G.R. No. 158929. August 3, 2010.

ROSARIO P. TAN, petitioner, vs. ARTEMIO G. RAMIREZ,

MOISES G. RAMIREZ, RODRIGO G. RAMIREZ,
DOMINGO G. RAMIREZ, and MODESTA RAMIREZ
ANDRADE, respondents.

Civil Law; Property; Ownership; Prescription; Prescription, as

a mode of acquiring ownership and other real rights over
immovable property, is concerned with lapse of time in the manner
and under conditions laid down by law, namely, that the
possession should be in the concept of an owner, public, peaceful,
uninterrupted and adverse; Acquisitive prescription of real rights
may be ordinary or extraordinary.—Prescription, as a mode of
acquiring ownership and other real rights over immovable
property, is concerned with lapse of time in the manner and under
conditions laid down by law, namely, that the possession should
be in the concept of an owner, public, peaceful, uninterrupted and
adverse. The party who asserts ownership by adverse possession
must prove the presence of the essential elements of acquisitive
prescription. Acquisitive prescription of real rights may be
ordinary or extraordinary. Ordinary acquisitive prescription
requires possession in good faith and with just title for ten years.
In extraordinary prescription, ownership and other real rights
over immovable property are acquired through uninterrupted
adverse possession for thirty years without need of title or of good
faith.
Same; Compromise Agreements; The main purpose of a
compromise agreement is to put an end to litigation because of the
uncertainty that may arise from it.—In Ramnani v. Court of
Appeals, 360 SCRA 645 (2001), we held that the main purpose of
a compromise agreement is to put an end to litigation because of
the uncertainty that may arise from it. Reciprocal concessions are
the very heart and life of every compromise agreement. By the
nature of a compromise agreement, it brings the parties to agree
to something that neither of them may actually want, but for the
peace it will bring them without a protracted litigation.

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* THIRD DIVISION.

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Tan vs. Ramirez

Constitutional Law; Judgments; A decision, judgment or final

order determining the merits of the case shall state, clearly and
distinctly, the facts and the law on which it is based.—Before
closing, we cannot close our eyes to the failure of the RTC decision
to measure up to the standard set by Section 14 of Article VIII of
the Constitution, as well as Section 1 of Rule 36 and Section 1,
Rule 120 of the Rules on Civil Procedure, that a decision,
judgment or final order determining the merits of the case shall
state, clearly and distinctly, the facts and the law on which it is
based. Our Administrative Circular No. 1 of January 28, 1988
reiterates this requirement and stresses that judges should make
complete findings of facts in their decisions, scrutinize closely the
legal aspects of the case in the light of the evidence presented,
and avoid the tendency to generalize and to form conclusions
without detailing the facts from which such conclusions are
deduced.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
   The facts are stated in the opinion of the Court.
  Hugo Kudera for respondents.

BRION, J.:
We resolve in this Decision the petition for review on
certiorari1 filed by petitioner Rosario P. Tan (petitioner)
who seeks to reverse and set aside the decision2 dated
January 28, 2003 and the resolution3 dated June 19, 2003
of the former Seventh Division of the Court of Appeals (CA)
in CA-G.R. SP No. 66120. The assailed CA decision
declared Roberto Ramirez, father and predecessor-in-
interest of respondents Artemio G. Ramirez, Moises G.
Ramirez, Rodrigo G. Ramirez, Do-

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1 Filed under Rule 45 of the 1997 Rules of Civil Procedure.

2  Penned by Associate Justice Remedios A. Salazar-Fernando, with
Associate Justices Ruben T. Reyes (former member of this Court) and
Edgardo F. Sundiam concurring. Rollo, pp. 117-130.
3 Id., at p. 139.

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Tan vs. Ramirez
mingo G. Ramirez, and Modesta Ramirez Andrade
(respondents), as the lawful owner of a 86,433-square meter
parcel of land in Mahaba, Apid, Inopacan, Leyte, known as
Cadastral Lot No. 3483, Case 12, CAD 637-D, Inopacan
Cadastre (subject property). The assailed CA resolution
denied the petitioner’s motion for reconsideration.

