G.R. No. 136456. October 24, 2000
HEIRS OF RAMON DURANO, SR., RAMON DURANO III, AND ELIZABETHHOTCHKISS DURANO, PETITIONERS, VS. SPOUSES ANGELES SEPULVEDA UY AND EMIGDIO BING SING UY, SPOUSES FAUSTINO ALATAN AND …
GONZAGA-REYES, J.:
Petitioners seek the reversal of the decision of the First Division of the
Court of Appeals dated November 14, 1997 in CA-G.R. CV No. 27220, entitled
“Heirs of Ramon Durano, Sr., et. al. versus Spouses Angeles Supelveda Uy, et.
al.”, and the resolution of the Court of Appeals dated October 29, 1998 which
denied petitioners’ motion for reconsideration.
The antecedents of this case may be traced as far back as August 1970; it
involves a 128-hectare parcel of land located in the barrios of Dunga and
Cahumayhumayan, Danao City. On December 27, 1973, the late Congressman Ramon
Durano, Sr., together with his son Ramon Durano III, and the latter’s wife,
Elizabeth Hotchkiss Durano (petitioners in the herein case), instituted an
action for damages against spouses Angeles Supelveda Uy and Emigdio Bing Sing
Uy, spouses Faustino Alatan and Valeriana Garro, spouses Rufino Lavador and
Aurelia Mata, Silvestre Ramos, Hermogenes Tito, Teotimo Gonzales, Primitiva
Garro, Julian Garro, Ismael Garro, Bienvenido Castro, Glicerio Barriga, Beatriz
Calzada, Andrea Mata de Batulan, Teofista Alcala, Filemon Lavador, Candelario
Lumantao, Gavino Quimbo, Justino Tito, Marcelino Gonzales, Salvador Dayday,
Venancia Repaso, Leodegario Gonzales, Jose de la Calzada, Restituta Gonzales,
and Cosme Ramos (herein respondents[1])
before Branch XVII of the then Court of First Instance of Cebu, Danao City.
In that case, docketed as Civil Case No. DC-56, petitioners accused
respondents of officiating a “hate campaign” against them by lodging complaints
in the Police Department of Danao City in August 1970, over petitioners’
so-called “invasion” of respondents’ alleged properties in Cahumayhumayan, Danao
City. This was followed by another complaint sent by respondents to the
President of the Philippines in February 1971, which depicted petitioners as
“oppressors”, “landgrabbers” and “usurpers” of respondents’ alleged rights. Upon
the direction of the President, the Department of Justice through City Fiscal
Jesus Navarro and the Philippine Constabulary of Cebu simultaneously conducted
investigations on the matter. Respondents’ complaints were dismissed as
“baseless”, and they appealed the same to the Secretary of Justice, who called
for another investigation to be jointly conducted by the Special Prosecutor and
the Office of the City Fiscal of Danao City. During the course of said joint
investigation, respondents Hermogenes Tito and Salvador Dayday again lodged a
complaint with the Office of the President, airing the same charges of
“landgrabbing”. The investigations on this new complaint, jointly conducted by
the 3rd Philippine Constabulary Zone and the Citizens Legal
Assistance Office resulted in the finding that “(petitioners) should not be held
answerable therefor.”[2]
Petitioners further alleged in their complaint before the CFI that during the
course of the above investigations, respondents kept spreading false rumors and
damaging tales which put petitioners into public contempt and ridicule.[3]
In their Answer, respondents lodged their affirmative defenses, demanded the
return of their respective properties, and made counterclaims for actual, moral
and exemplary damages. Respondents stated that sometime in the early part of
August 1970 and months thereafter they received mimeographed notices dated
August 2, 1970 and signed by the late Ramon Durano, Sr., informing them that the
lands which they are tilling and residing in, formerly owned by the Cebu
Portland Cement Company (hereafter, “Cepoc”), had been purchased by Durano &
Co., Inc. The notices also declared that the lands were needed by Durano &
Co. for planting to sugar and for roads or residences, and directed respondents
to immediately turn over the said lands to the representatives of the company.
Simultaneously, tall bamboo poles with pennants at the tops thereof were planted
in some areas of the lands and metal sheets bearing the initials “RMD” were
nailed to posts.
As early as the first week of August 1970, and even before many of the
respondents received notices to vacate, men who identified themselves as
employees of Durano & Co. proceeded to bulldoze the lands occupied by
various respondents, destroying in their wake the plantings and improvements
made by the respondents therein. On some occasions, respondents alleged, these
men fired shots in the air, purportedly acting upon the instructions of
petitioner Ramon Durano III and/or Ramon Durano, Jr. On at least one instance,
petitioners Ramon Durano III and Elizabeth Hotchkiss Durano were seen on the
site of the bulldozing operations.
On September 15, 1970, Durano & Co. sold the disputed property to
petitioner Ramon Durano III, who procured the registration of these lands in his
name under TCT No. T-103 and TCT No. T-104.
Respondents contended that the display of force and the known power and
prestige of petitioners and their family restrained them from directly resisting
this wanton depredation upon their property. During that time, the mayor of
Danao City was Mrs. Beatriz Durano, wife of Ramon Durano, Sr. and mother of
petitioner Ramon Durano III. Finding no relief from the local police, who
respondents said merely laughed at them for daring to complain against the
Duranos, they organized themselves and sent a letter to then President Ferdinand
Marcos reporting dispossession of their properties and seeking a determination
of the ownership of the land. This notwithstanding, the bulldozing operations
continued until the City Fiscal was requested by the Department of Justice to
conduct an investigation on the matter. When, on July 27, 1971, the City Fiscal
announced that he would be unable to conduct a preliminary investigation,
respondents urged the Department of Justice to conduct the preliminary
investigation. This was granted, and the investigations which spanned the period
March 1972 to April 1973 led to the conclusion that respondents’ complaint was
untenable.[4]
In their counterclaim, respondents alleged that petitioners’ acts deprived
most of them of their independent source of income and have made destitutes of
some of them. Also, petitioners have done serious violence to respondents’
spirit, as citizens and human beings, to the extent that one of them had been
widowed by the emotional shock that the damage and dispossession has caused.[5] Thus, in addition to the dismissal of the
complaint, respondents demanded actual damages for the cost of the improvements
they made on the land, together with the damage arising from the dispossession
itself; moral damages for the anguish they underwent as a result of the
high-handed display of power by petitioners in depriving them of their
possession and property; as well as exemplary damages, attorney’s fees and
expenses of litigation.
