EDGARDO HAGORILLES AND ELMA HAGORILLES, PLAINTIFFS-APPELLEES, VS. NESTOR GUBAC AND MARTA GUBAC, DEFENDANTS-APPELLANTS.

Hagorilles versus Gubac

The Case

This is an action for recovery of possession with damages, brought by the spouses Edgardo and Elma Hagorilles against the spouses Nestor and Marta Gubac over a parcel of public agricultural land in Borbon, San Francisco, Agusan del Sur. The Hagorilles claim that they acquired the land by occupation in 1976, when it was still second-growth forest, and that they merely allowed the Gubacs, as a matter of brotherly accommodation, to till a portion of it beginning in 1990. The Gubacs, in turn, claim ownership by long possession and raise procedural defenses of forum shopping, failure to exhaust administrative remedies, prescription, laches, and non-compliance with the earnest-efforts requirement of the Family Code. The case matters because it draws a clean line between the power of the Department of Environment and Natural Resources over preferential rights to public land and the power of the regular courts over possession, and because it restates the strict proof required before actual or compensatory damages, moral damages, attorney's fees, and litigation expenses may be awarded.

Procedural History

The case was filed before the Regional Trial Court of Prosperidad, Agusan del Sur, and tried on the merits. On 26 January 2012, the trial court rendered judgment in favor of the Hagorilles. It affirmed the findings of the DENR Regional Executive Director declaring the plaintiffs to have preferential rights under the Public Land Act to the grant of a title over the land; ordered the Gubacs to vacate and peacefully turn over possession; and ordered them to pay land rental equivalent to twenty-four cavans of palay every year from 1998 up to the filing of the complaint, with interest, plus moral damages of 50,000 pesos, attorney's fees of 30,000 pesos, and litigation expenses of 25,000 pesos, with costs.

Aggrieved, the Gubacs interposed an appeal, assigning as errors the identification of the lot, the affirmation of preferential rights, the monetary awards, and the trial court's failure to declare forum shopping, non-exhaustion of administrative remedies, prescription, laches, and want of earnest efforts toward a compromise. The appeal reached the Supreme Court, which resolved it by affirming the trial court's decision with modification, deleting the monetary awards.

Facts

In 1976, Edgardo Hagorilles occupied the land, then still covered with timber and showing no sign of previous occupation. He cleared it, planted fruit trees, constructed rice paddies, and declared it for taxation. He also drove a passenger jeepney plying the Borbon to San Francisco route. In 1990, he allowed his then struggling brother-in-law, Nestor Gubac, to till a portion of the land without any share in the yield. He provided farm implements, including a motorized plow and a thresher, and even had a house built for the Gubacs on the land.

In 1998, Edgardo applied with the DENR for a patent and learned that the land had an absentee survey claimant, one Paulo Adencia. Gubac also filed an adverse claim. After investigation, the DENR Regional Director rendered a decision on 30 July 2008 cancelling Adencia's claim in favor of Edgardo, and later denied Gubac's motion for reconsideration. Edgardo then applied for a homestead patent and filed this suit to recover the land and claim damages.

The Gubacs countered that they had owned and tilled the lot since 1990, that they had already turned it over to their two sons as actual tillers, and that the DENR decision was not final because they had appealed to the DENR Secretary. They insisted that the land mortgaged to Edgardo by Jose Noja was a different lot, already distributed to agrarian beneficiaries. The trial court found for the Hagorilles, and the Gubacs appealed.

Issues

• Whether or not the lot installed upon the Gubacs by Edgardo Hagorilles was Lot 5340 and not Lot 5342.
• Whether or not the Hagorilles have preferential rights to the grant of title over the land.
• Whether or not the Gubacs are guilty of forum shopping and whether the Hagorilles failed to exhaust administrative remedies.
• Whether or not the cause of action of the Hagorilles has prescribed or is barred by laches.
• Whether or not the Hagorilles complied with the earnest-efforts requirement under Article 151 of the Family Code.
• Whether or not the awards of land rental, moral damages, attorney's fees, and litigation expenses are sustainable.

Applicable Provisions

Article 151 of the Family Code provides:

No suit between members of the same family shall prosper unless it should appear from the verified complaint or petition that earnest efforts toward a compromise have been made, but that the same have failed if it is shown that no such efforts were in fact made, the same case must be dismissed.

