EDUARDO TAN, PETITIONER, VS. FLORITA MUECO AND ROLANDO MUECO, RESPONDENTS.

Tan versus Mueco

The Case

This is a petition for review on certiorari brought by Eduardo Tan against Florita Mueco and Rolando Mueco, arising from a complaint for injunction with damages over a twenty six square meter strip of commercial land on Real Street in Dumaguete City. Tan operates the Ultra Vision Cinema on the adjoining lot and insists that the strip is part of the public domain, a sidewalk open to public use, so that the Muecos cannot fence it off or exclude him. The Muecos hold the lot by virtue of a public auction sale in satisfaction of a labor award. The case matters because it draws a clean line between ownership and possession: even a possessor whose title is open to question may be protected by injunction against self help, and the public character of land is a question the State must raise, not a private litigant.

Procedural History

The Muecos filed a complaint for injunction with damages, with a prayer for a temporary restraining order, before the Regional Trial Court of Dumaguete City, Branch 34. The trial court rendered judgment in their favor on October 8, 1996, perpetually enjoining Tan from intruding on the lot, ordering him to pay moral damages, exemplary damages, and attorney's fees, and directing him to remove the stone washed cement pavement and the concrete walls he had introduced. Tan appealed to the Court of Appeals, which affirmed the trial court's decision in its entirety in a decision dated May 7, 1999. His motion for reconsideration was denied in a resolution dated December 15, 1999. Tan then came to the Supreme Court by petition for review on certiorari.

Facts

In a labor case, the National Labor Relations Commission ordered Dovedato Flores to pay separation pay to his former employee, Florita Mueco, in the amount of twenty thousand eight hundred forty seven pesos. To satisfy that award, Lot No. 6124, a twenty six square meter elongated strip adjoining Real Street in the commercial district of Dumaguete City and declared for taxation purposes in the name of Dovedato Flores, was levied upon and sold at public auction to Florita Mueco. After the redemption period lapsed, a Final Deed of Sale was issued to her on December 10, 1990.

The lot is adjacent to Tan's own lot, where his Ultra Vision Cinema stands. On November 5, 1993, the Muecos wrote Tan offering him the option to buy the lot, warning that if he was not interested they would fence the area and establish their own business there. Tan did not respond. The Muecos then placed a placard on a portion of the lot declaring it private property and demanding a fee of one peso for every person passing through it on the way to the theater. The placard was removed at the instance of Tan's mother.

On November 23, 1993, the Muecos sued for injunction, and they later complained that despite a temporary restraining order Tan caused the removal of the nylon fence and placard. Tan answered that the lot is part of the public domain and that the auction sale was void because Flores, from whom the Muecos supposedly acquired the property, never claimed any right over it. Flores himself testified in 1996 that he never owned the lot, never declared it for taxation, and that the tax declarations in his name were forgeries. Tan also presented city resolutions which he said declared the lot a sidewalk.

Issues

• Whether or not Lot No. 6124 is part of Real Street and of the public domain, and therefore open to public use.
• Whether or not the Court of Appeals erred in affirming the grant of injunction in favor of the Muecos despite the alleged nullity of their claim over the lot.
• Whether or not the case should be remanded so that the Province of Negros Oriental and the City of Dumaguete may be impleaded as indispensable parties.
• Whether or not the awards of moral damages, exemplary damages, and attorney's fees are excessive and should be reduced.

Applicable Provisions

Article 2208 of the Civil Code, as cited in the decision, provides:

In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except: (1) When exemplary damages are awarded.

This provision supports the award of attorney's fees, because the Court sustained an award of exemplary damages in the same judgment.

Ruling

On the first issue, the Court held that the contention is without merit. The records show that Lot No. 6124 is a distinct and separate lot from Real Street. As early as May 25, 1920, it was placed under cadastral survey by the Bureau of Lands and was the subject of the application of Cenon Sillero and the Provincial Government of Negros Oriental, and it was declared for taxation purposes by them. Tax declarations in the name of Dovedato Flores for the years 1974, 1980, and 1985 also appear on the record. The Court explained that although tax declarations are not conclusive evidence of ownership, they are good indicia of possession in the concept of owner, for no one in his right mind would pay taxes on property not in his actual or at least constructive possession. They are at the very least proof that Flores had a claim of title, which was validly transferred to the Muecos when Florita Mueco bought the lot at public auction.

Even granting that the lot is part of the public domain, the Court held that the possessory right of the Muecos is still entitled to protection, citing its earlier rulings that a party in peaceful possession may not be ousted by force, violence, or intimidation, regardless of the quality of his alleged right, and that the public character and ownership of the lot could properly be raised by the State. As between Tan and the Muecos, the latter have a right to be protected by injunctive relief.

On the second issue, the Court found no merit in Flores's belated disclaimer. His testimony in 1996, several years after he had been dispossessed, cannot affect the right of the Muecos, and the tax declarations deserve credence having been executed in 1974, when Flores had no reason to give biased testimony. The city resolutions relied upon by Tan are merely intended to regulate the granting or withholding of building permits and cannot be made the basis for classifying lots as public or private. The Court restated the requisites of injunction: the existence of a right to be protected, and facts against which the injunction is directed that violate that right. Both concurred.

On the third issue, the Court held that remand is not necessary. The Province of Negros Oriental and the City of Dumaguete are not indispensable parties, because their interest is distinct and divisible from that of the parties, so that they will not necessarily be directly or injuriously affected by a judgment that completely disposes of the issues between Tan and the Muecos.

On the fourth issue, the Court held that moral and exemplary damages may be reduced where there is no adjudication of actual damages, as in this case. It reduced the moral damages from forty thousand pesos to twenty five thousand pesos, and the exemplary damages from one hundred thousand pesos to twenty five thousand pesos. The award of attorney's fees of twenty thousand pesos was sustained, there being an award of exemplary damages.

Doctrine

A party in peaceful possession of land is entitled to be protected by injunction against intrusion, independently of whether the land is private in nature or part of the public domain; no one may be ousted from possession by force, violence, or intimidation, regardless of the quality of his alleged right. The public character and ownership of land is a matter the State must raise, not a defense a private intruder may invoke against a possessor. Tax declarations are not conclusive proof of ownership, but they are good indicia of possession in the concept of owner and, at the very least, proof of a claim of title. For injunction to issue, two requisites must concur: the existence of a right to be protected, and facts against which the injunction is directed that violate that right. Moral and exemplary damages may be reduced where no actual damages are adjudicated, and attorney's fees are recoverable when exemplary damages are awarded, as Article 2208 of the Civil Code provides.

Disposition

The Muecos won: the Court affirmed the decision of the Court of Appeals, with the modification that moral damages were reduced to twenty five thousand pesos and exemplary damages to twenty five thousand pesos.

Remember This

Memorize the line that possession is protected even against a claim that the land belongs to the public domain, for the State alone may raise that claim. Examiners use this case on the requisites of injunction, on the probative value of tax declarations, and on the reduction of damages where no actual damages are proved.