ESTATE OF EDWARD MILLER GRIMM versus ESTATE OF CHARLES PARSONS and PATRICK C. PARSONS, G-P AND COMPANYand MANILA GOLF & COUNTRY CLUB, INC.,Respondents.

GARCIA, J.: Because legal and situational ambiguities often lead to disagreements even between or amongst the most agreeable of persons, it behooves all concerned to put their financial affairs and proprietary interests in order before they depart for the great beyond. Leaving legal loose ends hanging or allowing clouds to remain on property titles when one can do something about them before the proverbial thief in the night suddenly comes calling only opens the door to bruising legal fights and similar distracting inconveniences. So it was here. In this petition for review under Rule 45 of the Rules of Court, the Estate of Edward Miller Grimm, represented by its judicial administrators, assails and seeks to set aside the Decision[1] dated September 8, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 69990, reversing an earlier decision of the Regional Trial Court (RTC) of Makati City in its Civil Case No. 92-2452. At the core of the controversy is a stock certificate of the Manila Golf & Country Club, Inc. (MGCC or the Club, for short) covered by Membership Certificate (MC) No. 1088for 100 units, the playing rights over which the Rizal Commercial Banking Corporation (RCBC), the court-appointed receiver, had, in the meantime, leased out. The Club issued MC No. 1088 to replace MC No. 590. Asserting clashing ownership claims over MC No.1088, albeit recorded in the name of Charles Parsons (Parsons, hereinafter) are petitioner Estate of Edward Miller Grimm and respondent G-P and Company (G-P & Co., hereinafter). Parsons and Edward Miller Grimm (Grimm), together with Conrado Y. Simon (Simon), formed in 1952 a partnership for the stated purpose of engaging in the import/export and real estate business. Per SEC Certificate #3305,[2] the partnership was registered under the name G - P and Company. Before September 1964, Parsons and Grimm each owned proprietary membership share in MGCC,[3] as evidenced by MC No. 374 for 100 units in the name of Parsons, andMC No. 590, also for 100 units, in the name of Grimm. Per records, the Club issued MC No. 590 to Grimm on May 25, 1960.[4] After Grimms demise on November 27, 1977, Parsons and Simon continued with the partnership under the same name, G P and Company, as reflected in Articles of Partnership dated December 14, 1977.[5] The articles of the partnership would later undergo another amendment to admit Parsons son, Patrick, in the partnership.[6] After Parsons died onMay 12, 1988, Amended Articles of Partnership of G-P and Company was executed on September 23, 1988 by and among Parsons heirs, namely, Patrick, Michael, Peter and Jose, all surnamed Parsons, albeit the amendment appeared to have been registered with the SEC only on March 18, 1993. [7]The herein legal dispute started when brothers Patrick and Jose, both surnamed Parsons, responding to a letter[8] from the Estate of Grimm, rejected the existence of a trust arrangement between their father and Grimm involving MC No. 1088. Thus spurned, the Estate of Grimm filed on August 31, 1992 before the RTC of Makati City, a suit for recovery of MC No. 1088 with damages against the Estate of Parsons, Patrick Parsons and MGCC. In its complaint,[9] docketed as Civil Case No. 92-2452 and eventually raffled to Branch 135 of the court, the Estate of Grimm, represented by its judicial administrator, Ramon J. Quisumbing, alleged, among other things, the following: 1. That on September 7, 1964, Grimm transferred MC No. 590 in trust to Parsons; on the same day, MGCC cancelled MC No. 590 and issued MC No. 1088 in the name of Parsons; 2. That in separate letters dated February 28, 1968 addressed to MGCC, both Grimm and Parsons stated that the transfer of MC No. 590 was temporary. Enclosed in that Parsons letter was MC No. 1088 which he was turning over for safekeeping to the Club, thru E.C. Von Kauffmann and Romeo Alhambra, then MGCC honorary secretary and assistant manager, respectively; 3. That on June 9, 1978, or after Mr. Kauffman death and Mr. Alhambras resignation, MGCC turned over the possession of MC No. 1088 to Parsons; 4. That in 1977, Grimm died; after a protracted proceedings, his estate was finally settled in 1988, the year Parsons also died; 5. That Patrick and Jose Parsons had, when reminded of the trust arrangement between their late father and Grimm, denied the existence of a trust over the Club share and refused to return the same; and 6. That MGCC had refused, despite demands, to cancel MC No. 1088 and issue a new certificate in the name of the Estate of Grimm. Attached to the complaint were the demand letters and other communications which, to the Estate of Grimm, document the Grimm-Parsons trust arrangement. In his Answer with counterclaim,[10] Patrick Parsons averred that his father was, with respect to MC No. 1088, a mere trustee of the true owner thereof, G-P & Co., and alleged, by way of affirmative defense, that the claim set forth in the complaint is unenforceable, barred inter alia by the dead mans statute, prescription or had been waived or abandoned. Herein respondent G-P & Co., echoing Patrick Parsons allegation respecting the ownership of MC No. 1088, moved to intervene and to implead Far East Bank & Trust Co. (FEBTC), as transfer agent of MGCC, as defendant-in-intervention. Attached to its motion was its COMPLAINT In Intervention[11] therein alleging (a) that on September 1, 1964, Parsons executed a Letter of Trust, infra, in which he acknowledged the beneficial ownership of G-P & Co. over MC No. 374 and MC No.1088; (b) that Parsons, as required by the partnership, endorsed both certificates in blank; and (c) that G-P & Co. carried said certificates amongst its assets in its books of accounts and financial statements and paid the monthly dues of both certificates to the Club when its membership privileges were not temporarily assigned to others. In the same complaint-in-intervention, G-P & Co. cited certain tax incidents as reasons why the transfer of MC No. 374 and MC No. 1088 from Parsons to the intervenor-partnership cannot as yet be accomplished. After the usual reply and answer to counterclaims had been filed, the Estate of Grimm filed an amended complaint to include Randy Gleave Lawyer, the other judicial co-administrator, as representative of the Estate. On April 28, 1993, the trial court admitted the amended complaint. After a lengthy trial, the trial court rendered its May 29, 2000 judgment[12] finding for the Estate of Grimm, as plaintiff a quo, disposing as follows: 1. Ordering defendants ESTATE OF CHARLES PARSONS and PATRICK C. PARSONS: 1.1 to turn over [MC] No. 1088 to plaintiff ESTATE OF EDWARD MILLER GRIMM; 1.2 jointly and severally to pay damages to plaintiff ESTATE in the amount of P400,000.00 per annum from September 8, 1989 to November 12, 1998, with legal interest thereon from the date of this Decision until fully paid; 1.3 Jointly and severally, to pay plaintiff ESTATE attorneys fees in the amount of P1,000,000.00 and the costs; 2. Ordering defendant [MGCC] and defendant-in-intervention [FEBTC] to cancel [MC] No. 1088 and to issue a new Membership Certificate in lieu thereof in the name of plaintiff ESTATE . 3. Ordering Receiver RIZAL COMMERCIAL BANKING CORPORATION to turn over to plaintiff ESTATE all income derived from the lease of the playing rights of [MC] No. 1088, less Receivers fees and charges. 4. Ordering the dismissal of the counterclaim of the defendants [Parsons]; and 5. Ordering the dismissal of the complaint-in-intervention and the supplemental counterclaim of intervenor G - P AND COMPANY. SO ORDERED. (Words in bracket added.)In gist, the trial court predicated its ruling on the postulate that the temporary transfer of Grimms original share in MGCC - covered by MC No. 590 whence MC No. 1088 descended to Parsons, created a trust relationship between the two. Therefrom, only herein respondents G-P & Co., Patrick Parsons and the Parsons Estate appealed to the CA, albeit MGCC would, in its brief, reiterate its readiness to issue the corresponding replacement certificate to whosoever is finally adjudged owner of MC No. 1088. On September 8, 2003, in CA-G.R.CV No. 69990, the appellate court rendered its herein assailed Decision,[13] disposing as follows: WHEREFORE, the Decision of the lower court dated May 29, 2000 is hereby REVERSED and SET ASIDE, and another one rendered: 1. Dismissing the complaint filed by Estate of Edward Miller Grimm for lack of merit; 2. Ordering Manila Golf and Country Club, Inc., and defendant-in-intervention Far East Bank & Trust Company, as transfer agent, to immediately effect the reconveyance of [MC] No. 1088 to Intervenor-appellant G-P and Company; 3. Ordering Rizal Commercial Banking Corporation, as receiver, to immediately turn over to intervenor-appellant G-P and Company all income derived from the lease of the playing rights of said Membership Certificate, less receivers fees; 4. Ordering [the] Estate of Edward Miller Grimm to pay appellants the amount of P800,000.00 as attorneys fees; 5. Ordering Estate of Edward Miller Grimm to pay appellants the costs of suit. SO ORDERED. (Words in bracket added.)Hence, this petition for review on the lone submission that the CA erred in finding that respondent G-P & Co. is the beneficial owner of MC No. 1088. In their comment to the petition, the respondents urge the outright dismissal thereof on the ground that it raises only purely factual and evidentiary issues which are beyond the office of an appeal by certiorari. As argued further, the factual findings of the CA are conclusive on the parties.It should be made clear right off that respondent Patrick Parsons, in his individual capacity, and the Estate of Parsons (collectively, the Parsons) are not claiming beneficial ownership over MC No. 1088. The same goes for respondent MGCC which went to state on record that [T]he ownership of [MC] No. 1088 (previously No. 590) does not belong to the Club and it does not stand to gain from the determination of its real owner.[14] We GRANT the petition. The respondents formulation of the grounds for the dismissal of the instant petition is a statement of the general rule. A resolution of the petition would doubtless entail a review of the facts and evidentiary matters against which the appealed decision is cast, a procedure which is ordinarily outside the province of the Court and the office of a certiorari review under Rule 45 of the Rules of Court. For, the rule of long standing is that the Court will not set aside the factual determinations of the CA lightly nor will it embark in the evaluation of evidence adduced during trial. This rule, however, admits of several exceptions. Among these are when the factual conclusions of the CA are manifestly erroneous; are contrary to those of the trial court; when the judgment of the CA is based on misapprehension of facts or overlooked certain relevant facts not disputed by the parties which, if properly considered, would justify a different conclusion.