Pen Vs Leyba
Pen Vs Leyba
Pen Vs Leyba
Assailed in this Petition for Review on Certiorari1 are the July 17, 2013
Decision2 of the Court of Appeals (CA) in CA-G.R CV No. 97478 which
affirmed with modification the January 20, 2009 Decision3 of the Regional
Trial Court of Antipolo City, Branch 71 (RTC) in Civil Case No. 97-4386, and
the CA's March 28, 2014 Resolution4 denying herein petitioners' Motion for
Reconsideration.5
Factual Antecedents
Martinez sent two (2) more Letters dated 31 March 1970 and 3
November 1970 to Las Brisas informing the latter of the encroachmnent
of its structures and improvements over Martinez's titled land.
On 31 July 1971, Las Brisas, through a certain Paul Naidas, sent a letter
to Martinez, claiming that it 'can not [sic] trace the origin of these titles'
(pertaining to Martinez's land).
Martinez sent two (2) Letters to Las Brisas reiterating its ownership over
the land that Las Brisas' improvements have encroached upon. Despite
the notices, Las Brisas continued developing its property.
Martinez sought the services of a licensed geodetic engineer to survey
the boundaries of its land. The verification survey plan Vs-04,00034,
which was approved by the Regional Technical Director for Lands of the
Department of Enviromnent and Natural Resources (DENR), revealed
that the building and improvements constructed by Las Brisas occupied
portions of Martinez's lands: 567 square meters of Lot No. 29, Block 3,
(LRC) Pcs. 7305; a portion of 1,389 square meters of Lot No. 30, Block
3, (LRC) Pes. 7305 covered under TCT Nos. 250242, 250244 and
250243, respectively.
Las Brisas countered in its Answer11 that it bought the land covered by TCT
153101 (consisting of 3,606 square meters) on May 18, 1967 from Republic
Bank; that it took possession thereof in good faith that very same year; and
that it is actually Martinez that was encroaching upon its land.
After trial, the RTC issued its Decision dated January 20, 2009, containing
the following pronouncement:
b. A portion of 1,389 square meters of Lot No. 30, Block 3, (LRC) Pcs-
7305, covered by plaintiff's T.C.T. No. 250243. This is the portion
where the defendant had constructed an old building.
c. A portion of 1,498 square meters of Lot No. 31, Block 3, (LRC) Pcs-
7305, covered by plaintiff's T.C.T. No. 250244. This is the portion
where the defendant constructed a new multi-story edifice.
xxxx
Considering that the defendant has raised the defense of the validity of
T.C.T. No. N-21871 of the Registry of Deeds, Marikina (Exhibit 1), and
subsequently cancelled by T.C.T. No. 153101 as transferred to the Pen
Development Corp. (Exh. 2) and introduced substantial improvements
thereon which from the facts established and evidence presented during
the hearings of the case it cannot be denied that said title over the
property in question is genuine and valid. Moreover, the defendant
obtained the property as innocent purchasers for value, having no
knowledge of any irregularity, defect, or duplication in the title.
Defendant also cited Articles 544, 546, 548 of the New Civil Code of the
Philippines in further support of its defense.
xxxx
In the cases of Chan vs. CA, 298 SCRA 713, de Villa vs. Trinidad, 20
SCRA 1167, Gotian vs. Gaffud, 27 SCRA 706, again the Supreme Court
held:
xxxx
Article 526 of the Civil Code defines a possession in good faith as 'one
who is not aware that there exists in his title or mode of acquisition any
flaw which invalidates it, and a possession in bad faith as one who
possesses in any case contrary to the foregoing.'
xxxx
In the case of Ortiz vs. Fuentebella, 27 Phil. 537, the Supreme Court
held:
Consequently, the rule on the matter can be found in Articles 449, 450
of the Civil Code of the Philippines which provide:
'Article 449. – He who builds, plants, or sows in bad faith on the land
of another, loses what is built, planted or sown without right to
indemnity."
