THE GOVERNMENT OF THE PHILIPPINE ISLANDS, PLAINTIFF AND APPELLANT, VS. JOSE M.A MEMIJE, DEFENDANT AND APPELLEE.

The Government of the Philippine Islands appeals from a judgment
dismissing its complaint in an action brought to recover possession of
two lots or parcels of land located upon a larger tract known as the
San Lazaro Estate.

The case was submitted upon the following agreed statement of facts:

“1. That the defendant Jose M.a Memije is in possession of the land
described in the plan marked with the letter A, and included within the
perimeter indicated by the letters ABCD.

“2. His possession dates back to the 22d day of July, 1902, on which
date, according to the public document acknowledged before the notary
Calixto Reyes y Cruz, and to the two private documents subscribed by
the contracting parties on September 24, 1902, and February 1, 1904, he
acquired for the sum of P6,300, from Sra. Consolacion Marasigan y
Cesarea, assisted by her husband, D. Silvino Dancel, through sale with
the right to repurchase within a period already elapsed of two years, a
house of strong materials situated in the rented land above referred
to, of the Hacienda de San Lazaro, which land has a
superficial area of 527.67 square meters. In said sale was included the
right of lease that the vendor had on the land of the area mentioned,
which previously belonged to the Hacienda de San Lazaro and
now to the Government of the Philippine Islands. The contract of lease
by virtue of which the former owner was in possession was a verbal one.

“3. That the house acquired, the picture of which is hereby
presented and marked with the letter B, is constructed within the
perimeter ABCD and occupies approximately the extent, marked with the
letters MNOP, of 160 square meters.

“4. That when, for the more expeditious administration of the Hacienda de San Lazaro,
the Bureau of Lands proceeded in 1907 with the work of subdividing it
into lots (they completed said work in 1911) said Bureau divided the
extent of land occupied by the defendant Memije into three lots, one
being that marked with the letters AEFD, known as lot 8-A and ceded to
the said defendant under a contract of purchase and sale, and the other
two those marked in said plan A with the numbers 5 and 6, in which are
included two portions previously forming an integral part of the whole,
of which portions one is indicated in said plan with the letters EBGH
and the other with the letters GHFC.

“5. That until the year 1909 the Bureau of Lands has been collecting
from the defendant an annual rental of P160 for the whole extent of
land marked in plan A with the letters ABCD; from the year 1910 to
1913, there was collected from him P140; in the year 1914, P148 for the
extent already reduced and included only within lot 8-A and limited by
the perimeter AEFD, Mr. Memije protesting when said sum was collected.
When he came to know that the extent for which said sum was collected
from him had been reduced to approximately 350 square meters and the
remaining part had been taken away from him, he made known his
opposition to such reduction of his lot and his desire to preserve the
whole extent which he had been occupying up to that date.

“6. That at the time such purchase was made by Mr. Memije Act No.
2360, under which the contract was made, was already approved, and that
when the Legislature approved Act No. 2478 on February 28, 1915, the
plan of the Hacienda de San Lazaro as prepared by the Bureau of Lands
is the one which has been exhibited and in which it appears, first, that
the lot assigned to Mr. Memije is only that indicated by the letters
AEFD of Exhibit A, and, second, that parts of the land which he
formerly occupied, within the perimeter marked in the plan A with the
letters ABCD now already form a part of lots Nos. 5 and 6 which appear
in the official subdivision made by the said Bureau.

“7. That in the contract of purchase and sale executed in favor of
Mr. Memije and presented under the letter C, only lot 8-A, block 2,
with an area of 350 square meters, is sold to him.

“8. That on November 28, 1914, Mr. Memije signed a contract of sale
of said lot, executed by the Director of Lands in his favor, which
contract, because it was drafted in English, according to Mr. Memije,
he did not understand but always believed that there was sold to him
the same land he occupied since he acquired the house constructed on
it, with the right of lease enjoyed by the former owner.

