PERSHING TAN QUETO, PETITIONER, VS. COURT OF APPEALS, JUAN POMBUENA AND RESTITUTA TACALINAR GUANGCO DE POMBUENA, RESPONDENTS.

This is a Motion for Reconsideration of the decision dated
May 16, 1983 of this
Court^[*] in the above-entitled case,
asking for the reversal of said decision on the following grounds:

1. The Decision erred in disregarding the fact that Lot No. 304-B was
   registered in the name of the husband, Juan Pombuena,
   as per OCT No. 0-1160 issued pursuant to the November 22, 1938 Decision
   (Exh. 3) of the Cadastral Court in Cadastral Case No.
   12, G.L.R.O. Cad. Rec. No. 1638, and that petitioner
   had the right to rely on said OCT;

2. The Decision erred in misinterpreting the admission in Answer of petitioner
   to the complaint in the unlawful detainer Case No. 448
   (City Court of Ozamiz City) as his admission that Lot
   304-B is the paraphernal property of the wife, Restituta Tacalinar;

3. The Decision erred in reforming the Contract of Sale (Exh. B) of Lot 304-B from Basilides Tacalinar (mother) to
   the respondent, Restituta Tacalinar Guangco de Pombuena, from a sale to a conveyance of the share
   of the wife Restituta Tacalinar (daughter) in the future hereditary
   estate of her parents;

4. The Decision erred in overlooking that the barter agreement is an
   onerous contract of exchange, whereby private respondents-spouses received
   valuable consideration, concessions and other benefits therefor and in concluding that ‘the barter agreement has no
   effect’;

5. The Decision erred in disregarding the fact that petitioner
   constructed his concrete building on Lot No. 304-B in good faith
   relying OCT No. 0-1160, after the
   dismissal of the ejectment case and only after
   the execution of said barter agreement;

6. The Decision erred in confusing the conclusion of law that
   petitioner is a builder in bad faith with a finding of fact. 
   The rule is that questions of law are reviewable on appeal or by certiorari. 
   Moreover, the rule on finding of fact is subject to well-settled
   exceptions.  (pp. 257-258, Rollo)

It will be recalled that the undisputed relevant facts
indicate:

(1)   that Restituta Tagalinar Guangco de Pombuena (RESTITUTA, for short) received the questioned lot
(no. 304-B), of the Cadastre Survey of the Municipality of Centro, Misamis Occidental, either as a purported donation or by way
of purchase on (February 11, 1927) (with P50.00) as the alleged
consideration thereof;

(2)   that the transaction
took place during her mother’s lifetime, her father having predeceased the
mother;

(3)   that the donation or
sale was consummated while RESTITUTA was already married to her husband Juan
Pombuena (JUAN, for short);

(4)   that on January 22, 1935, JUAN filed for
himself and his supposed co-owner RESTITUTA an application for a Torrens Title
over the land;

(5)   that under date of November 22, 1938 a decision
was promulgated in G. L. R. C. No. 1638 (Cadastral Case No. 12) pronouncing JUAN
(‘married to RESTITUTA’) as the owner of the land;

(6)   that on September 22, 1949 a contract of lease
over the lot was entered into between Pershing Tan Queto (TAN QUETO, for short, the herein petitioner) and
RESTITUTA (with the consent of her husband JUAN) for a period of ten (10)
years;

(7)   that on December 27, 1960 RESTITUTA sued TAN
QUETO for unlawful detainer (the lease contract having
expired) before the Municipal
Court of
Ozamis
City;

(8)   that as a consequence of the cadastral case, an
Original Certificate of Title (Exh. 10) was
issued in JUAN’s name (“married to RESTITUTA”) on
April 23, 1962;

(9)   that the unlawful detainer case was won by the spouses in the Municipal Court;
but on appeal in the Court of First Instance, the entire case was
DISMISSED because of an understanding (barter) whereby TAN QUETO became the
owner of the disputed lot, and the spouses RESTITUTA and JUAN in turn became the
owners of a parcel of land (with the house constructed thereon) previously owned
(that is, before the barter) by TAN QUETO;

(10) that after the barter agreement dated October 10,
1962 between JUAN and TAN QUETO, the latter constructed (See p. 257, Rollo, Vol. II) on the disputed land a concrete
building, without any objection on the part of RESTITUTA;

(11) that later, RESTITUTA
sued both JUAN and TAN QUETO for reconveyance of the
title over the registered but disputed lot, for annulment of the barter, and for
recovery of the land with damages.

The two principal issues are clearly the following:

(1)  Is the questioned lot paraphernal or conjugal?

(2)  In having constructed the building on the lot,
should TAN QUETO be regarded as a builder in good faith (and hence
entitled to reimbursement) or a builder in bad faith (with no right to
reimbursement)?

