ABALOS vs.

HEIRS of VICENTE TORIO

Petitioners: Jaime Abalos, Spouses
Salazar, Heirs of Aquilino Abalos
Respondents: Heirs of Vicente Torio

Salazar,

Consuelo

Facts:
- July 24, 1996: Respondents filed a Complaint for
Recovery of Possession and Damages with the Municipal
Trial Court (MTC) of Pangasinan against Jaime Abalos
and the spouses Salazar.
- Respondents contended that they are the heirs of Vicente
Torio who died intestate on the year 1973. They stated that
Mr. Vicente allowed Jaime and Spouses Salazar to stay on
his land (2,950sq.m.) at Pangasinan.
- After the death of Vicente, the respondents still
allowed petitioners to stay.
- On1985, respondents requested Mr. Vicente and Salazar to
vacate the subject lot but the latter refused.
- Respondents filed a complaint against petitioners.
- Jaime and the Spouses Salazar filed their Answer with
Counter claim and stated that respondents' cause of
action is barred by acquisitive prescription.
-Petitioners claim the court has no jurisdiction over the nature
of the action
And the persons of the defendant. They also alleged that they
are in actual, continuous and peaceful possession of the
subject lot as owners since time immemorial.
- They also said that they have been paying real property
taxes and have been introducing improvements on the
said and.
- December10, 2003: MTC issued a Decision ordering
herein petitioners to vacate the subject lot and turnover
said property to the heirs of Vicente Torio.
- Jaime and the Spouses Salazar appealed the Decision of
the MTC with the
RTC of Lingayen, Pangasinan.
- June14, 2005: RTC ruled in favor of Jaime and the Spouses
Salazar, holding that they have acquired the subject property
through prescription. Accordingly, the RTC dismissed herein
respondents' complaint.
- Heirs of Vicente Torio filed a petition for review with the CA
assailing the
Decision of the RTC.
- June30, 2006: CA granted the petition of the respondents
(in this case).
- Petitioners filed a Motion for Reconsideration, but the same
was denied by the CA in its Resolution dated November 13,
2006.
Issue:
Whether or not the Court of Appeals erred in not
appreciating that herein petitioners are now the absolute and
exclusive owners of the land in question by virtue of
acquisitive prescription. EXCLUSIVE OWNERS OF THE
LAND IN
Held:
After review of the records, however, the Court finds that the
petition must fail as it finds no error in the findings of fact and
conclusions of law of the CA and the MTC.
Petitioners claim that they have acquired ownership over the
disputed lot through ordinary acquisitive prescription.
Acquisitive prescription of dominion and other real rights may
be ordinary or extraordinary. Ordinary acquisitive prescription

requires possession in good faith and with just title for ten (10)
years. Without good faith and just title, acquisitive prescription
can only be extraordinary in character which requires
uninterrupted adverse possession for thirty (30) years,
Possession in good faith consists in the reasonable belief
that the person from whom the thing is received has been the
owner thereof, and could transmit this ownership. There is
just title when the adverse claimant came into possession
of the property through one of the modes recognized by law
for the acquisition of ownership or other real rights, but the
grantor was not the owner or could not transmit any right.
In the instant case, it is clear that during their possession of
the property in question, petitioners acknowledged
ownership thereof by the immediate predecessor-in-interest
of respondents. This is clearly shown by the Tax
Declaration in the name of Jaime for the year 1984 wherein
it contains a statement admitting that Jaime's house was
built on the land of Vicente, respondents' immediate
predecessor-in-interest.
Petitioners never disputed such an acknowledgment. Thus,
having knowledge that they nor their predecessors-ininterest are not the owners of the disputed lot, petitioners'
possession could not be deemed as possession in good
faith as to enable them to acquire the subject land by
ordinary prescription.
In this respect, the Court agrees with the CA that petitioners
possession of the lot in question was by mere tolerance of
respondents and their predecessors-in-interest. Acts of
possessory character executed due to license or by mere
tolerance of the owner are inadequate for purposes of
acquisitive prescription.
Possession, to constitute the foundation of a prescriptive
right, should be adverse, if not, such possessory acts, no
matter how long, do not start the running of the period of
prescription.
Moreover, the CA correctly held that even if the character of
petitioners' possession of the subject property had become
adverse, still falls short of the required period of thirty (30)
years in cases of extraordinary acquisitive prescription.
Records show that the earliest Tax Declaration in the name of
petitioners was in 1974. Reckoned from such date, the thirtyyear period was completed in 2004. However, herein
respondents' complaint was filed in1996, effectively interrupting
petitioners' possession upon service of summons on them.

HEIRS OF MALABANAN VS REPUBLIC

FACTS:
On 20 February 1998, Mario Malabanan filed an application
for land registration before the RTC of Cavite-Tagaytay,
covering a parcel of land situated in Silang Cavite,
consisting of 71,324 square meters. Malabanan claimed
that he had purchased the property from Eduardo Velazco,
and that he and his predecessors-in-interest had been in
open, notorious, and continuous adverse and peaceful
possession of the land for more than thirty (30) years.
Velazco testified that the property was originally belonged
to a twenty-two hectare property owned by his greatgrandfather, LinoVelazco. Lino had four sons Benedicto,

