BUKIDNON DOCTORS HOSPITAL VS METROPOLITANT BANK TRUST & CO.

GR 161882 JULY 8, 2005

FACTS:

Herein petitioner loaned a money amounting to P25 M from respondent as a security it mortgaged 6 parcels of land located in Bukidnon. Upon default in the payment of the loan, the said parcels of land were extrajucially foreclosed and put in a public auction and were sold to the repondent bank.

In order to continue its business the petitioner proposed that It would lease the land where its hospital is erected in 3 years for 100,000 a month. Respondent bank agreed to the proposal however increasing the rental to 200,000 a month with the contract subject to a review every 6 months. The parties were able to agree with a monthly rental of 150,000 and that the contract shall take effect in November 2001.

Approximately 1 year and 8 months, respodent ordered the petitioner to vacate the premises within 15 days. The latter refused.

MBTC filed for Ex Parte Motion for a Writ of Possession.

RTC granted the motion.

ISSUE:

whether or not a writ of possession is the proper remedy for evicting a mortgagor who became a lessee of the mortgaged properties after the mortgagee has consolidated ownership over the properties and was issued new certificates of title.

HELD:

NO

In the case at bar, it is not disputed that after the foreclosure of the property in question and the issuance of new certificates of title in favor of the respondent, the petitioner and the respondent entered into a contract of lease of the subject properties. This new contractual relation presupposed that the petitioner recognized that possession of the properties had been legally placed in the hands of the respondent, and that the latter had taken such possession but delivered it to the former as lessee of the property. By paying the monthly rentals, the petitioner also recognized the superior right of the respondent to the possession of the property as owner thereof. And by accepting the monthly rentals, the respondent enjoyed the fruits of its possession over the subject property. Clearly, the respondent is in material possession of the subject premises. Thus, the trial court’s issuance of a writ of possession is not only superfluous, but improper under the law. Moreover, as a lessee, the petitioner was a legitimate possessor of the subject properties under Article 525 of the Civil Code. Thus, it could not be deprived of its lawful possession by a mere ex parte motion for a writ of possession.

In a nutshell, where a lease agreement, whether express or implied, is subsequently entered into by the mortgagor and the mortgagee after the expiration of the redemption period and the consolidation of title in the name of the latter, a case for ejectment or unlawful detainer, not a motion for a writ of possession, is the proper remedy in order to evict from the questioned premises a mortgagor-turned-lessee.  The rationale for this rule is that a new relationship between the parties has been created.  What applies is no longer the law on extrajudicial foreclosure, but the law on lease.  And when an issue arises, as in the case at bar, regarding the right of the lessee to continue occupying the leased premises, the rights of the parties must be heard and resolved in a case for ejectment or unlawful detainer under Rule 70 of the Rules of Court.

EDCA PUBLISHING & DISTRIBUTING CORP. vs. THE SPOUSES LEONOR and GERARDO SANTOS, doing business under the name and style of "SANTOS BOOKSTORE," and THE COURT OF APPEALS

G.R. No. 80298 April 26, 1990

FACTS:

Petitioner EDCA prapared 406 books amounting P8,995.65 for delivery to one Professor Jose Cruz.

Subsequently, the latter sold 120 of the said books to the respondent.

Petitioner became suspicious when Professor Cruz, placed another order without settling his previous account. EDCA find out that the check released by the same does not have funds and that no Professor under the name of Jose Cruz works for De La Salle College.

Over investigation it was made known that Jose Cruz's real name is Tomas de la Peña. Petitioners with the assistance of authority, seized without warrant the books sold to the respondent Leonor Santos and delivered it to the petitioners.

ISSUE:

Whether or not the petitioner may seize the books from private respondent because it has been unlawfully deprived of the books due to the dishonored check issued by the impostor.

HELD:

NO

In its extended memorandum, EDCA cites numerous cases holding that the owner who has been unlawfully deprived of personal property is entitled to its recovery except only where the property was purchased at a public sale, in which event its return is subject to reimbursement of the purchase price. The petitioner is begging the question. It is putting the cart before the horse. Unlike in the cases invoked, it has yet to be established in the case at bar that EDCA has been unlawfully deprived of the books.

Actual delivery of the books having been made, Cruz acquired ownership over the books which he could then validly transfer to the private respondents. The fact that he had not yet paid for them toEDCA was a matter between him and EDCA and did not impair the title acquired by the private respondents to the books. 

It would certainly be unfair now to make the private respondents bear the prejudice sustained by EDCA as a result of its own negligence. We cannot see the justice in transferring EDCA's loss to the Santoses who had acted in good faith, and with proper care, when they bought the books from Cruz. 