Factual Background

The facts of the case, gathered from the records, are

briefly summarized below.
On August 11, 1998, the petitioner, representing her
parents (spouses Crispo and Nicomedesa P. Alumbro), filed
with the Municipal Circuit Trial Court (MCTC) of
Hindang-Inopacan, Leyte a complaint for the recovery of
ownership and possession and/or quieting of title of a one-
half portion of the subject property against the
respondents.4
The petitioner alleged that her great-grandfather
Catalino Jaca Valenzona was the owner of the subject
property under a 1915 Tax Declaration (TD) No. 2724.
Catalino had four children: Gliceria,5 Valentina, Tomasa,
and Julian; Gliceria inherited the subject property when
Catalino died; Gliceria married Gavino Oyao, but their
union bore no children; when Gliceria died on April 25,
1952, Gavino inherited a one-half portion of the subject
property, while Nicomedesa acquired the other half
through inheritance, in representation of her mother,
Valentina, who had predeceased Gliceria, and through her
purchase of the shares of her brothers and sisters. In 1961,
Nicomedesa constituted Roberto as tenant of

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4 Republic Act No. 7691, which took effect on April 15, 1994, expanded
the MCTC’s jurisdiction to include other actions involving title to or
possession of real property where the assessed value of the property does
not exceed P20,000.00 (or P50,000.00, for actions filed in Metro Manila).
The assessed value of the subject property is P2,770.00. id., at pp. 34-39.
5 Spelled as “Gleceria” in other parts of the records.

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330 SUPREME COURT REPORTS ANNOTATED

Tan vs. Ramirez

her half of the subject property; on June 30, 1965,

Nicomedesa bought Gavino’s one-half portion of the subject
property from the latter’s heirs, Ronito and Wilfredo Oyao,6
evidenced by a Deed of Absolute Sale of Agricultural Land;7
on August 3, 1965, Nicomedesa sold to Roberto this one-
half portion in a Deed of Absolute Sale of Agricultural
Land;8 and in 1997, Nicomedesa discovered that since
1974, Roberto had been reflecting the subject property
solely in his name under TD No. 4193.
The respondents, on the other hand, traced ownership of
the subject property to Gavino who cultivated it since 1956;
Roberto bought half of the subject property from
Nicomedesa on August 3, 1965,9 and the remaining half
from Gavino’s heirs, Ronito and Wilfredo Oyao, on October
16, 1972.10 On January 9, 1975, a certain Santa Belacho,
claiming to be Gavino’s natural child, filed a complaint
with the Court of First Instance of Baybay, Leyte against
Roberto, Nicomedesa, Ronito and Wilfredo Oyao, docketed
as Civil Case No. B-565, for recovery of possession and
ownership of two (2) parcels of land, including the subject
property;11 on September 16, 1977, Roberto bought the
subject property from Belacho through a Deed of Absolute
Sale of Land; and on October 5, 1977, Roberto and
Nicomedesa entered into a Compromise Agreement with
Belacho to settle Civil Case No. B-565. Belacho agreed in
this settlement to dismiss the case and to waive her
interest over the subject property in favor of Roberto, and
the

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6  Inherited by right of representation of Emiliano Oyao, Gavino’s

nephew. Rollo, p. 42.
7  Ibid.
8  Id., at p. 43.
9  Id., at p. 54.
10 Id., at p. 56.
11  Entitled “Santa Belacho v. Roberto Ramirez, Nicomedeza P.
Alumbro, Crispo D. Alumbro, Wilfredo Oyao and Ronito Oyao”; CA Rollo,
pp. 38-41.