Gregorio, Eduardo and Estebanthe fourth being

Aristedess grandfather. Upon Linos death, his four sons
inherited the property and divided it among themselves. But
by 1966, Estebans wife, Magdalena, had become the
administrator of all the properties inherited by the Velazco
sons from their father, Lino. After the death of Esteban and
Magdalena, their son Virgilio succeeded them in
administering the properties, including Lot 9864-A, which
originally belonged to his uncle, Eduardo Velazco. It was
this property that was sold by Eduardo Velazco to
Malabanan.
Among the evidence presented by Malabanan during trial
was a Certification dated 11 June 2001, issued by the
Community Environment & Natural Resources Office,
Department of Environment and Natural Resources
(CENRO-DENR), which stated that the subject property
was verified to be within the Alienable or Disposable land
per Land Classification Map No. 3013 established under
Project No. 20-A and approved as such under FAO 4-1656
on March 15, 1982. On 3 December 2002, the RTC
approved the application for registration.
The Republic interposed an appeal to the Court of Appeals,
arguing that Malabanan had failed to prove that the
property belonged to the alienable and disposable land of
the public domain, and that the RTC had erred in finding
that he had been in possession of the property in the
manner and for the length of time required by law for
confirmation of imperfect title. On 23 February 2007, the
Court of Appeals reversed the RTC ruling and dismissed
the appliocation of Malabanan.

regardless of good faith or just title, ripens into ownership.

It is clear that the evidence of petitioners is insufficient to

establish that Malabanan has acquired ownership over the
subject property under Section 48(b) of the Public Land Act.
There is no substantive evidence to establish that
Malabanan or petitioners as his predecessors-in-interest
have been in possession of the property since 12 June
1945 or earlier. The earliest that petitioners can date back
their possession, according to their own evidencethe Tax
Declarations they presented in particularis to the year
1948. Thus, they cannot avail themselves of registration
under Section 14(1) of the Property Registration Decree.
Neither can petitioners properly invoke Section 14(2) as
basis for registration. While the subject property was
declared as alienable or disposable in 1982, there is no
competent evidence that is no longer intended for public
use service or for the development of the national evidence,
conformably with Article 422 of the Civil Code. The
classification of the subject property as alienable and
disposable land of the public domain does not change its
status as property of the public dominion under Article
420(2) of the Civil Code. Thus, it is insusceptible to
acquisition by prescription.

REPUBLIC OF THE PHILIPPINES v.

DOMINGO ESPINOSA
FACTS: On March 2, 1999, Domingo Espinosa applied for title
registration over a lot in Cebu. He alleged that:

ISSUE: For purposes of Section 14(2) of the Property

Registration Decree may a parcel of land classified as
alienable and disposable be deemed private land and
therefore susceptible to acquisition by prescription in
accordance with the Civil Code?

RULING: In complying with Section 14(2) of the Property

Registration Decree, consider that under the Civil Code,
prescription is recognized as a mode of acquiring
ownership of patrimonial property. However, public domain
lands become only patrimonial property not only with a
declaration that these are alienable or disposable. There
must also be an express government manifestation that the
property is already patrimonial or no longer retained for
public service or the development of national wealth, under
Article 422 of the Civil Code. And only when the property
has become patrimonial can the prescriptive period for the
acquisition of property of the public dominion begin to run.
(a) Patrimonial property is private property of the
government. The person acquires ownership of patrimonial
property by prescription under the Civil Code is entitled to
secure registration thereof under Section 14(2) of the
Property Registration Decree.
(b) There are two kinds of prescription by which patrimonial
property may be acquired, one ordinary and other
extraordinary. Under ordinary acquisitive prescription, a
person acquires ownership of a patrimonial property
through possession for at least ten (10) years, in good faith
and with just title. Under extraordinary acquisitive
prescription, a persons uninterrupted adverse possession
of patrimonial property for at least thirty (30) years,

a)
b)

c)
d)

He acquired the land from his mother by virtue of a

deed of absolute sale (June 15, 1971).
He has been in open, public, continuous and
notorious possession of the land in the concept of an
owner for more than thirty (30) years.
His mother had declared the land for taxation
purposes as early as 1965.
He had the property surveyed and an advance survey
and a technical description were secured.

Republic opposed contending that:

a)
b)

Espinosa failed to prove that the land has been

classified as alienable or disposable; and
That he failed to submit the original tracing cloth plan
from the land registration authority, and thus the
decree of land registration cannot be issued.

ISSUE: Whether Espinosas application has satisfied the legal

requirements for registration over the subject property which
warrants the granting of the decree of registration.
HELD: NO. Espinosa failed to comply with the other legal
requirements for its application for registration to be granted.
It is doctrinal that all lands not appearing to be clearly
of private dominion presumptively belong to the State. Public
lands not shown to have been reclassified or released as
alienable agricultural land or alienated to a private person by
the State remain part of the inalienable public domain. Unless
public land is shown to have been reclassified or alienated to a

private person by the State, it remains part of the inalienable

public domain.
The onus to overturn, by incontrovertible evidence,
the presumption that the land subject of an application for
registration is alienable or disposable rests with the applicant. 12
Applicants for confirmation of imperfect title must
prove the following: (a) that the land forms part of the alienable
and disposable agricultural lands of the public domain; and (b)
that they have been in open, continuous, exclusive and
notorious possession and occupation of the same under a
bona fide claim of ownership either since time immemorial or
since June 12, 1945.
In the present case, Espinosa failed to prove the first
requirement that the properties sought to be titled forms part of
the alienable and disposable agricultural lands of the public
domain.
Section 6 of Commonwealth Act No. 141, as amended,
provides that the classification and reclassification of public
lands into alienable or disposable, mineral or forest land is the
prerogative of the Executive Department. Under the Regalian
doctrine, all lands of the public domain belong to the State,
which is the source of any asserted right to any ownership of
land. All lands not appearing to be clearly within private
ownership are presumed to belong to the State. Accordingly,
public lands not shown to have been reclassified or released
as alienable agricultural land or alienated to a private person
by the State remain part of the inalienable public domain.
To prove that the land subject of an application for registration
is alienable, an applicant must establish the existence of a
positive act of the government such as:
a)
b)
c)
d)
e)

a presidential proclamation or an executive order,

an administrative action,
investigation reports of Bureau of Lands
investigators, and
a legislative act or statute.
certification from the Government that the lands
applied for are alienable and disposable