SOTERA PAULINO MARCELO, GABRIELA M. ANGELES, SIMEONA CUENCO, EMILIA MARCELO and RUBEN MARCELO vs. HON. COURT OF APPEALS, FERNANDO CRUZ and SERVANDO FLORES

G.R. No. 131803. April 14, 1999

FACTS:

Petitioners, heirs of the deceased Jose Marcelo, filed an action for recovery over an unregistered parcel of land in Sta. Lucia, Angat, Bulacan. It was alleged that the pertitoners had been encroached, to the extent of 7,540 square meters thereof, by respondents Fernando Cruz and Servando Flores. Which the later had denied.

From the evidence presented during trial, it shows that the said encroached parcel of land was acquired from the Heirs of Jorge Sarmiento and sold by Fernando Cruz to Servando Flores.

Trial Court ruled in favor of petitioners

Apellate Court reversed, on the grounds that Flores already has acquired ownership of the disputed land by ordinary acquisitive prescription.

ISSUE:

Whether or not Respondent is the owner by acquisitive prescription.

HELD:

YES

Respondent Cruz sold, on 03 November 1968, the 13,856 square meters of land to respondent Flores under a “Kasulatan ng Bilihan.” Respondent Flores immediately took possession of the property to the exclusion of all others and promptly paid the realty taxes thereon. From that time on, Flores had been in possession of the entire area in the concept of an owner and holding it in that capacity for almost fourteen (14) years before petitioners initiated their complaint on 06 October 1982.

Acquisitive prescription is a mode of acquiring ownership by a possessor through the requisite lapse of time. In order to ripen into ownership, possession must be in the concept of an owner, public peaceful and uninterrupted.Thus, mere possession with a juridical title,such as, to exemplify, by a usufructuary, a trustee, a lessee, an agent or a pledgee, not being in the concept of an owner, cannot ripen into ownership by acquisitive prescription, unless the juridical relation is first expressly repudiated and such repudiation has been communicated to the other party. Acts of possessory character executed due to license or by mere tolerance of the owner would likewise be inadequate.Possession, to constitute the foundation of a prescriptive right, must be en concepto de dueno, or, to use the common law equivalent of the term, that possession should be adverse; if not, such possessory acts, no matter how long, do not start the running of the period of prescription.

cquisitive prescription of dominion and other real rights may be ordinary or extraordinary. Ordinary acquisitive prescription requires possession of things in good faith and with just title for the time fixed by law; without good faith and just title, acquisitive prescription can only be extraordinary in character.

As regards, real or immovable property, Article 1134 of the Civil Code provides:

“ART. 1134. Ownership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years.

FERNANDA MENDOZA CEQUEÑA and RUPERTA MENDOZA LIRIO vs. HONORATA MENDOZA BOLANTE

G.R. No. 137944 April 6, 2000

FACTS:

Prior to 1954 a parcel of land located in the Province of Rizal was originally declared for taxation purposes of the father (Sinfroso Mendoza) of herein respondent who also is the present occupant of the land.

Subsequently the said tax declaration was cancelled and declared under the name of Sinfroso's brother (Margarito Mendoza) who are alsot the Petitioners' father.

On October 15, 1975. respondent and another brother of the petitioners ( Miguel) had a dispute over the ownership of the land during the cadastral survey of the same.

Trial Court rendred that the righful owner and possessor of the land is the petitioners.

Court of Appeals reversed the decision on the ground that the affidavits presented during trial had not been sufficiently established. Moreover, the appellate court held that the probative value of petitioners' tax receipts and declarations paled in comparison with respondent's proof of ownership of the disputed parcel. Actual, physical, exclusive and continuous possession by respondent since 1985 indeed gave her a better title under Article 538 of the Civil Code.

ISSUE:

Whether or not the respondent is the lawful owner and possessor of the parcel of land.

HELD:

YES.

When respondent came of age in 1948, she paid realty taxes for the years 1932-1948. Margarito declared the lot for taxation in his name in 1953 and paid its realty taxes beginning 1952. When he died, Miguel continued cultivating the land. As found by the CA, the respondent and her mother were living on the land, which was being tilled by Miguel until 1985 when he was physically ousted by the respondent.

Based on Article 538 of the Civil Code, the respondent is the preferred possessor because, benefiting from her father's tax declaration of the subject lot since 1926, she has been in possession thereof for a longer period. On the other hand, petitioners' father acquired joint possession only in 1952.

To settle the issue of ownership, we need to determine who between the claimants has proven acquisitive prescription.

