Magalang v. Heretape

 Doctrine: The person who claims a better right of ownership to the property sought to be recovered must prove two things: first, the identity of the land claimed; and second, his title thereto.

Facts: Petitioners Spouses Kawasa Magalang and Mona Wahab were the owners of a 10-hectare property located at Salabaca, Ampatuan, Cotabato. On February 4, 1969, Kawasa Magalang and Lucibar Heretape executed a memorandum of agreement authorizing the latter "to occupy, cultivate and produce in a certain portion of TWO AND A HALF (2 1/2) hectares" of the lot for a period of one year and four months. 

In the early 1970s, Kawasa Magalang and his family were forced to evacuate the lot because of the Ilaga-Blackshirt conflict. Spouses Lucibar Heretape and Rosalina Funa, Spouses Nestor Heretape and Rosa Rogador, and Roberto Landero took advantage of the situation and usurped the whole 10-hectare lot. In connivance with these persons, Geodetic Engineer Eusebio Fortinez caused the subdivision of the lot into three parts.

Respondents answered that at the time Lucibar Heretape executed subject memorandum of agreement, Kawasa Magalang misrepresented himself as the lot owner. When Kawasa Magalang later abandoned the lot, a certain Pedro Deansin^** claiming to be the real owner, showed up and demanded that they (respondents) vacate the lot. As proofs of his ownership, Pedro Deansin showed them a Deed of Transfer of Rights.

Nestor Heretape, Lucibar Heretape's son, opted to buy 5 hectares from Pedro Deansin, corresponding to one-half of the lot. After the purchase, Nestor Heretape gave 2.5 hectares to his father Lucibar Heretape. In 1974, Pedro Deansin sold the remaining 5 hectares to Roberto Landero. 

RTC ruled in favor of the petitioners. CA reversed and dismissed the petition. MR was denied.

Issue: Are petitioners entitled to reconveyance of the entire Lot 1064 or the three subdivided lots 2238-B, Lot 2238-A, and Lot 1064-A?

Held: No. Article 1456 of the Civil Code provides that a person acquiring property through fraud becomes by operation of law, a trustee of an implied trust for the benefit of the real owner of the property. If fraud was indeed committed, it gives a complainant the right to seek reconveyance of the property from the registered owner or subsequent buyers.

The party seeking to recover the property must prove, by clear and convincing evidence, that he or she is entitled to the property, and that the adverse party has committed fraud in obtaining his or her title. 

Article 434 of the New Civil Code further provides what complainant must prove in order to recover the property:

Art. 434. In an action to recover, the property must be identified, and the plaintiff must rely on the strength of his title and not on the weakness of the defendant's claim.

In other words, the person who claims a better right of ownership to the property sought to be recovered must prove two things: first, the identity of the land claimed; and second, his title thereto.

CA did not err in dismissing petitioners' complaint for recovery of possession and ownership and/or declaration of nullity of acquisition of property.

Dispositive Portion: ACCORDINGLY, the petition is DENIED. The assailed Decision dated December 30, 2010 and Resolution dated October 6, 2011 of the Court of Appeals in CA-G.R. CV No. 81939 are AFFIRMED.

Provincial Assessor v. Filipinas

 Doctrine: The exemption from real property taxes given to cooperatives applies regardless of whether or not the land owned is leased. This exemption benefits the cooperative's lessee. The characterization of machinery as real property is governed by the LGC and not the Civil Code.

Facts: Filipinas Palm Oil Plantation Inc. (Filipinas) is a private organization engaged in palm oil plantation with a total land area of more than 7,000 hectares of National Development Company (NDC) lands in Agusan del Sur. After the CARL was passed, NDC lands were transferred to CARL beneficiaries who formed themselves as the merged NDC-Guthrie Plantations, Inc. - NDC-Guthrie Estates, Inc. (NGPI-NGEI) Cooperatives. FILIPINAS entered into a lease contract agreement with NGPI-NGEI.

The Provincial-Assessor of Agusan del Sur assessed Filipinas  of real property taxes over the leased land, the roads constructed therein, as well as the company’s road equipment and mini haulers, which the Provincial Assessor considered as machineries subject to real property tax. 