In the case at bar, while the Advance Plan bearing the notation
was certified by the Lands Management Services of the DENR,
the certification refers only to the technical correctness of
the survey plotted in the said plan and has nothing to do
whatsoever with the nature and character of the property
surveyed.
JESUS VIRTUCIO v. JOSE ALEGARBES
FACTS: Respondent Jose Alegarbes (Alegarbes) filed a
homestead application for a 24-hectare tract of unsurveyed
land. His application was approved on January 23, 1952. In
1955, however, the land was subdivided into three (3) lots -Lot Nos. 138, 139 and 140, Pls-19 - as a consequence of a
public land subdivision. Lot 139 was allocated to Ulpiano
Custodio (Custodio) while Lot 140 was allocated to petitioner
Jesus Virtucio (Virtucio).
Alegarbes opposed the homestead applications filed by
Custodio and Virtucio, claiming that his approved application
covered the whole area, including Lot Nos. 139 and 140. On
October 30, 1961, the Director of Lands rendered a decision

denying Alegarbes' protest and amending the latter's

application to exclude Lots 139 and 140. Only Lot 138 was
given due course.
Alegarbes appealed to the Secretary of Agriculture and Natural
Resources, who dismissed the appeal. On appeal to the Office
of the President, the latter affirmed the dismissal order. Thus,
an order of execution was issued by the Lands Management
Bureau of the DENR. It ordered Alegarbes and all those acting
in his behalf to vacate the subject lot, but he refused.
On September 26, 1997, Virtucio then filed a complaint for
recovery of possession and ownership before the RTC. The
RTC ruled infavor of Virtucio. The CA reversed the RTC and
ruled that Alegarbes became ipso jure owner of Lot 140 by
virtue of acquisitive prescription.
Aggrieved, Virtucio filed this petition. He argues that the period
of acquisitive prescription was interrupted on October 30, 1961
when Alegarbes filed a protest before the Director of Lands.
Virtucio further claims that since 1954, several extrajudicial
demands were also made upon Alegarbes demanding that he
vacate said lot. Those demands constitute the "extrajudicial
demand" contemplated in Article 1155, thus, tolling the period
of acquisitive prescription.
ISSUE: Whether or not Alegarbes acquired ownership over the
subject property by acquisitive prescription?
HELD: The petition must fail.
CIVIL LAW: acquisitive prescription; kinds of prescription
Article 1106 of the New Civil Code, in relation to its Article 712,
provides that prescription is a mode of acquiring ownership
through the lapse of time in the manner and under the
conditions laid down by law. Under the same law, it states that
acquisitive prescription may either be ordinary or extraordinary.
Ordinary acquisitive prescription requires possession of things
in good faith and with just title for a period of ten years, while
extraordinary acquisitive prescription requires uninterrupted
adverse possession of thirty years, without need of title or of
good faith.
There are two kinds of prescription provided in the Civil Code.
One is acquisitive, that is, the acquisition of a right by the lapse
of time as expounded in par. 1, Article 1106. Other names for
acquisitive prescription are adverse possession and
usucapcion. The other kind is extinctive prescription whereby
rights and actions are lost by the lapse of time as defined in
Article 1106 and par. 2, Article 1139. Another name for
extinctive prescription is litigation of action. These two kinds of
prescription should not be interchanged. Article 1155 of the
New Civil Code refers to the interruption of prescription of
actions. Interruption of acquisitive prescription, on the other
hand, is found in Articles 1120-1125 of the same Code.
Thus, Virtucios reliance on Article 1155 for purposes of tolling
the period of acquisitive prescription is misplaced. The only
kinds of interruption that effectively toll the period of acquisitive
prescription are natural and civil interruption. Civil interruption
takes place with the service of judicial summons to the
possessor. When no action is filed, then there is no occasion to
issue a judicial summons against the respondents. The period
of acquisitive prescription continues to run.
In this case, Virtucio claims that the protest filed by Alegarbes
against his homestead application interrupted the thirty (30)year period of acquisitive prescription. The law, as well as

jurisprudence, however, dictates that only a judicial summons

can effectively toll the said period. Only in cases filed before
the courts may judicial summons be issued and, thus, interrupt
possession. Records show that it was only in 1997 when
Virtucio filed a case before the RTC. The CA was, therefore,
correct in ruling that Alegarbesbecame ipso jure owner of Lot
140 entitling him to retain possession of it because he was in
open, continuous and exclusive possession for over thirty (30)
years of alienable public land.
Denied.

