IGNACIO WONG, PETITIONER, VS. HON. LUCAS D. CARPIO, AS PRESIDING JUDGE, COURT OF FIRST INSTANCE OF DAVAO DEL SUR, BRANCH V AND MANUEL MERCADO, RESPONDENTS.

This is a petition for review on certiorari, certified to
this Court by the Court of Appeals as it involves purely ques­tion of law,
seeking the annulment of the September 29, 1978 decision of the then Court of
First Instance* of Davao del Sur, Branch V, in
Civil Case No. 1258 which reversed the February 20, 1978 decision of the
Municipal Court of Sta. Maria**, Davao del Sur in an action for Forcible Entry
(Civil Case No. 13) ordering the dismissal of the complaint as well as the
counterclaim.

The undisputed facts of this case, as found by both the trial
court and the then Court of First Instance of Davao
del Sur, are as follows:

“On the basis of the admission of
parties in their respective pleadings, the oral testimonies of all witnesses
for both plaintiff and defendants and the documentary evidence offered and
admitted this Court finds that plaintiff
Manuel Mercado acquired his rights to possess the land in litigation,
particularly lot 3 (LRC) Pcs-295, (situated at Colonga, Sta. Maria, Davao del
Sur) and which is particularly de­scribed and embraced in Transfer Certificate
of title No. (T-4244) T-972 from William Giger by virtue of a deed of sale with
right to repurchase which was executed in 1972 for a consideration of P3,500.00
(testimony of plaintiff, T.S.N., p. 3, hearing of January 7, 1977).  Then, in 1973, William Giger again asked an
addition­al amount of P2,50.00 from plaintiff and so he required William Giger
to sign a new deed of Pacto de Retro Sale
(Exhibit “A”) on November 5,
1973 at Davao City
before Notary Public Gregorio C. Batiller (T.S.N., p. 5, hearing of January 7,
1977).  In 1972, plaintiff began
harvesting only the coconut fruits and he paid the taxes on the land (Exhibits
B to E) for Mr. Giger.  He went
periodically to the land to make copra but he never placed any person on the
land in litigation to watch it.  Neither
did he re­side on the land as he is a businessman and storekeeper by occupation
and resides at Lower Sta. Maria, Davao del Sur while the land in li­tigation is
at Colongan, Sta. Maria.  Neither did he
put any sign or hut to show that he is in actual possession (p. 8, T.S.N., p.
7, hear­ing of January 14, 1978).  He
knew defendants laborers were in the land in suit as early as August, 1976 and
that they have a hut there but he did not do anything to stop them.  Instead plaintiff was happy that there were
people and a hut on the land in suit (p. 14, T.S.N., hearing of January 14,
1978).

Before July, 1976, defendant Ignacio Wong went to the land in
litigation to find out if there were other people residing there or claim­ing
it besides the owner and he found none. 
So, in July, 1976, defendant Ignacio Wong bought the parcel of land in
litigation from William Giger and his wife Cecilia Valenzuela (Exhibit 5).  After the execution of Exhibit 5, defendant
Ignacio Wong asked for the delivery of the title to him and so he has in his
possession TCT No. (T-4244) T-974 (Exhibit 6) in the name of William
Giger.  Mr. Wong declared the land in
suit for taxation purposes in his name (Exhibit 7).  He tried to register the pacto de retro sale with the Register of Deeds
by paying the registration fee (Exhibit 8) but due to some technicalities, the
pacto de retro sale could not be registered. 
The defendant Wong placed laborers on the land in suit, built a small
farm house after making some clearings and fenced the boundaries.  He also placed signboards (T.S.N., pp. 14-15,
hearing of September 15, 1977).  On September 27, 1976, plaintiff Manuel
Mercado again went to the land in suit to make coprax.  That was the time the matter was brought to
the attention of the police of Sta. Maria, Davao del Sur and the in­cident
entered in the police blotter (Exhibit 11). 
Then on November 18, 1976,
defendant Wong ordered the hooking of the coconuts from the land in litigation
and nobody disturbed him.  But on November 29, 1976, defendant
received a copy of plaintiff’s complaint for forcible entry with summons to
answer which is the case now before the Court. 
During the pendency of this instant complaint for forcible entry,
spouses William Giger and Cecilia Valenzuela filed a case for reformation of
instrument with the Court of First Instance of Digos, Davao del Sur against
plaintiff Mercado (Exhibit 4).  The case
pertains to Exhibit “A” of plaintiff.” (pp. 1­-3, CA Decision,
pp. 82-84, Rollo).

