SUPREME COURT REPORTS ANNOTATED

Alcaraz vs. Tangga-an

*
G.R. No. 128568. April 9, 2003.

SPOUSES REYNALDO ALCARAZ and ESMERALDA ALCARAZ, petitioners, vs. PEDRO M.

TANGGA-AN, MENAS R. TANGGAAN, VIRGINIA III YVETTE R. TANGGA-AN, CECIL T.
VILLAFLOR, HERMES R. TANGGA-AN, VENUS R. TANGGA-AN, JUPITER R. TANGGA-
AN, YVONNE T. FRI, VIVIEN R. TANGGA-AN and HON. JUDGE JOSE P. BURGOS and
THE COURT OF APPEALS, respondents.

Courts; Pleadings and Practice; Appeals; A petition for review before the Supreme Court should only
raise questions of law.—Pursuant to Section 1, Rule 45 of the 1997 Revised Rules of Civil Procedure, a
petition for review before this Court should only raise questions of law. In the absence of showing that
the case falls under one of the exceptions, factual findings of the Court of Appeals are conclusive on the
parties and not reviewable by this Court. And they carry even more weight when the Court of Appeals
affirms the factual findings of the trial court. As such, this Court is not duty-bound to analyze and weigh
all over again the evidence already considered in the proceedings below.
Contracts;  Lease;  Possession;  Although tax declarations or realty tax payment of property are not
conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner.
—Although tax declarations or realty tax payment of property are not conclusive evidence of ownership,
nevertheless, they are good  indicia  of possession in the concept of owner for no one in his right mind
would be paying taxes for a property that is not in his actual or at least constructive possession. They
constitute at least proof that the holder has a claim of title over the property. The voluntary declaration
of a piece of property for taxation purposes manifests not only one’s sincere and honest desire to obtain
title to the property and announces his adverse claim against the State and all other interested parties,
but also the intention to contribute needed revenues to the Government. Such an act strengthens
one’s bona fide claim of acquisition of ownership.
Same; Same; Section 2, Rule 131 of the Rules of Court provides a conclusive presumption.—Section 2,
Rule 131 of the Rules of Court provides as a conclusive presumption that: Sec. 2.  Conclusive
presumptions.—The following are instances of conclusive presumptions: (a) Whenever a party has, by his
own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing
true, and to act

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* THIRD DIVISION.

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Alcaraz vs. Tangga-an

upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be
permitted to falsify it; xxx xxx xxx After recognizing the validity of the lease contract for two years, the
petitioner spouses are barred from alleging the automatic cancellation of the contract on the ground that
the respondents lost ownership of the house after Virgilio acquired title over the lot.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.
     Rolando P. Quimbo for petitioners.
     Alfonso Dela Cerna for respondents.

CORONA, J.:
1
Before us2
is a petition for review
3
of the decision   dated January 10, 1997 of the Court of
Appeals  affirming the decision  dated June 26, 19954of the Regional Trial Court (RTC) of Cebu
City, Branch 17, which in turn upheld the decision  dated January 5, 1995 of the Municipal
Trial Court (MTC) of Cebu City, Branch 2, ordering the ejectment of the petitioner spouses
from the house they were renting from respondents.
On October 4, 1994, respondents Pedro Tangga-an, Menas Tangga-an, Virginia III Yvette
Tangga-an, Cecil Villaflor, Hermes Tangga-an, Venus Tangga-an, Jupiter Tangga-an, Yvonne
Fri and Vivien Tangga-an filed a complaint for unlawful detainer, with damages, docketed
as  Civil Case No. R-33928, against petitioner spouses Reynaldo Alcaraz and Esmeralda
Alcaraz.
The complaint alleged that the late Virginia Tangga-an (the spouse of respondent Pedro
Tangaa-an and mother of the rest of the respondents) leased a residential building (house)
located at Premier Street, Hipodromo, Cebu City to the petitioner spouses.

______________
1 Penned by Associate Justice Artemon Luna, and concurred in by Associate Justices Ramon Barcelona and
Maximiano Asuncion; Rollo, pp. 29-33.
2 Twelfth Division.
3 Penned by Judge Jose P. Burgos; Court of Appeals Records, pp. 34-36.
4 Penned by Judge Olegario Sarmiento, Jr.; Court of Appeals Records, pp. 120-122.