[15] Decidedly, this case falls within the recognized exceptions to the rule on the finality of factual findings or conclusions of the CA. The principal issue tendered in this case turns on who between petitioner Estate of Grimm and respondent G.P. & Co. beneficially owns MC No. 1088. Corollary thereto - owing to the presentation by respondents of a LETTER OF TRUST that Parsons allegedly executed in favor of G-P and Company with respect to MC No. 1088 - is the question of whether or not the transfer of MC No. 590 effected on September 7, 1964 by Grimm in favor of Parsons resulted, as the petitioner would have it, in the formation of a trust relation between the two. Thus formed, the trust relationship would preclude the trustee from disposing of the trust property, save when repudiation of the trust had effectively supervened. The trial court found the September 7, 1964 Grimm- to- Parsons certificate transfer to be only temporary and without valuable consideration to accommodate a third person and thus adjudged Grimm to be the real owner of MC No. 590, as later replaced by MC No. 1088. According to the trial court, such transfer created a trust, with Parsons, as trustee, and Grimm, as the beneficial owner of the share thus transferred, adding that Parsons, as mere trustee, is without right to transfer the replacement certificate to G-P & Co. On the other hand, the CA, while eschewing the alternative affirmative defenses interposed below by respondents, nonetheless ruled for respondent GP & Co. Citing Article 1448of the Civil Code,[16] the appellate court held that respondent GP & Co. pertains the beneficial ownership of MC No. 1088, an implied trust in its favor having been created when MC No. 590 and MC No. 374 were acquired for and placed in the names of Grimm and Parsons, respectively, albeit the partnership paid for the price therefor. To the appellate court, the fact that these certificates were carried, as of December 31, 1974, November 27, 1977 and December 31, 1978 in the books[17] of G-P & Co. as investment assets only proves one thing: the company paid the acquisition costs for the membership certificates. If Grimm was the real owner of said share, he should have, according to the appellate court, objected to its inclusion in the partnership assets during his lifetime. Completing its ratiocination, the CA wrote: xxx. A trust, which derives its strength from the confidence one reposes on another especially between the partners and the company, does not lose that character simply because of what appears in a legal document. The transfer therefore of Grimms [MC] No. 590 on September 7, 1964 in favor of Charles Parsons resulted merely in the change of the person of trustee but not of the beneficial owner, the G-P and Company. The CAs ruling does not commend itself for acceptance. As it were, the assailed decision started on the wrong foot and thus had to limp all along to arrive at a strained and erroneous conclusion. We shall explain. A party in whose favor a legal presumption exists may rely on and invoke such legal presumption to establish a fact in issue. He need not introduce evidence to prove that fact. For, a presumption is prima facie proof of the fact presumed and to the party against whom it operates rests the burden of overthrowing by substantial and credible evidence the presumption.[18] Under the law on evidence, it is presumed that there was sufficient consideration for a contract.[19] Inasmuch as Grimms name appeared on MC No. 590 as registered owner thereof, he is deemed to have paid sufficient consideration for it. The onus of proving otherwise would fall on respondents G-P & Co. and/or the Parsons. Without so much of an explanation, however, the CA minimized the value of MC No. 590 as arguably the best evidence of ownership. Corollarily, the appellate court devalued the rule on legal presumption and faulted petitioner Estate of Grimm for not presenting evidence to prove that Grimm paid for his original acquisition of MC No. 590. Wrote the CA: Contrary to the findings of the lower court, [petitioner] failed to establish [its] right over the said shares. xxx Not a single evidence of proof of payment for the said shares was ever presented by the [petitioner] to establish ownership. (Words in bracket added.)[20] Ironically, while the CA held it against the petitioner for failing to adduce proof of payment by Grimm for his MC No. 590, it nonetheless proceeded to declare respondent G-P & Co. to be the beneficial owner of said certificate even if it, too, had not presented proof for such payment. Respondent G-P & Co., in its complaint-in-intervention (should have been answer-in-intervention), did not allege paying for MC No. 590. Surely, payment cannot be validly deduced, as the CA did, from the bare fact of such membership certificatebeing listed in the books of respondent G -P & Co. as partnership investment assets. For one, the self-serving book entries in question are, as correctly dismissed by the trial court, not evidentiary of ownership. Else, anyone can lay a claim, or worse, acquire ownership over a share of stock by the simple expedience of listing, without more, the same in the partnership or corporate books. The sheer absurdity of the notion need no belaboring. For another, what appears or what respondent company uniformly entered as investments are: Manila Golf & Country Club, Inc. 2 shares. No reference was made whatsoever in the books or financial statements about MC No. 590, (MC. No. 1088) and MC. No. 374. In the absence of the number reference or other similar identifying details, the CAs categorical conclusion that one of the 2 shares referred to is MC No. 1088 is at best speculative. This observation becomes all the more valid given that Michael Parsons had in his name two (2) Club share certificates. Exhibit X-4, a September 21, 1964 letter from Parsons to Mr. Kaufmann made specific reference to Michaels shares: Under the circumstance, please disregard the previous letter which Michael wrote in connection with the shares in his name . In the case of the two shares in the name of Michael, please leave the two in his name . . . . As matter now stands, in summary, I shall retain my shares in my name and continue playing under such shares; Michael will retain two shares assigning one to Mr. Stoner; and Pete Grimm will assign his playing rights to Mr. Daikichi Yoshida.[21] And for a significant third, respondent G-P & Co. is not the same G-P & Co. that Parsons, Grimm and Simon organized in 1952, the former being an entity that came into existence only on September 23, 1988. It is thus well-nigh impossible for respondent company to have participated in a transaction that occurred years before it acquired juridical personality. In the concrete, it is not physically possible for respondent G-P & Co. to have paid the price for the purchase of Grimms MC No. 590, the same having been acquired in 1960 or some 28 years before the respondent company was established by the execution of the Articles of Partnership on September 23, 1988. The trial court depicted theincongruity of the situation in the following fashion: Intervenor [respondent G-P & Co.] is not the same partnership originally formed by Grimm, Parsons and Simon. When Grimm died on November 27, 1977, the original partnership was dissolved. The death of a partner causes dissolution of a partnership [Article 1829, Civil Code]. A new partnership was formed with Parsons and Simon as partners. Besides this new partnership formed after the death of Grimm, there were five (5) others formed [Exhibit DD, EE, FF, GG, HH and II] carrying the name, G-P and Company. [22] (Words in bracket in the original) Independent of the cited Article 1829 of the Civil Code on the matter of partnership dissolution, however, it bears to state that Parsons and Simon executed on December 13, 1977 a joint affidavit[23] wherein they declared the dissolution of the original 3-man G-P & Co., owing to the death of Grimm. The registration on December 14, 1977 of a new Articles of Partnership of G-P & Co. followed the execution by Parsons and Simon of said affidavit. [24] It may be, as respondents rationalize, that the succeeding G-P & Co. partnerships merely continued with the business started by the original G-P & Co.[25] This element of continuity, assuming to be true, does not, however, detract from the fact that the partnerships of the same name formed after Grimms demise are entities altogether different and with personalities distinct from the original partnership. This brings us to the next issue of whether or not the transfer to Parsons of MC No. 590, as replaced by MC No. 1088, partook of the nature of a trust transaction. Trust is the legal relationship between one having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter.[26] Trust relations between parties may be express, as when the trust is created by the intention of the trustor.[27] An express trust is created by the direct and positive acts of the parties, by some writing or deed or by words evidencing an intention to create a trust; the use of the word trust is not required or essential to its constitution, it being sufficient that a trust is clearly intended.[28] Implied trust comes into existence by operation of law, either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of, and even contrary to any such intention.[29] Judging from their documented acts immediately before and subsequent to the actual transfer on September 7, 1964 of MC No. 590, Parsons, as transferee, and Grimm, as transferor, indubitably contemplated a trust arrangement. Consider:There can be no quibbling, owing to the letter exchanges between the Club, in particular its Honorary Secretary E. C. Von Kauffman, and Parsons, that the reason Grimm transferred his MC No. 590 to Parsons was because of the latters wish to accommodate one Daikichi Yoshida. Earlier, Parsons recommended to Club management the approval of Mr. Yoshidas Application For Waiting List Eligible To [Club] Proprietary Membership.[30] In a letter of August 10, 1964[31] to the MGCCs Board of Directors, Parsons endorsed the application of Yoshida as Club member. While the Clubs response does not appear in its files, it is quite apparent that Parsons addressed a letter to Kauffman requesting that Yoshida be taken in as a Company assignee. In his reply-letter[32] of August 29, 1964, Kauffman explained why he cannot, under Club rules, favorably act on Parsons specific request, but suggested a viable solution, as follows:Reference to your letter dated August 25th, there is a hitch of assigning the playing rights to Mr. Daikichi Yoshida, as a company assignee. xxx xxx xxx The only solution that I see is that you transfer Pete Grimms 100 units to your name and leave the other 100 units in your name, then you may assign the playing rights of one of the certificates for 100 units to Mr. Yoshida. Mr. Yoshida was approved by the Board but not as a Company assignee. (Emphasis added.) Parsons response to Kauffmans August 29, 1964 letter partly reads as follows: Thank you for your letter of the 29th .Under the circumstances, please disregard the previous letter which I wrote with reference to Pete Grimms and my shares .xxx xxx xxxAs matter now stands, in summary, I shall retain in my name and continue playing under such shares . And Pete Grimm will assign his playing rights to Mr. Daikichi Yoshida. The conclusion easily deductible from the foregoing exchanges is that, given existing Club restrictions, the simplest way to accommodate and qualify Yoshida for Club membership was for Grimm to transfer his 100-unit share to Parsons who will then assign the playing rights of that share to Yoshida.