SOUTH CITY HOMES, INC. v. REPUBLIC OF THE

PHILIPPINES and COURT OF APPEALS
FACTS: The subject of this dispute is a strip of land between
two lots owned by the petitioner. It has an area of 613 square
meters and is situated in Calabuso, Bian, Laguna. It was
discovered only in 1983 after a survey conducted by the
Bureau of Lands and is now identified as Lot No. 5005 of the
Binan Estate.
The two lots bordering the subject property are Lot No. 2381,
containing an area of 36,672 square meters, and Lot No. 2386A, containing an area of 32,011 square meters. Both are now
registered in the name of the petitioner. The history of these
lots is described by the trial court as follows:
The record shows that Lot 2381 was purchased on installment
basis by BasiliaDimaranan, and Lot 2386 was acquired under
similar condition by Fernando Guico, both from the Friar Lands
Division of the Bureau of Lands in the year 1910. Eight
(8)years thereafter, installment-payment for Lot 2386 was
completed in favor of BasiliaDimaranan.
On the other hand, Lot 2381 was on September 12, 1911
assigned to Bartolome Pea who continued and completed the
installment payments culminating into the issuance in his name
of Patent No. 19138 on September 26,1919. From Bartolome
Pena, Lot 2381 was acquired by Fidel M. Cabrera, Sr. and the
title was transferred to his namewhile Lot 2386 was acquired
by the GarciasOn August 27,1981, Lot 2386-A was sold by the
Garcias to the applicant South City Homes, Inc. Lot 2381 was
on February 25,1977 sold by Fidel M. Cabrera, Sr. to Koo Jun
Engwho in turn assigned the property to the applicant in
February of 1981.
It is the position of the petitioner that Lot No. 5005 should be
registered in its name for either of two reasons. The first is that
the disputed strip of land really formed part of Lots 2381 and
2386-A but was omitted therefrom only because of the
inaccuracies of the old system of cadastral surveys. The
second is that it had acquired the property by prescription
through uninterrupted possession thereof in concept of owner,
by itself and its predecessors-in-interest, for more than forty
years.
For its part, the Republic argues that the elongated piece of
land between the two lots now owned by the petitioner used to
be a canal which could not have been appropriated by the
purchasers of the adjacent lots or their successors-in-interest.
Neither could it be deemed included in the lots now owned by
the petitioner because their respective technical descriptions
indicate otherwise. Prescription is also not applicable because
the petitioner has not established the requisite possession of
the lot, as to manner and length, to justify judicial confirmation
of title in its name.The petitioner insists it is patrimonial
property of the State, being part of the so-called Friar Lands,

while the Republic maintains it is part of the public domain and

cannot therefore be acquired by a private corporation.
ISSUE: Whether or not the petitioner can acquire lot no
5005 by prescription.
HELD: NO. Petition has no merit.
To argue that Lot No. 5005 is really a part of the other two lots
owned by the petitioner is to oppose the obvious. What is
obvious is the technical descriptions of the two lots whose
areas do not include the strip of land between them. The
petitioner could not also rely to the original surveys since it has
itself suggested that the old surveys were inaccurate. If it is
true that there was no canal between the two lots at the time of
their survey, then the disputed strip of land should have been
included as part of either of the two adjoining lots. It was not.
The petitioner itself insists that the canal, if there ever was one,
had disappeared after it had been filled with silt and dirt. The
result was the segregation of a third and separate lot, now
known as Lot No. 5005.
The Republic submits that the petitioner and its predecessorsin-interest could not have appropriated the strip of land
because it used to be a canal over which they could not have
acquired any exclusive right. The applicable law is Act No.
1120, otherwise known as the Friar Lands Act, providing in its
Section 19 as follows:
No purchaser or lessee under this Act shall acquire any
exclusive rights to any canal, ditch, reservoir, or other
irrigation works, or to any water supply upon which such
irrigation works are or may be dependent, but all of such
irrigation works and water supplies shall remain under the
exclusive control of the Government of the Philippine
Islands and be administered under the direction of the
Chief of the Bureau of Public Lands for the common
benefit of those interest dependent upon them
According to the respondent court, the fact that the canal had
been filled up did not change its nature as a canal; it was still a
canal although it had dried up. We do not think so. A canal
without water is not a canal. The status of a canal is not
perpetual. Consequently, the above provision is not
applicable and cannot defeat the petitioner's claim to the
disputed property either as part of two other lots or as a
separate lot.
As we have already rejected the contention that the third lot
was part of the other two lots, the petitioner must fall back on
its claim of acquisitive prescription over it as a separate lot. Its
submission is that its possession of the lot dates back to "time
immemorial," by which tired phrase it is intended to convey the
idea that the start of such possession can no longer be
recollected. Indeed, it can be. The petitioner's possession does
not in fact go back to "time immemorial," but only to the recent
remembered past.
The petitioner presented only two witnesses whose testimony
regarding its supposed possession of Lot No. 5005 is
essentially hearsay and inherently inadequate. Thus, Rogelio
Constantino, an employee of the petitioner, declared on the
stand:
A.
Yes sir, as a matter of fact we were duly informed that
since the beginning even from the time of their predecessorsin-interest, such strip of land was believed to be forming part of
the two parcels of land and since the beginning they have been

cultivating the same and treating the said strip of land as their
own, publicly, notoriously and in the concept of owner.
The other witness, Meliton Casunuran, was more explicit but
his testimony is largely hearsay also, let alone the fact that the
possession he sought to establish is likewise insufficient.
According to him, he worked as a tenant on the land for the
previous owners of the other two lots before these were
acquired by the petitioner and that the subject property was
regarded as part of their lots by their respective owners.
The testimony falls short of establishing the manner and length
of possession required by law to vest prescriptive title in the
petitioner to Lot No. 5005. Casunurans allegation that the claim
of the petitioner's predecessors-in- interest to the disputed strip
of land was "in the concept of owner, open, public and
adversely against the whole world" was fed to him with a
leading question during the ex parte hearing, thus:

