MONICA PASTRANA BAMBAO, ET AL., PLAINTIFFS AND APPELLANTS, VS. VICTOR E. LEDNICKY, ET AL., DEFENDANTS AND APPELLEES.

Bambao versus Lednick

The Case

This is an appeal from a judgment of the Court of First Instance of Baguio City dismissing a complaint that sought to recover fourteen lode mining claims in Mountain Province, or in the alternative to annul the deed of sale by which the plaintiffs' predecessors had conveyed those claims to the Lepanto Consolidated Mining Company. The plaintiffs are the heirs and successors of the original locators; the defendants are the mining company and its privies. The case matters because it gathers in one decision three doctrines a reviewee must command: the prescriptive periods for recovery of real property and for acquisition of title by adverse possession under the old Code of Civil Procedure, the rule that a perfected mining location segregates the claim from the public domain and vests a private right in the locator, and the relentless application of laches to mining claims.

Procedural History

The plaintiffs filed their complaint in the Court of First Instance of Baguio City in May 1958. The defendants answered, raising acquisitive prescription, extinctive prescription, and laches as special and affirmative defenses. The trial court directed the parties to submit memoranda on whether judgment on the pleadings on the defense of prescription was feasible, and the parties complied. The trial court then rendered judgment finding merit in the defense of prescription and dismissing the complaint, with costs against the plaintiffs. The plaintiffs moved for reconsideration, and the court denied the motion for lack of merit. The plaintiffs appealed directly to the Supreme Court, and the appeal is the matter now before us.

Facts

The plaintiffs' predecessors, the spouses Felix Pastrana and Tomasa Mendoza together with one Marcelo, located and owned fourteen lode mining claims, all duly recorded in the Office of the Mining Recorder of the Mineral District of Bontoc, Mountain Province, in October and November 1933. In February 1937, by a duly notarized deed of sale executed in Mankayan, Mountain Province, those predecessors conveyed all their right, title, and interest in the claims to the Lepanto Consolidated Mining Company for ten thousand pesos, receipt of which was acknowledged in the instrument.

Years later the plaintiffs sued. They alleged that the deed was void because, being a contract with members of the non-Christian tribes of Mountain Province, it had not been approved by the Governor of the province, and because it was not signed by the duly authorized representatives of the company. They further alleged that, taking advantage of the loss of records during the war and the death of their predecessors, the defendants through fraud and misrepresentation led them to believe that the claims had been lawfully conveyed, and so deceived them into allowing the defendants to take possession and into delaying suit. They claimed damages.

The defendants set up prescription and laches. The record showed, and the plaintiffs did not dispute, that the claims had been conveyed by the deed of February 1937, and that the defendants' possession began with that conveyance, not after the war. More than twenty-one years passed between the deed and the filing of the complaint in May 1958.

Issues

• Whether or not the trial court erred in deciding the defense of prescription on the pleadings, without receiving evidence.
• Whether or not the plaintiffs' action for recovery of the mining claims had already prescribed.
• Whether or not the period of prescription was suspended during the war because the defendants were enemy aliens.
• Whether or not adverse possession may confer title to mineral lands.
• Whether or not the defendants' possession was merely tolerated by the plaintiffs.
• Whether or not the suit should be treated as an action to annul the deed of sale on the ground of fraud, rather than an action for recovery of title or possession.
• Whether or not the defense of laches lies in favor of the defendants.

Applicable Provisions

Section 40 of the Code of Civil Procedure, then in force, provides:

Section 40. Period of Prescription as to Real Estate. An action for recovery of title to, or possession of, real property, or an interest therein, can only be brought within ten years after the cause of such action accrues.

This is the extinctive period that bars the plaintiffs' action for recovery.

Section 41 of the same Code provides:

Section 41. Title to Land by Prescription. Ten years actual adverse possession by any person claiming to be the owner for that time of any land or interest in land, uninterruptedly continued for ten years by occupancy, descent, grants, or otherwise, in whatever way such occupancy may have commenced or continued, shall vest in every actual occupant or possessor of such land a full and complete title, saving to the persons under disabilities the right secured by the next section. In order to constitute such title by prescription or adverse possession, the possession by the claimant or by the person under or through whom he claims must have been actual, open, public, continuous, under a claim of title exclusive of any other right and adverse to all other claimants. But failure to occupy or cultivate land solely by reason of war shall not be deemed to constitute an interruption of possession of the claimant, and his title by prescription shall be complete, if in other respects perfect, notwithstanding such failure to occupy or cultivate the land during the continuance of war.