Ownership of immovable property is acquired by ordinary prescription through possession for ten years. Being the sole heir of her father, respondent showed through his tax receipt that she had been in possession of the land for more than ten years since 1932. When her father died in 1930, she continued to reside there with her mother. When she got married, she and her husband engaged in kaingin inside the disputed lot for their livelihood.

Respondent's possession was not disturbed until 1953 when the petitioners' father claimed the land. But by then, her possession, which was in the concept of owner — public, peaceful, and uninterrupted— had already ripened into ownership. Furthermore she herself, after her father's demise, declared and paid realty taxes for the disputed land. Tax receipts and declarations of ownership for taxation, when coupled with proof of actual possession of the property, can be the basis of a claim for ownership through prescription.

In contrast, the petitioners, despite thirty-two years of farming the subject land, did not acquire ownership. It is settled that ownership cannot be acquired by mere occupation. Unless coupled with the element of hostility toward the true owner, occupation and use, however long, will not confer title by prescription or adverse possession. Moreover, the petitioners cannot claim that their possession was public, peaceful and uninterrupted. Although their father and brother arguably acquired ownership through extraordinary prescription because of their adverse possession for thirty-two years (1953-1985), This supposed ownership cannot extend to the entire disputed lot, but must be limited to the portion that they actually farmed.

We cannot sustain the petitioners' contention that their ownership of the disputed land was established before the trial court through the series of tax declarations and receipts issued in the name of Margarito Mendoza. Such documents prove that the holder has a claim of title over the property. Aside from manifesting a sincere desire to obtain title thereto, they announce the holder's adverse claim against the state and other interested parties.

However, tax declarations and receipts are not conclusive evidence of ownership. At most, they constitute mere prima facie proof of ownership or possession of the property for which taxes have been paid. In the absence of actual public and adverse possession, the declaration of the land for tax purposes does not prove ownership. In sum, the petitioners' claim of ownership of the whole parcel has no legal basis.

LEONOR GRANA and JULIETA TORRALBA VS. THE COURT OF APPEALS, AURORA BONGATO and JARDENIO SANCHEZ

GR L-12486 31 AUG 1960

Facts:

The herein Petitioners were sued by Bongato and Sanchez for the recovery of 87 square meters of residential land which they have inherited as the children of the spouses Marcos Bongato and Eusebia. The former were ordered by the to vacate and deliver it to said respondents and to pay a monthly rental of P10.00 from the filing of the complaint until they actually vacate the same, plus attorney's fees and costs.

The Petitioners alleged that the said property became a subject of a cadastral survey due to conflicts and overlapping of boundaries. In that survey, Gregorio Bongato's lot, according to petitioners, was identified as Lot No. 311 and that of Isidaria Trillo, their predecessor in interest, as Lot No. 310. Citing the fact that Original Certificate of Title No. RO-72 (138) covers 295 square meters of land, while the sketch plan of the second cadastral survey of Butuan shows that Lot No. 311 has only 230 square meters, petitioners maintain that it is the latter area properly belongs to respondents and that the land in question is part of the adjoining land, Lot No. 310, which belonged to their predecessor in interest.

Issue:

Whether or not the first survey was erroneous or that it included part of the contiguous land of petitioners' predecessor in interest?

Held:

Petitioners' stand is untenable. No proof was presented to show that the first survey was erroneous or that it included part of the contigous land of petitioners' predecessor in interest as part of the lot now covered by Original Certificate of Title No. RO-72 (138). Note that the difference in area between the land covered by said title and Lot No. 311 of the resurvey plan is 65 square meters while the area of the land in dispute if 87 square meters. And what is more, the alleged sketch plan of the resurvey was not presented in evidence.

Upon the other hand, it is not disputed that the land in question is part of the lot covered by the Torrens title issued way back in 1923 in the name of respondents' predecessor in interest. Said title has not been contested up to the present, and, therefore, has become inconvertible evidence of the ownership of the land covered by it. Well settled is the rule that a Torrens certificate of title becomes conclusive and indefeasible after the lapse of the period within which it may be impugned (Reyes, et al. vs. Borbon, et al., 50 Phil., 791; Yumul vs. Rivera, et al., 64 Phil., 13).

