LEONCIA FRANCISCO, PETITIONER, VS. SPOUSES LAMBERTO B. MAGBITANG AND NICETAS SANCHEZ, AND COURT OF APPEALS, RESPONDENTS.

The center of controversy in this petition for review on certiorari
is the 470-square meter portion of Lot 113 of the
cadastre of San Leonardo, Nueva Ecija.  Petitioner seeks a reversal of the decision
of the Court of Appeals in CA-G.R. No. 46909-R
entitled “Leoncia Francisco, Plaintiff-Appelle v. Lamberto Magbitang, et al., Defendants-Appellants” which
reversed the decision of the trial court, Court of First instance, in Civil
Case No. 348, an action for recovery of a parcel of land which declared Leoncia Francisco as
owner of the land in question.

The record shows that Lot
113 was originally part of a 1,891-square meter land which Mariano Fajardo declared as his own.^[1]
In 1919, Mariano Fajardo died without issue, survived
by his sisters Gliceria and Teodora.  As Gliceria also
died without issue, the property was eventually inherited by the children of Teodora, namely, Gregorio Fajardo,
Leoncia Francisco and Cristina Francisco.^[2]

Gregorio and his half-sisters, Leoncia
and Cristina divided the unsurveyed and unregistered
land equally among themselves.  Thus,
each of them had a lot with a ten-meter frontage (width) and sixty-meter length
or approximately 610 square meters.

Cristina sold her share to Leoncia
through a “kasulatang bilihan”
dated July 3, 1947^[3]
and a “kasulatang pagbibilihan”
dated March 7, 1950.^[4]
The later document was actually in favor of Teodora, Ignacia and Francisco Balajadia,
the children of Leoncia, but it was the latter who paid the contract price of P300.^[5]
These two agreements were
acknowledged after Cristina’s death by her husband, Antonio Atayde,
and only surviving child, Clara, in a joint affidavit of quitclaim executed on July 27, 1968.^[6]

While Gregorio was still alive or on March 6, 1951, his daughter, Celestina, sold a 180-square meter portion of his
share to Leoncia.^[7]
After Celestina’s death, her husband, Sancho Cauzon, executed an
affidavit of quitclaim dated May 28,
1955, recognizing said sale.^[8]
One of the witnesses to the execution of said affidavit was Gregorio Fajardo himself.

It appears, however, that even before said sale or on February 27, 1951, Gregorio had sold 500 square meters
of his share to the spouses Candido Candelaria and Leonila Mendoza.^[9]
Less than two months later or on April 14, 1951, the Candelaria spouses parted with said property in favor of
the spouses Martin and Rosa Gonzales.^[10]
During that same year, or on September
6, 1951, the Gonzaleses sold said 500
square meters of land
to Pedro Erce and Rosario Erce.^[11]

In 1956, through tax declaration No. 7949, the Erce spouses claimed ownership over a residential lot containing 360 square meters and a cornland containing
.0720 hectares or at 720
square meters^[12] of a total area of 1,080 square meters.  Said tax declaration contains a note stating:

“Transferred as per Deed of Sale executed by Spouses Martin Gonzales and
Rosa Gonzales, Hospicio Fajardo,
Gregorio Fajardo, et al. in favor of the declarants and ratified by Notary Public Sabino Aguilar on September 6, 1951, etc.  The succession
of ownership and the right to inherit with sale is hereto attached.  Tax for 1955 paid under O/R No. 1593978 dated
May 28, 1955.”

On April 22, 1958,
the Erce spouses executed a deed of absolute sale of
an unregistered parcel of land in favor of Atty. Lamberto
B. Magbitang and his wife, Nicetas
Sanchez.^[13]
The subject matter of the sale is described in said document as follows:

“A parcel of land located at San Leonardo, Nueva
Ecija, with Tax Dec. No. 7949 (a portion being cornland and a portion being residential land), the portion
being classified as cornland with an area of seven
hundred twenty (720) square meters more or less with an assessed value of
P21.60 and the portion classified as residential land with an area of three
hundred sixty (360) square meters more or less and with an assessed value of
P216.00.  Bounded on
the North by Roman Pestaño; on the South by Teodora Balajadia, et al; on the
East by Rizal Street and
on the West by Jose Manson.  The
boundaries of this land could be determined by the fences surrounding the same
and trees on its fences (sic).  Its
permanent improvements are bamboo grooves and a chico
tree and we are the ones in possession of the same.”

After taking possession of the parcel of land, Magbitang paid real estate taxes thereon, built a fence
around the area, and introduced improvements including his house.  The land with an area of 946 square meters
later became known as Lot 113 after the cadastral survey
was conducted in San Leonardo.  The
remainder of the lot originally owned by Mariano Fajardo
known as Lot 112 had an area of 780 square meters and,
therefore, Mariano Fajardo’s land was found to
contain 1,726 square meters and not 1,891 square meters as he had previously
declared for tax purposes.