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Alcaraz vs. Tangga-an

The lease contract was limited to the use and occupancy of the said residential building and
did not include the lot on which it was constructed because the said lot was then owned by the
National Housing Authority (NHA). Under the contract, the petitioner spouses bound
themselves for five years to pay Virginia a monthly rental of P4,000 beginning November 22,
1991. However, since November 1993, they failed to pay rent. Thus, as of October, 1994, they
were in arrears in the amount of P48,000. Despite repeated demands by respondents to pay
the rentals in arrears and to surrender the possession of the residential building, the
petitioner spouses refused to vacate the same. Respondents sought to repossess the property
for their own use and benefit.
On the other hand, the petitioner spouses alleged that, on July 23, 1993, the ownership of
the lot on which the house stood was transferred by the NHA to Virgilio and Angelita D.
Tangga-an. Virgilio Tangga-an is the son of the late Virgilia Tangga-an and respondent Pedro
Tangga-an, and the brother of the other respondents. Transfer Certificate of Title No. 125657
was consequently issued in the name of Virgilio Tangga-an. According to the petitioner
spouses, the subsequent change in ownership of the lot and the house resulted in the
cancellation of the contract of lease between respondents and petitioner spouses. Thereafter,
they paid the rent to the new owners of the lot (Virgilio and Angelita) and not to respondents
since the latter supposedly no longer had the legal right to collect rentals.
On January 5, 1995, the MTC rendered a decision, the dispositive portion of which read:
“WHEREFORE, Judgment is entered by way of preponderance of evidence in favor of plaintiffs and
against the defendants, Ordering the latter to vacate the premises immediately, including all those who
are occupying the subject house in relation to them; They are also jointly ordered to pay the sum of
P48.000 representing rental payment in arrears from November, 1993 up to October, 1994 and to update
monthly payment of P4,000 thereafter until their vacation therefrom; They are saddled to pay attorney’s
fees in the sum of P5,000
5
and litigation costs in the amount of P1,000.
SO ORDERED.”

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5 Court of Appeals Records, p. 33.

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In ruling in favor of the respondents, the MTC held that the petitioner spouses clearly violated
the contract of lease due to non-payment of rent. They failed to show that the subject house
belonged to Virgilio alone. On the other hand, the respondents proved that, after the death of
Virgilia, they registered said house in the name of their trustees, corespondents Hermes
Tangga-an and his wife. Furthermore, considering that Virgilio’s claim of ownership over the
lot was the subject of a pending litigation for annulment of deed of sale and reconveyance of
property involving the Tanggaans, the MTC ruled that it “cannot6 usurp to pass judgment on
the issues, as well as the conflicting claims of the parties therein.”
On appeal, the RTC affirmed the decision of the MTC, and held that:
x x x [D]efendants failed to present any documentary evidence modifying or amending the contract of
lease (Annex “C”, complaint) to justify the transfer of payment of the monthly rental to Virgilio Tanga-an
who claims only as the registered owner of the lot on which the leased house is located. It appears that
Virgilio Tanga-an does not possess any proof of ownership of the rented house. Clearly, defendants had
violated the lease agreement executed between them and the deceased lessor Virginia R. Tangga-an (sic)
the predecessor in interest of Hermes Tangaa-an and his wife as shown in the Tax Declaration of the
said spouses (Annex “A”, complaint) whose name appears under the space for previous owner by stopping
payment of rental to the present owner despite the existence of the contract of lease which expires on
November 22, 1996. The law on contracts basically states:

“Obligations arising from contracts have the force of law between the contracting parties and should be complied
with in good faith.” 7(Article 1159, New Civil Code of the Philippines).
xxx     xxx     xxx

In denying the petition for review and affirming the judgments of the courts a quo, the Court
of Appeals ruled that:
We also concur with the holding of both courts that as heirs of Virginia Tangga-an, private respondents
have the right to institute the action for ejectment, in accordance with Article 487 of the Civil Code; and
that the claim of petitioner—that Virgilio Tangga-an owns the lot where the leased residential building
stands and occupied by petitioners—is still the

______________
6 Court of Appeals Records, p. 121.
7 Court of Appeals, Records, pp. 35-36.

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Alcaraz vs. Tangga-an
subject of a civil action for annulment of the sale of the lot before the Regional Trial Court of Cebu. It
does not follow as a matter of course that whoever owns the lot owns the building in question. Ownership
of the lot cannot change the nature and ownership of the building, which belongs to the plaintiffs as heirs
of the late Virginia Tangga-an through Ernest Tangga-an and his wife. Respondent court correctly
reasoned out that “x x x defendants cannot hide over the cloak of Virgilio Tangga-an, his claim of
ownership over the lot as far as the Court is concerned being irrelevant to this case x x x.” Most
importantly, the action involving the question of ownership of the lot is not a lawful ground to
suspend/abate the ejectment proceeding. The rationale of the rule being that an ejecment suit involves
only the issue of material8 possession or possession de facto (San Pedro vs. Court of Appeals, 235 SCRA
145, 150, and cases cited).

Hence, this petition on the following assignments of error:

THE LEASE CONTRACT EXECUTED BY PETITIONERS WITH VIRGINIA TANGGA-AN,

PLAINTIFFS’ PREDECESSOR-IN-INTEREST, COVERED NOT ONLY THE LAND, BUT ALSO THE
IMPROVEMENT THEREON, INCLUDING THE BUILDING.