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Tan vs. Ramirez

other parcel of land in favor of Nicomedesa in consideration

of P1,800.00.12

The MCTC Ruling

In a Decision dated April 2, 2001, the MCTC found that

Catalino’s 1915 TD No. 2724 was not the source of Gavino’s
1945 TD No. 3257 because it involved the other parcel of
land subject of Civil Case No. B-565. It noted that the
subject property was the conjugal property of Gavino and
Gliceria; Gliceria’s death in 1952 dissolved the conjugal
partnership and entitled Gavino to a one-half portion as his
conjugal share, while Gliceria’s one-half share should be
equally divided among Gavino and Gliceria’s brothers and
sisters or their children. It held that Roberto was entitled
to only three-fourths, as this was Gavino’s entire share,
while the petitioner was entitled to one-fourth of the
subject property, and gave the parties sixty days to effect
the partition.13
The MCTC brushed aside the respondents’ argument
that they acquired the subject property by ordinary
acquisitive prescription, noting that bad faith attended
their possession because they were well aware of
Nicomedesa’s claim of ownership over a one-half portion of
the subject property, long before the property was tax
declared solely in Roberto’s name in 1974. It observed that
the required thirty-year period for extraordinary
acquisitive prescription was not met because the
respondents had only twenty-four years of adverse
possession, counted from 1974 until the filing of the
complaint in 1998.14

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12 Id., at p. 42.
13 Rollo, pp. 58-70.
14 Ibid.

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332 SUPREME COURT REPORTS ANNOTATED

Tan vs. Ramirez

The RTC Ruling

On appeal, Judge Abraham B. Apostol15 of the Regional
Trial Court (RTC), Branch 18, Hilongos, Leyte, rendered a
two-page Decision dated June 29, 2001, which we quote in
full:

I. The Case
THIS IS A COMPLAINT FOR Recovery of Ownership And Possession
And/Or Quieting of Title With Damages filed by Plaintiffs against
defendants on a parcel of land located at Mahaba, Apid, Inopacan, Leyte
presently described as follows
A parcel of land situated at Mahaba, Inopacan, Leyte, bounded on
the NORTH by Camotes Sea; EAST by Camotes Sea; SOUTH by
Lot 3478, 3476, 3473, WEST by Lot 3480 covered by Tax
Declaration No. 4193 in the name of Roberto Ramirez.
After a full blown hearing, a DECISION was rendered, the decretal
portion being:
WHEREFORE, all the foregoing considered the court hereby
decrees:
 1. That plaintiff and defendants are lawful co-owners of Lot
3483 as afore-described;
2. That the shares of the parties shall be divided and
apportioned in the following manner: plaintiff shall own
one-fourth (1/4) of Lot 3483 and defendants shall
collectively own three-fourth (3/4) of Lot 3483;
3. That the parties are hereby given sixty days from receipt
hereof within which to effect the actual partition among
themselves observing the foregoing proportion,
proportionately sharing the expenses therefor and to
submit to the court for final approval the project of partition
including the proposed subdivision plan prepared by a
geodetic engineer;

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15 Optionally retired on July 15, 2001.

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Tan vs. Ramirez

4. That should the parties be unable to voluntarily agree to

make the partition, they shall so inform the court within
thirty days from receipt hereof.
5. That the parties equally share the costs of this suit.
SO ORDERED.
II. Facts of the Case:
a. Version of the Plaintiffs is extant on the rollo of the case
summarized on Appeal by a MEMORANDUM but
negligently forgetting to enumerate their PRAYERS.
b. Version of the Defendants is also extant on the records of
the case and clearly expanded via a MEMORANDUM.
III. Court Findings/Ruling:
THIS COURT adopts in toto the DECISION of the Court a quo,
slightly correcting no. 2 of the same to conform to the fallo of the
DECISION which stated a “proportion of 1:3[.]”
No. 2 shall therefore read as follows:
2. That the shares of the parties shall be divided and
apportioned in the following manner: plaintiff shall own
ONE-THIRD (1/3) of Lot 3483 and defendants shall
collectively own TWO-THIRDS (2/3) of Lot 3483.
SO ORDERED.”16

The respondents elevated the case to the Court of

Appeals via a petition for review under Rule 42 of the
Rules of Court, insisting that the lower courts erred in
finding that the petitioner is a co-owner since they have
already acquired the entire area of the subject property by
ordinary acquisitive prescription.
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16 Rollo, pp. 90-91.