On October 19, 1965,
Leoncia Francisco was issued Original Certificate of
Title No. P-4126 covering Lot 112 after her free patent
application^[14]
therefor was granted.^[15]
Sometime in 1968, she discovered at the provincial assessor’s office that Lot
113 has a bigger area than Lot 112.  Hence, Leoncia
filed a complaint against the Magbitang spouses in
the Court of First Instance of Nueva Ecija for the recovery of three hundred seventy (370)
square meters of Lot 113.^[16]

In her complaint, Leoncia averred that
since the actual area of the parcel of land declared as his own by Mariano Fajardo was determined by the cadastral survey to be 1,726
square meters, and since she was entitled to two-thirds of that area or 1,150
square meters although she obtained title over only 780 square meters thereof, the remaining 370 square meters
should be recovered from Lot 113 in the
possession of the Magbitang spouses.

The lower court ruled in favor of Leoncia.  In its decision, the lower court concluded
that the Magbitang spouses could not have purchased an area more than 500 square
meters from the Erce spouses because the latter acquired
only 500 square meters from the Gonzales spouses.  It observed that being a lawyer, Lamberto Magbitang should have
realized that he was dealing with an unregistered parcel of land whose
ownership was vague and hence, he could not have missed the annotation on tax
declaration No. 7949 herein aforequoted.  The lower court remarked that Magbitang could not have known that the Erce
spouses bought only 500 square meters from the Gonzales spouses.  It also overturned Magbitang’s
contention that he was a possessor in good faith of the entire 1,080 or 946
square meters.  Magbitang
must have realized that he was occupying a portion of Leoncia’s
lot when, in fulfilling the requirements for his loan application with the
Development Bank of the Philippines, he presented the affidavits of only three
of the boundary owners surrounding Lot 113 but failed to secure that of Leoncia.

The lower court declared Leoncia to be
the owner of 470 square meters (instead of 370 square meters as prayed for by Leoncia) of Lot 113 and ordered its
segregation therefrom.

On appeal, the Court of Appeals reversed the lower court on the
basis of its finding that Leoncia’s claim over a
portion of Lot 113 “is based on mere estimates and the exact and correct
figures were ascertained at the cadastral survey — to which the appellee not only did not object, but she proceeded to
obtain a patent and a title to exactly 780 square meters of land.”^[17]

In its resolution denying
Leoncia’s motion for reconcideration
of its decision, the appellate court ruled that it could not grant said motion
because of the facts that while “the complaint claims encroachment by the
appellants of 470 sq. m. (sic), (but now) the appellee
asks for affirmance of the trial court’s finding of
an encroachment of only 370 sq. m.” (sic); that
the missing 470 square meters could be contained in any of the various lots
covered by OCT P-4126; and that Leoncia candidly
testified that she lacked personal knowledge as to the exact area of Lot 112.

Hence, Leoncia Francisco interposed the
instant petition for review on certiorari.

The pivotal issue in this case is who is the
real owner of the excess area in question.

What comes across as a
glaring point in this case is the fact that the area of the land acquired by Magbitang from Erce appears to be
much bigger than the area of the land actually acquired by Erce
from his predecessor-in-interest, Gonzales. 
As there are no proofs that other lots adjacent to the 500 square meters
were acquired and later transmitted by Gonzales to Magbitang,
the inevitable inference is that either Erce or Magbitang enlarged the area of the lot purchased by the
latter from the former.

It is a well-settled principle that the findings of fact of the
Court of Appeals are conclusive on the parties and on this Court, subject to
certain exceptions, among which are:  the
judgment is based on misapprehension of facts; the inference made is manifestly
mistaken and the findings of fact of the Court of Appeals are contrary to those
of the trial court.^[18]

We hold that the evidence
on hand reveals that Magbitang can lay claim to no
more than 500 square meters of Lot
113.  In the first place, the area of 500
square meters had been specified throughout the series of transfers of the land
in question.  Verily it is beyond comprehension how the
portion of 500 square meters, since the time of the first transfer made by
Gregorio Fajardo and eventually to Magbitang, had increased and added to it another portion of
580 square meters enabling them to possess and occupy a bigger portion.  Thus, while it is true that
tax declaration No. 7949 indicates that the total area involved is 1,080 square
meters, the same document shows the source of the property — the Gonzales
spouses.  In the absence of proof therefore,
that Hospicio and Gregorio Fajardo
whose names appear in said tax declaration, also sold some properties to Erce who in
turn sold the same to Magbitang, the actual area
involved can be no more than 500 square meters. 
After all, as the saying
goes, the spring cannot rise higher than its source.