The LBAA adopted Filipinas' claim that the basis for assessment should only be 98 trees. Although 1 hectare of land can accommodate 124 oil palm trees, the mountainous terrain of the plantation should be considered. Because of the terrain, not every meter of land can be fully planted with trees. The LBAA found that roads of any kind, as well as all their improvements, should not be taxed since these roads were intermittently used by the public. It resolved that the market valuation should be based on the laws of the DAR since the area is owned by the NDC, a quasi-governmental body of the Philippines. The LBAA exempted the low-cost housing units from taxation except those with a market value of more than P150,000.00 under the LGC. Finally, the LBAA considered the road equipment and mini haulers as movables that are vital to Filipinas' business.

Filipinas appealed before the CBAA. The Board decided to set aside the LBAA decision. CBAA denied the MR filed by the Provincial Assessor. 

The Provincial Assessor filed a Petition for Review before the CA which sustained the CBAA’s decision. The CA held that the land owned by NGPI-NGEI, which Filipinas has been leasing, cannot be subjected to real property tax since these are owned by cooperatives that are tax-exempt under the LGC. 

Issues: whether the exemption privilege of NGPI-NGEI from payment of real property tax extends to respondent Filipinas Palm Oil Plantation Inc. as lessee of the parcel of land owned by cooperatives; and whether respondent's road equipment and mini haulers are movable properties and have not been immobilized by destination for real property taxation.

Held: 

First issue: NGPI-NGEI, as the owner of the land being leased by respondent, falls within the purview of the law. Section 234 of the LGC exempts all real property owned by cooperatives without distinction. Nothing in the law suggests that the real property tax exemption only applies when the property is used by the cooperative itself. Similarly, the instance that the real property is leased to either an individual or corporation is not a ground for withdrawal of tax exemption.

The roads that respondent constructed became permanent improvements on the land owned by the NGPI-NGEI by right of accession. Despite the land being leased by respondent when the roads were constructed, the ownership of the improvement still belongs to NGPI-NGEI. As provided under Article 440 and 445 of the Civil Code, the land is owned by the cooperatives at the time respondent built the roads. Hence, whatever is incorporated in the land, either naturally or artificially, belongs to the NGPI-NGEI as the landowner.

Although the roads were primarily built for respondent's benefit, the roads were also being used by the members of NGPI and the public. Furthermore, the roads inured to the benefit of NGPI-NGEI as owners of the land not only by right of accession but through the express provision in the lease agreement.

Second issue: The road equipment and mini haulers shall be considered as real property, subject to real property tax.

Section 199(o) of the Local Government Code defines "machinery" as real property subject to real property tax. Article 415(5) of the New Civil Code defines "machinery" as that which constitutes an immovable property.

Section 199(o) of the Local Government prevails over Article 415(5) of the Civil Code. In Manila Electric Company:

As between the Civil Code, a general law governing property and property relations, and the Local Government Code, a special law granting local government units the power to impose real property tax, then the latter shall prevail. 

Respondent is engaged in palm oil plantation. Thus, it harvests fruits from palm trees for oil conversion through its milling plant. By the nature of respondent's business, transportation is indispensable for its operations.

Petitioner is correct in claiming that the phrase pertaining to physical facilities for production is comprehensive enough to include the road equipment and mini haulers as actually, directly, and exclusively used by respondent to meet the needs of its operations in palm oil production. Moreover, "mini-haulers are farm tractors pulling attached trailers used in the hauling of seedlings during planting season and in transferring fresh palm fruits from the farm [or] field to the processing plant within the plantation area." The indispensability of the road equipment and mini haulers in transportation makes it actually, directly, and exclusively used in the operation of respondent's business.

Dispositive Portion: WHEREFORE, the Petition is PARTLY GRANTED. The Decision of the Court of Appeals dated September 26, 2007 and the Resolution dated May 26, 2008 in CA-G.R. SP No. 74060 are AFFIRMED with MODIFICATION, in that the road equipment and the mini haulers should be assessed with real property taxes.

Heirs of Limense v. de Ramos

Facts:

Dalmacio Lozada was the registered owner of a parcel of land identified as Lot No. 12, Block No. 1074 of the cadastral survey of the City of Manila covered by OCT No. 7036 issued at the City of Manila on June 14, 1927, containing an area of 873.80 square meters, more or less, located in Beata Street, Pandacan, Manila.