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334 SUPREME COURT REPORTS ANNOTATED

Tan vs. Ramirez

The CA Ruling
The CA decided the appeal on January 28, 2003. It set
aside the Decisions dated April 2, 2001 and June 29, 2001
of the MCTC and the RTC, respectively, and declared
Roberto as the lawful owner of the entire area of the
subject property. The appellate court found that the
October 5, 1977 Compromise Agreement executed by
Belacho gave Roberto’s possession of the subject property
the characters of possession in good faith and with just
title; the respondents’ twenty-one years of possession, from
execution of the compromise agreement in 1977 until the
filing of the case in 1998, is more than the required ten-
year possession for ordinary acquisitive prescription. The
CA also noted that Roberto also enjoyed just title because
Belacho executed a contract of sale in his favor on
September 16, 1977.17
After the CA’s denial18 of her motion for
reconsideration,19 the petitioner filed the present petition
for review on certiorari under Rule 45 of the Rules of Court.

The Petition

The petitioner contends that the CA misappreciated the

legal significance of the compromise agreement and the
contract of sale, both executed by Belacho, and thus
concluded that the respondents were possessors in good
faith and with just title and could acquire the subject
property through ordinary acquisitive prescription. She
argues that the parties merely entered into the compromise
agreement to settle the case. She further argues that
Roberto entered the contract of sale in bad faith because
the sale took place during the pendency of Civil Case No.
B-565.

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17 Id., at pp. 117-130.

18 Resolution of June 19, 2003; id., at p. 139.
19 Id., at pp. 131-137.

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 Tan vs. Ramirez

The respondents submit that they are possessors in good

faith and with just title because Roberto bought the subject
property from Belacho in a contract of sale dated
September 16, 1977, and the compromise agreement,
executed on October 5, 1977, recognized Roberto’s
ownership of the subject property.

The Issue

The core issue is whether the CA erred in relying upon

the compromise agreement and the contract of sale to
conclude that the respondents had been possessors in good
faith and with just title and could acquire the subject
property through ordinary acquisitive prescription.

Our Ruling

We find the petition meritorious.

This Court is not a trier of facts. However, if the
inference drawn by the appellate court from the facts is
manifestly mistaken, as in the present case, we can review
the evidence to allow us to arrive at the correct factual
conclusions based on the record.20
Prescription as a mode of acquiring ownership
Prescription, as a mode of acquiring ownership and
other real rights over immovable property,21 is concerned
with lapse of time in the manner and under conditions laid
down by law,

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20  Heirs of Flores Restar v. Heirs of Dolores R. Cichon, G.R. No.

161720, November 22, 2005, 475 SCRA 731, 739; Casol v. Purefoods
Corporation, G.R. No. 166550, September 22, 2005, 470 SCRA 585, 589;
Carpio v. Valmonte, 481 Phil. 352, 358; 438 SCRA 38, 48-49 (2004).
21  Heirs of Marcelina Arzadon-Crisologo v. Rañon, G.R. No. 171068,
September 5, 2007, 532 SCRA 391, 404; Calicdan v. Cendaña, 466 Phil.
894, 902; 422 SCRA 272, 279 (2004).

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336 SUPREME COURT REPORTS ANNOTATED

Tan vs. Ramirez

namely, that the possession should be in the concept of an

owner, public, peaceful, uninterrupted, and adverse.22 The
party who asserts ownership by adverse possession must
prove the presence of the essential elements of acquisitive
prescription.23
 Acquisitive prescription of real rights may be ordinary
or extraordinary.24 Ordinary acquisitive prescription
requires possession in good faith and with just title for ten
years.25 In extraordinary prescription, ownership and other
real rights over immovable property are acquired through
uninterrupted adverse possession for thirty years without
need of title or of good faith.26
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 his
ownership.27 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.28
Compromise agreement not a valid basis
of possession in good faith and just title
We find that the CA mistakenly relied upon the
compromise agreement, executed by Belacho to conclude
that the respondents were possessors in good faith and
with just title who acquired the property through ordinary
acquisitive prescription.