Article 450. – The owner of the land on which anything has been
built, planted or sown in bad faith may demand the demolition of the
work; or that the planting or sowing be removed, in order to replace
things in their former condition at the expense of the person who
built, planted or sowed, or he may compel the builder or planter to
pay the price of the land, and the sower the proper rent.'
In the case of Tan Queto vs. CA, 122 SCRA 206, the Supreme Court held:
xxxx
SO ORDERED.14
Article 528 of the New Civil Code provides that possession acquired in
good faith does not lose this character, except in a case and from the
moment facts exist which show that the possessor is not unaware that
he possesses the thing improperly or wrongfully. Possession in good
faith ceases from the moment defects in the title are made known to the
possessors, by extraneous evidence or by suit for recovery of the
property by the true owner. Whatever may be the cause or the fact from
which it can be deduced that the possessor has knowledge of the
defects of his title or mode of acquisition, it must be considered
sufficient to show bad faith.
In the instant case, as early as 1968, Martinez sent several letters to Las
Brisas informing the latter of Martinez's ownership over the land covered
by TCT Nos. 250242, 250243 and 250244 and that the buildings and
improvements Las Brisas made have encroached on the said property. In
the Letter dated 11 March 1968, Martinez informed Las Brisas that the
latter's fence had overlapped into the former's land and requested that
Las Brisas refrain from entering Martinez's property. However, Las Brisas
did not heed Martinez's demand and continued developing its property.
Martinez sent six (6) more letters to Las Brisas reiterating that the latter's
structure and improvements encroached on Martinez's land. Records
show that Las Brisas received these notices and in fact, made a reply to
one of Martinez's letters. Clearly, Las Brisas was informed on several
occasions about Martinez's titles x x x over its land and, despite such
notices, Las Brisas chose to ignore Martinez's demand and continued
constructing other buildings and improvements that intruded into
Martinez's property. Hence, Las Brisas cannot claim that it had no
knowledge of the defects of its title and, consequently, cannot be
considered in good faith.
Neither did Las Brisas bother to have its property surveyed in order to
discover, for its own benefit, the actual boundaries of its land (TCT No.
153101). It is doctrinal in land registration law that possession of titled
property adverse to the registered owner is necessarily tainted with bad
faith. Thus, proceeding with the construction works on the overlapped
portions of TCT Nos. 250242, 250243 and 250244 despite knowledge
of Martinez's ownership thereof puts Las Brisas in bad faith.
We disagree.
xxxx
Furthermore, Martinez is the registered owner of TCT Nos. 250242,
250243 and 250244 and, as such, its right to demand to recover the
portions thereof encroached by Las Brisas is never barred by laches. In
the case of Arroyo vs. Bocago Inland Dev't Corp., the Supreme Court
held:
Las Brisas argues that the court a quo erred in admitting Martinez's
Relocation Survey of Lot Nos. 28, 29 and 30 and the Verification Plan Vs
04-00394 as they constitute hearsay evidence and as such are
inadmissible.
It bears noting that this issue of hearsay evidence was raised for the first
time on appeal. It is a fundamental rule that no question will be
entertained on appeal unless it has been raised below, Stated differently,
issues of fact and arguments not adequately brought to the attention of
the lower courts will not be considered by the reviewing courts as they
cannot be raised for the first time on appeal. An issue, which was neither
averred in the complaint nor raised during the trial in the lower courts,
cannot be raised for the first time on appeal because it would be
offensive to the basic rule of fair play and justice, and would be violative
of the constitutional right to due process of the other party. In fact, the
determination of issues at the pre-trial bars consideration of other issues
or questions on appeal,
In this case, Las Brisas failed to raise this argument during pre-trial and
in the trial proper. Las Brisas even failed to [raise] its objection during
Martinez's formal offer of evidence. Clearly, Las Brisas waived its right to
object on [sic] the admissibility of Martinez's evidence. Thus, We cannot
bend backwards to examine this issue raised by Las Brisas at this late
stage of the proceedings as it would violate Martinez's right to due
process and should thus be disregarded.
Art. 2222. The court may award nominal damages in every obligation
arising from any source enumerated in Article 1157, or in every case
where any property right has been invaded.