Although without any legal and valid claim over the land in question, petitioners, however, were found by the Court of Appeals to have constructed a portion of their house thereon in good faith. Under Article 361 of the old Civil Code (Article 448 of the new), the owner of the land on which anything has been built in good faith shall have the right to appropriate as his own faith shall have the right to appropriate as his own the building, after payment to the builder of necessary and useful expenses, and in the proper case, expenses for pure luxury or mere pleasure, or to oblige the builder to pay the price of the land. Respondents, as owners of the land, have therefore the choice of either appropriating the portion of petitioners' house which is on their land upon payment of the proper indemnity to petitioners, or selling to petitioners that part of their land on which stands the improvement. It may here be pointed out that it would be impractical for respondents to choose to exercise the first alternative, i.e., buy that portion of the house standing on their land, for in that event the whole building might be rendered useless. The more workable solution, it would seem, is for respondents to sell to petitioners that part of their land on which was constructed a portion of the latter's house. If petitioners are unwilling or unable to buy, then they must vacate the land and must pay rentals until they do so. Of course, respondents cannot oblige petitioners to buy the land if its value is considerably more than that of the aforementioned portion of the house. If such be the case, then petitioners must pay reasonable rent. The parties must come to an agreement as to the conditions of the lease, and should they fail to do so, then the court shall fix the same. (Article 361, old Civil Code; Article 448 of the new).

Francisco Depra VS Agustin Dumlao

GR L-57348 16 May 1985

Facts:

Depra is the owner of a parcel of land to which Dumlao, living in an adjoining lot, had built a kitchen that encroached an area of 34 square meters. The encroachment was discovered in a relocation survey of Depra’s property. Upon discovery, Depra’s mother wrote a demand letter asking Dumlao to move back from his encroachment. She then filed a case of Unlawful Detainer against Dumlao.

In the trial court it was proven that Dumlao was a builder in good faith; thus the Municipal Court rendered it judgment that reads:

Ordering that a forced lease is created between the parties with the plaintiffs, as lessors, and the defendants as lessees, over the disputed portion with an area of thirty four (34) square meters, the rent to be paid is five (P5.00) pesos a month, payable by the lessee to the lessors within the first five (5) days of the month the rent is due; and the lease shall commence on the day that this decision shall have become final.

Neither party appealed. However, Depra did not accept the payment of rentals so that Dumlao deposited such rentals with the Municipal Court.

Depra then filed a Complaint for Quieting of Title against Dumlao, the latter admitted the encroachment but alleged, that the present suit us barred by res judicate by virtue of the decision of the Municipal Court.

DEPRA claims that the Decision of the Municipal Court was null and void ab initio because its jurisdiction is limited to the sole issue of possession, whereas decisions affecting lease, which is an encumbrance on real property, may only be rendered by Courts of First Instance.

Issue:

I. Whether or not the Municipal Court’s decision was null and void ab initio because it has no jurisdiction over the case?

II. Whether or not the factual situations of DUMLAO and DEPRA conform to the juridical positions respectively defined by law, for a "builder in good faith" under Article 448, a "possessor in good faith" under Article 526 and a "landowner in good faith' under Article 448?

Held:

I.               Addressing out selves to the issue of validity of the Decision of the

Municipal Court, we hold the same to be null and void. The judgment in a detainer case is effective in respect of possession only (Sec. 7, Rule 70, Rules of Court). The Municipal Court over-stepped its bounds when it imposed upon the parties a situation of "forced lease", which like "forced co-ownership" is not favored in law. Furthermore, a lease is an interest in real property, jurisdiction over which belongs to Courts of First Instance (now Regional Trial Courts) (Sec. 44(b), Judiciary Act of 1948; Sec. 19 (2) Batas Pambansa Blg. 129).  Since the Municipal Court, acted without jurisdiction, its Decision was null and void and cannot operate as res judicata to the subject complaint for Queting of Title. Besides, even if the Decision were valid, the rule on res judicata would not apply due to difference in cause of action. In the Municipal Court, the cause of action was the deprivation of possession, while in the action to quiet title, the cause of action was based on ownership. Furthermore, Sec. 7, Rule 70 of the Rules of Court explicitly provides that judgment in a detainer case "shall not bar an action between the same parties respecting title to the land. "

II. ART. 448. The owner of the land on which anything has been built sown or planted in good faith,

shall have the right

to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or

to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent.

However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof (Paragraphing supplied)

Pursuant to the foregoing provision, DEPRA has the option either to pay for the encroaching part of DUMLAO's kitchen, or to sell the encroached 34 square meters of his lot to DUMLAO. He cannot refuse to pay for the encroaching part of the building, and to sell the encroached part of his land, 5 as he had manifested before the Municipal Court. But that manifestation is not binding because it was made in a void proceeding.

However, the good faith of DUMLAO is part of the Stipulation of Facts in the Court of First Instance. It was thus error for the Trial Court to have ruled that DEPRA is "entitled to possession," without more, of the disputed portion implying thereby that he is entitled to have the kitchen removed. He is entitled to such removal only when, after having chosen to sell his encroached land, DUMLAO fails to pay for the same. 6 In this case, DUMLAO had expressed his willingness to pay for the land, but DEPRA refused to sell.