[33] The RTC aptly described the relevant factual situation, viz.: With these exchanges between Parsons and Kauffman , it is apparent that since the shares held by Parsons and Grimm are individual shares and not company shares, their shares may not be assigned . The proposal of Parsons that Pete Grimm will assign his playing rights to Yoshida was rejected by Kauffman in his letter dated September 5, 1964 [Exhibit X-5 / 27] that Pete Grimms assignment to him (Yoshida) cannot be made as the rules are that only members who holds (sic) 200 units may assign 100 units to an individual. A letter of the same date [Exhibit X-6 / 28] was sent by Kauffman to Mr. Yoshida informing him of his election to the Club apologizing for the delay . Kauffman wrote further Mr. Charles Parsons has made arrangement for to play (sic) as assignee of extra membership which he now holds. The election of Yoshida as assignee of a proprietary member and the resignation of Grimm were approved by the Clubs Board on August 27, 1964. Kauffman and Parsons were still discussing the ways Mr Yoshida can be accommodated as of September 5, 1964, but the resignation of Grimm and election of Yoshida was already approved more than a week before. [34] (Words in bracket in the original; Underscoring added.) Even on the above factual perspective alone, it is not difficult to characterize, as did the trial court, the certificate transfer from Grimm to Parsons, as temporary, there being no evidence whatsoever that the transfer was for value. Such transfer was doubtless meant only to accommodate Yoshida whose stay in the country was obviously temporary. As it were, Yoshidas application[35] for Club membership juxtaposed with the August 10, 1964 endorsement- letter[36] of Parsons, yielded the information that he (Yoshida) is the manager of the Manila Liaison Office of Mitsubishi Shoji Kaisha desiring to acquire Company membership in the name of his employer Mitsubishi to enable future representatives to avail themselves of Club facilities. Since Club membership did not seem possible at the time, Yoshida had to come in as an assignee of a proprietary member. Other compelling evidence attest to the temporary nature of the transfer in question. The trial court cited two in its Decision. Wrote that court: Even a witness for the (respondents) intervenor and the Parsons, Celso Jamias, Chief Accountant of G-P and Company, confirmed that the transfer of the share to Parsons was temporary. In a letter [Exhibit 7-GG] dated 10 August 1991 addressed to Atty. Patricia Cecilia B. Bisda, counsel for G-P and Company, Jamais wrote: . . . please be informed that the accommodation for Mr. Yoshida to have playing rights has not bearing on the ownership of the share. The share of Grimm (EMG) was transferred to Mr. Charles Parsons (CP) to accommodate Mr. Yoshida due to Manila Golf club requirements. Atty. Patricia Cecilia B. Bisda echoed the view of Jamias, in a letter [Exhibit Y] dated 30 August 1991 addressed to (the) then General Manager of the Club: She wrote: Also, we would like to clarify . That the accommodation of Mr. Yoshida to enjoy the playing rights has no bearing to the ownership of the shares. The share of Edward Grimm was transferred to Charles Parsons to accommodate D. Yoshida due to club requirements.[37] Any lingering doubt, however, as to the temporary nature of the Grimm-to-Parsons transfer should, in our view, be put to rest by what MGCC records-file contained and the testimony of its former records custodian, Romeo Alhambra. In his affidavit of May 12, 1989,[38] Alhambra stated that [A]ccording to Club records, the transfer of [MC] # 580 was only temporary, and that Mr. Grimm was and, according to club records, is in fact the owner of [MC] # 1088 and that after the transfer, Mr. Charles Parsons endorsed the share certificate and turned it over to Kauffmann for safekeeping. Forming parts of the same records were letters both dated February 28, 1968 the day the share certificatetransfer was effected separately submitted by Grimm and Parsons, to inform MGCC of the temporary nature of the transfer. In his letter, Grimm stated that MC No. 1088 is still my property and I wish it recorded as such in the Clubs file.[39] Parsons letter[40] was just as simple as it was revealing, thus: Reference to the transfer of [MC] #590 in the name of Mr. E.M. Grimm to my name, for which I now have the new Certification No. 1088 , please be advised that this transfer was made on a temporary basis and that said new certificate is still the property of Mr. E.M. Grimm and I enclose the certificate duly endorsed by me for safekeeping. At bottom then, documented events immediately before and after the February 28, 1968 share certificate conveyance in question veritably confirm the trust arrangement Parsons had or intended to have with Grimm and vice versa, vis--vis MC No. 1088. If, as herein respondent G-P & Co. posits at every turn, Parsons was its trustee, then the latters act of endorsing MC No. 1088 in blank and then delivering the same to the Club for safekeeping instead of directly to the G-P & Co. was without sense. The trial court correctly described the relationship that was formed between Grimm and Parsons, and the consequence of such relationship, as follows: Since the transfer of Grimms share to Parsons was temporary, a trust was created with Parsons as the trustee, and Grimm, the beneficial owner of the share. The duties of trustees have been said, in general terms, to be: to protect and preserve the trust property, and to see to it that it is employed solely for the benefit of the cestui que trust. xxx Parsons as a mere trustee, it is not within his rights to transfer the share to G-P and Company (sic). The Court has, to be sure, considered the Letter of Trust[41] dated September 1, 1964 largely because, in respondents own words, it provides the answer to the question of who the real owner of MC #1088 is.[42] In the Letter he purportedly signed, Parsons declared holding MC No. 374 and MC No. 1088 as NOMINEE IN TRUST for and in behalf of G-P AND COMPANY or its nominee. This piece of document is not, however, a winning card for the respondents. The trial court mentioned two compelling reasons why not, both reasons bearing on the due execution and genuineness of the document. Wrote the court: This LETTER OF TRUST was purportedly signed by Parsons on September 1, 1964. But the transfer of [MC] No. 590 was recorded (and MC No. 1088 issued) only on September 7, 1964 in the Clubs Proprietary Membership Card No. 144 [Exhibit 8]. With the testimony of Celso B. Jamias, a long time employee of G-P and Company, the doubt as to the genuineness of the signature of Parsons on the LETTER OF TRUST was brought to light. Jamias was cross-examined on the signatures of Parsons on several documents including the signature of the LETTER OF TRUST:Q: How about the signature appearing on Exhibit CC-1 ? A: This is Charles Parsons, sir. Q:- You are familiar with the signature? A: Yes, sir. Q: - Im showing you Exhibit I which is a letter of trust dated September 1, 1964, comparing those signatures which you identified above the printed name C. Parsons there are, two signatures, the signatures you identified earlier and the one appearing on the letter of trust are similar in the sense that the s of Parsons is elevated and it slopes down, is that correct? xxx xxx xxx A:- Based on how I see, this doesnt seem to be the signature of Parsons, it looks like but it is not, sir. [TSN, May 4, 1999, pp 5-6]. (Words in parenthesis added.) And lest it be overlooked, Parsons had previously acknowledged Grimm to be the owner of MC No. 1088, after his earlier repeated declarations that the transfer of the replaced MC No. 580 was temporary. Parsons was thus in contextually in estoppel to deny, thru the Letter of Trust aforementioned, hypothetically assuming its authenticity, Grimms ownership of the replacement certificate. Summing up, the Court finds the evidence adduced and admitted by the trial court more than adequately supporting a conclusion that MC No. 1088 was issued to and held by Parsons as the trustee thereof of Grimm or his estate. The fact that respondent G-P & Co. may have paid, starting 1992, as evidence discloses, the membership fees due on MC No. 1088 does not make Grimm less of a beneficial owner. Such payment, needless to stress, is not a mode of acquiring ownership. Parenthetically, the CA is observed to have said that in the settlement of the estate of Parsons, MC No. 1088 was not included in the list of stocks owned by him. And from this inconsequential event, the appellate court would conclude that the estate administrator recognized Parsons to be a mere trustee of such certificate. While the decision does quite say so, the implication is that Parsons was the trustee of G -P & Co. We cannot agree with this non-sequitur approach which, at bottom, clearly tends to lower the evidentiary bar for respondents. Needless to stress, it is not for the CA and all courts for that matter to compensate for a burden of proof not discharged or a quantum of evidence not met. The Court cannot, for two reasons, also lend cogency to the CAs observation that the heirs of Grimm may have had waived, abandoned or denounced their rights to the trust property when, for P100,000.00, they executed a Deed of Acknowledgment of Satisfaction of Partnership Interests.[43] Firstly, the deed, as a quitclaim instrument, did not mention any share certificate at all, which is only logical since MC No. 1088 was not a partnership asset in the first place. Secondly, the intention to waive a known right must be clear and unequivocal. In this case, the intent to renounce beneficial ownership of MC No. 1088 cannot reasonably be drawn from the tenor of the quitclaim document. For perspective, what the heirs of Grimm stated in the Deed of Acknowledgment is that the amount of P100,000.00 they received represents the total liquidation and complete settlement of the entire partnership interests pertaining to the late Edward Miller Grimm as partner in G-P AND COMPANY. If, to borrow from Thompson v. Court of Appeals,[44] we apply the standard norm on how a waiver must be formulated, then clearly the general terms of the aforementioned deed merely indicate a clearance from general accountability, not specifically an abandonment of ownership of the disputed share. For: xxx. Settled is the rule that a waiver to be valid and effective must, in the first place, be couched in clear and unequivocal terms which leave no doubt as to the intention of a party to give up a right or benefit which legally pertains to him. xxx A waiver may not be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person. If we apply the standard rule that waiver must be cast in clear and unequivocal terms, then clearly the general terms of the cited release and quitclaim indicates merely a clearance from general accountability, not specifically a waiver of Amchams beneficial ownership of the disputed shares.[45] In all, the facts and circumstances attendant militate against the CAs finding pointing to G-P & Co. as the beneficial owner of MC No. 1088. What the evidence adduced instead proved beyond cavil is that Grimm or his estate is such owner. We therefore reverse. WHEREFORE, the herein assailed decision of the Court of Appeals is REVERSED and SET ASIDE, and the Decision of the Regional Trial Court of Makati City in Civil Case No. 92-2452 is REINSTATED. Costs against the respondents. SO ORDERED.