The award of damages is also in accordance with Article 451 of the New
Civil Code which states that the landowner is entitled to damages from
the builder in bad faith.
Issues
In a June 15, 2015 Resolution,18 this Court resolved to give due course to
the Petition, which contains the following assignment of errors:
Petitioners' Arguments
In praying that the assailed CA and trial court dispositions be set aside and
that Civil Case No. 97-4386 be dismissed instead, petitioners argue in their
Petition and Reply20 that they are not builders in bad faith; that in
constructing the improvements subject of the instant case, they merely
relied on the validity and indefeasibility of their title, TCT 153101; that until
their title is nullified and invalidated, the same subsists; that as builders in
good faith, they are entitled either to a) a refund and reimbursement of the
necessary expenses, and full retention of the land until they are paid by
respondent, or b) removal of the improvements without damage to
respondent's property; that contrary to the CA's pronouncement,
respondent may be held accountable for laches in filing a case only after
the lapse of thirty years; and that the Survey Plan of Lots 29, 30 and 31 and
the Verification Survey Plan Vs-04-000394 are inadmissible in evidence for
being hearsay, as they were not authenticated in court.
Respondent's Arguments
Our Ruling
The Court denies the Petition.
Section 146. The Regional Technical Director for Lands may issue order
to conduct a verification survey whenever any approved survey is
reported to be erroneous, or when titled lands are reported to overlap or
where occupancy is reported to encroach another property. x x x
xxxx
Section 149. All survey work undertaken for verification purposes shall
be subject of verification and approval in the DENR-LMS Regional Office
concerned and shall be designated as Verification Surveys Vs). x x x
a. A Portion of 567 square meters of Lot No. 29, Block 3, (LRC) Pcs-
7305, covered by respondent's TCT 250242. This is the portion
where the petitioners built a riprapping.
b. A portion of 1,389 square meters of Lot No. 30, Block 3, (LRC) Pcs-
7305, covered by respondent's TCT 250243. This is the portion
where the petitioners had constructed an old building.
c. A portion of 1,498 square meters of Lot No. 31, Block 3, (LRC) Pcs-
7305, covered by respondent's TCT 250244. This is the portion
where the petitioners constructed & new multi-story edifice.
On this basis, respondent filed Civil Case No. 97-4386. Respondent's main
evidence is the said Verification Survey Plan Vs-04-000394, which is a
public document. As a public document, it is admissible in evidence even
without further proof of its due execution and genuineness,23 and had in its
favor the presumption of regularity, To contradict the same, there must be
evidence that is clear, convincing and more than merely preponderant,
otherwise the document should be upheld.24 The certification and approval
by the Regional Technical Director of Lands signifies the "technical
correctness of the survey plotted in the said plan."25
On the other hand, petitioners' evidence consists mainly of the claim that
their TCT 153101 is a valid title and that they purchased the land covered by
it in good faith and for value. TI1ey did not present evidence to contradict
respondent's Verification Survey Plan VS-04-000394; in other words, no
evidence was presented to disprove respondent's claim of overlapping.
Their evidence only goes so far as proving that they acquired the land
covered by TCT 153101 in good faith. However, while it may be true that
they acquired TCT 153101 in good faith and for value, this does not prove
that they did not encroach upon respondent's lands.
Although "[i]n overlapping of titles disputes, it has always been the practice
for the [trial] court to appoint a surveyor from the government land
agencies [such as] the Land Registration Authority or the DENR to act as
commissioner,"26 this is not mandatory procedure; the trial court may rely
on the parties' respective evidence to resolve the case.27 In this case,
respondent presented the results of a verification survey conducted on its
lands. On the other hand, petitioners did not present proof like the results of
a survey conducted upon their initiative to contradict respondent's
evidence; nor did they move for the appointment by the trial court of
government or private surveyors to act as commissioners. Their sole
defense is that they acquired their land in good faith and for value; but this
does not squarely address respondent's claim of overlapping.
