GENARO NAVERA AND EMMA AMADOR, PETITIONERS, VS. THE HONORABLE COURT OF APPEALS, ARSENIO NARES AND FELIX NARES, RESPONDENTS.

Navera versus Nares

The Case

This is a petition for review on certiorari brought by the spouses Genaro Navera and Emma Amador against the Court of Appeals, Arsenio Nares and Felix Nares. The private respondents sued to be declared owners of a registered parcel of land in Camalig, Albay, known as Lot 1460, and the petitioners resisted on the strength of a chain of sales running back to the petitioners' predecessor, Mariano Navera. The case matters because it is the Supreme Court's clean teaching on the double sale of registered land that was never annotated on the certificate of title, and on why long material possession by a second vendee does not defeat the first vendee's symbolic possession acquired through a public instrument.

Procedural History

Arsenio Nares and Felix Nares filed their complaint in March 1971 with the then Court of First Instance of Albay, now the Regional Trial Court. After trial, the court rendered judgment in February 1978, declaring the plaintiffs owners of the lot described in the certificate of title, except 5,726 square meters which it held rightfully belonged to Genaro Navera. The petitioners appealed to the Court of Appeals, which in December 1980 affirmed the trial court's decision in its entirety. The petitioners then came to the Supreme Court by petition for review on certiorari, assigning three errors: that acquisitive prescription in their favor was not appreciated, that actual knowledge should serve the purpose of registration, and that the appellate court wrongly found them in bad faith.

Facts

Leocadio Navera had five children: Elena, Mariano, Basilio, Eduarda and Felix. Mariano was the father of the petitioner Genaro Navera, while Elena had three children by Antonio Nares, two of them the respondents Arsenio Nares and Felix Nares. The petitioners and the respondents are therefore first cousins. In 1916 Leocadio executed a private instrument purporting to donate a portion of his land to Fausto Mustar in consideration of the marriage of Mariano to Fausto's daughter Restituta. In July 1927, Original Certificate of Title No. RO-154 was issued in the name of "Elena Navera, et al." over Lot 1460, containing 26,995 square meters. Elena died in 1924.

In May 1947 Eduarda Navera sold all of her one-half share in Lot 1460 to her nephew, the respondent Arsenio Nares, by public instrument. In June 1948 Eduarda sold a portion of the same lot to Mariano Navera, also by public instrument. Mariano in turn sold that portion to Serapio Mustar in 1955, and Serapio sold it to Genaro Navera in 1959. Meanwhile, in 1953 Arsenio Nares had sold 5,726 square meters to Perpetua Dacillo, who donated it to Francisco Dacillo, who sold it to Genaro Navera in 1971. None of these transfers was ever annotated on the certificate of title.

The respondents alleged that Mariano's sale to Serapio was a sham, that Genaro entered the land in 1957 and gathered its produce, and that earnest efforts at compromise failed. The petitioners answered that the "et al." in the title covered the shares of Fausto Mustar, Eduarda, Mariano and Elena, and that they had possessed the land, tacking their possession to their predecessors, since 1916. At pre-trial the parties agreed on the identity of the land and of the parties, on the Dacillo sale of 5,726 square meters, and on the fact that the defendants were in possession.

Issues

• Whether or not the petitioners acquired ownership of Lot 1460 by ordinary or extraordinary acquisitive prescription.
• Whether or not the respondents' actual knowledge of the earlier donation to Fausto Mustar binds them and defeats their claim.
• Whether or not the petitioners were possessors in good faith.

Applicable Provisions

Article 1544 of the Civil Code governs the double sale, and it provides:

If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

Because neither sale was recorded, the rule on first possession in good faith decides the case.

Article 1118 of the Civil Code states the requirements of possession for prescription:

Possession has to be in the concept of an owner, public, peaceful and uninterrupted.

The Court uses this to test, and reject, the petitioners' claim of prescription.

Article 526 of the Civil Code defines good faith and bad faith in possession:

He is deemed a possessor in good faith who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. He is deemed a possessor in bad faith who possesses in any case contrary to the foregoing.

This supplies the standard by which the petitioners' possession is measured.

Ruling

On the first issue, the Court held that prescription fails. Prescription as a defense must be expressly relied upon in the pleadings; it cannot be availed of unless specially pleaded in the answer and proved with the same certainty as any essential allegation. The petitioners did not claim acquisitive prescription in their answer, and even if they had, the records lack sufficient proof of its elements. Ordinary prescription of ten years cannot run without good faith, and extraordinary prescription cannot run without proof of the thirty-year requirement in bad faith. The Court also noted that possession must be in the concept of an owner, public, peaceful and uninterrupted, and that the demand letter of May 1970 showed the dispute had long been running among the families, so the petitioners knew or should have known of their cousins' rights.

On the second issue, the Court held that the respondents' knowledge of the alleged donation to Fausto Mustar is immaterial. The donation was never recorded, never inscribed on the certificate of title, and the donee never had the property titled in his name; Fausto was not a party, and no public instrument showed any transfer from him to Mariano. The certificate of title itself covers the whole 26,995 square meters in the name of "Elena Navera, et al.," with no mention of any prior donation.

On the third issue, the Court held that the petitioners were not in good faith. On the double sale, the first sale to Arsenio Nares in May 1947 preceded the sale to Mariano in June 1948, and since neither was recorded, ownership vests in the person first in possession in good faith. That possession includes symbolic possession, acquired by the execution of a public instrument, so the prior sale to Arsenio was tantamount to delivery. The Court applied the maxim prior est in tempore, potior est in jure, meaning he who is first in time is preferred in right, and recognized ownership in the first vendee. The petitioners' entry in 1957 made them mere detainers, and their bad faith is confirmed by the tax declarations, which stood in the respondents' names in 1951 and 1965, while Genaro declared the land only in 1966.

Doctrine

In a double sale of registered immovable property where neither sale is annotated on the certificate of title, Article 1544 awards ownership to the vendee who in good faith was first in possession, and possession for this purpose includes symbolic possession acquired by the execution of a public instrument. The first vendee's prior public-instrument sale is tantamount to delivery, so the second vendee who later takes material possession holds merely as a detainer. Acquisitive prescription must be expressly pleaded in the answer and proved with the same certainty as any essential allegation; ordinary prescription requires good faith, and extraordinary prescription requires proof of thirty years of possession in bad faith. Possession, to ripen into ownership, must be in the concept of an owner, public, peaceful and uninterrupted.

Disposition

The petition was denied, and the decision of the Court of Appeals was modified to declare the respondents Arsenio Nares and Felix Nares the rightful owners of Lot 1460 as against the petitioners, except for the 5,726 square meters belonging to Genaro Navera, without prejudice to the rights of the other compulsory heirs of Elena Navera in her one-half portion.

Remember This

Memorize the line: in an unannotated double sale of land, the first vendee's public instrument gives him symbolic possession, and prior est in tempore, potior est in jure. Examiners use this case to test Article 1544 when neither sale is registered, and to test whether prescription was properly pleaded and proved.