Q So you mean to convey to this Honorable Court that from the

time of your predecessor up to your time as tenant, the owners
of Lots 2381 and 2386-A have been in possession of this strip
of land containing an area of 613 square meters more or less
in the concept of owner, open, public and adversely against the
whole world?
A Yes, sir.
The witness was a farmer and could hardly be expected to
understand the legal significance of the question, to which he
could have give only the short and simple answer "Yes." He
did not and was not asked to elaborate. The statement was
also not corroborated and no other documents were presented
except for tax declarations made only in 1980.
By the testimony of the two witnesses, the petitioner obviously
meant to tack the possession of the two lots by the previous
owners to its own possession. There was no need for this
because the petitioner acquired ownership of Lot No. 2381 by
assignment and Lot No. 2386-A by purchase; and such
ownership includes the right of possession. The petitioner is
not claiming prescriptive rights to these two lots, which had
previously been registered in the name of the transferors. The
lot it is claiming by prescription is Lot No. 5005, which it did not
acquire from the owner of the other two lots, or from any
previous private registered owner of the lot, as there was none.
Neither of the owners of Lots Nos. 2381 or 2386-A, in their
respective deeds, transferred Lot No. 5005 to the petitioner; as
already explained, Lot No. 5005 was not part of either of the
two lots. The simple reason is that the possession of the said
lot was not and could not have been transferred to the
petitioner when it acquired Lots Nos. 2381 and 2386-A
because these two lots did not include the third lot. Article
1138 of the Civil Code provides that
(1)
The present possessor may complete the period
necessary for prescription by tacking his possession to
that of his grantor or predecessor- in interest.
However, tacking of possession is allowed only when there is a
privity of contract or relationship between the previous and
present possessors. In the absence of such privity, the
possession of the new occupant should be counted only from
the time it actually began and cannot be lengthened by
connecting it with the possession of the former possessors.
Thus it has been held:

A deed, in itself, creates no privity as to land outside its calls.

Nor is privity created by the bare taking of possession of land
previously occupied by the grantor. It is therefore the rule,
although sharply limited, that a deed does not of itself create
privity between the grantor and the grantee as to land not
described in the deed but occupied by the grantor in
connection therewith, although the grantee enters into
possession of the land not described and uses it in connection
with that conveyed.
It is said, in Hanlon v. Ten Hove supra, that this rule is not
harsh, the court using the following language: "If A purchases
and by adverse possession obtains title to an adjoining 40
acres, it would hardly be contended that a conveyance by him
of the 40 acquired by deed would carry with it title to the 40
acquired by adverse possession. So if A acquires by deed a 40
acres and obtains an adjoining strip 2 rods wide or some
interest in it, his conveyance of the 40 acquired by deed does
not carry with it his interest in the adjoining strip. If the sole
defense here was that of adverse possession, we would be
obliged to hold that it had not been made out.
It should also be noted that, according to Article 1135 of the
Civil Code:
In case the adverse claimant possesses by mistake an
area greater, or less, than that expressed in his title,
prescription shall be based on the possession.
This possession, following the above quoted rulings, should be
limited only to that of the successor-in-interest; and in the case
of the herein petitioner, it should begin from 1981 when it
acquired the two adjacent lots and occupied as well the lot in
question thinking it to be part of the other two.
It follows that when the application for registration of the lot in
the name of the petitioner was filed in 1983, the applicant had
been in possession of the property for less than three years.
This was far too short of the prescriptive period required for
acquisition of immovable property, which is ten years if the
possession is in good faith and thirty years if in bad faith, or if
the land is public.
The weakness of the petitioner's position prevents this Court
from affirming the claim to the lot in question either as part of
the two other lots or by virtue of acquisitive prescription. And
having made this ruling, we find it unnecessary to determine
whether the land is patrimonial in nature or part of the public
domain.
The case of Director of Lands v. Intermediate Appellate Court,
on which the petitioner relied so strongly (to the point of simply
invoking it in a supplemental petition instead of filing its
memorandum), is not applicable. That decision, which
reversed the case of Manila Electric Co. v. Castro-Bartolome,
involved a situation where the public land automatically
became private as a result of prescription clearly and
indubitably established by the claimant. In the case at bar, the
petitioner's claim is rejected not because it is a private
corporation barred from acquiring public land but because it
has failed to establish its title to the disputed lot, whatever its
nature.

AINZA v. PADUA
FACTS: Concepcion Ainza (Concepcion) alleged that
respondent-spouses Eugenia (Eugenia) and Antonio Padua
(Antonio) owned a 216.40 sq. m. lot with an unfinished

residential house located in Project 2, Quezon City. Sometime

in April 1987, she bought 1/2 of an undivided portion of the
property from her daughter, Eugenia and the latters husband,
Antonio, for P100,000.00.
No Deed of Absolute Sale was executed, but cash payment
was received by the respondents, and ownership was
transferred to Concepcion through physical delivery to her
attorney-in-fact and daughter, Natividad Tuliao (Natividad).
Concepcion authorized Natividad and the latters husband,
Ceferino Tuliao (Ceferino) to occupy the premises, and make
improvements on the unfinished building.
Thereafter, Concepcion alleged that without her consent,
respondents caused the subdivision of the property into three
portions and registered it in their names. On the other hand,
Antonio averred that he merely allowed Natividad and Ceferino
to occupy the premises temporarily. In 1994, they caused the
subdivision of the property and three (3) separate titles were
issued.
Thereafter, Antonio requested Natividad to vacate the
premises but the latter refused, claiming that Concepcion
owned the property. Antonio thus filed an ejectment suit.
Concepcion, represented by Natividad, also filed on May 4,
1999 a civil case for partition of real property and annulment of
titles with damages.
Antonio claimed that his wife, Eugenia, admitted that
Concepcion offered to buy 1/3 of the property who gave her
small amounts over several years which totaled P100,000.00
by 1987 and for which she signed a receipt.
On January 9, 2001, the RTC rendered judgment in favor of
Concepcion. The CA reversed the decision of the RTC, and
declared the sale null and void. Applying Article 124 of the
Family Code, the CA ruled that since the subject property is
conjugal, the written consent of Antonio must be obtained for
the sale to be valid. It also ordered the spouses Padua to
return the amount of P100,000.00 to petitioners plus interest.
ISSUE: Whether there was a valid contract of sale between
Eugenia and Concepcion.
A contract of sale is perfected by mere consent, upon a
meeting of the minds on the offer and the acceptance thereof
based on subject matter, price and terms of payment.
In this case, there was a perfected contract of sale between
Eugenia and Concepcion. The contract of sale was
consummated when both parties fully complied with their
respective obligations. Eugenia delivered the property to
Concepcion, who in turn, paid Eugenia the price of One
Hundred Thousand Pesos (P100,000.00), as evidenced by
the receipt which reads:
RECEIPT
Received the amount of ONE HUNDRED
THOUSAND PESOS (P100,000.00) as payment for
the lot on 85-A Durian St., Project 2, Quezon City,
from Mrs. Concepcion R. Ainza, on April, 1987.
______________________
(Sgd.)Mrs.. Eugenia A. Padua
The verbal contract of sale between Eugenia and Concepcion
did not violate the provisions of the Statute of Frauds that a
contract for the sale of real property shall be unenforceable
unless the contract or some note or memorandum of the sale
is in writing and subscribed by the party charged or his agent.