Respondents’ respective counterclaims — referring to the improvements
destroyed, their values, and the approximate areas of the properties they owned
and occupied — are as follows:
a) TEOFISTA ALCALA – Tax Declaration No. 00223; .2400 ha.; bulldozed on
August, 10, 1970. Improvements destroyed consist of 47 trees, 10 bundles
beatilis firewood and 2 sacks of cassava, all valued at P5,437.00. (Exh. B,
including submarkings)b) FAUSTINO ALATAN and VALERIANA GARRO – Tax Declaration No. 30758; .2480
ha.; Tax Declaration No. 32974; .8944 ha.; Tax Declaration No. 38908; .8000 ha.;
Bulldozed on September 9, 1970; Improvements destroyed consist of 682 trees, a
cornfield with one cavan per harvest 3 times a year, valued at P71,770.00;
Bulldozed on March 13, 1971; 753 trees, 1,000 bundles beatilis firewood every
year, valued at P29,100.00; Cut down in the later part of March, 1971 – 22
trees, 1,000 bundles beatilis firewood every year, 6 cavans corn harvest per
year, valued at P1,940.00 or a total value of P102,810.00. (Exh. C, including
submarkings)c) ANDREA MATA DE BATULAN – Tax Declaration No. 33033; .4259 has.; bulldozed
on September 11, 1970. Improvements destroyed consist of 512 trees and 15 sacks
cassava all valued at P79,425.00. (Exh. D, including submarkings)d) GLICERIO BARRIGA – Tax Declaration No. 32290; .4000 ha.; bulldozed on
September 10, 1990. Improvements destroyed consist of 354 trees, cassava field
if planted with corn good for one liter, 30 cavans harvest a year of corn, and
one resthouse, all valued at P35,500.00. (Exh. E, including submarkings)e) BEATRIZ CALZADA – Tax Declaration No. 03449; .900 ha.; Bulldozed on June
16, 1971. Improvements destroyed consist of 2,864 trees, 1,600 bundles of
beatilis firewood, 12 kerosene cans cassava every year and 48 cavans harvest a
year of corn all valued at P34,800.00. (Exh. F, including submarkings)f) BIENVENIDO CASTRO – Tax Declaration No. 04883; .6000 ha.; bulldozed on
September 10, 1970. Improvements destroyed consist of 170 trees, 10 sacks
cassava every year, 500 bundles beatilis firewood every year, 60 cavans corn
harvest per year, all valued at (5,550.00. (Exh. G, including submarkings)g) ISMAEL GARRO – Tax Declaration No. 7185; 2 has. Bulldozed in August, 1970.
Improvements destroyed consist of 6 coconut trees valued at P1,800.00. Bulldozed
on February 3, 1971 – improvements destroyed consist of 607 trees, a corn field
of 5 cavans produce per harvest thrice a year, all valued at P67,890.00. (Exh.
H, including submarkings)h) JULIAN GARRO – Tax Declaration No. 28653; 1 ha.; Bulldozed in the latter
week of August, 1970. Improvements destroyed consist of 365 trees, 1 bamboo
grove, 1 tisa, 1,000 bundles of beatilis firewood, 24 cavans harvest a year of
corn, all valued at P46,060.00. (Exh. I, including submarkings)i) PRIMITIVA GARRO – Tax Declaration No. 28651; .3000 ha.; Bulldozed on
September 7, 1970. Improvements destroyed consist of 183 trees, 10 pineapples, a
cassava field, area if planted with corn good for ½ liter, sweet potato, area if
planted with corn good for ½ liter all valued at P10,410.00. (Exh. J, including
submarkings)j) TEOTIMO GONZALES – Tax Declaration No. 38159; .8644 ha.; Tax Declaration
No. 38158; .8000 ha.; Bulldozed on September 10, 1970 – improvements destroyed
consist of 460 trees valued at P20,000.00. Bulldozed on December 10, 1970 –
Improvements destroyed consist of 254 trees valued at P65,600.00 – or a total
value of P85,600.00. (Exh. K, including submarkings)k) LEODEGARIO GONZALES – Tax Declaration No. 36884; Bulldozed on February 24,
1971. Improvements destroyed consist of 946 trees, 40 ubi, 15 cavans harvest a
year of corn, all valued at P72,270.00. (Exh. L, including submarkings)l) FILEMON LAVADOR – Tax Declaration No. 14036; 1 ha.; Bulldozed on February
5, 1971. Improvements destroyed consist of 675 trees and 9 cavans harvest a year
of corn all valued at P63,935.00. (Exh. M, including submarkings)m) CANDELARIO LUMANTAO – Tax Declaration No. 18791; 1.660 ha. Bulldozed on
the second week of August, 1970 – Improvements destroyed consist of 1,377 trees,
a cornfield with 3 cavans per harvest thrice a year and a copra dryer all valued
at P193,960.00. Bulldozed on February 26, 1971 – Improvements destroyed consist
of 44 trees, one pig pen and the fence thereof and the chicken roost all valued
at P12,650.00. Tax Declaration No. 33159; 3.500 has. Bulldozed in the last week
of March, 1971 – Improvements destroyed consist of 13 trees valued at P1,550.00.
Bulldozed in the latter part consist of 6 Bamboo groves and Ipil-Ipil trees
valued at P700.00 with total value of P208,860.00. (Exh. N, including
submarkings)n) AURELIA MATA – Tax Declaration No. 38071; .3333 ha.; Bulldozed sometime in
the first week of March, 1971 – Improvements destroyed consist of 344 trees and
45 cavans corn harvest per year valued at P30,965.00. (Exh. Q, including
submarkings)o) GAVINO QUIMBO – Tax Declaration No. 33231; 2.0978 has.; Tax Declaration
No. 24377; .4960 ha. (.2480 ha. Belonging to your defendant) Bulldozed on
September 12, 1970 – Improvements destroyed consist of 200 coconut trees and 500
banana fruit trees valued at P68,500.00. Bulldozed on consist of 59 trees, 20
sacks cassava and 60 cavans harvest a year of corn valued at P9,660.00 or a
total value of P78,160.00. (Exh. R, including submarkings)p) SILVESTRE RAMOS – Tax Declaration No. 24288; 1.5568 has.; Bulldozed on
February 23, 1971. – Improvements destroyed consist of 737 trees, a cornfield
with 3 cavans per harvest 3 times a year and 50 bundles of beatilis firewood,
all valued at P118,170.00. (Exh. S, including submarkings) .q) MARCELINO GONZALES – Tax Declaration No. 34057; .4049 ha. Bulldozed on
March 20, 1972 – Improvements destroyed consist of 5 coconut trees and 9 cavans
harvest a year of corn valued at P1,860.00. Bulldozed on July 4, 1972 –
destroying 19 coconut trees valued at P5,700.00 or a total value of P7,560.00.