FREDERICK GARFIELD WAITE, Plaintiff-Appellee, v. JAMES J. PETERSON, ET AL., Defendants-Appellants.

D E C I S I O N

The appellant (Kwong We Shing) has not caused the proof in this case to be brought here. The only question therefore is whether the facts admitted in the pleadings and those found by the court below in its decision sustain the judgment appealed from. That court found among other things as follows:jgc:chanrobles.com.ph

"From the evidence presented at the trial, the court finds that on December 8, 1905, one Henry Manheim delivered to L.K. Tiao Eng a diamond ring one consignment for 800 pesos, to be returned, if not sold, in sixty days; that on the 22d day of January, 1906, while the ring was in the possession of L.K. Tiao Eng, the defendant, as sheriff of Manila, levied upon the said ring; that on the 23d day of January, 1906, the aforementioned Henry Manheim, for value received, assigned all his right to and interest in said ring to the said plaintiff herein; that on the 25th day of January, 1906, the plaintiff made demand upon the sheriff of Manila, who had made the levy, as before said, for the said ring, and alleged the value thereof to be 800 pesos; that the sheriff was indemnified by the judgment creditor, in whose favor the levy had been made, as provided by law, and retained possession of the ring and sold the same at public sale; that the said Henry Manheim has never been paid for the said ring, in accordance with the terms of the contract hereinbefore mentioned or any part thereof; that at the time of the levy by the sheriff upon the said ring, as before stated, the said Henry Manheim was the owner of and entitled to possession of the said ring; that while the ring was in the possession of the sheriff the said Henry Manheim transferred his ownership and right to possession of said ring to plaintiff herein and that the plaintiff thereupon became the owner and entitled to possession of said ring."cralaw virtua1aw library

Judgment was rendered against both of the defendants for the return of the ring, and, if that could not be had, for the sum of 725 pesos, with interest, and costs.