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22 Heirs of Marcelina Arzadon-Crisologo v. Rañon, supra.

23 Ibid.
24 Article 1117 of the Civil Code.
25 Article 1134 of the Civil Code.
26 Article 1137 of the Civil Code.
27 Article 1127 of the Civil Code.
28 Article 1129 of the Civil Code.

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Tan vs. Ramirez

In Ramnani v. Court of Appeals,29 we held that the main

purpose of a compromise agreement is to put an end to
litigation because of the uncertainty that may arise from it.
Reciprocal concessions are the very heart and life of every
compromise agreement.30 By the nature of a compromise
agreement, it brings the parties to agree to something that
neither of them may actually want, but for the peace it will
bring them without a protracted litigation.31
In the present case, to avoid any conflict with Belacho,
Roberto and Nicomedesa paid P1,800.00 in consideration of
Belacho’s desistance from further pursuing her claim over
two (2) parcels of land, including the subject property.
Thus, no right can arise from the compromise agreement
because the parties executed the same only to buy peace
and to write finis to the controversy; it did not create or
transmit ownership rights over the subject property. In
executing the compromise agreement, the parties, in effect,
merely reverted to their situation before Civil Case No. B-
565 was filed.
Contract of sale cannot support claim
of good faith and just title
Neither can the respondents benefit from the contract of
sale of the subject property, executed by Belacho in favor of
Roberto, to support their claim of possession in good faith
and with just title. In the vintage case of Leung Yee v. F.L.
Strong Machinery Co. and Williamson,32 we explained good
faith in this manner:

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29 413 Phil. 194, 207; 360 SCRA 645, 654 (2001).

30 Spouses Miniano v. Court of Appeals, 485 Phil. 168, 179; 442 SCRA
492, 504 (2004).
31 Alonso v. San Juan, 491 Phil. 232, 247; 451 SCRA 45, 58-59 (2005);
Litton v. Hon. Court of Appeals, 331 Phil. 324, 332; 263 SCRA 40, 45
(1996).
32 37 Phil. 644, 651 (1918).

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338 SUPREME COURT REPORTS ANNOTATED

Tan vs. Ramirez

“One who purchases real estate with knowledge of a defect or

lack of title in his vendor cannot claim that he has acquired title
thereto in good faith as against the true owner of the land or of an
interest therein; and the same rule must be applied to one who
has knowledge of facts which should have put him upon such
inquiry and investigation as might be necessary to acquaint him
with the defects in the title of his vendor.”33

Good faith, or the want of it, can be ascertained only

from the acts of the one claiming it, as it is a condition of
mind that can only be judged by actual or fancied token or
signs.34
In the present case, no dispute exists that Roberto,
without Nicomedesa’s knowledge or participation, bought
the subject property on September 16, 1977 or during the
pendency of Civil Case No. B-565. Roberto, therefore, had
actual knowledge that Belacho’s claim to ownership of the
subject property, as Gavino’s purported heir, was disputed
because he (Roberto) and Nicomedesa were the defendants
in Civil Case No. B-565. Roberto even admitted that he
bought the subject property from Belacho to “avoid any
trouble.”35 He, thus, cannot claim that he acted in good
faith under the belief that there was no defect or dispute in
the title of the vendor, Belacho.
Not being a possessor in good faith and with just title,
the ten-year period required for ordinary acquisitive
prescription cannot apply in Roberto’s favor. Even the
thirty-year period under extraordinary acquisitive
prescription has not been met because of the respondents’
claim to have been in possession, in the concept of owner, of
the subject property for only twenty-four years, from the
time the subject property was tax declared in 1974 to the
time of the filing of the complaint in 1998.