On the basis of the aforestated undisputed facts, the Municipal
Court of Sta. Maria, Davao del Sur in its February 20, 1978 Decision found that herein petitioner
(defendant Ignacio Wong) had prior, actual and continuous physical possession
of the dis­puted property and dismissed both the complaint and the
counterclaim.

On appeal, the then Court of First Instance of Davao del Sur, in
its September 29, 1978 Decision drew a completely different conclusion from the
same set of facts and ruled in favor of here­in private respondent (plaintiff
Manuel Mercado).  The decretal portion of
the said decision, reads:

“WHEREFORE, the Court finds the plaintiff to have taken
possession of the property earlier in point of time and defendant is an
intruder and must, as he is hereby ordered to return, the possession of the
land in question to the plaintiff, paying a monthly rental of P400.00 from
August, 1976, till the property is returned with costs against the defendant.  Judgment is reversed.”

Petitioner filed the
instant petition with the Court of Appeals. 
But the Court of Appeals, in its March 1, 1979 Resolu­tion* found that the only issue is a pure question
of law – the correctness of the conclusion drawn from the undisputed facts and
certified the case to this Court.

In its April 4,
1979 Resolution, the
Second Division of this Court docketed the case in this Court and considered it
submitted for decision.

Petitioner alleged two
(2) errors committed by respondent judge, to wit:

A) THE CONCLUSION
DRAWN BY RESPONDENT JUDGE THAT PETITIONER IS AN INTRUDER IS WITHOUT FACTUAL AND
LEGAL BASIS FOR PURPOSES OF A FORCIBLE ENTRY.

B) THE CONCLUSION
DRAWN BY RESPONDENT JUDGE THAT PETITIONER MUST PAY A MONTHLY RENTAL OF P400.00
FROM AUGUST, 1976 TILL THE PROPERTY IS RETURNED HAS NO LEGAL AND FACTUAL BASIS.

The petition is without
merit.

Petitioner, in claiming
that the private respondent has not established prior possession, argues that
private respondent’s periodic visit to the lot to gather coconuts may have been
con­sented to and allowed or tolerated by the owner
thereof for the purposes of paying an obligation that may be due to the person gathering
said nuts and that a person who enter a property to gather coconut fruits and
convert the same to coprax may only be a hired laborer who enters the premises
every harvest season to comply with the contract of labor with the true owner
of the property.

The argument is untenable.

It should be stressed that “possession is acquired by the
material occupation of a thing or the exercise of a right, or by the fact that
it is subject to the action of our will, or by the proper acts and legal
formalities for acquiring such right.” (Art. 531, Civil code; Rizal Cement
Co., Inc. vs. Villareal, 135 SCRA 15 [1985]); and that the execution of a sale
thru a public instrument shall be equivalent to the delivery of the thing,
unless there is stipulation to the contrary x x x.  If, however, notwith­standing the execution
of the instrument, the purchaser cannot have the enjoyment and material tenancy
of the thing and make use of it herself, because such tenancy and enjoyment are
opposed by another, then delivery has not been effected.  (Paras, Civil Code of the Philippines, Vol.
II, 1989 Ed., p. 400).

Applying the above pronouncements on the instant case, it is
clear that possession passed from vendor William Giger to private respondent
Manuel Mercado by virtue of the first sale a retro (Ex­hibit A), and
accordingly, the later sale a retro (Exhibit 5) in favor of petitioner failed
to pass the possession of the property because there is an impediment – the
possession exercised by priv­ate respondent. 
Possession as a fact cannot be recognized at the same time in two
different personalities except in the cases of co-possession.  Should a question arise regarding the fact of
possession, the present possessor shall be preferred; if there are two
possessions, the one longer in possession, if the dates of possession are the
same, the one who presents a title; and if these conditions are equal, the
thing shall be placed in
judicial deposit pending determination of its possession or ownership through
proper proceedings (Art. 538, Civil Code).