For the RTC and CA, respondent's undisputed evidence proved its claim of
overlapping. This Court agr s. As a public document containing the
certification and approval by the Regional Technical Director of Lands,
Verification Survey Plan Vs-04-000394 can be relied upon as proof of the
encroachment over respondent's lands. More so when petitioners could not
present contradictory proof.
Art. 449. He who builds, plants or sows in bad faith on the land of
another, loses what is built, planted or sown without right to indemnity.
Art. 450. The owner of the land on which anything has been built,
planted or sown in bad faith may demand the demolition of the work, or
that the planting or sowing be removed, in order to replace things in their
former condition at the expense of the person who built, planted or
sowed; or he may compel the builder or planter to pay the price of the
land, and the sower the proper rent.
Art. 451. In the cases of the two preceding articles, the landowner is
entitled to damages from the builder planter or sower.
The right of the owner of the land to recover damages from a builder in
bad faith is clearly provided for in Article 451 of the Civil Code. Although
said Article 451 does not elaborate on the basis for damages, the Court
perceives that it should reasonably correspond with the value of the
properties lost or destroyed as a result of the occupation in bad faith, as
well as the fruits (natural, industrial or civil) from those properties that
the owner of the land reasonably expected to obtain. x x x28
For their part, petitioners are not entitled to reimbursement for necessary
expenses. Indeed, under Article 452 of the Civil Code,29 the builder, planter
or sower in bad faith is entitled to reimbursement for the necessary
expenses of preservation of the land. However, in this case, respondent's
lands were not preserved: petitioners' construction and use thereof in fact
caused damage, which must be undone or simply endured by respondent
by force of law and circumstance. Respondent did not in any way benefit
from petitioners' occupation of its lands.
WHEREFORE, the Petition is DENIED. The July 17, 2013 Decision and
March 28, 2014 Resolution of the Court of Appeals in CA-G.R. CV No.
97478 are AFFIRMED in toto.
SO ORDERED.
Endnotes:
4 Id. at 81-82.
5 Id. at 53-62.
6 Id. at 43-45.
7 Id. at 91-99.
8 Id. at 113-115.
9 Id. at 92.
10 Id. at 166-167.
11 Id. at 100-104.
12 Martinez.
13 Las Brisas.
14Rollo, pp. 200-207.
15 Id. at 208-222.
16 Id. at 245-251.
17 Id. at 46-52.
18 Id. at 425-426.
19 Id. at 17-18.
20 Id. at 405-411.
21 Id. at 369-387.
25Republic v. Dayaoen, G.R. No. 200773, July 8, 2015, 762 SCRA 310,
337.
27 Id.
28Heirs of Durano, Sr. v. Spouses Uy, 398 Phil. 125, 155 (2000).
29 Art. 452. The builder, planter or sower in bad faith is entitled to
reimbursement for the necessary expenses of preservation of the land.
CAGUIOA, J.:
Given the fact that this case involves overlapping of titles, I fully concur with
the Decision that as between Martinez Leyba, Inc. (MLI) and Las Brisas
Resorts Corp.1 (Las Brisas), MLI has a superior right to the overlapped or
encroached portions in issue being the holder of a transfer certificate of
title that can be traced to the earlier original certificate of title.
In case of double registration where land has been registered in the name of
two persons, priority of registration is the settled rule. In the 1915 en banc
case of Legarda v. Saleeby,2 the Court stated:
TCT Nos. 250242, 250243 and 250244 registered in the name of MLI
conflict with TCT No. 153101 registered in the name of Las Brisas. There is
encroachment or overlapping of: (1) a portion of 567 square meters in TCT
No. 250242 where Las Brisas built a riprapping; (2) a portion of 1,389
square meters in TCT No. 250243 where Las Brisas constructed an old
building; and (3) a portion of 1,498 square meters in TCT No. 250244
where Las Brisas constructed a new multi-story edifice. The overlapped
portions add up to 3,454 square meters. Given that the total area of TCT
No. 153101 is 3,606 square meters and 3,454 square meters will be
deducted therefrom because that portion rightfully pertains to MLI pursuant
to prevailing and settled rule on double registration, only 152 square meters
will remain under TCT No. 153101 in the name of Las Brisas.