I. The appellant claims that by the terms of section 451 of the Code of Civil Procedure this action can not be maintained by the plaintiff because he was not the owner of the ring at the time the levy was made. In other words, as we understand it, his claim is that no action for the value of the property taken can be maintained except by the person who was the owner thereof at the time it was seized by the sheriff. We do not think that this contention can be sustained. Said section 451 is as follows:jgc:chanrobles.com.ph

"Claims by third persons to property levied on. Property levied on can be claimed by a third person as his property, by a written claim, verified by the oath of such claimant, setting out his title thereto, his right to possession thereof, stating the ground of such title, and served upon the governor, or his deputy, or officer making the levy. The officer in such case is not bound to keep the property, unless the plaintiff, or the person in whose favor the writ of execution runs, on demand, indemnify the officer against such claim by an obligation, signed by the plaintiff, with good and sufficient surety, and no claim to such property shall be valid against the officer, or shall be received or be notice of any rights against him, unless made as herein provided; but nothing herein contained shall prevent such third person from vindicating his claim to the property by any proper action."cralaw virtua1aw library

The vice in the argument of the appellant consist in the fact that he assumes that section 451 is the only law which gives the plaintiff a right of action against the sheriff, and that if he is not included within that section, he can not maintain any action. This is manifestly erroneous. So far from being the origin of any rights on the part of the owner of property wrongfully taken by the sheriff, it is rather a limitation upon his rights previously existing. If property of a person is taken by the sheriff upon an execution against another person, the sheriff is liable thereof in the absence of statute, as any private person would be. When ones property is wrongfully taken by another, the former has a right of action against the person who interfered with his property, whether for the recovery of the property itself or for damages for its taking, and he has his choice of these remedies. If section 451 did not exist, by the general principles of the law the sheriff would always be responsible for wrongfully taking the property of another. For the purpose of limiting the responsibility of the sheriff in such cases, and to provided that some notice should be given to him of the claims of third persons, this section requires such third persons to make such claims in writing, so that the sheriff, after the notice is given to him, can decide for himself whether he will proceed with the levy or abandon the property.

The right of action given by the general principles of law to the person whose property has wrongfully been taken from him, either to recover damages or the possession of the property, is a right which can be transferred by him, and his transferee can maintain either one of these actions against the wrongdoer. On this first claim of the appellant, then, the only question is whether this section 451 has taken away from the assignee of the owner his right to maintain an action to recover the value of the property.

An examination of the section will show that there is no distinct statements therein, that the claim can only be made by a person who was the owner of the property at the time the levy was made. As the section is written, we do not think that it should be so construed. Such a construction would, in case of the involuntary transfer of rights, deprive the transferee of actions which might be absolutely necessary to him for the protection of his interest. If we so construed the section, we should have the levy his executor or administrator would have no right to make a claim against the sheriff for the return of the property and would be deprived of an action against the sheriff for the recovery of damages for such wrongful taking. The same rule would have to be made if an order in bankruptcy was passed against the owner of the property the day after the levy. We do not think that the section requires any such construction.

II. It is further claimed by the appellant that in no event should judgment have been entered against him that is to say, against Kwong We Shing. It will be noticed that the court found that the sheriff was indemnified by the judgment creditor. This statement is sufficient to make the judgment creditor liable for the acts of the sheriff. In the case of Lovejoy v. Murray (3 Wall. U.S., 1) the court said, at page 9:jgc:chanrobles.com.ph

"The demand for indemnity, and the giving of it by the defendants, proceeded upon the supposition that the sheriff would without it go no further in that direction, but would give up the property to the claimant, the present plaintiff, and make his peace on the best terms he could. By the present statute of Iowa he had a right to do this, if the plaintiff in attachment refused to assume the hazard of indemnifying him. And if there were no such statute, he had a right to deliver the property to the claimant, and risk a suit by the plaintiff in attachment rather than a contest with a rightful claimant of the goods.

"The giving of the bond by the present defendants must, therefore, be held equivalent to a personal interference in the course of the proceeding, by directing or requesting of the defendants in attachment. In doing this they assumed the direction and control of the sheriffs future action, so far as it might constitute a trespass, and they became to that extent the principals, and he their agent in the transaction. This made them responsible for the continuance of the wrongful possession and for the sale and conversion of the goods; in other words, for all the real damages which plaintiff sustained."cralaw virtua1aw library

The judgment of the court below is affirmed, with the costs of this instance against the appellant, Kwong We Shing. So ordered.

Arellano, C.J., Torres, Johnson, and Tracey, JJ., concur.

