisions of the Civil Code relative to builders specially since there is no question as to the ownership of the land as shown by the certificates of title, and the ownership of the buildings. Petitioners insist that the relation between them and the respondents is that of lessor and lessee and in support of their contention they point to the contract of lease between Maria Lim and the Yusecos executed in 1930. As already stated, the Court of Appeals found respondents to be builders in good faith and that finding is conclusive. In connection with said finding, we are of the opinion that the Yusecos in the mistaken belief that the two lots were being given to them free constructed the improvements in question, and that as already stated, the execution and registration of the contract of lease was a mere formality to legalize the occupation of the lots. Despite the belief of the Yusecos about the lots being donated to them, there is every reason to believe that what Maria Lim intended was to keep the title to the land but allow the Yusecos to occupy the same free, at least as long as she kept said title. This arrangement would appear to have been known to Belen, Maria's daughter, when the two lots were transferred to her a few days before Maria died, because as observed by the Court of Appeals although the Yusecos had paid no rent since the year 1930 when they constructed the two buildings, Belen in 1946, one year after the land was transferred to her, demanded rents not for the period of 15 or 16 years but only from 1946. This action of hers neither supports nor strengthens her theory that the Yusecos since 1930 were mere lessees and continued to be such after Belen acquired the lots in question. It will be remembered that the construction in good faith was effected in 1930 and that good faith of the builders may be considered as ended in 1946 when the demand for rent was made. It is, therefore, clear that Art. 361 of the old Civil Code instead of article 448 of the new Civil Code is applicable for the reason that the new Civil Code did not go into effect until 1950. Article 361 of the old Civil Code reads as follows: Art. 361. The owner of land on which anything has been built, sown, or planted in good faith, shall be entitled to appropriate the things so built, sown or planted, upon paying the compensation mentioned in Article 453

and 454, or to compel the person who has built or planted to pay him the value of the land, and the person who sowed thereon to pay the proper rent therefor. The above-quoted legal provision is clear and it is now up to the parties, particularly the petitioners to act and make their choice. Since the Court of Appeals has found that neither party has expressed its desire or willingness to do the thing or things which by law they are authorized or compelled to perform, the courts cannot disturb their present status and naturally, payment of rent by respondent for the present, is not in order. Petitioners question the correctness of the amount of P50,000 fixed by the trial court and approved by the Court of Appeals, as the value of the improvements, claiming that under article 546 of the new Civil Code (taken from article 453 of the old Civil Code) they (petitioners) as owners of the land have the option of either refunding the amount spent for the construction of the two buildings, said to be only P18,000 or "paying him the increase in value which the thing has acquired by reason thereof." The contention of petitioners is well taken. Affirming the decision of the Court of Appeals in so far as it finds and declares respondents to be possessors in good faith, let this case be remanded to the trial court for further proceedings, particularly to give an opportunity to plaintiffs-petitioners to exercise their choice and option; and for purposes of said choice and option the trial court will admit evidence and make a finding as to the amount of the useful expenditures or "the increase in value which the thing has acquired by reason thereof", under article 453 of the old Civil Code, to be refunded or paid by the petitioners should they choose to appropriate the buildings; "the value of the land" under article 361 of the same Code, to be paid by the defendants-respondents in case plaintiffs-petitioner elect to compel them to buy the land. No costs. Paras, C. J., Bengzon, Padilla, Reyes, A., Jugo, Bautista Angelo, Labrador, Concepcion, and Reyes, J. B. L., JJ.,concur.