Dalmacio Lozada subdivided his property into five (5) lots, namely: Lot Nos. 12-A, 12-B, 12-C, 12-D and 12-E. Through a Deed of Donation dated March 9, 1932, he donated the subdivided lots to his daughters in the following manner:

a. Lot No. 12-A in favor of Isabel Lozada, married to Isaac Limense;

b. Lot No. 12-B in favor of Catalina Lozada, married to Sotero Natividad;

c. Lot No. 12-C in favor of Catalina Lozada, married to Sotero Natividad; Isabel Lozada, married to Isaac Limense; and Salud Lozada, married to Francisco Ramos, in equal parts;

d. Lot No. 12-D in favor of Salud Lozada, married to Francisco Ramos; and

e. Lot No. 12-E in favor of Isabel Lozada, married to Isaac Limense, and Felicidad Lozada, married to Galicano Centeno.

On May 16, 1969, TCT No. 96886 was issued in the name of Joaquin Limense covering the very same area of Lot No. 12-C. On October 1, 1981, Joaquin Limense secured a building permit for the construction of a hollow block fence on the boundary line between his aforesaid property and the adjacent parcel of land, designated as Lot No. 12-D, which was being occupied by respondents. The fence, however, could not be constructed because a substantial portion of respondents' residential building in Lot No. 12-D encroached upon portions of Joaquin Limense's property in Lot No. 12-C. Joaquin Limense demanded the removal of the encroached area; however, respondent ignored both oral and written demands.

Joaquin Limense prayed that the RTC issue an order directing respondents, to remove the portion which illegally encroached upon his property on Lot No. 12-C and, likewise, prayed for the payment of damages, attorney’s fees and costs of suit.

RTC rendered a Decision dismissing the complaint of Joaquin Limense. He then filed a notice of appeal. The records of the case were transmitted to the CA. During the pendency of the appeal with the CA, Joaquin Limense died in 1999.

Issue:

Did the CA commit a grave abuse of discretion amounting to lack of jurisdiction, in holding, like the Trial Court did, that respondents' lot 12-D has an easement of right of way over Joaquin Limense's lot 12-C?

Did the CA commit a grave abuse of discretion amounting to lack of jurisdiction, in failing to hold, like the Trial Court did, that the protruding portions of respondents' house on lot 12-D extending into Joaquin Limense's lot 12-C constitute a nuisance and, as such, should be removed?

Held:

Petitioners aver that the CA erred in ruling that since Lot No. 12-C was covered by two TCT's, i.e., TCT Nos. 40043 and 96886, and there was no evidence on record to show how Joaquin Limense was able to secure another title over an already titled property, then one of these titles must be of dubious origin. According to the CA, TCT No. 96886, issued in the name of Joaquin Limense, was spurious because the Lozada sisters never disposed of the said property covered by TCT No. 40043.

Respondents allege that it was possible that TCT No. 96886, in the name of Joaquin Limense, was obtained thru fraud, misrepresentation or falsification of documents because the donees of said property could not possibly execute any valid transfer of title to Joaquin Limense, as they were already dead prior to the issuance of TCT No. 96886 in 1969.

In the case at bar, the action filed before the RTC against respondents was an action for removal of obstruction and damages. Respondents raised the defense that Joaquin Limense's title could have been obtained through fraud and misrepresentation in the trial proceedings before the RTC. Such defense is in the nature of a collateral attack, which is not allowed by law. Further, it has been held that a certificate of title, once registered, should not thereafter be impugned, altered, changed, modified, enlarged or diminished, except in a direct proceeding permitted by law. Otherwise, the reliance on registered titles would be lost.

Additionally, an examination of TCT No. 40043 would readily show that there is an annotation that it has been CANCELLED. It is possible that there was a series of transfers effected from TCT No. 40043 prior to the issuance of TCT No. 96886. Hence, respondents' position that the issuance of TCT No. 96886 in the name of Joaquin Limense is impossible, because the registered owners of TCT No. 40043 were already dead prior to 1969 and could not have transferred the property to Joaquin Limense, cannot be taken as proof that TCT No. 96886 was obtained through fraud, misrepresentation or falsification of documents.