“9. That at the time of signing the contract, Exhibit C, the Bureau of Land’s official plan of the subdivision of the Hacienda de San Lazaro, is the one which has been presented and in which appears lot 8-A, Block 2, to which the said contract refers.”

The plan filed with the agreed statement of facts clearly discloses
that the surveyors of the Bureau of Lands ran one of the lines
subdividing the parcel of land occupied by the defendant, through his
house, from front to rear, so that a substantial part of the house
stands on lot 8-A and a substantial part on lot number 6. The house, as
shown by the photograph, appears to be a two-story building, of strong
materials, which might well be worth as much or more than the defendant
paid for it in 1902, that is to say, P6,300.

Plaintiff
seeks to recover possession of the two lots which, together with lot
8-A, formed the entire tract occupied by the defendant when the estate
was surveyed and subdivided by the surveyors of the Bureau of Lands in
1911.

The most cursory examination of the circumstances under which the
defendant has been in possession of the entire tract, as disclosed by
the agreed statement of facts, leaves no room for doubt that under the
provisions of Act No. 2360, as amended by Act No. 2478, he was one of
the occupants of the San Lazaro Estate to whom that Act secured the
right to continue in possession of the lands occupied by them and to
acquire title thereto upon the terms and conditions prescribed by the
Act.

Section 2 of Act No. 2360, as amended by Act No. 2478, which
provides for the administration of the lands of the San Lazaro Estate,
is as follows:

“Prior to July first, nineteen hundred and fifteen, all bona fide
occupants of the said estate shall be entitled to purchase all the
lands occupied by them or by their legal representatives as shown by the
records of the Bureau of Lands, not to exceed fifteen hundred square
meters for residential and twelve thousand square meters for
charitable, religious, or any other purposes, at a price to be fixed by
the Director of Lands with the approval of the Secretary of the
Interior not to exceed the value at which said lands are now assessed
by the city assessor and collector of Manila, and the purchase price
may be paid cash down or in semiannual installments within a period of
not more than fifteen years, and the purchasers shall be compelled to
pay the cost of the surveys necessary to carry out the purposes of this
Act, which shall be added to the sale value of the lands surveyed. Land
or lands purchased in accordance with the provisions of this Act shall
be subject to the payment of the land tax, like any other property,
from the date of the execution of the contract covering it or them.

“For the purposes of this Act, lands purchased by the city of Manila
shall be considered as residential lots, witht out limitation as to
area, and the actual cost of the improvements made on said lots by the
city of Manila shall be deducted from the price thereof.”

Under the express terms of this Act no person who, prior to its
enactment, was an occupant of lands included within the San Lazaro
Estate in the sense in which the word occupant is used in the Act, can
be ejected from the lands thus occupied by him at the instance of the
Government until and unless he has failed to comply with the terms and
conditions prescribed by the Act; and an action of ejectment instituted
by or on behalf of the Government cannot be successfully maintained
unless it affirmatively appears that there has been such a failure to
comply with the terms and conditions prescribed in the Act, or with
some lawful rule or regulation prescribed in pursuance of its
provisions.

The complaint in this action does not allege any failure to comply
with the terms and conditions prescribed by the statute under which the
defendant had the right to continue in possession and to acquire title
thereto, nor any failure or refusal to comply with any lawful rule or
regulation prescribed by the Bureau of Lands under authority of the
statute, and no such failure is disclosed by the agreed statement of
facts.

Of course the mere fact that the surveyors of the Bureauof Lands
divided the tract occupied by him into three separate lots or parcels
on the maps prepared by them, in no wise restricted or limited his
rights under the statute: and the refusal or failure of the Director of
Lands to continue to rent to him the entire tract in the year 1914
should not be held to have that effect unless it appears that such
action on the part of the Director of Lands was predicated on some
refusal or failure on the part of the defendant to comply with the
lawful terms and conditions upon which he had the right to continue in
possession and acquire title to the land. The agreed statement of facts
does not clearly set forth the circumstances under which the Director
of Lands declined to continue to rent these lands to the defendant, but
it does affirmatively appear that the defendant protested against the
action of the Director and that he continued in possession,
notwithstanding the dispute which seems to have arisen at that time;
and it further appears that he has continued in possession to this day.