(Exh. U, including submarkings)r) JUSTINO TITO -Tax Declaration No. 38072; .2000 has.; Bulldozed on February
25, 1971 – Improvements destroyed consist of 338 trees and 5 kamongay all valued
at P29,650.00. (Exh. T, including submarkings)s) EMIGDIO BING SING UY and ANGELES SEPULVEDA UY – Transfer Certificate of
Title No. T-35 (Register of Deeds of Danao City); 140.4395 has.; Area bulldozed-
20.000 has. Bulldozed on August 5, 6 and 7, 1970 – destroying 565 coconut trees,
2-1/2 yrs. old, 65,422 banana groves with 3,600 mango trees, 3 years old,
grafted and about to bear fruit valued at P212,260.00. Bulldozed on November 24,
1970 and on February 16, 1971 – destroying 8,520 madri-cacao trees and 24
cylindrical cement posts boundaries valued at P18,540.00. Bulldozed on November
24, 1970 – destroying 90 coconut trees, 3 years old cornfield at 40 cavans per
harvest and at 3 harvests a year (120 cavans) valued at P31,800.00. Bulldozed on
February 16, 1971 – destroying 25,727 trees and sugarcane field value
P856,725.00 or a total value of P1,123,825.00. (Exh. V, including
submarkings)t) SALVADOR DAYDAY – Tax Declaration No. (unnumbered) dated September 14,
1967; 4.000 has. Bulldozed on May 6, 1971 – destroying 576 trees, 9 cavans
yearly of corn, 30 kerosene cans of cassava yearly valued at P4,795.00.
Bulldozed from March 26, 1973 to the first week of April, 1973 – destroying 108
trees and cornland, 6 cavans harvest per year valued at P53,900.00 or a total
value of P58,695.00. (Exh. A, including submarkings)u) VENANCIA REPASO – Tax Declaration No. 18867; 1.1667 has. Bulldozed on
April 15, 1971 – Improvements destroyed were 775 trees, 500 abaca, about to be
reaped, and being reaped 3 times a year 2 bamboo groves all valued at
P47,700.00. (Exh. O, including submarkings)v) HERMOGENES TITO – Tax Declaration No. 38009; over one (1) ha. Bulldozed in
the latter part of September, 1970 – destroying 1 coconut tree, 18 sacks of corn
per year valued at P1,020.00. Bulldozed on March 15, 1973 – destroying 2 coconut
trees, 5 buri trees, 1 bamboo grove valued at P1,400.00. Bulldozed on March 26,
1974 – destroying 3 coconut trees valued at P1,500.00 with a total value of
P3,920.00. (Exh. P, including submarkings).[6]
On April 22, 1975, petitioners moved to dismiss their complaint with the
trial court. The trial court granted the motion to dismiss, without prejudice to
respondents’ right to proceed with their counterclaim. Hence, the trial
proceeded only on the counterclaim.
On September 23, 1980, this Court issued a resolution in Administrative
Matter No. 6290 changing the venue of trial in Civil Case No. DC-56 to the
Regional Trial Court of Cebu City.
The change was mainly in line with the transfer of Judge Bernardo Ll. Salas,
who presided over the case in Danao City, to Cebu City. The parties agreed to
dispense with pre-trial, and for the evidence-in-chief to be submitted by way of
affidavits together with a schedule of documentary exhibits, subject to
additional direct examination, cross examination and presentation of rebuttal
evidence by the parties.
The trial court and later, the Court of Appeals, took note of the following
portions of affidavits submitted by petitioners:
xxx City Fiscal Jesus Navarro said that in August, 1967, he issued subpoenas
to several tenants in Cahumayhumayan upon representation by Cepoc, the latter
protesting failure by the tenants to continue giving Cepoc its share of the corn
produce. He learned from the tenants that the reason why they were reluctant and
as a matter of fact some defaulted in giving Cepoc its share, was that Uy Bing
Sepulveda made similar demands to them for his share in the produce, and that
they did not know to whom the shares should be given.
|
xxx
|
xxx
|
xxx
|
Jesus Capitan said that he is familiar with the place Cahumayhumayan and that
the properties in said locality were acquired by Durano and Company and Ramon
Durano III, but formerly owned by Cepoc.When the properties of Ramonito Durano were cultivated, the owners of the
plants requested him that they be given something for their effort even if the
properties do not belong to them but to Cepoc, and that he was directed by
Ramonito Durano to do a listing of the improvements as well as the owners. After
he made a listing, this was given to Ramonito who directed Benedicto Ramos to do
payment.When he was preparing the list, they did not object to the removal of the
plants because the counterclaimants understood that the lands did not belong to
them, but later and because of politics a complaint was filed, and finally that
when he was doing the listing, the improvements were even pointed to him by the
counterclaimants themselves. (Exh. 48, Records, p. 385-386).