II

VIRGILIO TANGGA-AN, AS ONE OF THE HEIRS OF VIRGINIA, HAD THE SAME RIGHTS OVER
THE PROPERTY AS THOSE OF THE OTHER HEIRS, THE PLAINTIFFS. HENCE, VIRGILIO MAY
NOT BE EXCLUDED UNILATERALLY BY THE OTHER HEIRS IN HIS ENJOYMENT OF HIS
HEREDITARY RIGHTS.

III

THE REGISTRATION OF THE LAND, INCLUDING THE IMPROVEMENTS THEREON, IN THE

NAME OF VIRGILIO TANGGA-AN UNDER THE TORRENS SYSTEM IS INDEFEASIBLE
9
AND MAY
NOT BE ATTACKED COLLATERALLY IN THE PRESENT ILLEGAL DETAINER CASE.

We rule in favor of the respondents.

Section 16 of the 1997 Revised Rules of Civil Procedure provides that:

______________
8 Rollo, pp. 32-33.
9 Id., pp. 14-15.

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Alcaraz vs. Tangga-an

SEC. 16.  Resolving defense of ownership.—When the defendant raises the defense of ownership in his
pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the
issue of ownership shall be resolved only to determine the issue of possession.

The issue of ownership is precisely what the petitioner spouses raised to justify their non-
payment of rent and to resist eviction from the house they leased from respondents. Being
indispensable to the resolution of the issue of possession, we herein render a provisional ruling
on ownership.
Petitioner spouses seek a dismissal of the case for lack of jurisdiction claiming that the only
issue to be resolved is ownership over the house which is improper in an ejectment case. We
disagree. The issue in the case at bar is whether the petitioner spouses, as lessees, were
excused from paying the rent because of the change in the ownership of the land on which the
rented house was built. The main question therefore is still the lawful possession of the subject
premises by the petitioner spouses. To resolve it, a discussion of the ownership issue is
necessary.
The petitioner spouses insist that the courts a quo erred in not finding that Virgilio Tangga-
an became the new owner not only of the lot but also of the residential house. They claim that,
before she died, Virginia, the original owner of the subject house, waived and ceded her rights
over the land in favor of Virgilio. The said transfer allegedly included the subject house
because, pursuant to Article 440 of the Civil Code, “the ownership of the property gives the
right of accession to everything which is produced thereby, or which is incorporated or
attached thereto, either naturally or artificially.” They also maintain that the NHA executed a
deed of sale of both the house and the lot in favor of Virgilio. According to the petitioner
spouses, the tax declaration over the house in the name of respondent Hermes Tangga-an, as
trustee of the other respondents, was self-serving and had no probative value compared to the
certificate of title over the lot in the name of Virgilio Tangga-an.
We find no merit in petitioners’ arguments.
Pursuant to Section 1, Rule 45 of the 1997 Revised Rules of Civil Procedure, a petition for
review before this Court should only raise questions of law. In the absence of showing that the
case falls un-
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Alcaraz vs. Tangga-an
10
der one of the exceptions,   factual findings of the Court of Appeals are conclusive on the
parties and not reviewable by this Court. And they carry even more weight when the Court of
Appeals affirms the factual findings of the trial court. As such, this Court is not duty-bound 11
to
analyze and weigh all over again the evidence already considered in the proceedings below.
The courts  a quo  were unanimous in holding that the petitioner spouses failed to
substantiate their factual averment that Virgilio not only acquired the lot but also the house.
After examining the records, we found nothing to disprove the facts determined by the lower
courts. All the petitioner spouses presented was Virgilio’s uncertified xerox copy of the
certificate of title over the lot. No document was ever shown evidencing cession of the subject
house in Virgilio’s favor. Virgilio’s title could not be used to prove ownership over the house
built on said lot as it carried no reference at all to the house. A building
12
by itself is a real or
immovable property distinct from the land on which it is constructed  and therefore can be a
separate subject of contracts.
On the other hand, the respondents proved that, as compulsory heirs of Virginia, they were
the rightful owners of the subject house. They presented a tax declaration in the name of their
trustees, co-respondent Hermes Tangga-an and his wife, which tax declaration sufficiently
evidences their co-ownership and acquisition of title following the death of the decedent,
Virginia. We have ruled that:
Although tax declarations or realty tax payment of property are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind
would be paying taxes for a property that is not in his actual or at least constructive possession. They
constitute at least proof that the holder has a claim of title over the property. The voluntary declaration
of a piece of property for taxation purposes manifests not only one’s sincere and honest desire to obtain
title to the property and announces his adverse claim against the State and all other interested parties,
but also the intention to contribute

______________
10 See Martinez vs. Court of Appeals, G.R. No. 123547, May 21, 2001, 358 SCRA 38.
11 Romago Electric Co., Inc. vs. Court of Appeals, 333 SCRA 291, 301 [2000]; Borromeo vs. Sun, 317 SCRA 176, 182 [1999].
12 Article 415 of the Civil Code.
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needed revenues
13
to the Government. Such an act strengthens one’s  bona fide  claim of acquisition of
ownership.