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33 Id., at p. 651.
34 Id., at p. 652.
35 MCTC Decision dated April 2, 2001, p. 6; Rollo, p. 63.

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Tan vs. Ramirez

Based on the foregoing, the CA erred in finding that the

respondents acquired the petitioner’s one-fourth portion of
the subject property through acquisitive prescription. As
aptly found by the MCTC, the respondents are only entitled
to three-fourths of the subject property because this was
Gavino’s rightful share of the conjugal estate that Roberto
bought from Ronito and Wilfredo Oyao.
RTC Decision did not conform to the
requirements of the Constitution and
of the Rules of Court
Before closing, we cannot close our eyes to the failure of
the RTC decision to measure up to the standard set by
Section 14 of Article VIII of the Constitution, as well as
Section 1 of Rule 36 and Section 1, Rule 120 of the Rules on
Civil Procedure, that a decision, judgment or final order
determining the merits of the case shall state, clearly and
distinctly, the facts and the law on which it is based. Our
Administrative Circular No. 1 of January 28, 1988
reiterates this requirement and stresses that judges should
make complete findings of facts in their decisions,
scrutinize closely the legal aspects of the case in the light of
the evidence presented, and avoid the tendency to
generalize and to form conclusions without detailing the
facts from which such conclusions are deduced.
In Yao v. Court of Appeals,36 we emphasized:
 “Faithful adherence to the requirements of Section 14, Article
VIII of the Constitution is indisputably a paramount component
of due process and fair play. It is likewise demanded by the due
process clause of the Constitution. The parties to a litigation
should be informed of how it was decided, with an explanation of
the factual and legal reasons that led to the conclusions of the
court. The court cannot simply say that judgment is rendered in
favor of X and against Y and just leave it at that without any
justification whatsoever for its action. The losing party is entitled
to know why he lost, so he may

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36 398 Phil. 86; 344 SCRA 202 (2000).

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340 SUPREME COURT REPORTS ANNOTATED

Tan vs. Ramirez

appeal to the higher court, if permitted, should he believe that the

decision should be reversed. A decision that does not clearly and
distinctly state the facts and the law on which it is based leaves
the parties in the dark as to how it was reached and is precisely
prejudicial to the losing party, who is unable to pinpoint the
possible errors of the court for review by a higher tribunal. More
than that, the requirement is an assurance to the parties that, in
reaching judgment, the judge did so through the processes of legal
reasoning. It is, thus, a safeguard against the impetuosity of the
judge, preventing him from deciding ipse dixit. Vouchsafed
neither the sword nor the purse by the Constitution but
nonetheless vested with the sovereign prerogative of passing
judgment on the life, liberty or property of his fellowmen, the
judge must ultimately depend on the power of reason for
sustained public confidence in the justness of his decision.”37

The RTC decision did not distinctly and clearly set forth,
nor substantiate, the factual and legal bases for its
affirmance of the MCTC decision. It contained no analysis
of the evidence of the parties nor reference to any legal
basis in reaching its conclusions. Judges must inform the
parties to a case of the legal basis for their decision so that
if a party appeals, it can point out to the appellate court the
points of law to which it disagrees. Judge Apostol should
have known the exacting standard imposed on courts by
the Constitution and should not have sacrificed the
constitutional standard for brevity’s sake. Had he
thoroughly read the body of the MCTC decision, he would
have clearly noted that the “proportion of 1:3,” stated in the
penultimate paragraph of the decision, meant that the
petitioner was entitled to one-fourth, while the respondents
were entitled to three-fourths, of the subject property.
 WHEREFORE, in light of all the foregoing, we hereby
REVERSE and SET ASIDE the decision dated January 28,
2003 and the resolution dated June 19, 2003 of the former
Seventh Division of the Court of Appeals in CA-G.R. SP No.
66120.   The decision dated April 2, 2001 of the Municipal
Circuit

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37 Id., at pp. 105-106; p. 219.

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