When a verbal contract has been completed, executed or

partially consummated, as in this case, its enforceability will not
be barred by the Statute of Frauds, which applies only to an
executory agreement. Thus, where one party has performed
his obligation, oral evidence will be admitted to prove the
agreement.
In the instant case, the oral contract of sale between Eugenia
and Concepcion was evidenced by a receipt signed by
Eugenia. Antonio also stated that his wife admitted to him that
she sold the property to Concepcion.
It is undisputed that the subject property was conjugal and sold
by Eugenia prior to the effectivity of the Family Code.
However, Article 256 thereof limited its retroactive effect only to
cases where it would not prejudice or impair vested or acquired
rights. In the case at bar, vested rights of Concepcion will be
impaired or prejudiced by the application of the Family Code;
hence, the provisions of the Civil Code should be applied.
Felipe v. Heirs of Aldon, clarified the legal effect of a sale of
conjugal properties by the wife without the consent of the
husband was clarified, to wit: The husband is the administrator
of the conjugal partnership. (Art. 165, Civil Code) Subject to
certain exceptions, the husband cannot alienate or encumber
any real property of the conjugal partnership without the wifes
consent. (Art. 166, Idem.) And the wife cannot bind the
conjugal partnership without the husbands consent, except in
cases provided by law. (Art. 172, Idem.).
The sale made by Gimena is a voidable contract.
According to Art. 1390 of the Civil Code, among the voidable
contracts are "[T]hose where one of the parties is incapable of
giving consent to the contract." (Par. 1.) In the instant case
Gimena had no capacity to give consent to the contract of sale.
The capacity to give consent belonged not even to the
husband alone but to both spouses.
The view that the contract made by Gimena is a voidable
contract is supported by the legal provision that contracts
entered by the husband without the consent of the wife
when such consent is required, are annullable at her
instance during the marriage and within ten years from the
transaction questioned. (Art. 173, Civil Code).
The consent of both Eugenia and Antonio is necessary for the
sale of the conjugal property to be valid. Except for the selfserving testimony of petitioner Natividad, there is no evidence
that Antonio participated or consented to the sale of the
conjugal property. Therefore, in the absence of Antonios
consent, the disposition made by Eugenia is voidable.
The contract of sale between Eugenia and Concepcion
being an oral contract, the action to annul the same must
be commenced within six years from the time the right of
action accrued. Eugenia sold the property in April 1987 hence
Antonio should have asked the courts to annul the sale on
or before April 1993. No action was commenced by Antonio
to annul the sale, hence his right to seek its annulment was
extinguished by prescription.
Even assuming that the ten (10)-year prescriptive period under
Art. 173 should apply, Antonio is still barred from instituting an
action to annul the sale because since April 1987, more than
ten (10) years had already lapsed without any such action
being filed.

In sum, the sale of the conjugal property by Eugenia without

the consent of her husband is voidable. It is binding unless
annulled. Antonio failed to exercise his right to ask for the
annulment within the prescribed period, hence, he is now
barred from questioning the validity of the sale between his
wife and Concepcion. Petition is GRANTED.