Discontinuous easements are those which are used at intervals and depend upon the acts of man Being a discontinuous and apparent easement, the same can be acquired only by virtue of a title.

In the case at bar, TCT No. 96886, issued in the name of Joaquin Limense, does not contain any annotation that Lot No. 12-D was given an easement of right of way over Lot No. 12-C. However, Joaquin Limense and his successors-in-interests are fully aware that Lot No. 12-C has been continuously used and utilized as an alley by respondents and residents in the area for a long period of time. Joaquin Limense's Attorney-in-Fact, Teofista L. Reyes, testified that respondents and several other residents in the area have been using the alley to reach Beata Street since 1932.

Aqualab Philippines, Inc. v. Heirs of Marcelino Pagobo

Facts:

Lot 6727-Q and Lot 6727-Y of the Opon Cadastre, situated in Punta Engao, Lapu-lapu City, Mactan Island, Cebu used to form part of Lot 6727 owned by respondents’ great grandfather, Juan Pagobo, covered by OCT RO-2246 containing an area of 127,436 square meters.

Lot 6727 was once covered by Juan Pagobos homestead application. Upon his death on January 18, 1947, his homestead application continued to be processed culminating in the issuance on December 18, 1969 of Homestead Patent No. 128470 for Lot 6727. On the basis of this homestead patent, OCT RO-2246 was issued in the name of Juan Pagobo. Apparently, from the description of the subdivision lots of Lot 6727, particularly those of subject Lots 6727-Q and 6727-Y above, and even before the issuance of OCT RO-2246, the mother Lot 6727 was surveyed in 1963 and 1967 and eventually subdivided into 34 subdivision lots denominated as Lots 6727-A to 6727-HH.

Incidentally, on the same date that OCT RO-2246 was issued covering Lot 6727, OCT RO-1277 was likewise issued also covering Lot 6727 in the name of the late Juan Pagobo also pursuant to Homestead Patent No. 128470. Subsequently, however, on August 10, 1977, OCT RO-1277 was canceled for being null and void pursuant to an Order issued on August 4, 1977 by the Court of First Instance in Lapu-lapu City in view of the issuance of OCT RO-2246.Subject Lots 6727- Q  and 6727-Y were subsequently sold to Tarcela de Espina who then secured TCT 3294 therefor on April 21, 1970.

Subsequently, Tarcela de Espina sold subject lots to Rene Espina who was issued, on September 28, 1987, TCT 17830 for Lot 6727-Q and TCT 17831 for Lot 6727-Y. Thereafter, Rene Espina sold subject lots to Anthony Gaw Kache, who in turn was issued TCT 17918 and TCT 18177, respectively, on November 9, 1987. Finally, Aqualab acquired subject lots from Anthony Gaw Kache and was issued TCT 18442 and TCT 18443, respectively, on May 4, 1988.

The heirs of Bernabe Pagobo asserted that subject Lot 6727-Y was owned by their predecessor Bernabe Pagobo as evidenced by TD 00520. They maintained that even before the Second World War and before the death of Juan Pagobo on January 18, 1947, Bernabe Pagobo already had possession of subject Lot 6727-Y which was the portion assigned to him. Moreover, they contended that respondents never made any demands for partition of subject Lot 6727-Y.

RTC granted Aqualabs motion and dismissed respondents’ complaint.

CA reversed the Order of dismissal by the RTC, declaring the sale of subject lots as null and void, and remanding the case to the trial court for partition proceedings.

Issue:

Whether or not the action of respondents is barred by prescription; and whether or not Aqualab is an innocent purchaser for value.

Held:

No and no.

From the foregoing premises, the trial court erred in finding prescription. Prescription, as a ground for a motion to dismiss, is adequate when the complaint, on its face, shows that the action has already prescribed. Such is not the case in this instance. Respondents have duly averred continuous possession until 1991 when such was allegedly disturbed by Aqualab. Being in possession of the subject lotshypothetically admitted by Aqualab, respondents’ right to reconveyance or annulment of title has not prescribed or is not time-barred.