This is the acquisitive period that vested title in the defendants, and its war clause defeats the claim of suspension.

Section 2578 of the Revised Administrative Code, quoted in the decision, defines the territory to which the provisions on non-Christian tribes apply:

The Department of Mindanao and Sulu shall consist of the entire Island of Mindanao, excluding only the provinces of Misamis and Surigao, together with the Sulu Archipelago, including the islands known as the Jolo Group, the Tawi-Tawi Group and all other Islands pertaining to the Philippine Archipelago under the sovereignty of the United States of America south of the eighth parallel of north latitude, excepting therefrom the Islands of Palawan and Balabac, and the immediately adjacent islands, but including the island of Cagayan Sulu.

Because Mankayan, Mountain Province, lies outside this territory, the cited provisions of the Administrative Code of Mindanao and Sulu do not void the deed.

Ruling

On the first issue, the Court held that the trial court did not err in refusing to receive evidence on prescription. The pleadings, and particularly the complaint, contained averments sufficient to decide that legal question, and the parties did not dispute that the claims were conveyed by the deed of February 1937. That admission belied the claim that the defendants' possession began only after the war.

On the second issue, the Court held that the action had prescribed. The deed conveyed not only title but possession, for as the Court said, the instrument had the effect of deeding the possession of the property to the defendants. From February 1937 to May 1958, more than twenty-one years had intervened, well beyond the ten-year period of Section 40.

On the third issue, the Court held that even if prescription were suspended during the war, the action would still have prescribed. The war lasted five years at the most, and tacking the defendants' possession before and after the war still left about sixteen years of adverse possession in their favor.

On the fourth issue, the Court held that adverse possession may confer title to mineral lands. Upon perfection of their location in October 1933, before the Constitution took effect, the mining claims became segregated from the public domain and the beneficial ownership vested in the locator. That beneficial ownership is a private right and could pass to another by adverse possession. The Government's title was not in issue, and the plaintiffs showed no right to speak for the Government.

On the fifth issue, the Court held that the possession was not merely tolerated. The defendants were vendees of the plaintiffs' predecessors; as vendees they acquired the very right of possession of the vendors, and the vendors could not be deemed to have merely tolerated a possession that the sale had vested in the buyers. The vendors had nothing left to tolerate.

On the sixth issue, the Court refused to treat the suit as one for annulment of the deed on the ground of fraud. The fraud alleged did not concern the execution of the deed but the supposed concealment of its invalidity. That charge could not stand, because the provisions invoked apply only to Mindanao and Sulu, and the deed was executed in Mankayan, Mountain Province, which is outside that territory. The plaintiffs, as successors of the sellers, are bound by the sale validly made by the latter.

On the seventh issue, the Court held that laches lay in favor of the defendants. Laches has been most rigidly applied to cases involving mining claims, because of the sudden and violent fluctuations in the value of such property, and the plaintiffs' inaction for more than twenty-one years converted their claim into a stale demand.

Doctrine

First, an action for recovery of title to, or possession of, real property or an interest therein must be brought within ten years after the cause of action accrues, and ten years of actual, open, public, continuous, exclusive, and adverse possession vests full and complete title in the possessor. Second, a perfected mining location segregates the claim from the public domain and vests the beneficial ownership in the locator as a private right, which may be sold and conveyed like any other private property and may be lost to another by adverse possession. Third, a vendee's possession is not merely tolerated by the vendor, because the sale divests the vendor of the right of possession and vests it in the vendee. Fourth, the provisions of the Administrative Code of Mindanao and Sulu on contracts with non-Christian tribes apply only within the territory of the Department of Mindanao and Sulu, and a deed executed in Mountain Province is not governed by them. Fifth, laches applies most rigidly to mining claims, and long inaction converts the claim into a stale demand.

Disposition

The Supreme Court affirmed the order of dismissal, with costs against the plaintiffs and appellants.

Remember This

Memorize the line that a perfected mining location segregates the claim from the public domain and vests a private right in the locator, which prescription may thereafter transfer to another. Examiners use this case to test the ten-year periods under Sections 40 and 41 of the old Code of Civil Procedure, the non-suspension of prescription by war under the war clause of Section 41, and the rigid application of laches to mining claims.