One of the factual issues raised by the petitioner spouses concerns the alleged waiver and
cession of Virginia’s rights over the house and lot to Virgilio. But the petitioner spouses did not
mention any consideration received by Virginia for the waiver of the house, in effect making
said waiver a donation thereof to Virgilio. However, in order for a donation of real property
like a house to be valid, a public instrument duly signed by the donor and accepted by the
donee (which
14
acceptance must be known to the donor while alive) must be
executed.   Moreover, said donation must not impair
15
the legitime of the forced heirs of the
donor in order for the same not to be inofficious.  In the case at bar, no such public instrument
was presented. Neither was it explained why said waiver did not impair the rights of the other
compulsory heirs of Virginia.
To support their argument that the house necessarily became Virgilio’s property as a result
of the acquisition of the lot on which the same was built, the petitioner spouses invoke the
principle that the accessory follows the principal. Being an accessory, the house is necessarily
owned by the owner of the lot on which it is built.
There is no need, however, to disturb and analyze the applicability of this well-entrenched
principle because the petitioner spouses are estopped from raising the same. Both parties
knew that their contract pertained only to the lease of the house, without including the land.
The contract states: “1. That the lessor is the owner
16
of a building of mixed materials situated
at Premier St., Mabolo, Hipodromo, Cebu City.”  At the time of the perfection of the contract,
the petitioner spouses, as lessees, were aware that the NHA, and not Virginia, the lessor,
owned the land on which the rented house stood yet they signed the same, obliged themselves
to comply with the terms thereof for five years and performed their obligations as lessees for
two years.
Now they assume a completely different legal position. They claim that the lease contract
ceased to be effective because Virgi-

______________
13 Director of Lands vs. Court of Appeals, 308 SCRA 317, 324-325 [1999]; Republic vs. Court of Appeals, 258 SCRA
712, 720-721 [1996].
14 Article 749, Civil Code.
15 Article 752, Civil Code.
16 Court of Appeals Records, p. 19.

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Alcaraz vs. Tangga-an

lio’s assumption of ownership of the land stripped the respondents of ownership of the
building. They argue that, under Article 440 of the Civil Code, Virgilio’s title over the lot
necessarily included the house on the said lot, thus automatically canceling the contract.
Section 2, Rule 131 of the Rules of Court provides as a conclusive presumption that:
Sec. 2. Conclusive presumptions.—The following are instances of conclusive presumptions:
(a) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to
believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such
declaration, act or omission, be permitted to falsify it;
xxx     xxx     xxx

After recognizing the validity of the lease contract for two years, the petitioner spouses are
barred from alleging the automatic cancellation of the contract on the ground that the
respondents lost ownership of the house after Virgilio acquired title over the lot.
We also note that the petitioner spouses rescinded the contract of lease without judicial
approval. Due to the change in ownership of the land, the petitioner spouses decided to
unilaterally cancel the contract because Virgilio supposedly became the new owner of the
house after acquiring title to the lot. They alleged that there was no reason anymore to
perform their obligations as lessees because the lessor had ceased to be the owner of the house.
But there is nothing in their lease contract that allows the parties to extrajudicially rescind
the same in case of violation of the terms thereof. Extrajudicial
17
rescission of a contract is not
possible without an express stipulation to that effect.   What the petitioner spouses should
have done was to file a special civil action for interpleader for the claimants to litigate their
claims and to deposit the rentals in court.
The petitioner spouses aver that their payments to Virgilio beginning November, 1993 were
payments made in good faith to a person in possession of the credit, in consonance with Article
1242

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17 Article 1191, Civil Code.

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18
of the Civil Code.  This therefore released them from their obligation. They claim that Virgilio
collected the rentals in his capacity as a co-owner. Being a son of Virginia, he was also entitled
to the rent of the subject house. We disagree. Virgilio collected the rentals not as a co-
owner  but as the alleged sole owner of the subject house.  The petitioner spouses themselves
admitted that Virgilio claimed sole ownership of the house and lot. It would be incongruous for
them to now assert payment in good faith to a person they believed was collecting in behalf of
his coheirs after admitting that they paid rent to Virgilio as the sole owner thereof.
Hence, for violating the terms of the lease contract,  i.e.,payment of rent, respondents can
legally demand the ejectment of the petitioner spouses.
WHEREFORE, the decision dated January 10, 1997 of the Court of Appeals is hereby
AFFIRMED. With costs against the petitioners.
SO ORDERED.