Verily, an action for annulment of title or reconveyance based on fraud is imprescriptible where the plaintiff is in possession of the property subject of the acts. And the prescriptive period for the reconveyance of fraudulently registered real property is 10 years, reckoned from the date of the issuance of the certificate of title, if the plaintiff is not in possession. Thus, one who is in actual possession of a piece of land on a claim of ownership thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. Since respondents filed their complaint in 1994, or three years after their possession was allegedly disturbed, it is clear that prescription has not set in, either due to fraud or constructive trust.

It would appear that Anthony Gaw Kache, Aqualabs predecessor-in-interest, was not in possession of subject lots. Such a fact should have put Aqualab on guard relative to the possessors’ interest over subject lots. A buyer of real property that is in the possession of a person other than the seller must be wary, and a buyer who does not investigate the rights of the one in possession can hardly be regarded as a buyer in good faith. Aqualab cannot be considered, in the context of its motion to dismiss, to be an innocent purchaser for value or a purchaser in good faith. Moreover, the defense of indefeasibility of a Torrens title does not extend to a transferee who takes it with notice of a flaw in the title of his transferor.

The appellate court was, thus, correct insofar as it reversed and set aside the September 30, 1997 Order of dismissal of the trial court. Unfortunately, however, it went further, for it did not merely remand the case for further proceedings, i.e., for trial on the merits, but it also resolved and decided the case in favor of respondents without going into a full-blown trial on the merits. This violated Aqualabs right to due process.

The CA reversibly erred when it decided the case on the merits when what was appealed thereto was a dismissal of the case through a motion to dismiss. There was no trial on the merits. Thus, its resolution of the case on the merits had no factual basis.

First, the assertion of respondents that they had possession until 1991, a factual issue, still had to be established on trial. Indeed, he who asserts a fact has the burden of proving it. So, too, the contention of being an innocent purchaser for value by Aqualab still has yet to be determined through a trial on the merits. The hypothetical admission applied against a defendant is relied upon by the court only to resolve his motion to dismiss. Verily, the burden of proving the purchasers good faith lies in the one who asserts the same it is not enough to invoke the ordinary presumption of good faith.

Second, and corollary to the first, given that there is no judicial factual finding that Aqualab is not an innocent purchaser for value, it is legally and factually without bases for the appellate court to order the cancellation of the certificates of title covering subject lots in the name of Aqualab.

Third, the issues of reconveyance or redemptive rights of respondents and their action for partition have to be resolved by the trial court in light of its eventual findings from a trial on the merits of the instant case.

Mistica v. Republic

Facts:

Petitioner filed with the MTC of Meycauayan, Bulacan, an Application for Registration of Title over a parcel of land known as Lot 7766-D located in Malhacan, Meycauayan, Bulacan. Attached to the application were the following documents: 1) the technical description of the subject lot; 2) Certification in Lieu of Lost Surveyors Certificate; 3) tax declaration of Real Property No. 06075, covering the subject lot effective 1998; 4) official receipts of realty tax payments; and 5) blueprint/machine copies of Subdivision Plan Csd-03-010587-D. Petitioner prayed for the registration and confirmation of her title over the subject lot.

However, according to the Director of Lands, a) neither the applicant nor her predecessors-in-interest had been in open, continuous, exclusive, and notorious possession and occupation of the land in question since June 12, 1945 or prior thereto; b) the muniments of title did not appear to be genuine and did not constitute competent and sufficient evidence of a bona fide acquisition of the land applied for, or of petitioners open, continuous, exclusive, and notorious possession and occupation thereof in the concept of an owner since June 12, 1945; c) the claim of ownership in fee simple of the subject lot on the basis of a Spanish title or grant could no longer be availed of by petitioner who failed to file an appropriate application for registration within a period of six (6) months from January 16, 1976 as required by Presidential Decree (P.D.) No. 892; and d) the subject lot applied for was a portion of the public domain belonging to the Republic of the Philippines not subject to private appropriation.

During trial, petitioner testified that the previous owner and possessor of the subject lot was her father. In support thereof, she presented a photocopy of a document dated May 16, 1921, written in Spanish, which allegedly was the Deed of Sale of the subject lot, with his father as the vendee. After the death of her father, the heirs executed an extrajudicial settlement of his estate. Eventually, she acquired sole ownership over the subject property.