DEPARTMENT OF EDUCATION, G.R. No. 161758DIVISION OF ALBAYrepresented by its SCHOOLS P- versus - TINGA, andONATE The Case This is a Petition for Review on Certiorari[1] under Rule 45 seeking to reverse and set aside the January 14, 2004 Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 60659, which affirmed the November 3, 1997 Decision[3] of the Legaspi City Regional Trial Court (RTC), Branch I, declaring as null and void the December 21, 1998 Deed of Donation[4] executed by the Municipality of Daraga, Albay in favor of petitioner, and directing the latter to return to respondent Celso Oate the possession of the portion of land occupied by the school site of the Daraga North Central Elementary School. The Facts Spouses Claro Oate and Gregoria Los Baos owned Lot No. 6849 (disputed lot) with an area of around 27,907 square meters registered under the Torrens System of land registration under Original Certificate of Title (OCT) No. 2563. Claro Oate had three children, namely: Antonio, Rafael, and Francisco, all surnamed Oate. Respondent Celso Oate is the grandson of Claro Oate, being the son of Francisco Oate. In 1940, Bagumbayan Elementary School of Daraga was constructed on a portion of the disputed lot. The school was eventually renamed Daraga North Central Elementary School. The Municipality of Daraga leveled the area while petitioner Department of Education Culture and Sports (DECS; now Department of Education [DepEd]) developed and built various school buildings and facilities on the disputed lot. Sometime in 1991, respondent filed a reconstitution proceeding of OCT No. 2563 which was granted by the Legaspi City RTC, Branch V after due notice, publication, and hearing. Consequently, OCT No. RO-18971[5] was issued in the name of spouses Claro Oate and Gregoria Los Baos. On August 26, 1991, a Deed of Extrajudicial Settlement of Estate and Cession was executed by respondent and his three (3) sisters, namely: Melba O. Napil, Cielo O. Lardizabal, and Maria Visia O. Maldo, who waived their successional rights in favor of respondent Celso Oate. Asserting that the disputed lot was inherited by his father, Francisco Oate, from the latters father, Claro Oate, by virtue of a prior partition among the three (3) sons of Claro Oate and Gregoria Los Baos, respondent in turn claimed ownership of said lot through the deed of extrajudicial settlement. Meanwhile, the issue of whether respondents father, Francisco Oate, truly acquired the disputed lot through a prior partition among Claro Oates three (3) children had been passed upon in another case, Civil Case No. 8724 for Partition, Reconveyance and Damages filed by the heirs of Rafael Oate before the Legaspi City RTC, Branch IX.[6] In said case, respondent Celso Oate, the defendant, prevailed and the case was dismissed by the trial court. Thereafter, respondent caused Lot No. 6849 to be subdivided into five (5) lots, all under his name, except Lot No. 6849-B which is under the name of Mariano M. Lim. OnOctober 26, 1992, the subdivided lots were issued Transfer Certificate of Titles (TCTs): (1) Lot No. 6849-A (13,072 square meters) under TCT No. T-83946;[7] (2) Lot No. 6849-B (3,100 square meters) under TCT No. T-84049;[8] (3) Lot No. 6849-C (10,000 square meters) under TCT No. T-83948;[9] (4) Lot No. 6849-D (1,127 square meters) under TCT No. T-83949;[10] and (5) Lot No. 6849-E (608 square meters) under TCT No. T-83950.[11] On December 15, 1992, through his counsel, respondent sent a letter to petitioner apprising it about the facts and circumstances affecting the elementary school and its occupancy of Lot No. 6849-A with an area of 13,072 square meters. Respondent proposed to petitioner DECS that it purchase Lot No. 6849-A at the Fair Market Value (FMV) of PhP 400 per square meter and also requested for reasonable rentals from 1960.[12] The records show that then DECS Director IV Jovencio Revil subsequently referred the matter to the DECS Division Superintendent Rizalina D. Saquido for investigation.[13] On February 24, 1993, through his counsel, respondent likewise wrote to Engr. Orlando Roces, District Engineer, Albay Engineering District about the on-going construction projects in the school.[14] Engr. Roces then informed respondents counsel that petitioner DECS is the owner of the school site having acquired the disputed lot by virtue of a Deed of Donation executed by the Municipality of Daraga, Albay in favor of petitioner.[15] Consequently, on March 18, 1993, respondent instituted a Complaint[16] for Annulment of Donation and/or Quieting of Title with Recovery of Possession of Lot No. 6849 located at Barrio Bagumbayan, Daraga, Albay before the Legaspi City RTC, docketed as Civil Case No. 8715, against petitioner DECS, Division of Albay, represented by the Division Superintendent of Schools, Mrs. Rizalina D. Saquido; and the Municipality of Daraga, Albay, represented by the Municipal Mayor, Honorable Cicero Triunfante. In its April 28, 1993 Answer,[17] the Municipality of Daraga, Albay, through Mayor Cicero Triunfante, denied respondents ownership of the disputed lot as it alleged that sometime in 1940, the Municipality bought said lot from Claro Oate, respondents grandfather, and since then it had continually occupied said lot openly and publicly in the concept of an owner until 1988 when the Municipality donated the school site to petitioner DECS; thus asserting that it could also claim ownership also through adverse possession. Moreover, it claimed that the disputed lot had been declared in the name of defendant municipality in the Municipal Assessors Office under Tax Declaration No. 31954 from 1940 until 1988 for purposes of exemption from real estate taxes. Further, defendant Municipality contended that respondent was guilty of laches and was estopped from assailing ownership over the disputed lot. Similarly, petitioners April 29, 1993 Answer[18] reiterated in essence the defenses raised by the Municipality of Daraga, Albay and further contended that respondent had no cause of action because it acquired ownership over the disputed lot by virtue of a Deed of Donation executed on December 21, 1988 in its favor; and that respondents claim was vague as it was derived from a void Deed of Extrajudicial Settlement of Estate and Cession disposing of the disputed lot which was already sold to the Municipality of Daraga, Albay in 1940. Petitioner likewise assailed the issuance of a reconstituted OCT over Lot 6849 when the lower court granted respondents petition for reconstitution without notifying petitioner. During the ensuing trial where both parties presented documentary and testimonial evidence, respondent testified that he came to know of the disputed lot in 1973 when he was 23 years old; that he took possession of the said lot in the same year; that he came to know that the elementary school occupied a portion of the said lot only in 1991; and that it was only in 1992 that he came to know of the Deed of Donation executed by the Municipality of Daraga, Albay.[19] Also, Felicito Armenta, a tenant cultivating a portion of disputed Lot 6849, testified that respondent indeed owned said lot and the share of the crops cultivated were paid to respondent.[20] However, after respondent testified, defendants in said case filed a Joint Motion to Dismiss[21] on the ground that respondents suit was against the State which was prohibited without the latters consent. Respondent countered with his Opposition to Joint Motion to Dismiss.[22] Subsequently, the trial court denied the Joint Motion to Dismiss, ruling that the State had given implied consent by entering into a contract.