|
xxx
|
xxx
|
xxx
|
Ruperto Rom said that he had an occasion to work at Cepoc from 1947 to 1950
together with Benedicto and Tomas Ramos, the latter a capataz of the
Durano Sugar Mills. Owner of the properties, subject of the complaint, was
Cepoc.The persons who eventually tilled the Cepoc properties were merely allowed to
do cultivation if planted to corn, and for Cepoc to be given a share, which
condition was complied with by all including the counterclaimants. He even
possessed one parcel which he planted to coconuts, jackfruit trees and other
plants. (Exh. 51, Records, pp. 383-384)
|
xxx
|
xxx
|
xxx
|
Co-defendant Ramon Durano III said that he agreed with the dismissal of the
complaint because his father’s wish was reconciliation with the defendants
following the death of Pedro Sepulveda, father of Angeles Sepulveda Uy, but
inspite of the dismissal of the complaint, the defendants still prosecuted their
counterclaim.The disputed properties were owned formerly by Cepoc, and then of the latter
selling the properties to Durano and Company and then by the latter to him as of
September 15, 1970. As a matter of fact, TCT T-103 and T-104 were issued to him
and that from that time on, he paid the taxes.At the time he purchased the properties, they were not occupied by the
defendants. The first time he learned about the alleged bulldozing of the
improvements was when the defendants filed the complaint of land grabbing
against their family with the Office of the President and the attendant
publicity. Precisely his family filed the complaint against them. (Exh. 57,
Records, pp. 723-730)
|
xxx
|
xxx
|
xxx
|
Congressman Ramon Durano said he is familiar with the properties, being owned
originally by Cepoc. Thereafter they were purchased by Durano and Company and
then sold to Ramon Durano III, the latter now the owner. He filed a motion to
dismiss the case against Angeles Sepulveda et al. as a gesture of respect to the
deceased Pedro Sepulveda, father of Angeles Sepulveda, and as a Christian, said
Pedro Sepulveda being the former Mayor of Danao, if only to stop all
misunderstanding between their families.
|
xxx
|
xxx
|
xxx
|
He was the one who did the discovery of the properties that belonged to
Cepoc, which happened when he was doing mining work near Cahumayhumayan and
without his knowledge extended his operation within the area belonging to Cepoc.
After Cepoc learned of the substantial coal deposits, the property was claimed
by Cepoc and then a survey was made to relocate the muniments. Eventually he
desisted doing mining work and limited himself within the confines of his
property that was adjacent to Cepoc’s property. All the claimants except
Sepulveda Uy were occupants of the Cepoc properties. Durano and Company
purchased the property adjacent to Cepoc, developed the area, mined the coal and
had the surveyed area planted with sugar cane, and finally the notices to the
occupants because of their intention to plant sugar cane and other crops (T.S.
N. December 4, 1985, pp. 31-32, 44-54, RTC Decision, pp. 16-19, Records, pp.
842-845).[7]
Petitioners also presented Court Commissioner, Engineer Leonidas Gicain, who
was directed by the trial court to conduct a field survey of the disputed
property. Gicain conducted surveys on the areas subjected to bulldozing,
including those outside the Cepoc properties. The survey — which was based on
TCT No. T-103 and TCT No. T-104, titled in the name of Ramon Durano III, and TCT
No. 35, in the name of respondent Emigdio Bing Sing Uy — was paid for by
petitioners.[8]
Respondents, for their part, also presented their affidavits and supporting
documentary evidence, including tax declarations covering such portions of the
property as they formerly inhabited and cultivated.
On March 8, 1990, the RTC issued a decision upholding respondents’
counterclaim. The dispositive portion of said decision reads:
“THE FOREGOING CONSIDERED, judgment is hereby rendered in favor of the
counter claimants and against the plaintiffs directing the latter to pay the
former:
| a) With respect to Salvador Dayday |
P 14,400.00
|
| b) With respect to Teofista Alcala |
4,400.00
|
| c) With respect to Faustino Alatan |
118,400.00
|
| d) With respect to Andrea Mata de Batulan |
115,050.00
|
| e) With respect to Glicerio Barriga |
35,500.00
|
| f) With respect to Beatriz Galzada |
70,300.00
|
| g) With respect to Bienvenido Castro |
5,000.00
|
| h) With respect to Ismael Garro |
66,060.00
|
| i) With respect to Julian Garro |
48,600.00
|
| j) With respect to Primitiva Garro |
13,000.00
|
| k) With respect to Teotimo Gonzales |
63,200.00
|
| l) With respect to Leodegario Gonzales |
85,300.00
|
| m) With respect to Filemon Lavador |
70,860.00
|
| n) With respect to Venancia Repaso |
101,700.00
|
| o) With respect to Candelario Lumantao |
192,550.00
|
| p) With respect to Hermogenes Tito |
1,200.00
|
| q) With respect to Aurelia Mata |
28,560.00
|
| r) With respect to Gavino Quimbo |
81,500.00
|
| s) With respect to Silvestre Ramos |
101,700.00
|
| t) With respect to Justino Tito |
27,800.00
|
| u) With respect to Marcelino Gonzales |
2,360.00
|
| v) With respect to Angeles Supelveda |
902,840.00
|
P120,000.00 should be the figure in terms of litigation expenses and a
separate amount of P100,000.00 as attorney’s fees.Return of the properties to Venancia Repaso, Hermogenes Tito and Marcelino
Gonzales is hereby directed. With respect to counter claimant Angeles Sepulveda
Uy, return of the property to her should be with respect to the areas outside of
the Cepoc property, as mentioned in the sketch, Exhibit 56-A.Finally with costs against the plaintiffs.
SO ORDERED. [9]
The RTC found that the case preponderated in favor of respondents, who all
possessed their respective portions of the property covered by TCT Nos. T-103
and T-104 thinking that they were the absolute owners thereof. A number of these
respondents alleged that they inherited these properties from their parents, who
in turn inherited them from their own parents. Some others came into the
properties by purchase from the former occupants thereof. They and their
predecessors were responsible for the plantings and improvements on the
property. They were the ones who sought for the properties to be tax-declared in
their respective names, and they continually paid the taxes thereto. Respondents
maintained that they were unaware of anyone claiming adverse possession or
ownership of these lands until the bulldozing operations in 1970.
As for Venancia Repaso, Hermogenes Tito and Marcelino Gonzales, the Court
found that the properties they laid claim to were not part of the land that was
purchased by Durano & Co. from Cepoc. Thus, it found the bulldozing of these
lands by petitioners totally unjustified and ordered not only the total
reimbursement of useful and necessary expenses on the properties but also the
return of these properties to Repaso, Tito and Gonzales, respectively. As for
all the other respondents, the RTC found their possession of the properties to
be in the concept of owner and adjudged them to be builders in good faith.
Considering that petitioners in the instant case appropriated the improvements
on the areas overran by the bulldozers, the RTC ruled that “(t)he right of
retention to the improvements necessarily should be secured (in favor of
respondents) until reimbursed not only of the necessary but also useful
expenses.”[10]
On the matter of litigation expenses and attorney’s fees, the RTC observed
that the trial period alone consisted of forty (40) trial dates spread over a
period of sixteen (16) years. At the time, respondents were represented by
counsel based in Manila, and the trial court took into consideration the travel,
accommodation and miscellaneous expenses of their lawyer that respondents must
have shouldered during the trial of the case.