However, I cannot agree with the finding that Las Brisas is a builder in bad
faith. Thus, my dissent tackles directly and mainly the issue of good faith on
the part of a registered owner (Las Brisas) who built within a portion of the
parcel of land delimited by the boundaries or technical descriptions of its
own certificate of title that turns out to be within the boundaries or technical
descriptions of the adjoining titled parcels of land despite prior written
notices by the registered owner (MLI) of the adjoining parcels of land that
the former owner was building within the latter owner's registered property.
The Decision rules in favor of MLI and affirms the finding of the Court of
Appeals (CA) that Las Brisas is a builder in bad faith. The CA Decision
states:
[W]hile [Las Brisas] may have been [an] innocent [purchaser] for value
with respect to [its] land, this does not prove that they are equally
innocent of the claim of encroachment upon [MLI]'s lands. The evidence
suggest otherwise; despite being apprised of the encroachment, [Las
Brisas] turned a blind eye and deaf ear and continued to construct on
the disputed area. They did not bother to conduct their own survey to
put the issue to rest, and to avoid the possibility of being adjudged as
builders in bad faith upon land that did not belong to them.4
With due respect, the determination of the good faith of Las Brisas should
not be made to depend solely on the written notices sent by MLI to Las
Brisas warning the latter that it was building and making improvements on
MLI's parcels of land. I firmly subscribe to the view that the fact that Las
Brisas built within its titled property and the doctrine of indefeasibility or
incontrovertibility of its certificate of title should also be factored in.
ART. 526. He is deemed a possessor in good faith who is not aware that
there exists in his title or mode of acquisition any flaw which invalidates
it.
In turn, Article 528 of the Civil Code provides: "Possession acquired in good
faith does not lose this character except in the case and from the moment
facts exist which show that the possessor is not unaware that he possesses
the thing improperly or wrongfully."
When did Las Brisas became aware of facts which show that it was
possessing the disputed areas or portions improperly or wrongfully? There
are several en banc Decisions of the Court which may find application in
this case. These are Legarda v. Saleeby5 (1915), Dizon v. Rodriguez6 (1965),
De Villa v. Trinidad7 (1968) and Gatioan v. Gaffud8 (1969).
In Legarda, the Court had to grapple with Sections 38,9 5510 and 11211 of
Act No. 496 which indicate that the vendee may acquire rights and be
protected against the defenses which the vendor would not and speak of
available rights in favor of third parties which are cut off by virtue of the sale
of the land to an "innocent purchaser."12 Thus, the Court said:
May the purchaser of land which has been included in a "second original
certificate" ever be regarded as an "innocent purchaser," as against the
rights or interest of the owner of the first original certificate, his heirs,
assigns, or vendee? The first original certificate is recorded in the public
registry. It is never issued until it is recorded. The record is notice to all
the world. All persons are charged with the knowledge of what it
contains. All persons dealing with the land so recorded, or any portion of
it, must be charged with notice of whatever it contains. The purchaser is
charged with notice of every fact shown by the record and is presumed
to know every fact which the record discloses. x x x
When a conveyance has been properly recorded such record is
constructive notice of its contents and all interests, legal and equitable,
included therein. x x x
Under the rule of notice, it is presumed that the purchaser has examined
every instrument of record affecting the title. Such presumption is
irrebutable. He is charged with notice of every fact shown by the record
and is presumed to know every fact which an examination of the record
would have disclosed. This presumption cannot be overcome by proof of
innocence or good faith. Otherwise the very purpose and object of the
law requiring a record would be destroyed. Such presumption cannot be
defeated by proof of want of knowledge of what the record contains any
more than one may be permitted to show that he was ignorant of the
provisions of the law. The rule that all persons must take notice of the
facts which the public record contains is a rule of law. The rule must be
absolute. Any variation would lead to endless confusion and useless
litigation.
xxxx
Legarda was concerned more with the issue of ownership than with the
issue of possession: To bar transferees of the "second or later original
certificate of title" from ever having a right of ownership superior to those
who derive their title from the "earlier or first original certificate of title,"
Legarda ruled that the "innocent purchaser [for value]" doctrine should not
apply because "[w]hen land is once brought under the torrens system, the
record of the original certificate and all subsequent transfers thereof is
notice to all the world."14 However, that notice is constructive and not
actual.