As to petitioner’s query that “Is the entry of petitioner to
the property characterized by force, intimidation, threat, strategy, or stealth
in order to show that private
respondent has had possession so that the case is within the jurisdiction of
the in­ferior court?” (p. 15, Petition; p. 16, Rollo).  The same is an­swered in the affirmative.

The act of entering the property and excluding the lawful pos­sessor
therefrom necessarily implies the exertion of force over the property, and this
is all that is necessary.  Under
the rule, entering upon the premises by strategy or stealth is equally as
obnoxious as entering by force.  The
foundation of the action is really the forcible exclusion of the original
possessor by a person who has entered without right.  The words “by force, inti­midation,
threat, strategy, or stealth” include every situation or condition under
which one person can wrongfully enter upon real property and exclude another
who has had prior possession there­from. 
If a trespasser enters upon land in open daylight, under the very eyes
of person already clothed with lawful possession, but without the consent of
the latter, and there plants himself and excludes such prior possessor from the
property, the action of forcible entry and detainer can unquestionably be
maintained, even though no force is used by the trespasser other than such as
is necessarily implied from the mere acts of planting himself on the ground and
excluding the other party.  (Tolentino,
Civil Code of the Philippines, Vol. II, 1983 Ed., pp. 243-244; Drillon vs.
Gaurana, 149 SCRA 342 [1987]).

Anent the award of rentals in favor of private respondent, the
same is in order.  Petitioner’s argument that there is no legal
or factual basis for the payment of monthly rentals because bad faith on the
part of petitioner was never proved” deserves no merit.

It should be noted that possession acquired in good faith does
not lose this character except in the case and from the moment facts exist
which show that the possessor is not unaware that he possesses the thing
improperly or wrongfully.  (Art. 528, Civil
Code).

Possession in good faith ceases from the moment defects in the
title are made known to the possessors, by extraneous evidence or by suit for
recovery of the property by the true owner. 
Whatever may be the cause or the fact from which it can be deduced that
the possessor has knowledge of the defects of his title or mode of acquisition,
it must be considered sufficient to show bad faith.  (Tolentino, Civil Code of the Philippines,
Vol. II, p. 226).  Such interruption
takes place upon service of summons (Manotok Realty vs. Judge Tecson, 164 SCRA
587 [1988] citing Mindanao Academy, Inc.
v. Yap (13 SCRA 190 [1965]).  In
the latter case, this Court held:

“x x x Although the bad faith of one party neutralizes that of
the other and hence as between themselves their rights would be as if both of
them had acted in good faith at the time of the transaction, this legal fiction
of Yap’s good faith ceased when the complaint against him was filed, and
consequently the court’s declaration of liability for the rents thereafter is
correct and proper.  A possessor in good faith is entitled
to the fruits only so long as his possession is not legally interrupted, and
such interruption takes place upon service of judicial summons (Arts. 544 and
1123, Civil Code).”

A perusal of the records of the case shows that petitioner received private respondent’s complaint for
forcible entry with summons on November 29, 1976 (Rollo, p. 46).  His good faith therefore ceased on November
29, 1976.  Accordingly, the computation of the payment
of monthly rental should start from December, 1976, instead of August, 1976.

WHEREFORE, with the modification that the computation
of the monthly rental should start from December, 1976 instead of August, 1976,
the September 29, 1978 decision of respondent judge is Affirmed in all other respects, with
costs against petitioner.

SO ORDERED.

Fernan, C.J., (Chairman), Gutierrez, Jr., Feliciano, and Davide, Jr., JJ., concur.

* Presided by Hon. Judge Lucas D.
Carpio.

** Presided by Actg. Judge
Rosalinda L. Montejo.

* Penned by then Justice Hugo
Gutierrez and concurred in by Justices Lourdes San Diego and Serafin Cuevas.