[23] Aside from the reconstituted OCT No. RO-18971, respondent presented the TCTs covering the five (5) portions of the partitioned Lot 6849, Tax Declaration No. 04-006-00681[24] issued for said lot, and the April 20, 1992 Certification[25] from the Office of the Treasurer of the Municipality of Daraga, Albay attesting to respondents payment of realty taxes for Lot 6849 from 1980 to 1990. After respondent rested his case, the defense presented and marked their documentary exhibits of Tax Declaration No. 30235 issued in the name of the late Claro Oate, which was cancelled in 1938; Tax Declaration 31954,[26] which cancelled Tax Declaration No. 30235, in the name of Municipality of Daraga with the annotation of Ex-Officio Deputy Assessor Natalio Grageda attesting to the purchase by the Municipality under Municipal Voucher No. 69, August 1940 accounts and the issuance of TCT No. 4812 in favor of the Municipality; Tax Declaration No. 8926[27] in the name of the Municipality which cancelled Tax Declaration No. 31954; and the subsequent Tax Declaration Nos. 22184,[28] 332,[29] and 04-006-00068.[30] The defense presented the testimony of Mr. Jose Adra,[31] the Principal of Daraga North Central Elementary School, who testified on the Municipalitys donation of disputed Lot 6849 to petitioner and the improvements on said lot amounting to more than PhP 11 million; and Mrs. Toribia Milleza,[32] a retired government employee and resident of Bagumbayan, Daraga, Albay since 1955, who testified on the Municipalitys continuous and adverse possession of the disputed lot since 1940. As mentioned earlier, Civil Case No. 8724 for Partition, Reconveyance and Damages was instituted by the heirs of Rafael Oate in Legaspi City RTC, Branch IX against Spouses Celso Oate and Allem Vellez, involving the same disputed lot. Petitioner and co-defendant Municipality of Daraga, Albay were about to file a complaint for intervention in said case, but it was overtaken by the resolution of the case on August 14, 1995 with the trial court dismissing the complaint. The Ruling of the RTC On November 3, 1997, the trial court rendered a Decision in favor of respondent Celso Oate. The dispositive portion declared, thus: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants: 1. Declaring the Deed of Donation executed by the Municipality of Daraga, Albay in favor of the defendant Department of Education Culture and Sports through the Albay Schools Division as null and void; 2. Declaring the plaintiff as the owner in fee simple of Lots Nos. 6849-A, 6849-C, 6849-D and 6849-E which are registered in his name; 3. Commanding the defendants to return the possession of the portion of the land occupied by the school site to the herein plaintiff Celso Oate; 4. Ordering the plaintiff for reason of equity, to pay the defendant Municipality of Daraga, Albay the amount of Fifty Thousand (50,000.00) Pesos pursuant to Article 479 of the New Civil Code of the Philippines; 5. The defendant Department of Education Culture and Sports being a builder in good faith, the provisions of Article 448 of the New Civil Code of the Philippines shall be observed by the parties; and 6. Ordering the defendants to pay the costs of the suit. No attorneys fees is hereby adjudged in favor of plaintiffs counsel. SO ORDERED.[33] The trial court ratiocinated that it was clear that subject Lot 6849 was originally registered under the Torrens System in the name of Spouses Claro Oate and Gregoria Los Baos as evidenced by OCT No. RO-18971. The right of respondent Celso Oate over the disputed lot had not been proven otherwise or overturned in Civil Case No. 8724, and this was bolstered by the Deed of Extrajudicial Settlement of Estate and Cession, where respondents sister waived their successional rights in his favor. Thus, the trial court ruled in favor of respondents title. Besides, it further ruled that defendants could not assail the registered title of respondent in a collateral proceeding. While the Municipality of Daraga, Albay anchored its prior ownership over the disputed lot by virtue of a sale in 1940 and mentioned TCT No. 4812 supposedly issued in its name, it however failed to submit any deed of conveyance in its favor, as well as a copy of the alleged TCT No. 4812. Hence, the trial court held that its claim over disputedLot 6849 was based solely on adverse prescription which could not prevail over respondents registered title. The trial court concluded that given these factual and evidentiary proofs, petitioner had no right to occupy Lot 6849-A, and the Deed of Donation executed by theMunicipality of Daraga, Albay in favor of petitioner must be nullified. Finally, the trial court awarded PhP 50,000 to the Municipality of Daraga, Albay for the cost of landfill and ordered that Article 448[34] of the New Civil Code be followed by the parties as petitioner was a builder in good faith. The Ruling of the Court of Appeals Aggrieved, petitioner DECS and Municipality of Daraga, Albay filed their respective Notices of Appeal[35] assailing the trial courts Decision before the CA. However, onJune 17, 1998, the appellate court declared the appeals of both petitioners abandoned and dismissed for their failure to pay the required docket fees within the reglementary period.[36] Petitioner then filed a Motion for Reconsideration[37] of the said June 17, 1998 Resolution and its appeal was subsequently reinstated.[38] The Municipality ofDaraga, Albay, however, totally lost its appeal due to inaction, and the appellate court correspondingly issued a Partial Entry of Judgment on July 9, 1998.[39] Moreover, the appellate court held that there was no jurisdictional defect in the reconstitution proceeding being one in rem, and in the issuance of OCT No. RO-18971 based on the destroyed or lost OCT No. 2563, even if no notice was sent to petitioner. Thus, the CA ruled that respondents claim of ownership over Lot 6849-A occupied by the school is conclusive for being soundly predicated on TCT No. T-83946 which cancelled the reconstituted OCT No. RO-18971. Furthermore, it reiterated the trial courts holding that petitioner is precluded from attacking collaterally respondents title over the disputed lot in this proceeding. The CA emphasized that petitioners failure to present TCT No. 4812allegedly issued in the name of the Municipality of Daraga, Albay in 1940 in lieu of OCT No. 2563 and the Deed of Conveyance executed by the original owner, Claro Oate, in favor of the Municipalitywas fatal to the defense. It reasoned that all the more had their claim of ownership become doubtful when defendants-appellants [sic] failed to explain from their pleadings and the evidence submitted before Us their failure to present the two documents.[40] The appellate court concluded that given these facts, no title in the name of the Municipality ever existed and thus it could not have validly donated the subject property to petitioner. Anent the issue of the applicability of Amigable v. Cuenca,[41] the CA affirmed the doctrine enunciated in said case that to uphold the States immunity from suit would subvert the ends of justice. In fine, the appellate court pointed out the inconvenience and impossibility of restoring possession of Lot 6849-A to respondent considering the substantial improvements built on said lot by the government which amounted to almost PhP 12 million; and that the only relief available was for the government to pay just compensation in favor of respondent computed on the basis of the value of the property at the time of the governments taking of the land. Through its assailed Decision,[42] the CA dismissed petitioners appeal for lack of merit and affirmed the trial courts decision in toto. It reasoned that laches does not apply, its application rests on the sound discretion of the court, and where the court believes that its application would result in manifest wrong or injustice, it is constrained not to be guided strictly by said doctrine. Besides, it opined that laches could not defeat the rights of a registered owner. The IssuesHence, we have the instant petition where petitioner raises the following assignment of errors: ITHE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS FINDING THAT RESPONDENTS CAUSE OF ACTION TO RECOVER POSSESSION OF THE SUBJECT PROPERTY IS NOT YET BARRED BY LACHES.IITHE COURT OF APPEALS ERRED IN ACCORDING GREAT WEIGHT ON RESPONDENTS RECONSTITUTED ORIGINAL CERTIFICATE OF TITLE (OCT) NO. 2563 COVERING SUBJECT PROPERTY.III THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER MAY BE SUED IN VIOLATION OF THE STATES IMMUNITY FROM SUIT.IVTHE COURT OF APPEALS ERRED IN RULING THAT PETITIONER MAY BE SUED INDEPENDENTLY OF THE REPUBLIC OF THE PHILIPPINES.[43]