"The concept of possessor in good faith given in Art. 526 of the Civil
Code and when said possession loses this character under Art. 528,
needs to be reconciled with the doctrine of indefeasibility of a Torrens
title. Such reconciliation can only be achieved by holding that the
possessor with a Torrens title is not aware of any flaw in his title which
invalidates it until his Torrens Title is declared null and void by final
judgment of the Courts.
The Court, in De Villa v. Trinidad,19 while it cited Legarda, did not apply the
constructive notice doctrine in determining whether necessary and useful
expenses may be recovered by a transferee of the "second original
certificate" and reckoned the said transferee's bad faith from the filing of
the complaint, viz.:
We have laid the rule that where two certificates of title are issued to
different persons covering the same land in whole or in part, the earlier
in date must prevail as between original parties and in case of
successive registrations where more than one certificate is issued over
the land, the person holding under the prior certificate is entitled to the
land as against the person who rely on the second certificate. The
purchaser from the owner of the later certificate and his successors,
should resort to his vendor for redress, rather than molest the holder of
the first certificate and his successors, who should be permitted to rest
secure in their title. Consequently, since Original Certificate of Title No.
183 was registered on January 30, 1920, De Villa's claim which is based
on said title should prevail, as against Trinidad's whose original title was
registered on November 25, 1920. And from the point of equity, this is
the proper solution, considering that unlike the titles of Palma and the
DBP, De Villa's title was never tainted with fraud.
xxxx
In Gatioan v. Gaffud,22 the Court did not only cite Legarda but held it
controlling. In that case, while the appellant therein (Philippine National
Bank) did not impugn the lower court's ruling in declaring null and void and
cancelling OCT No. P-6038 in favor of defendant spouses Gaffud and
Logan, it insisted that the lower court should have declared it an innocent
mortgagee in good faith and for value as regards the mortgages executed
in its favor by said defendant spouses and duly annotated on their OCT and
that consequently, the said mortgage annotations should be carried over to
and considered encumbrances on the land covered by TCT No. T-1212 of
appellee which is the identical land covered by the OCT of the Gaffuds. The
Court found the contention of the appellant therein without merit and
quoted extensively Legarda wherein the Court held that the purchaser of
the land or a part thereof which has been included in a "second original
certificate" cannot be regarded as an "innocent purchaser" under Sections
38, 55, and 112 of Act No. 496 because of the facts contained in the record
of the first original certificate.
However, in the same breath, the Court also took judicial notice that before
a bank grants a loan on the security of a land, it first undertakes a careful
examination of title of the applicant as well as a physical and on-the-spot
investigation of the land itself offered as security. In that case, had the
appellant bank taken such a step which was demanded by the most
ordinary prudence, it would have easily discovered the flaw in the title of the
defendant spouses. As such, it was held guilty of gross negligence in
granting the loans in question. The Court further said:
A more factual approach would lead to the same result. From the
stipulated facts, it can be seen that prior to the execution of the
mortgage between appellant and the defendant spouses, the appellee
had been mortgaging the land described in TCT No. T-1212 to it. She did
this first in the year 1950 for a loan of P900.00 and again in 1954 for a
loan of P1,100.00. In both instances, the appellant Bank had possession
of, or at least, must have examined appellee's title, TCT No. T-1212,
wherein appear clearly the technical description, exact area, lot number
and cadastral number of the land covered by said title. In other words, by
the time the defendant spouses offered OCT P-6038, in their names, for
scrutiny in connection with their own application for loan with appellant,
the latter was charged with the notice of the identity of the technical
descriptions, areas, lot numbers and cadastral numbers of the lands
purportedly covered by the two titles and was in a position to know, if it
did not have such knowledge actually, that they referred to one and the
same lot. Under the circumstances, appellant had absolutely no excuse
for approving the application of the defendant spouses and giving the
loans in question. x x x23
Thus, the Court in Gatioan took "a more factual approach" in determining
the good faith of the mortgagee who derived its right from the owner of the
"second original certificate" and it did not simply apply the constructive
notice doctrine espoused in Legarda.