SIMEON MIGUEL v. FLORENDO CATALINO

FACTS: On January 22, 1962, appellants Simeon, Emilia and

Marcelina Miguel, and appellant Grace Ventura brought suit in
the Court below against FlorendoCatalino for the recovery of
the land above-described, plaintiffs claiming to be the children
and heirs of the original registered owner, and averred that
defendant, without their knowledge or consent, had unlawfully
taken possession of the land, gathered its produce and
unlawfully excluded plaintiffs therefrom. Defendant answered
pleading ownership and adverse possession for 30 years, and
counterclaimed for attorney's fees. After trial the Court
dismissed the complaint, declared defendant to be the rightful
owner, and ordered the Register of Deeds to issue a transfer
certificate in lieu of the original. Plaintiffs appealed directly to
this Court, assailing the trial Court's findings of fact and law.
As found by the trial Court, the land in dispute is situated in the
Barrio of San Pascual, Municipality of Tuba, Benguet,
Mountain Province and contains an area of 39,446 square
meters, more or less. It is covered by Original Certificate of
Title No. 31, which was issued on 28 December 1927 in the
name of Bacaquio (or Bakakew), a widower. No encumbrance
or sale has ever been annotated in the certificate of title.
The plaintiff-appellant Grace Ventura2 is the only child of
Bacaquio by his first wife, Debsay, and the other plaintiffsappellants, Simeon, Emilia and Marcelina, all surnamed
"Miguel", are his children by his third wife, Cosamang. He
begot no issue with his second wife, Dobaney. The three
successive wives have all died.
Bacaquio, who died in 1943, acquired the land when his
second wife died and sold it to CatalinoAgyapao, father of the
defendant FlorendoCatalino, for P300.00 in 1928. Of the
purchase price P100.00 was paid and receipted for when the
land was surveyed, but the receipt was lost; the balance was
paid after the certificate of title was issued. No formal deed of
sale was executed, but since the sale in 1928, or for more than
30 years, vendee CatalinoAgyapao and his son, defendantappelleeFlorendoCatalino, had been in possession of the land,
in the concept of owner, paying the taxes thereon and
introducing improvements.
On 1 February 1949, Grace Ventura, by herself alone, "sold"
(as per her Transferor's Affidavit, Exhibit "6") anew the same
land for P300.00 to defendant FlorendoCatalino.
In 1961, CatalinoAgyapao in turn sold the land to his son, the
defendant FlorendoCatalino.
ISSUE:
RULING:
the
judgment
in
favor
of
defendantappelleeFlorendoCatalino must be sustained. For despite the
invalidity of his sale to CatalinoAgyapao, father of defendantappellee, the vendor Bacaquio suffered the latter to enter,

possess and enjoy the land in question without protest, from

1928 to 1943, when the seller died; and the appellants, in turn,
while succeeding the deceased, also remained inactive,
without taking any step to reivindicate the lot from 1944 to
1962, when the present suit was commenced in court. Even
granting appellants' proposition that no prescription lies against
their father's recorded title, their passivity and inaction for more
than 34 years (1928-1962) justifies the defendant-appellee in
setting up the equitable defense of laches in his own behalf. As
a result, the action of plaintiffs-appellants must be considered
barred and the Court below correctly so held. Courts can not
look with favor at parties who, by their silence, delay and
inaction, knowingly induce another to spend time, effort and
expense in cultivating the land, paying taxes and making
improvements thereon for 30 long years, only to spring from
ambush and claim title when the possessor's efforts and the
rise of land values offer an opportunity to make easy profit at
his expense. In Mejia de Lucas vs. Gamponia, 100 Phil. 277,
281, this Court laid down a rule that is here squarely
applicable:
Upon a careful consideration of the facts and
circumstances, we are constrained to find, however,
that while no legal defense to the action lies, an
equitable one lies in favor of the defendant and that
is, the equitable defense of laches. We hold that the
defense of prescription or adverse possession in
derogation of the title of the registered owner
Domingo Mejia does not lie, but that of the equitable
defense of laches. Otherwise stated, we hold that
while defendant may not be considered as having
acquired title by virtue of his and his predecessors'
long continued possession for 37 years, the original
owner's right to recover back the possession of the
property and title thereto from the defendant has, by
the long period of 37 years and by patentee's inaction
and neglect, been converted into a stale demand.
As in the Gamponia case, the four elements of laches are
present in the case at bar, namely: (a) conduct on the part of
the defendant, or of one under whom he claims, giving rise to
the situation of which complaint is made and for which the
complaint seeks a remedy; (b) delay in asserting the
complainant's rights, the complainant having had knowledge or
notice, of the defendant's conduct and having been afforded an
opportunity to institute a suit; (c) lack of knowledge or notice on
the part of the defendant that the complainant would assert the
right on which he bases his suit; and (d) injury or prejudice to
the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred. In the case at
bar, Bacaquio sold the land in 1928 but the sale is void for lack
of the governor's approval. The vendor, and also his heirs after
him, could have instituted an action to annul the sale from that
time, since they knew of the invalidity of the sale, which is a
matter of law; they did not have to wait for 34 years to institute
suit. The defendant was made to feel secure in the belief that
no action would be filed against him by such passivity, and
also because he "bought" again the land in 1949 from Grace
Ventura who alone tried to question his ownership; so that the
defendant will be plainly prejudiced in the event the present
action is not held to be barred.
The difference between prescription and laches was
elaborated in Nielsen & Co., Inc. vs. Lepanto Consolidated
Mining Co., L-21601, 17 December 1966, 18 SCRA p. 1040,
as follows:

Appellee is correct in its contention that the defense

of laches applies independently of prescription.
Laches is different from the statute of limitations.
Prescription is concerned with the fact of delay,
whereas laches is concerned with the effect of delay.
Prescription is a matter of time; laches is principally a
question of inequity of permitting a claim to be
enforced, this inequity being founded on some
change in the condition of the property or the relation
of the parties. Prescription is statutory; laches is not.
Laches applies in equity, whereas prescription applies
at law. Prescription is based on fixed time laches is
not, (30 C.J.S., p. 522.See also Pomeroy's Equity
Jurisprudence, Vol. 2, 5th ed., p. 177) (18 SCRA
1053).
With reference to appellant Grace Ventura, it is well to remark
that her situation is even worse than that of her co-heirs and
co-plaintiffs, in view of her executing an affidavit of transfer
(Exh. 6) attesting under oath to her having sold the land in
controversy to herein defendant-appellee, and the lower
Court's finding that in 1949 she was paid P300.00 for it,
because she, "being a smart woman of enterprise, threatened
to cause trouble if the defendant failed to give her P300.00
more, because her stand (of being the owner of the land) was
buttressed by the fact that Original Certificate of Title No. 31 is
still in the name of her father, Bacaquio" (Decision, Record on
Appeal, p. 24). This sale, that was in fact a quitclaim, may not
be contested as needing executive approval; for it has not
been shown that Grace Ventura is a non-christian inhabitant
like her father, an essential fact that cannot be assumed (Sale
de Porkan vs. Yatco, 70 Phil. 161, 175).

d)

e)

The Surety Agreement is null and void from the

beginning due to a defect in the consent of the
defendants; and
That the cause of action of the complainant is barred
by laches and estoppel in that PNB with full
knowledge of the deteriorating financial condition of
Fil-Eastern did not take steps to collect from said
defendant corporation while still solvent.