MTC found that the subject property was alienable and disposable, and that petitioner sufficiently established her right over the lot in question and granted petitioners application for registration.

A Motion for Reconsideration was denied, thus respondents filed a Notice of Appeal to the RTC. RTC held that it had no jurisdiction over the case and instead forwarded the case to the CA considering that the appeal had already been perfected when the MTC gave due course to petitioners notice of appeal.

Issue:

Whether or not the petitioner failed to prove that she has been [in] open, continuous, exclusive and notorious possession and occupation of an alienable and disposable land of the public domain under bona fide claim of ownership since June 12, 1945 or earlier.

Held:

Petition denied. In accordance with Section 14(1) of P.D. No. 1529 and Section 48(b) of Commonwealth Act 141, as amended by Section 4 of P.D. No. 1073, any person, by himself or through his predecessor-in-interest, who has been in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945 or earlier, may file in the proper trial court an application for registration of title to land, whether personally or through his duly authorized representative.

Being the applicant for confirmation of imperfect title, petitioner bears the burden of proving that: 1) the land forms part of the alienable and disposable land of the public domain; and 2) she has been in open, continuous, exclusive, and notorious possession and occupation of the subject land under a bona fide claim of ownership from June 12, 1945 or earlier. These the petitioner must prove by no less than clear, positive and convincing evidence.

Petitioner presented documentary evidence such as the technical description of the subject lot, Certification in Lieu of Lost Surveyors Certificate, tax declaration of real property, official receipts of realty tax payments, blueprint/machine copies of Subdivision Plan Csd-03-010587-D, joint affidavits of her co-heirs, and Deed of Partition dated July 30, 1980. Moreover, petitioner presented a document written in Spanish which she claimed to be a Deed of Absolute Sale dated May 16, 1921. Lastly, she testified that she acquired the subject lot from her parents who had been the owners and possessors thereof since she was still very young.

These pieces of evidence, taken together, do not suffice to prove that petitioner and her predecessors-in-interest have been in open, continuous, exclusive, and notorious possession and occupation of the subject lot since June 12, 1945 or earlier. The technical description, Certification in Lieu of Lost Surveyors Certificate, and blueprint copies of the subdivision plan only prove the identity of the lot sought to be registered. The joint affidavits of her co-heirs, as well as the Deed of Partition, merely show that petitioner acquired the property through succession.

The Court notes, however, that the tax declaration was effective only in 1998, and that the tax receipts were dated 1997 and 1998. She failed to adduce in evidence any tax declaration over the property under the name of her parents and that the realty taxes for the property had been paid prior to 1998. At best, she offered a copy of a tax declaration which began in 1985 in the name of her co-heirs. While a tax declaration by itself is not adequate to prove ownership, it may serve as sufficient basis for inferring possession. The voluntary declaration of a piece of real property for taxation purposes not only manifests ones sincere and honest desire to obtain title to the property, but also announces an adverse claim against the state and all other interested parties with an intention to contribute needed revenues to the government. Such an act strengthens ones bona fide claim of acquisition of ownership.

The presentation of a document dated May 16, 1921 which, according to petitioner, was a Deed of Sale of the subject property where her father was the vendee, did not work to her advantage. In the first place, the document was written in Spanish and petitioner did not bother to have the contents thereof translated to English or to any other language that the court could understand.

Petitioner failed to state the facts and circumstances evidencing the alleged ownership of the land applied for. To be sure, general statements that are mere conclusions of law and not factual proof of possession are unavailing and cannot suffice.

Possession alone is not sufficient to acquire title to alienable lands of the public domain because the law requires possession and occupation. Since these words are separated by the conjunction and, the clear intention of the law is not to make one synonymous with the other. Possession is broader than occupation because it includes constructive possession. When, therefore, the law adds the word occupation, it seeks to delimit the all-encompassing effect of constructive possession. Taken together with the words open, continuous, exclusive, and notorious, the word occupation serves to highlight the fact that for an applicant to qualify, his possession must not be a mere fiction. Actual possession of land consists in the manifestation of acts of dominion over it of such a nature as a party would naturally exercise over his own property.