MIGUEL ESCRITOR, JR., ANGEL ESCRITOR, RAMON ESCRITOR, JUANA ESCRITOR, CONCORDIA ESCRITOR, IRENE ESCRITOR, MATILDE ESCRITOR, MERCEDES ESCRITOR, HEIRS OF LUIS ESCRITOR, REPRESENTE…

This is a petition for review on certiorari seeking the
reversal of the decision of the Intermediate Appellate Court in AC-G.R. No.
CV-01264-R entitled “Simeon Acuna vs. Miguel Escritor, Jr., et al.”, a case which originated from
the Court of First Instance of Quezon.

The record of the case discloses the following facts:

Lot No. 2749, located at Atimonan, Quezon, was the subject of cadastral proceedings in the
Court of First Instance of Quezon, Gumaca Branch.  Miguel Escritor, as
claimant, filed an answer thereto
declaring his ownership over the lot alleging that he acquired it by
inheritance from his deceased father.^[1] As required, a notice of hearing was duly
published, after which an order of general default was entered.^[2] The lot having become uncontested, only
Miguel Escritor appeared in order to adduce his
evidence of ownership.

On May 15,
1958, the Court
rendered a decision in the above-mentioned case, Cadastral Case No. 72,
adjudicating the lot with its improvements in favor of claimant Escritor and confirming his title thereto.^[3] Immediately thereafter, Escritor
took possession of the property.  On July 15,
1958, the Court, in
an Order, directed the Chief of the General Land Registration Office to issue
the corresponding decree of registration in favor of Escritor,
the decision in Cadastral Case No. 72 having become final.^[4]

On August 2, 1958,
Simeon S. Acuna, the herein respondent, filed a
petition for review of the above-mentioned decision contending that it was obtained
by claimant Escritor through fraud and
misrepresentation.^[5]
The petition was granted on July 18,
1960 and a new hearing was set for September 13, 1960.^[6]
While the proceedings were going on, claimant Escritor
died.  His heirs, the petitioners in this
case, took possession of the property.

On February 16, 1971 or
thirteen years after the disputed decision was rendered, the Court adjudicated
Lot No. 2749 in favor of respondent Acuna, ordering
petitioners to vacate the land.^[7] A writ of possession was later issued
and petitioners voluntarily gave up their possession.^[8]

More than four years
later, or on October 13, 1975, respondent Acuna filed
with the same Court in Civil Case No. 1138-G, a complaint for recovery of
damages against petitioners for the fruits of Lot No. 2749 which was allegedly
possessed by the latter unlawfully for thirteen years.  According to respondent Acuna,
the registration of the said lot was effectuated
by the deceased claimant Escritor through fraud,
malice, and misrepresentation.  The lower court, however, rendered a decision
dismissing Acuna’s complaint for damages,
finding that though petitioners enjoyed the fruits of the property, they were
in good faith, possessing under a just title, and the cause of action, if there
was any, has already prescribed.^[9]

On appeal to the
Intermediate Appellate Court, the judgment of the lower court was reversed in a
decision promulgated on October 31, 1984, the dispositive
portion of which reads:

“WHEREFORE, in
view of the foregoing considerations, the decision appealed from is hereby REVERSED and set aside and another one entered herein,
ordering the defendants-appellees jointly and
severally (a) to pay the plaintiff-appellant the sum of P10,725.00 representing the value of the
fruits appellees received for the 13 years they have
been in unlawful possession of the land subject-matter; (b) to pay
plaintiff-appellant the sum of P3,000.00 for attorney’s fees and expenses of
litigation, and (c) to pay the costs.”

Hence
this petition.

The main issue that has
to be resolved in this case is whether or not petitioners should be held liable
for damages.

Contrary to the finding
of the trial court, the Intermediate Appellate Court made the pronouncement
that petitioners were possessors in bad faith from 1958 up to 1971 and should
be held accountable for damages.  This
conclusion was based on the statement of the cadastral court in its August
21, 1971 decision, readjudicating Lot No. 2749 to respondent Simeon Acuna, that “Miguel Escritor
forcibly took possession of the land in May, 1958, and benefited from the
coconut trees thereon.”^[10] The Intermediate Appellate Court observed
that on the basis of the unimpeached conclusion of
the cadastral court, it must be that the petitioners have wrongfully entered
possession of the land.^[11] The Intermediate Appellate Court further
explains that as such possessors in bad faith, petitioners must reimburse
respondent Acuna for the fruits of the land they had
received during their possession.^[12]

We cannot affirm the
position of the Intermediate Appellate Court. 
It should be remembered that in the first decision of the cadastral
court dated May 15, 1958, Lot No. 2749 was adjudicated in
favor of claimant Escritor, petitioners’
predecessor-in-interest.  In this
decision, the said court found to its satisfaction that claimant Escritor acquired the land by inheritance from his father
who in turn acquired it by purchase,
and that his open, public, continuous, adverse, exclusive and notorious
possession dated back to the Filipino-Spanish Revolution.^[13]
It must also be recalled that in its Order for the issuance of decrees dated July 15, 1958, the same Court
declared that the above-mentioned
decision had become final.  Significantly,
nowhere during the entire cadastral proceeding did anything come up to suggest
that the land belonged to any person other than Escritor.