In the Decision, the factual approach is being adopted. This is evident when
it reproduced the Regional Trial Court of Antipolo City, Branch 71 (RTC)
Decision's citation and discussion of Ortiz v. Fuentebella,24 wherein it was
held that the defendant's possession in bad faith began from the receipt by
the defendant of a letter from the daughter of the plaintiff therein, advising
the defendant to desist from planting on a land in possession of the
defendant. The RTC noted that:
A close similarity exists in [Ortiz] with the facts obtaining in this case.
The pieces evidence [sic] show that while defendant was in good faith
when it bought the land from the Republic Bank as a foreclosed
property, the plaintiff in a letter dated as early as March 11, 1968 x x x
had advised the defendant that the land it was trying to fence is within
plaintiffs property and that the defendant should refrain from occupying
and building improvements thereon and from doing any act in derogation
of plaintiffs property rights. Six other letters followed suit x x x.25 The
records show that defendant received these letters but chose to ignore
them and the only communication in writing from the defendant thru
Paul Naidas was a letter dated July 31, 1971, stating that he (Naidas) was
all the more confused about plaintiff's claim to the land. x x x26
I must emphasize that, in this case, the issue of good faith or bad faith is
being decided in relation to possession, independently of ownership.
Legarda already grants the ownership of the overlapped portions in favor of
MLI, being a vendee who derives its title from the "earlier original certificate
of title" based on the rule that "the vendee of land has no greater right, title,
or interest than his vendor, that he acquires the right which his vendor had,
only."
In the instant case, the accurate question to ask is this: were the letters of
MLI sufficient to put Las Brisas on notice that it was possessing the
disputed areas or portions improperly or wrongfully?
It should be mentioned that Las Brisas bought the land in a foreclosure sale.
Furthermore, Las Brisas should not be blamed for the failure of the
government agency concerned to ascertain the overlapping when it
approved the survey plan that became the basis for the application and
approval of the confirmation of the original title of Las Brisas' predecessor-
in-interest, which overlapping also escaped the attention of the court that
granted the application and confirmed the title. Even the Assessor's Office
of Antipolo City never noticed the overlapping since there is no indication
thereof in the parties' respective declarations of real property value for real
property tax purposes. As formulated in Dizon, the matter indeed involves a
doubtful or difficult question of law which, under Article 526, may be the
basis of good faith.
The fact that Las Brisas did not present its own survey, unlike MLI, is of no
moment. What is crucial is that the improvements that Las Brisas made
were within the boundaries described in its title. This is clear from the
CA Decision dated July 17, 2013 when it affirmed the Decision dated
January 20, 2009 of the RTC in Civil Case No. 97-4386, "[o]rdering the
cancellation or annulment of portions of T.C.T. No. 153101 [,Las Brisas' title,]
insofar as it overlaps [MLI's] T.C.T. No. 250242, x x x T.C.T. No. 250243 x x
x; and T.C.T. No. 250244 x x x"30 and noted that the construction works of
Las Brisas were on the overlapped portions of TCT Nos. 250242, 250243
and 250244.31
Indeed, the real purpose of the Torrens system is to quiet title to land and to
forever stop any question as to its legality, so that once a title is registered,
the owner — in this case, Las Brisas — may rest secure, without the
necessity of waiting in the portals of the court, or sitting on the "mirador su
casa," to avoid the possibility of losing his land.32 Because of this principle,
MLI needed to file a complaint to directly question the validity of Las Brisas'
title which resulted to its partial nullity because a collateral attack on Las
Brisas' Torrens title is not allowed.33
Finally, even assuming that, as intimated by the ponencia, Las Brisas' initial
good faith when it bought the property ceased when it received the seven
letters from MLI, it is significant to note that the latter filed the complaint for
quieting of title/cancellation of title and recovery of ownership only on
March 24, 199734 — almost 30 years from 1968 when MLI sent its first
letter after it noticed the construction of Las Brisas' fence within the
contested area, and allowing Las Brisas to develop the property and
conducting its business therein, to put up a two-story building initially,
and in 1988, to expand and put up a multi-story conference center35
building that finished construction sometime in 1995 sourced from
bank loans and costing Las Brisas P55,000,000.00.36 By no means can
this be considered as MLI seasonably availing of "the means established by
the laws and the Rules of Court," such as a petition for injunction with a
prayer for a temporary restraining order, to protect MLI in its possession
thereof or restore to MLI its possession over the same.37These
circumstances indubitably taint MLI's good faith.38
If there was bad faith, not only on the part of the person who built,
planted or sowed on the land of another, but also on the part of the
owner of such land, the rights of one and the other shall be the same as
though both had acted in good faith.