The agreed statement of facts discloses that the defendant has
purchased one of the lots into which the entire tract was divided, and
further that he thought that the deed of sale executed at that time
included the entire tract. The deed of sale is so clear and explicit
that it is difficult to understand how he could have fallen into such
an error, and certain it is that the deed did not include the two lots
in question in these proceedings, -and that his mere claim of his
belief to the contrary does not sustain his allegation of ownership in
his answer, nor put in doubt the true nature of the transaction,
evidenced by the deed of sale, in the absence of competent evidence in
the record disclosing the existence of fraud, mutual error, mistake or
the like.

The nature of the contentions of the defendant suggests the
possibility that he may have failed to secure a renewal of his rental
contract for the entire tract in 1914, and thereafter to secure a deed
to the entire tract, because of his insistence upon a right to these
privileges for the consideration which the Director of the Bureau, in
the exercise of his lawful discretion, saw fit to exact with reference
to the lot 8-A which was in fact conveyed to the defendant in the deed
of sale. If this be the fact, and if he declined to accept the terms
and conditions lawfully prescribed by the Director for the purchase of
the rest of the tract, such conduct might well have entailed the loss
of his rights in and to the lots in question. But there is nothing in
the record which would sustain a solemn finding that he has ever been
given an opportunity to exercise the rights and privileges which were
secured to him under the express terms of the statute. Indeed the
blunder of the surveyors of the Bureau of Lands in running a
subdivision line through his house, and the confusion and uncertainty
as to his rights in the premises which that blunder seems to have
entailed, suggest the possibility that no such opportunity has ever
been extended to him so as to work a forfeiture of his rights in the
premises as a result of his failure to take advantage of it.

However this may be, we are of opinion that the record does not
disclose that the defendant has lost his right to retain possession and
acquire title to the lots in question under the terms and conditions
prescribed in the statute, and that the plaintiff is not, therefore,
entitled to judgment for possession; and, we are of opinion also, and
so hold, that the lots in question were not included in the deed of
sale herein before mentioned; that the defendant has failed to establish
his contention that these lots should have been included in the terms
of that deed; and that he is not entitled to a judgment declaring him
to be the owner of these lots upon the same terms and conditions as
those upon which he holds lot 8-A—his only rights in the premises, as
disclosed by the record, being the right to continue in possession
until he is given an opportunity to purchase either or both of these
lots upon the terms and conditions prescribed by the statute.

The trial court correctly held that the plaintiff is not entitled to
recover possession of the lots in question; but, without making an
express ruling upon the defendant’s allegations of ownership, ordered
the Director of the Bureau of Lands to sell these lots to the
defendant. Neither of the parties prayed for such an order, and the
defendant has not obligated himself to purchase either or both of the
lots, and is not and cannot be compelled to purchase them if the terms
and conditions fixed by the Director of the Bureau of Lands should not
prove acceptable. He has the option to comply with such lawful terms
and conditions as may be prescribed or surrender possession. The order
to the Director of the Bureau of Lands to sell the lots to the
defendant cannot, therefore, be sustained; and, basing our judgment on
the findings herein before set out as to the respective contentions of
the parties, it is ordered that the judgment entered in the court below
be modified by striking out therefrom so much thereof as expressly
directs the Director of Public Lands to sell the lots in question to
the defendant, and thus modified let the judgment be affirmed, with the
costs of this instance against the appellant. So ordered.

Torres, Trent, and Araullo, JJ., concur.

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MORELAND, J., dissenting:

I do not agree to the judgment of the court as written.