The finding by both the Court of First Instance and the Court of
Appeals that the disputed lot is paraphernal and that
TAN QUETO is a builder in bad faith were regarded by Us
in Our assailed decision as findings of facts and thus ordinarily conclusive on
Us.  Assuming they are factual findings, still if they are
erroneous inferences from certain facts, they cannot bind this Court.

A second hard look at the circumstances of the case has
constrained Us to rule as follows:

(1)  The land is conjugal, not paraphernal.  How was ownership transferred, if
at all, from her mother to RESTITUTA?  The oral donation
of the lot cannot be a valid donation intervivos because it was not executed in a public
instrument (Art. 749, Civil Code), nor as a valid donation mortis causa
for the formalities of a will were not complied with.  The
allegation that the transfer was a conveyance to RESTITUTA of her hereditary
share in the estate of her mother (or parents) cannot be sustained for the
contractual transmission of future inheritance is generally
prohibited.

The fact is ownership was acquired by both JUAN and
RESTITUTA by tradition (delivery) as a consequence of the contract of sale (See
Art. 712, Civil Code) with P50.00 (then a considerable amount) as the cause or
consideration of the transaction.  The lot is therefore
conjugal, having been acquired by the spouses thru onerous
title (the money used being presumably conjugal, there being no proof that
RESTITUTA had paraphernal funds of her own). 
The contention that the sale was fictitious or simulated
(and therefore void) is bankrupt.  Firstly, there was a
valid consideration therefor.  Secondly,
assuming that there had indeed been a simulation, the parties thereto cannot use
said simulation to prejudice a stronger to said strategem (like petitioner herein).

One nagging question has been posed.  But did not TAN
QUETO admit in his Answer that RESTITUTA was the owner of the lot. 
This is not so.  He admitted RESTITUTA was “an
owner” (not the owner) of the lot, and this is true, for she was a
co-owner (with JUAN, and therefore “an owner”.  Surely,
there is no admission of RESTITUTA’s exclusive
ownership.  And yet this is the basis of the trial court’s
conclusion that the lot was indeed paraphernal.

(2)  Was Tan Queto a
possessor and builder in good faith or in bad faith?

Even assuming that despite registration of the lot as conjugal,
Tan Queto nursed the belief that the lot was actually
RESTITUTA’s (making him in bad faith), still RESTITUTA’s failure to prohibit him from building despite
her knowledge that construction was actually being done, makes her also in bad
faith.  The net resultant of mutual bad faith would entitle TAN
QUETO to the rights of a builder in good faith (Art. 448, Civil
Code), ergo, reimbursement should be given him if RESTITUTA decides to
appropriate the building for herself (Art. 448, Civil Code).

However, as already previously intimated, TAN QUETO having
bartered his own lot and small house with the questioned lot with JUAN (who has
been adverted to by a court decision and by the OCT a conjugal owner)
may be said to be the OWNER-POSSESSOR of the lot.  Certainly he is
not merely a possessor or builder in
good faith (this phrase presupposes ownership in
another); much less is he a builder in bad faith.  He is a
builder-possessor (jus possidendi) because he is the OWNER
himself.  Please note that the Chapter on Possession (jus
possessionis, not jus possidendi) in the Civil Code refers
to a possessor other than the owner.  Please note further
that the difference between a builder (or possessor) in
good faith and one in bad faith is that the former is NOT AWARE of the defect or
flaw in his title or mode of acquisition while the latter is AWARE of such
defect or flaw (Art. 526, Civil Code).  But in either
case there is a flaw or defect.  In the case of TAN
QUETO there is no such flaw or defect because it is he himself (not
somebody else) who is the owner of the property.

WHEREFORE, Our decision
promulgated on May 16, 1983
is hereby SET ASIDE, and a new one is hereby rendered declaring the questioned
lot together with the building thereon, as TAN QUETO’s
exclusive property.  No costs.

SO ORDERED.

Tehankee, C.J.,
Yap, Fernan, Narvasa, Alampay, Cruz, Feliciano, Gancayco, Bidin, and Sarmiento,
JJ., concur.

Melencio-Herrera,
J., vote to uphold the
decision of May 16,
1983 and to deny
reconsideration.

Gutierrez, Jr., J., reiterate his vote in the decision sought to be reconsidered
and dissent herein.

Padilla and
Cortes, JJ., no
part.

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^[*] Affirming the Decision of the
Court of Appeals in G.R. No. 39492-R penned by Justice Ramon C. Fernandez
concurred in by Justices Hermogenes Concepcion, Jr. and Cecilia Munoz Palma which affirmed the
Decision of the Trial Judge Geronimo R. Marave.