ISSUE: Whether petitioners may invoke the defense of laches,

considering that PNBs claim had not yet prescribed. NO
The defense of laches applies independently of
prescription. Laches is different from the statute of
limitations. Prescription is concerned with the fact of
delay, whereas laches is concerned with the effect of
delay. Prescription is a matter of time; laches is
principally a question of inequity of permitting a claim to
be enforced, this inequity being founded on some change
in the condition of the property or the relation of the
parties. Prescription is statutory; laches is not. Laches
applies in equity; whereas prescription applies at
law. Prescription is based on fixed time, laches is not.
True, prescription is different from laches, laches is
principally a question of equity. Necessarily, there is no
absolute rule as to what constitutes laches or staleness of
demand; each case is to be determined according to its
particular circumstances. The question of laches is addressed
to the sound discretion of the court and since laches is an
equitable doctrine, its application is controlled by equitable
considerations.

Since the plaintiffs-appellants are barred from recovery, their

divestiture of all the elements of ownership in the land is
complete; and the Court a quo was justified in ordering that
Bacaquio's original certificate be cancelled, and a new transfer
certificate in the name of FlorendoCatalino be issued in lieu
thereof by the Register of Deeds.

Petitioners, however, failed to show that the collection

suit against sureties was inequitable. Remedies in equity
address only situations tainted with inequity, not those
expressly governed by statutes. Indeed, the petitioners failed
to prove the presence of all the four established requisites of
laches, viz:

AGRA v. Philippine National Bank

(1) conduct on the part of the defendant or one under whom he

claims, giving rise to the situation of which complaint is made
and for which the complainant seeks a remedy;

FACTS: On August 30, 1976, an action for collection of a

sum of money was filed by the PNB against Fil-Eastern Wood
Industries, Inc. (principal debtor) and Petitioners (sureties).
In its complaint, PNB alleged that on July 17, 1967 Fil-Eastern
was granted a loan in the amount of P2,500,000.00. To secure
the payment of the said loan Fil-Eastern as principal and
sureties Ferreria, Atienza, Novales, Agra, and Gamo executed
a Surety Agreement whereby the sureties, jointly and
severally with the principal, guaranteed to PNB prompt
payment of the subject obligations. Notwithstanding repeated
demands, the Petitioners refused and failed to pay their loans.
The Sureties claimed among others that:
a)

b)
c)

They only signed the Surety Agreement with the

understanding that the same was a mere formality
required of the officers of the corporation.
They did not benefit from the said loan.
The extension of time of payment of the loan,
released the defendants from any liability under the
Surety Agreement.

(2) delay in asserting the complainants right, the complainant

having had knowledge or notice of defendants conduct and
having been afforded an opportunity to institute a suit;
(3) lack of knowledge or notice on the part of the defendant
that the complainant would assert the right on which he bases
his claim; and
(4) injury or prejudice to the defendant in the event relief is
accorded to the complainant, or the suit is not held barred.[10]
First element (exists). Neither Fil-Eastern nor the
sureties, herein petitioners, paid the obligation under the
Surety Agreement.
Second element (inexistent). Although the collection
suit was filed more than seven years after the obligation of the
sureties became due, the lapse was within the prescriptive
period for filing an action. In this light, we find immaterial
petitioners insistence that the cause of action accrued on
December 31, 1968, when the obligation became due, and
not on August 30, 1976, when the judicial demand was
made. In either case, both submissions fell within the ten-

year prescriptive period. In any event, the fact of delay,

standing alone, is insufficient to constitute laches.
Third element (inexistent). It is absurd to maintain that
petitioners did not know that PNB would assert its right under
the Surety Agreement. It is unnatural, for banks to condone
debts without adequate recompense in some other
form. Petitioners have not given us reason why they assumed
that PNB would not enforce the Agreement against them.
Forth element (inexistent). The circumstances do not
justify the application of laches. Rather, they disclose
petitioners failure to understand the language and the nature of
the Surety Arrangement. They cannot now argue that the
Surety Agreement was merely a formality, secondary to the
assignment of 15 percent of the proceeds of the sale of FilEasterns logs to Iwai and Co., Ltd. Neither can they rely on
PNBs failure to collect the assigned share in the sale of the
logs or to make a demand on petitioners until after Fil-Eastern
had become bankrupt.
Although the contract of a surety is in essence secondary
only to a valid principal obligation, his liability to the creditor or
promisee of the principal is said to be direct, primary, and
absolute; in other words, he is directly and equally bound with
the principal. The surety therefore becomes liable for the debt
or duty of another although he possesses no direct or personal
interest over the obligations nor does he receive any benefit
therefrom.[14]
When petitioners signed as sureties, they expressly and
unequivocally agreed to the stipulation that the liability on this
guaranty shall be solidary, direct and immediate and not
contingent upon the pursuit by the creditor, its successors,
indorsees or assigns, of whatever remedies it or they have
against the principal or the securities or liens it or they may
possess.
If they had mistaken the import of the Surety Agreement,
they could have easily asked for its revocation.