This provision bears on the case because the parties are relatives by affinity, and the Court had to determine whether the Hagorilles complied with the earnest-efforts requirement before filing suit.

Ruling

On the first issue, the Court held that the land in question was Lot 5340. The tax declaration and the homestead application of the Hagorilles referred only to Lot 5340, and the Hagorilles never claimed Lot 5342. It was the Gubacs who alleged the mortgage by Jose Noja, and they failed to prove it. The Court found it baffling that Jose Noja's name never appeared in the tax declaration, that the adverse claimant discovered by Edgardo was Paulo Adencia and not Jose Noja, and that the lot previously owned by Jose Noja was the one already titled as Lot 5342. The Hagorilles were firm and consistent that their claim was over Lot 5340.

On the second issue, the Court affirmed the finding of preferential rights in favor of the Hagorilles, consistent with the DENR decision noting their compliance with the requirements of the Public Land Act.

On the third issue, the Court held that there was no forum shopping. The elements of forum shopping are identity of parties, identity of rights asserted and relief prayed for founded on the same facts, and identity of the two preceding particulars such that any judgment would amount to res judicata in the other action. Here, only the identity of parties was present. The civil case for recovery of possession asks who has the better right of possession, while the administrative case before the DENR is limited to who has the preferential right to apply for title. The right of possession does not automatically mean ownership. On exhaustion of administrative remedies, the Court held that the doctrine admits of exceptions, as when insistence on strict observance would be unreasonable, and that while jurisdiction to determine preferential rights over public land lies with the DENR, the power to determine who has the better right of possession remains with the regular courts.

On the fourth issue, the Court held that neither prescription nor laches had set in. The Gubacs came into possession not in the concept of owners but merely as tillers by accommodation or tolerance of the landowner, so their possession could not be deemed adverse or in good faith. Their claim of twenty-two years of possession was legally of no moment. The Hagorilles asserted their right with reasonable promptitude, from their occupation in 1976, their application in 1998, their adverse claim, the DENR decision in 2008, and the filing of this suit.

On the fifth issue, the Court held that Article 151 was complied with. The parties met for amicable settlement during the DENR investigation to no avail, and Edgardo initiated proceedings before the Lupon Tagapamayapa, which issued a Certification to File Action. The allegation in the complaint, together with the certification, was sufficient compliance.

On the sixth issue, the Court deleted the monetary awards. On land rental, no proof was presented except the judicial affidavit of Edgardo, and damages must not only be capable of proof but must actually be proved with a reasonable degree of certainty. On moral damages, these must be disallowed when not specifically prayed for in the complaint, and there must be pleading and proof of moral suffering, both of which were absent. On attorney's fees, the award is the exception rather than the general rule, and the court must state the reason for the award. The same goes for litigation expenses, whose grounds must be set forth in the decision.

Doctrine

A candidate should retain these rules. First, the power to determine preferential rights among claimants over public land lies with the DENR, but the power to determine who has the better right of possession over disputed lands remains with the regular courts; the right of possession does not automatically mean ownership. Second, there is no forum shopping where the civil action for possession and the administrative case for preferential right to title involve different causes of action and reliefs, even if the parties are the same. Third, a tiller installed by the landowner by accommodation or tolerance does not possess in the concept of an owner, so his possession cannot ripen into ownership by acquisitive prescription, whether ordinary or extraordinary, nor give rise to laches. Fourth, compliance with Article 151 of the Family Code is satisfied by allegations in the verified complaint of earnest efforts, supported by a Certification to File Action from the Lupon. Fifth, actual or compensatory damages must be proved with a reasonable degree of certainty and cannot be presumed; moral damages must be specifically prayed for and proved; and attorney's fees and litigation expenses, being the exception, require factual, legal, and equitable justification stated in the decision.

Disposition

The Supreme Court affirmed the decision of the trial court with modification, deleting the awards of land rental, moral damages, attorney's fees, and litigation expenses; the Hagorilles won the recovery of possession.

Remember This

Memorize this line: possession by tolerance is not possession in the concept of an owner, so it never ripens into ownership by prescription. Examiners like to use this case on the distinction between the DENR's power over preferential rights to public land and the regular courts' power over possession, and on the strict pleading and proof required for damages, attorney's fees, and litigation expenses.