Secondly, Magbitang failed to explain why, when he drafted the deed
of sale, he did not refer to the lot as Lot 113 with a definitive statement of its area
and boundary limits.  Instead, it appears
that the series of transfers of this portion of 500 square meters which was a
part of the share of Gregorio Fajardo in the inheritance were all effected
in 1951 when the land in question was still one parcel of land and before the cadastral survey of San
Leonardo, Nueva Ecija.^[19] But the sale made by the Erce
spouses in favor of Leonardo B. Magbitang,
et al. which appears to have taken place on April 22, 1958, was after the said cadastral survey.^[20] In effect, therefore, there is reason to
believe that Magbitang wanted the deed of sale to
show that he acquired 1,080 square meters of land.

Thirdly, in identifying the
land he purchased, Magbitang has always
referred to boundary owners and not the actual metes and bounds of the
property.  While natural boundaries like rivers and streams may be relied upon in determining the
limits of a piece of land,^[21]
the same may not be said of boundary owners because, as what happened in this
case, the boundary owners may have changed and a corresponding change in the limits of the property may have
occurred.

Lastly, it appears that as a lawyer (he was a municipal judge
when he testified in this case), Magbitang
left so much to be desired as to his actuations in his alleged investigation of
the “four corners” of the property he was buying.  All he did was to confer with his would-be neighbors and be satisfied with the “information and
statements” of the Erce spouses.  He did not even bother to measure the
property.^[22] He relied upon “the face of the
title” or on tax
declaration No. 7949.^[23] Had he examined thoroughly said
tax declaration, he could have noticed the annotation thereon indicating that
“the succession of ownership and the right to inherit with sale is hereto
attached” and he could have learned
from the deed of sale attached thereto that Erce
acquired only 500 square meters from Gonzales.

From the foregoing, it is
apparent that Magbitang is not a purchaser in good
faith of the 1,080 or 946 square meters of land.  Consequently, he may not be considered a
possessor in good faith of 446 square meters of Lot 113 as it appears that he was aware that
there was in his title or mode of acquisition of said lot, a flaw which
invalidates his possession.^[24]

Although we are unprepared to impute fraudulent intent on the
part of Magbitang, there is certainly a negligence in his acquisition of 446 square meters of Lot
113.  Pursuant to Article 1456 of the
Civil Code, he is by law considered a trustee of an implied trust for the
benefit of the true owner of the property. 
That being the case, Magbitang may not
successfully set up prescription as a defense with respect to the area he has
been holding in trust.^[25]

We are convinced
that Leoncia or her heirs (she was an octogenarian when she testified and she died
during the pendency
of this case) are the true owners of 446 square meters of Lot
113.  The private documents evidencing
ownership, pertaining as they are to be unregistered parcel of land, validly
transmitted ownership rights in favor of Leoncia most
especially because the vendors’ successors-in-interest acknowledged such
transmission of rights in public instruments.

WHEREFORE, the decision of the Court of Appeals is hereby reversed and set aside.  Private respondents are ordered to segregate four hundred forty-six (446)
square meters of Lot 113 and to deliver the same to
petitioner or her legal heirs who shall shoulder the expenses of the survey thereof.  Costs against private
respondents.

SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin, and Cortes, JJ., concur.

^[1]
Exhibit A.

^[2]
Decision in CA-G.R. No. 42226-R, p. 1; Rollo,
p. 127.

^[3]
Exhibit H.

^[4]
Exhibit G.

^[5]
TSN, May 21, 1969, p. 25.

^[6]
Exhibit I.

^[7]
Exhibit J; TSN, supra, pp. 13-18.

^[8]
Exhibits F & F-1.

^[9]
Exhibit Y.

^[10]
Exhibit Z.

^[11]
Exhibit AA.

^[12]
Exhibit 1.

^[13]
Exhibit 2.

^[14]
The propriety of Leoncia’s free patent application was put in issue in the ejecment
case she filed against Sancho Cauzon, Melquiades Fajardo and Hospicio Fajardo.  In its
decision of May 4, 1975, the
Court of Appeals ruled that inasmuch as there was no evidence as to the nature
of the acquisition of the land by Mariano Fajardo,
there is a presumption that Lot
112 belonged to the public domain as in fact the Secretary of Agriculture and
Natural Resources approved of the issuance of the free patent in favor of Leoncia [CA-G.R. No. 42226-R; Rollo,
pp. 127-139].

^[15]
Exhibit B.

^[16]
Civil Case No. 348.

^[17]
Rafael C. Climaco, J., ponente;
Crisolito Pascual and
Mariano V. Agcaoili, JJ.,
concurring.

^[18]
Sacay v.
Sandiganbayan, 142 SCRA 609 (1986); Manlapaz v. C.A.,
147 SCRA 238-239 (1987).

^[19]
Exhibit 8.

^[20]
Brief for Appellee, C.A.
pp. 4-5.

^[21]
Erico v. Chigas,
L-28064, July 16, 1980, 98 SCRA 575.

^[22]
TSN, June 11, 1969, pp. 21-32; 37.

^[23]
TSN, supra, p. 40.

^[24]
Article 526, Civil
Code.

^[25]
Government of the Philippines v. Abadilla, 46 Phil. 643.