Dissatisfied, petitioners appealed the RTC decision to the Court of Appeals,
which, in turn, affirmed the said decision and ordered the return of the
property to all the respondents-claimants, in effect modifying the RTC
decision which allowed return only in favor of respondents Repaso, Tito and
Gonzales.
In its decision, the Court of Appeals upheld the factual findings and
conclusions of the RTC, including the awards for actual damages, attorney’s fees
and litigation expenses, and found additionally that the issuance of TCT Nos.
T-103 and T-104 in the name of Ramon Durano III was attended by fraud.
Evaluating the evidence before it, the Court of Appeals observed that the
alleged reconstituted titles of Cepoc over the property, namely, TCT No. (RT-38)
(T-14457) -4 and TCT No. (RT-39) (T-14456) -3 (Exhibits “19” and “20” of this
case), which were claimed to be the derivative titles of TCT Nos. T-103 and
T-104, were not submitted in evidence before the RTC. Thus, in an Order dated
June 15, 1988, the RTC ordered Exhibits “19” and “20” deleted from petitioners’
Offer of Exhibits. The Court of Appeals further noted that even among the
exhibits subsequently produced by petitioners before the RTC, said Exhibits “19”
and “20” were still not submitted.[11]
Moreover, Cepoc had no registered title over the disputed property as indicated
in TCT Nos. T-103 and T-104. Thus:
TRANSFER CERTIFICATE OF TITLE NO.
– 103 –
xxx xxx
IT IS FURTHER CERTIFIED that said land was originally registered on the
N.A. day of N.A., in the year nineteen hundred and N.A. in
Registration Book No. N.A. page N.A. of the Office of the Register of
Deeds of N.A., as Original Certificate of Title No. N.A., pursuant
to a N.A. patent granted by the President of the Philippines, on the
N.A. day of N.A., in the year nineteen hundred and N.A., under Act No.
N.A.This certificate is a transfer from Transfer Certificate of Title No. (RT-39)
(T-14456) -3 which is cancelled by virtue hereof in so far as the above
described land is concerned.xxx xxx
TRANSFER CERTIFICATE OF TITLE
NO. T – 104 –
xxx xxx
IT IS FURTHER CERTIFIED that said land was originally registered on the
N.A. day of N.A., in the year nineteen hundred and N.A. in
Registration Book No. N.A. page N.A. of the Office of the Register
of Deeds of N.A., as Original Certificate of Title No. N.A., pursuant to
a N.A. patent granted by the President of the Philippines, on the N.A.
day of N.A., in the year nineteen hundred and N.A., under Act No.
N.A.This certificate is a transfer from Transfer Certificate of Title No.
(RT-38) (T-14457) -4 which is cancelled by virtue hereof in so far as the
above described land is concerned.[12]
From the foregoing, the Court of Appeals concluded that the issuance of the
TCT Nos. T-103 and T-104 in favor of petitioner Ramon Durano III was attended by
fraud; hence, petitioners could not invoke the principle of indefeasibility of
title. Additionally, the Court of Appeals found that the alleged Deed of
Absolute Sale, undated, between Cepoc Industries, Inc. and Durano & Co. was
not notarized and thus, unregistrable.
The Court of Appeals went on to state that while, on the one hand, no valid
issuance of title may be imputed in favor of petitioners from the private Deed
of Sale and the alleged reconstituted titles of Cepoc that were not presented in
evidence, respondents, in contrast — who although admittedly had no registered
titles in their names — were able to demonstrate possession that was public,
continuous and adverse — or possession in the concept of owner, and which was
much prior (one or two generations back for many of respondents) to the claim of
ownership of petitioners.
Thus, the Court of Appeals ordered the return of the properties covered by
TCT Nos. T-103 and T-104 to all respondents who made respective claims thereto.
Corollarily, it declared that petitioners were possessors in bad faith, and were
not entitled to reimbursement for useful expenses incurred in the conversion of
the property into sugarcane lands. It also gave no merit to petitioners’
allegation that the actual damages awarded by the trial court were excessive, or
to petitioners’ argument that they should not have been held personally liable
for any damages imputable to Durano & Co.
Following is the dispositive portion of the decision of the Court of
Appeals:
WHEREFORE, the appealed decision of the lower court in Civil Case No. DC-56
is hereby AFFIRMED with MODIFICATION ordering the return of the respective
subject properties to all the defendants-appellees, without indemnity to the
plaintiffs-appellants as regards whatever improvements made therein by the
latter. In all other respects, said decision in affirmed.Costs against plaintiffs-appellants.
SO ORDERED.[13]
On October 29, 1998, the Court of Appeals denied petitioners’ motion for
reconsideration for lack of merit. Hence, this petition.
Petitioners assign the following errors from the CA decision:
- The Court of Appeals erred in granting relief to the respondents who did not
appeal the decision of the lower court. - The Court of Appeals erred in collaterally attacking the validity of the
title of petitioner Ramon Durano III. - The respondents should not have been adjudged builders in good
faith. - The petitioners should not be held personally liable for damages because of
the doctrine of separate corporate personality. - It was an error to hold that the respondents had proved the existence of
improvements on the land by preponderance of evidence, and in awarding excessive
damages therefor. - It was error to direct the return of the properties to respondents Venancia
Repaso, Hermogenes Tito and Marcelino Gonzales. - The award of litigation expenses and attorney’s fees was erroneous.
- The petitioners are not possessors in bad faith.
On their first assignment of error, petitioners contend that before the Court
of Appeals, they only questioned that portion of the RTC decision which directed
the return of the properties to respondents Repaso, Tito and Gonzales. They
argued that the return of the properties to all the other respondents by the
Court of Appeals was erroneous because it was not among the errors assigned or
argued by petitioners on appeal. Besides, since respondents themselves did not
appeal from the RTC decision on the issue of return of the physical possession
of the property, it is understood that judgment as to them has already become
final by operation of law. To support its argument, petitioners cited the cases
of Madrideo vs. Court of Appeals[14] and Medida vs. Court of
Appeals[15], which held that
“whenever an appeal is taken in a civil case an appellee who has not himself
appealed cannot obtain from the appellate court any affirmative relief other
than the ones granted in the decision of the court below.”