On the basis of the
aforementioned favorable judgment which was rendered by a court of competent
jurisdiction, Escritor honestly believed that he is the legal owner of the land. 
With this well-grounded belief of ownership, he continued in his
possession of Lot No. 2749.  This cannot
be categorized as possession in bad faith.

As defined in the law, a
possessor in bad faith is one in possession of property knowing that his title
thereto is defective.^[14] Here, there is no showing that Escritor knew of any flaw in his title.

Nor was it proved that
petitioners were aware that the title of their predecessor had any defect.

Nevertheless, assuming
that claimant Escritor was a possessor in bad faith,
this should not prejudice his successors-in-interest, petitioners herein, as
the rule is that only personal knowledge of the flaw in one’s title or mode of
acquisition can make him a possessor
in bad faith, for bad faith is not transmissible from one person to another,
not even to an heir.^[15] As Article 534 of the Civil Code explicitly
provides, “one who succeeds by hereditary title shall not suffer the
consequences of the wrongful possession of the decedent, if it is not shown
that he was aware of the flaws affecting it; x x x.” The reason for this article is that bad faith
is personal and intransmissible.  Its effects must, therefore, be suffered only
by the person who acted in bad faith; his heir should not be saddled with such
consequences.^[16]

Under Article 527 of the
Civil Code, good faith is always presumed, and upon him who alleges bad faith
on the part of a possessor rests the burden of proof.  If no evidence is presented proving bad
faith, like in this case, the
presumption of good faith remains.

Respondent Acuna, on the other hand,
bases his complaint for damages on the alleged fraud on the part of the
petitioners’ predecessor in having the land registered under his (the
predecessor’s) name.  A review of the
record, however, does not indicate the
existence of any such fraud.  It
was not proven in the cadastral court nor was it shown in the trial court.

Lot No. 2749 was not awarded to Escritor
on the basis of his machinations.  What
is clear is that in the hearing of January
22, 1958, the Court permitted Escritor to
adduce his evidence of ownership without opposing evidence as the lot had become uncontested.^[17] Respondent Acuna
himself failed to appear in this hearing because of a misunderstanding with a
lawyer.^[18] There is no finding that such failure to appear
was caused by petitioners in this case. 
On the contrary, all the requirements of publication were followed.  Notice of hearing was duly published.  Clearly then, the allegation of fraud is
without basis.

Respondent having failed to prove fraud and bad faith on the part
of petitioners, We sustain the trial court’s finding that petitioners were
possessors in good faith and should, therefore, not be held liable for damages.

With the above
pronouncement, the issue of prescription of cause of action which was also
presented need not be passed upon.

WHEREFORE, the petition is GRANTED and the decision appealed from
is hereby REVERSED and SET ASIDE and another decision is
rendered dismissing the complaint.  No
pronouncement as to costs.

SO ORDERED.

Teehankee, C.J., Narvasa,
Cruz, and Paras,
JJ., concur.

^[1]
Exhibit “A”, Cadastral Answer.

^[2]
Exhibit “B”, Decision in
Cadastral Case No. 72 dated May 15, 1958.

^[3]
Ibid.

^[4]
Exhibit “C”, Order for the
Issuance of Decrees in cadastral cases.

^[5]
Exhibit “D”, Petition.

^[6]
Exhibit “E”, Order in Cadastral Case No. 72.

^[7]
Exhibit “F”, Decision in
Cadastral Case No. 72.

^[8]
Exhibit “H”, Writ of
Possession.

^[9]
Page 11, Record on Appeal.

^[10]
Page 26, Rollo.

^[11]  Pages 26-27, Rollo.

^[12]
Page 27, Rollo.

^[13]
Exhibit “B”, Decision in
Cadastral Case No. 72 dated May 15, 1958.

^[14]
Art. 526, New Civil Code.

^[15]
Tolentino, Civil Code of the Philippines, Vol. II,
1983 Ed., p. 223; Sotto vs. Enage, (CA) 43
Off. Gaz. 5057.

^[16]
Tolentino, Civil Code of the Philippines,
Vol. II, 1983 Ed., p. 234.

^[17]
Exhibit “B”, Decision in Cadastral Case No. 72 dated May 15, 1958.

^[18]
Exhibit “E”, Order dated July 18, 1960,
Cadastral Case No. 72.