MLI is now barred by estoppel by laches to claim good faith insofar as the
construction by Las Brisas is concerned of the improvements, consisting
mainly of a P55,000,000.00-worth multi-story building that it introduced in
the disputed areas. Laches is negligence or omission to assert a right within
a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.39 It is a type of
equitable estoppel which arises when a party, knowing his rights as against
another, takes no steps or delays in enforcing them until the condition of the
latter, who has no knowledge or notice that the former would assert such
rights, has become so changed that he cannot without injury or prejudice,
be restored to his former state.40
In this case, the doctrines of laches and estoppel are being invoked in
relation to the issue of possession and not with respect to ownership.
Section 47 of PD 1529 finds no application as it is confined to "title to
registered land."
Given the foregoing, I take the position that Las Brisas acted in good faith,
or, at the very least, be deemed to be in good faith since both Las Brisas.
and MLI were in bad faith following Article 453 of the Civil Code. Thus,
Article 448 is controlling in determining the rights and obligations of MLI
and Las Brisas with respect to the old building, the new multi-story edifice
and the riprapping.
The owner of the land on which anything has been built, sown or planted
in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in
Articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent. However, the
builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he
shall pay reasonable rent, if the owner of the land does not choose to
appropriate the building or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of disagreement, the
court shall fix the terms thereof.
Thus, I vote to GRANT the petition. The Decision dated July 17, 2013 and
the Resolution dated March 23, 2014 of the Court of Appeals in CA-G.R. CV
No. 97478 should be REVERSED and SET ASIDE.
Finding the parties to have acted in good faith insofar as the improvements
introduced by petitioner Las Brisas Resort Corporation are concerned, the
Regional Trial Court of Antipolo City, Branch 71 should be directed to issue
an Order in Civil Case No. 97-4386, directing the parties to observe and
comply with their respective rights and obligations under Article 448 of the
Civil Code.
Endnotes:
1 Pen Development Corp. merged with Las Brisas Resorts Corp and the
latter is the surviving entity; see rollo, p. 43.
3 Id. at 598-599.
4 Decision, p. 15.
5 Supra note 2.
6 121 Phil. 681 (1965).
9 Now Sec. 32, Presidential Decree No. (PD) 1529 or the Property
Registration Decree. It is in this section that the phrase "innocent
purchaser for value" is mentioned and it is deemed to include an
innocent lessee, mortgagee, or other encumbrancer for value.
13 Id. at 600-602.
14 Id. at 602.
15 Supra note 6.
16 Id. at 686.
17 Id.
18 Id. at 686-687.
19 Supra note 7.
22 Supra note 8.
25 In the letters (Exhs. "M", "N", "O", "P", "R", and "S") it will be noted that
MLI indicated the TCT Nos. of the land being claimed by MLI where Las
Brisas was introducing improvements and their predecessor certificates
of title.
33 Id.
36 Id, pars. 15, 16 and 17, p. 4, citing TSN, July 14, 2004, pp. 8-9; id. at
14.
38It must be noted that the owners of Las Brisas acquired the titled
property from Republic Bank in 1967; rollo, p. 13.
40 Id. at 623.