Rule 51 of the New Rules of Civil Procedure provides:
Sec. 8. Questions that may be decided. — No error which does not
affect the jurisdiction over the subject matter or the validity of the judgment
appealed from or the proceedings therein will be considered unless stated in the
assignment of errors, or closely related to or dependent on an assigned error
and properly argued in the brief, save as the court may pass upon plain errors
and clerical errors.
We find untenable petitioners’ argument that since no party (whether
petitioners or respondents) appealed for the return of the properties to
respondents other than Repaso, Tito and Gonzales, that portion of the RTC
decision that awards damages to such other respondents is final and may no
longer be altered by the Court of Appeals. A reading of the provisions of
Section 8, Rule 51, aforecited, indicates that the Court of Appeals is not
limited to reviewing only those errors assigned by appellant, but also those
that are closely related to or dependent on an assigned error.[16] In other words, the Court of Appeals is
imbued with sufficient discretion to review matters, not otherwise assigned as
errors on appeal, if it finds that their consideration is necessary in arriving
at a complete and just resolution of the case. In this case, the Court of
Appeals ordered the return of the properties to respondents merely as a legal
consequence of the finding that respondents had a better right of possession
than petitioners over the disputed properties, the former being possessors in
the concept of owner. Thus, it held —
Plaintiffs-appellants have to return possession of the subject property, not
only to defendants-appellees Venancia Repaso, Hermogenes Tito and Marcelino
Gonzales but to all other defendants-appellees herein, by virtue of the latter’s
priority in time of declaring the corresponding portions of the subject
properties in their name and/or their predecessors-in-interest coupled with
actual possession of the same property through their predecessors-in-interest in
the concept of an owner. Plaintiffs-appellants who had never produced in court a
valid basis by which they are claiming possession or ownership over the said
property cannot have a better right over the subject properties than
defendants-appellees.[17]
Moreover, petitioners’ reliance on the Madrideo and Medida
cases is misplaced. In the Madrideo case, the predecessors-in-interest of
the Llorente Group sold the disputed property to the Alcala Group, who in turn
sold the same to the spouses Maturgo. The RTC adjudged the spouses Maturgo
purchasers in good faith, such that they could retain their title to the
property, but held that the Lllorente Group was unlawfully divested of its
ownership of the property by the Alcala Group. The Alcala Group appealed this
decision to the Court of Appeals, who denied the appeal and ordered the
reinstatement in the records of the Registry of Deeds of the Original
Certificates of Title of the predecessors-in-interest of the Llorente Group. In
setting aside the decision of the Court of Appeals, this Court held that no
relief may be afforded in favor of the Llorente Group to the prejudice of the
spouses Maturgo, who — the Court carefully emphasized — were third
parties to the appeal, being neither appellants nor appellees before the
Court of Appeals, and whose title to the disputed property was confirmed by the
RTC. The application of the ruling in Madrideo to the instant case bears
no justification because it is clear that petitioners, in appealing the RTC
decision, impleaded all the herein respondents.
Meanwhile, in the Medida case, petitioners (who were the appellees
before the Court of Appeals) sought the reversal of a finding of the RTC before
the Supreme Court. The Court explained that since petitioners failed to appeal
from the RTC decision, they — as appellees before the Court of Appeals —
could only argue for the purpose of sustaining the judgment in their favor, and
could not ask for any affirmative relief other than that granted by the court
below. The factual milieu in Medida is different from that of the instant
case, where the return of the properties to respondents was not an “affirmative
relief” sought by respondents but an independent determination of the Court of
Appeals proceeding from its findings that respondents were long-standing
possessors in the concept of owner while petitioners were builders in bad faith.
Certainly, under such circumstances, the Court of Appeals is not precluded from
modifying the decision of the RTC in order to accord complete relief to
respondents.
Moving now to the other errors assigned in the petition, the return of the
properties to respondents Repaso, Tito and Gonzales was premised upon the
factual finding that these lands were outside the properties claimed by
petitioners under TCT Nos. T-103 and T-104. Such factual finding of the RTC,
sustained by the Court of Appeals, is now final and binding upon this Court.
In respect of the properties supposedly covered by TCT Nos. T-103 and T-104,
the Court of Appeals basically affirmed the findings of the RTC that respondents
have shown prior and actual possession thereof in the concept of owner, whereas
petitioners failed to substantiate a valid and legitimate acquisition of the
property — considering that the alleged titles of Cepoc from which TCT Nos.
T-103 and T-104 were supposed to have derived title were not produced, and the
deed of sale between Cepoc and Durano & Co. was unregistrable.
The records clearly bear out respondents’ prior and actual possession; more
exactly, the records indicate that respondents’ possession has ripened into
ownership by acquisitive prescription.
Ordinary acquisitive prescription, in the case of immovable property,
requires possession of the thing in good faith and with just
title,[18] for a period of ten
years.[19] A possessor is deemed to be
“in good faith” when he is not aware of any flaw in his title or mode of
acquisition of the property.[20] On the
other hand, there is “just title” when the adverse claimant came into possession
of the property through one of the modes for acquiring ownership recognized by
law, but the grantor was not the owner or could not transmit any right.[21] The claimant by prescription may compute
the ten-year period by tacking his possession to that of his grantor or
predecessor-in-interest.[22]
The evidence shows that respondents successfully complied with all the
requirements for acquisitive prescription to set in. The properties were
conveyed to respondents by purchase or inheritance, and in each case the
respondents were in actual, continuous, open and adverse possession of the
properties. They exercised rights of ownership over the lands, including the
regular payment of taxes and introduction of plantings and improvements. They
were unaware of anyone claiming to be the owner of these lands other than
themselves until the notices of demolition in 1970 — and at the time each of
them had already completed the ten-year prescriptive period either by their own
possession or by obtaining from the possession of their
predecessors-in-interest. Contrary to the allegation of petitioners that the
claims of all twenty-two (22) respondents were lumped together and
indiscriminately sustained, the lower courts (especially the RTC) took careful
consideration of the claims individually, taking note of the respective modes
and dates of acquisition. Whether respondents’ predecessors-in-interest in fact
had title to convey is irrelevant under the concept of just title and for
purposes of prescription.
Thus, respondents’ counterclaim for reconveyance and damages before the RTC
was premised upon a claim of ownership as indicated by the following
allegations:
(Y)our defendants are owners and occupants of different parcels of land
located in Barrio Cahumayhumayan, your defendants having occupied these parcels
of land for various periods by themselves or through their
predecessors-in-interest, some for over fifty years, and some with titles issued
under the Land Registration Act; xxxxx [23]
Respondents’ claim of ownership by acquisitive prescription (in respect of
the properties covered by TCT Nos. T-103 and T-104) having been duly alleged and
proven, the Court deems it only proper that such claim be categorically upheld.
Thus, the decision of the Court of Appeals insofar as it merely declares those
respondents possessors in the concept of owner is modified to reflect the
evidence on record which indicates that such possession had been converted to
ownership by ordinary prescription.
Turning now to petitioners’ claim to ownership and title, it is uncontested
that their claim hinges largely on TCT Nos. T-103 and T-104, issued in the name
of petitioner Ramon Durano III. However, the validity of these certificates of
title was put to serious doubt by the following: (1) the certificates reveal the
lack of registered title of Cepoc to the properties;[24] (2) the alleged reconstituted titles of
Cepoc were not produced in evidence; and (3) the deed of sale between Cepoc and
Durano & Co. was unnotarized and thus, unregistrable.
It is true that fraud in the issuance of a certificate of title may be raised
only in an action expressly instituted for that purpose,[25] and not collaterally as in the instant
case which is an action for reconveyance and damages. While we cannot sustain
the Court of Appeals’ finding of fraud because of this jurisdictional
impediment, we observe that the above-enumerated circumstances indicate none too
clearly the weakness of petitioners’ evidence on their claim of ownership. For
instance, the non-production of the alleged reconstituted titles of Cepoc
despite demand therefor gives rise to a presumption (unrebutted by petitioners)
that such evidence, if produced, would be adverse to petitioners.[26] Also, the unregistrability of the deed of
sale is a serious defect that should affect the validity of the certificates of
title. Notarization of the deed of sale is essential to its registrability,[27] and the action of the Register of Deeds
in allowing the registration of the unacknowledged deed of sale was unauthorized
and did not render validity to the registration of the document.[28]
Furthermore, a purchaser of a parcel of land cannot close his eyes to facts
which should put a reasonable man upon his guard, such as when the property
subject of the purchase is in the possession of persons other than the
seller.[29] A buyer who could not have
failed to know or discover that the land sold to him was in the adverse
possession of another is a buyer in bad faith.[30] In the herein case, respondents were in
open possession and occupancy of the properties when Durano & Co. supposedly
purchased the same from Cepoc. Petitioners made no attempt to investigate the
nature of respondents’ possession before they ordered demolition in August
1970.
In the same manner, the purchase of the property by petitioner Ramon Durano
III from Durano & Co. could not be said to have been in good faith. It is
not disputed that Durano III acquired the property with full knowledge of
respondents’ occupancy thereon. There even appears to be undue haste in the
conveyance of the property to Durano III, as the bulldozing operations by Durano
& Co. were still underway when the deed of sale to Durano III was executed
on September 15, 1970. There is not even an indication that Durano & Co.
attempted to transfer registration of the property in its name before it
conveyed the same to Durano III.
In the light of these circumstances, petitioners could not justifiably invoke
the defense of indefeasibility of title to defeat respondents’ claim of
ownership by prescription. The rule on indefeasibility of title, i.e.,
that Torrens titles can be attacked for fraud only within one year from the date
of issuance of the decree of registration, does not altogether deprive an
aggrieved party of a remedy at law. As clarified by the Court in Javier vs.
Court of Appeals[31] —
The decree (of registration) becomes incontrovertible and can no longer be
reviewed after one (1) year from the date of the decree so that the only remedy
of the landowner whose property has been wrongfully or erroneously registered in
another’s name is to bring an ordinary action in court for reconveyance, which
is an action in personam and is always available as long as the property
has not passed to an innocent third party for value. If the property has passed
into the hands of an innocent purchaser for value, the remedy is an action for
damages.
In the instant case, respondents’ action for reconveyance will prosper, it
being clear that the property, wrongfully registered in the name of petitioner
Durano III, has not passed to an innocent purchaser for value.
Since petitioners knew fully well the defect in their titles, they were
correctly held by the Court of Appeals to be builders in bad faith.
The Civil Code provides:
Art. 449. He who builds, plants or sows in bad faith on the land of another,
loses what is built, planted or sown without right of indemnity.Art. 450. The owner of the land on which anything has been built, planted or
sown in bad faith may demand the demolition of the work, or that the planting or
sowing be removed, in order to replace things in their former condition at the
expense of the person who built, planted or sowed; or he may compel the builder
or planter to pay the price of the land, and the sower the proper rent.Art. 451. In the cases of the two preceding articles, the landowner is
entitled to damages from the builder, planter or sower.
Based on these provisions, the owner of the land has three alternative
rights: (1) to appropriate what has been built without any obligation to pay
indemnity therefor, or (2) to demand that the builder remove what he had built,
or (3) to compel the builder to pay the value of the land.[32] In any case, the landowner is entitled to
damages under Article 451, abovecited.
We sustain the return of the properties to respondents and the payment of
indemnity as being in accord with the reliefs under the Civil Code.
On petitioners’ fifth assignment of error that respondents had not proved the
existence of improvements on the property by preponderance of evidence, and that
the damages awarded by the lower courts were excessive and not actually proved,
the Court notes that the issue is essentially factual. Petitioners, however,
invoke Article 2199 of the Civil Code which requires actual damages to be duly
proved. Passing upon this matter, the Court of Appeals cited with approval the
decision of the RTC which stated:
The counter claimants made a detail of the improvements that were damaged.
Then the query, how accurate were the listings, supposedly representing damaged
improvements. The Court notes, some of the counter claimants’ improvements in
the tax declarations did not tally with the listings as mentioned in their
individual affidavits. Also, others did not submit tax declarations supporting
identity of the properties they possessed. The disparity with respect to the
former and absence of tax declarations with respect to the latter, should not be
a justification for defeating right of reimbursement. As a matter of fact, no
controverting evidence was presented by the plaintiffs that the improvements
being mentioned individually in the affidavits did not reflect the actual
improvements that were overran by the bulldozing operation. Aside from that, the
City Assessor, or any member of his staff, were not presented as witnesses. Had
they been presented by the plaintiffs, the least that can be expected is that
they would have enlightened the Court the extent of their individual holdings
being developed in terms of existing improvements. This, the plaintiffs
defaulted. It might be true that there were tax declarations, then presented as
supporting documents by the counter claimants, but then mentioning improvements
but in variance with the listings in the individual affidavits. This disparity
similarly cannot be accepted as a basis for the setting aside of the listing of
improvements being adverted to by the counter claimants in their affidavits.
This Court is not foreclosing the possibility that the tax declarations on
record were either table computations by the Assessor or his deputy, or tax
declarations whose entries were merely copied from the old tax declarations
during the period of revision. (RTC Decision, p. 36, Records, p. 862)[33]
The right of the owner of the land to recover damages from a builder in bad
faith is clearly provided for in Article 451 of the Civil Code. Although said
Article 451 does not elaborate on the basis for damages, the Court perceives
that it should reasonably correspond with the value of the properties lost or
destroyed as a result of the occupation in bad faith, as well as the fruits
(natural, industrial or civil) from those properties that the owner of the land
reasonably expected to obtain. We sustain the view of the lower courts that the
disparity between respondents’ affidavits and their tax declarations on the
amount of damages claimed should not preclude or defeat respondents’ right to
damages, which is guaranteed by Article 451. Moreover, under Article 2224 of the
Civil Code:
Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary
loss has been suffered but its amount cannot, from the nature of the case, be
proved with certainty. We also uphold the award of litigation expenses and
attorney’s fees, it being clear that petitioners’ acts compelled respondents to
litigate and incur expenses to regain rightful possession and ownership over the
disputed property.[34]
The last issue presented for our resolution is whether petitioners could
justifiably invoke the doctrine of separate corporate personality to evade
liability for damages. The Court of Appeals applied the well-recognized
principle of “piercing the corporate veil”, i.e., the law will regard the
act of the corporation as the act of its individual stockholders when it is
shown that the corporation was used merely as an alter ego by those persons in
the commission of fraud or other illegal acts. The test in determining the
applicability of the doctrine of piercing the veil of corporate fiction is as
follows:
- Control, not mere majority or complete stock control, but complete
domination, not only of finances but of policy and business practice in respect
to the transaction attacked so that the corporate entity as to this transaction
had at the time no separate mind, will or existence of its own; - Such control must have been used by the defendant to commit fraud or wrong,
to perpetuate the violation of a statutory or other positive legal duty, or
dishonest and unjust acts in contravention of plaintiff’s legal rights;
and - The aforesaid control and breach of duty must proximately cause the injury
or unjust loss complained of. The absence of any one of these elements prevents
“piercing the corporate veil”. In applying the “instrumentality” or “alter ego”
doctrine, the courts are concerned with reality and not form, with how the
corporation operated and the individual defendant’s relationship to that
operation.[35]
The question of whether a corporation is a mere alter ego is purely one of
fact.[36] The Court sees no reason to
reverse the finding of the Court of Appeals. The facts show that shortly after
the purported sale by Cepco to Durano & Co., the latter sold the property to
petitioner Ramon Durano III, who immediately procured the registration of the
property in his name. Obviously, Durano & Co. was used by petitioners merely
as an instrumentality to appropriate the disputed property for themselves.
WHEREFORE, the instant petition is DENIED. The
decision of the Court of Appeals is MODIFIED to declare
respondents with claims to the properties covered by Transfer Certificate of
Title Nos. T-103 and T-104 owners by acquisitive prescription to the extent of
their respective claims. In all other respects, the decision of the Court of
Appeals is AFFIRMED. Costs against petitioners.
SO ORDERED.
Melo, (Chairman), Vitug, and Panganiban, JJ., concur.
Purisima, J., no part.
[1] With the exception of Rufino Lavador,
Jose de la Calzada and Cosme Ramos, who respondents in their Answer before the
trial court declared were only witnesses for respondents, and not claimants to
the disputed property. RTC Decision, 3; Records of the Case.
[2] CA Decision; Rollo, 48-49.
[3] RTC Decision, 2; Records of the
Case.
4] CA Decision; Rollo, 49-55.
[5] Ibid., 55.
[6] Ibid., 50-54.
[7] CA Decision; Rollo, 56-58.
[8] Ibid.; Rollo,
58.
[9] RTC Decision: Rollo,
114.
[10] Ibid., 111.
[11] “Submission of Copies of Some
Missing Exhibits of Plaintiffs” dated June 29, 1988 (Records of the Case,
774-775) cited in CA Decision; Rollo, 60.
[12] CA Decision; Rollo, 60.
[13] Ibid.; Rollo, 67.
Written by Associate Justice B. A. Adefuin-de la Cruz, with Acting Presiding
Justice Fidel P. Purisima and Associate Justice Ricardo P. Galvez concurring.
[14] 137 SCRA 797.
[15] 208 SCRA 887.
[16] Philippine Commercial and
Industrial Bank vs. Court of Appeals, 159 SCRA 24.
[17] CA Decision; Rollo, 64-65.
[18] Civil Code, Art. 1117.
[19] Id., Art. 1134.
[20] Id., Art. 526.
[21] Id., Art. 1129.
[22] Id., Art. 1138.
[23] RTC Decision; Rollo, 80.
[24] See note 12.
[25] Mallilin vs. Castillo, G.R. No.
136803, June 16, 2000; Eduarte vs. Court of Appeals, 311 SCRA 18; P.D. 1529,
Sec. 48.
[26] Rules of Court, Rule 131, Sec.
3(e).
[27] P.D. 1529, Sec. 112.
[28] Gallardo vs. Intermediate
Appellate Court, 155 SCRA 248.
[29] Republic vs. de Guzman, G.R. No.
105630, February 23, 2000; Embrado vs. Court of Appeals, 233 SCRA
355.
[30] St. Peter Memorial Park, Inc.
vs. Cleofas, 92 SCRA 389.
[31] 231 SCRA 498; reiterated in Heirs
of Pedro Lopez vs. de Castro, G.R. No. 112905, February 3, 2000; Millena vs.
Court of Appeals, G.R. No. 127797, January 31, 2000.
[32] De Vera vs. Court of
Appeals, 305 SCRA 624.
[33] CA Decision; Rollo, 65-66.
[34] Civil Code, Art. 2208.
[35] Lim vs. Court of Appeals, G.R.
No. 124715, January 24, 2000; Concept Builders, Inc. vs. NLRC, 257 SCRA
149.
[36] Concept Builders, Inc. vs.
NLRC, supra.