Petitioner basically raises two issuesthe application of laches and the non-suability of the State. The threshold issue is whether petitioner DECS can be sued in Civil Case No. 8715 without its consent. A supplementary issue is whether petitioner DECS can be sued independently of the Republic of the Philippines.We rule that petitioner DECS can be sued without its permission as a result of its being privy to the Deed of Donation executed by the Municipality of Daraga, Albay over the disputed property. When it voluntarily gave its consent to the donation, any dispute that may arise from it would necessarily bring petitioner DECS down to the level of an ordinary citizen of the State vulnerable to a suit by an interested or affected party. It has shed off its mantle of immunity and relinquished and forfeited its armor of non-suability of the State.[44] The auxiliary issue of non-joinder of the Republic of the Philippines is likewise resolved in the negative. While it is true that petitioner is an unincorporated government agency, and as such technically requires the Republic of the Philippines to be impleaded in any suit against the former, nonetheless, considering our resolution of the main issue below, this issue is deemed mooted. Besides, at this point, we deem it best to lift such procedural technicality in order to finally resolve the long litigation this case has undergone. Moreover, even if we give due course to said issue, we will arrive at the same ruling. The Republic of the Philippines need not be impleaded as a party-defendant in Civil Case No. 8715 considering that it impliedly gave its approval to the involvement of petitioner DECS in the Deed of Donation. In a situation involving a contract between a government department and a third party, the Republic of the Philippines need not be impleaded as a party to a suit resulting from said contract as it is assumed that the authority granted to such department to enter into such contract carries with it the full responsibility and authority to sue and be sued in its name.Main Issue: Equitable Remedy of Laches Petitioner strongly asserts that the Municipality of Daraga, Albay had continuous, open, and adverse possession in the concept of an owner over the disputed lot since 1940 until December 21, 1988 or for about 48 years. Significantly, it maintains that Tax Declaration No. 31954 covering the disputed lot in the name of the Municipality of Daraga, Albay contains an annotation certifying that said lot was under voucher No. 69, August, 1940 accounts. The corresponding Transfer Title No. 4812 has been issued by the Register of Deeds Office of Albay on August 3, 1940.[45] When petitioner received the lot as donation from the Municipality on December 21, 1988, it possessed the subject lot also in the concept of an owner and continued to introduce improvements on the lot. Consequently, when respondent instituted the instant case in 1993, petitioner and its predecessor-in-interest Municipality of Daraga, Albay had possessed the subject lot for a combined period of about fifty two (52) years. Petitioner strongly avers that Claro Oate, the original owner of subject lot, sold it to the Municipality. At the very least it asserts that said Claro Oate allowed the Municipality to enter, possess, and enjoy the lot without protest. In fact, Claro Oate neither protested nor questioned the cancellation of his Tax Declaration No. 30235 covering the disputed lot and its substitution by Tax Declaration No. 31954 in the name of the Municipality on account of his sale of the lot to the latter. In the same vein, when Claro Oate and his spouse died, their children Antonio, Rafael, and Francisco who succeeded them also did not take any steps to question the ownership and possession by the Municipality of the disputed lot until they died on June 8, 1990, June 12, 1991, and October 22, 1957, respectively. Petitioner maintains that significantly, respondent and his siblings succeeding their father Francisco as the alleged owners, from his death on October 22, 1957also did not take any action to recover the questioned lot from 1957 until 1993 when the instant suit was commenced. Petitioner avers that if they were really the owners of said lot, they would not have waited 52 long years to institute the suit assuming they have a cause of action against the Municipality or petitioner. Thus, petitioner submits that the equitable principle of laches has indubitably set in to bar respondents action to recover possession of, and title to, the disputed lot. Laches and its elements Indeed, it is settled that rights and actions can be lost by delay and by the effect of delay as the equitable defense of laches does not concern itself with the character of the defendants title, but only with plaintiffs long inaction or inexcusable neglect to bar the latters action as it would be inequitable and unjust to the defendant. Laches is defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that whichby the exercise of due diligencecould or should have been done earlier.[46] Verily, laches serves to deprive a party guilty of it to any judicial remedies. Its elements are: (1) conduct on the part of the defendant, or of one under whom the defendant claims, giving rise to the situation which the complaint seeks a remedy; (2) delay in asserting the complainant's rights, the complainant having had knowledge or notice of the defendant's conduct as having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right in which the defendant bases the suit; and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held barred.[47] In Felix Gochan and Sons Realty Corporation, we held that [t]hough laches applies even to imprescriptible actions, its elements must be proved positively. Laches is evidentiary in nature which could not be established by mere allegations in the pleadings and can not be resolved in a motion to dismiss (emphases supplied).[48] In the same vein, we explained in Santiago v. Court of Appeals that there is no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances.[49] Issue of laches not barred by adverse judgmentagainst Daraga, Albay It is unfortunate that defendant Municipality of Daraga, Albay lost its appeal in CA-G.R. CV No. 60659 before the CA for its failure to pay the required docket fees within the reglementary period. As a result, a Partial Entry of Judgment was made on July 9, 1998 and consequently, the dispositions in the November 3, 1997 Decision, rendered by the Legaspi City RTC, Branch I in favor of respondent Celso Oate, became final and executory as against defendant Municipality of Daraga, Albay. As an off-shoot, with respect to the Municipality of Daraga, the Deed of Donation in favor of petitioner DECS was annulledrespondent Oate was declared owner in fee simple of the disputed lots and entitled to possession but was required to pay PhP 50,000 to the Daraga Municipal Government and the costs of suit. By reason of the finality of the Decision against the Municipality of Daraga, Tax Declaration Nos. 04-006-00068, 332, 22184, 31954, and 8926 are all cancelled and annulled (if not yet cancelled). What are the effects of the final judgment against Municipality of Daraga on its co-defendant, petitioner DECS? Generally, it has no impact on the appeal of DECS unless the decision affects its defenses. In this petition, DECS no longer questions the declaration of nullity of the Deed of Donation over the disputed lot and hence can be considered as a final resolution of the issue. Likewise, it does not challenge the ownership of Oate of the disputed lots, but merely relied on the defense of laches. The final directive for Municipality of Daraga to return possession of the land has no significance on DECS appeal since precisely, it is DECS position that it should retain possession of the land. From these considerations, the final RTC November 3, 1997 Decision against the Municipality of Daraga has no substantial and material effect upon the DECS appeal. The only remaining issue left is whether laches can inure to the benefit of petitioner DECS considering the fact that Lot No. 6849-A was devoted to public education when the elementary school was built in 1940 under the supervision and control of DECS up to 1993 when Civil Case No. 8715 was filed by respondent Oate.We rule in the affirmative. Laches has set in A brief scrutiny of the records does show tell-tale signs of laches. The first element is undisputed: the then Bagumbayan Elementary School of Daraga was constructed in 1940 on a portion of disputed Lot 6849, specifically Lot No. 6849-A containing 13,072 square meters under TCT No. T-83946. Moreover, Mrs. Toribia Milleza,[50] a retired government employee and resident of Bagumbayan, Daraga since 1955 pertinently testified, thus: Q: How long have you been residing in this place, Bagumbayan, Daraga, Albay?A: Maybe I stayed there in 1955 until the present.[51] x x x x Q: Now, can you further recall the kind of building that was constructed in this property?A: Seva type, building. Q: At present how many buildings were constructed in this property?A: Plenty of school buildings. Q: Now, how many buildings were first constructed in [sic] this property?A: In 1955 only one, the Seva type, then there was constructed five (5) Marcos Type buildings during the Marcos time.[52] The devotion of Lot No. 6849-A to education started in 1940 and continued up to December 21, 1988 when said lot was donated to the DECS. From then on, DECS built various buildings and introduced improvements on said lot. Lot No. 6849-A was continuously used for public education until March 18, 1993 when respondent Oate filed Civil Case No. 8715 and thereafter up to the present. Thus, for a total period of more than fifty-two (52) years, Lot No. 6849-A was exclusively and completely utilized by DECS for public education. This fact was not successfully challenged nor refuted by respondent.The second element of laches was likewise proven. No evidence was presented to show that respondent or his predecessors-in-interest ever took any action, administrative or judicial, nor either party questioned or protested the Municipalitys adverse occupation of a portion of Lot 6849. As petitioner had demonstrated laches by persuasive and credible evidence, it is incumbent upon respondent to show that his predecessors-in-interest indeed protected their rights of ownership over the lot. Thus, as early as 1940, when the first Seva type school building was constructed over a portion of the disputed lot, now Lot 6849-A, respondent must prove that his predecessors-in-interest indeed undertook activities to contest the occupation of the portion of the lot by the Municipality and subsequently by petitioner DECS. Unfortunately, respondent failed to substantiate such defense of ownership and possession of the lot and even skirted this issue. Respondent testified that he came to know of Lot 6849 only in 1973 when he was 23 years old.[53] He asserted that he took possession of said lot in the same year when his two (2) uncles, the brothers of his late father, passed on to him the disputed lot as his fathers share of the inheritance from the late Claro Oate and Gregoria Los Baos (his grandparents). However, it is interesting to note that he testified that he only came to know in 1991 that the elementary school was built on a portion of Lot 6849, now Lot 6849-A. These assertions are irreconcilable. Common experience tells us that one who owns a property and takes possession of it cannot fail to discover and know that an existing elementary school was built and standing on the lot from the time that the owner starts possessing a property. Nonetheless, even granting that respondent indeed only came to know of such encroachment or occupation in 1991, his rights cannot be better than that of his predecessors-in-interest, that is, Claro Oate and his uncles, Antonio and Rafael, who died in 1990 and 1991, respectively. Since respondents right over the lot originated from his predecessors-in-interest, then he cannot have better rights over Lot No. 6849-A than the latter. The spring cannot rise higher than its source. Besides, respondent has not proffered any explanation why his predecessors-in-interest did not protest and challenge the Municipalitys occupancy over a portion of their lot. Verily, with the span of around 52 years afforded respondent and his predecessors-in-interest, their inaction and delay in protecting their rights were certainly excessive and unjustified. In the third element, the records clearly bear out the fact that petitioner DECS did not know nor anticipate that their possession and occupancy of a portion of Lot 6849 would later be questioned. In fact, petitioner built additional school buildings and facilities on the school site amounting to more than PhP 11 million. Mr. Jose Adra, School Principal of the Daraga North Central Elementary School, testified on the donation of the disputed lot to petitioner and the cost of the improvements on it.[54] After more than forty-eight (48) years of unquestioned, peaceful, and uninterrupted possession by petitioner DECS, it had no knowledge nor reason to believe that respondent would assert any right over the lot after the lapse of such long occupation coupled with a tax declaration in the name of the Daraga Municipality. Finally, the last element is likewise proven by the antecedent facts that clearly show grave prejudice to the government, in general, and to petitioner, in particular, if the instant action is not barred without even considering the cost of the construction of the school buildings and facilities and the deleterious effect on the school children and affected school teachers and personnel if Lot No. 6849-A would be returned to respondent. Verily, the application of laches is addressed to the sound discretion of the court as its application is controlled by equitable considerations. In the instant case, with the foregoing considerations, we are constrained from giving approbation to the trial and appellate courts ruling that the application of the principle of laches would subvert the ends of justice. Indeed, it is unjust for the State and the affected citizenry to suffer after respondent and his predecessors-in-interest had slept on their rights for 52 years. Also, the inaction of respondent Oate and his predecessors-in-interest for over 50 years has reduced their right to regain possession of Lot 6849-A to a stale demand. Laches holds over the actual area possessed and occupied by petitioner We, however, make the clear distinction that laches applies in favor of petitioner only as regards Lot 6849-A which is actually possessed and occupied by it. Laches does not apply to Lot Nos. 6849-B, 6849-C, 6849-D, and 6849-E. These portions were never occupied by the Municipality and petitioner. Agricultural tenant Felicito Armenta testified that his father, Antonio Armenta, started cultivating portions of Lot 6849 way back in the 1940s and that he took over the tenancy in 1960 when his father stopped tilling the land.Besides, if the Municipality indeed owned Lot 6849 by virtue of a purchase, it is likewise guilty of laches in not protecting or contesting the cultivation by Oates agricultural tenants of said portions of Lot 6849. Transfer Certificates of Title on portions of Lot 6849 valid Petitioner contends that the reconstitution of OCT No. 2563covering subject lot in 1991 or 52 years after the Municipality owned said lotdoes not in any way affect the latters preferential and superior right over the disputed lot. In the same vein, it maintains that it is inconsequential that petitioner and the Municipality failed to present as evidence the deed of conveyance in favor of the Municipality, as well as TCT No. 4812 as a registered land owner may lose the right to recover possession of a registered property by reason of laches. Petitioner concludes that the long delayed reconstitution of OCT No. 2563 by respondent was a mere afterthought and intended to camouflage his and his predecessors unreasonably long inaction which indicates an awareness that they have no valid claim whatsoever over disputed Lot 6849. We disagree. It must be noted that a reconstitution proceeding is one in rem and is thus binding to the whole world. While it is true that laches has set in so far as it pertains to the portion of Lot 6849, specifically Lot 6849-A where the Municipality and petitioner DECS had constructed the existing school, such does not hold true for the totality of Lot 6849 as explained above. Indeed, the reconstitution proceeding being one in rem, the consequent issuance of OCT No. RO-18971 in lieu of the lost or destroyed OCT No. 2563 is valid. Anent the issue of non-notification, we agree with the observation of the courts a quo that even granting arguendo that petitioner was not notified about the reconstitution proceeding, such deficiency is not jurisdictional as to nullify and prevail over the final disposition of the trial court in a proceeding in rem. More so, while petitioner strongly asserts that the certification in Tax Declaration No. 31954 attesting to the payment of the disputed lot under Municipal Voucher No. 69 and the issuance of TCT No. 4812, which was never disputed nor controverted by respondent, should have been given evidentiary weight by the trial and appellate courts as the presumptions of regularity and validity of such official act have not been overcome, such documents cannot defeat the registered title of respondent. Between a clear showing of ownership evidenced by a registered title and a certification in a tax declaration, albeit done in an official capacity, the former holds as the latter is only persuasive evidence. Indeed, tax declarations in land cases per se do not constitute ownership without other substantial pieces of evidence. The records do not show and petitioner has not given any cogent explanation why the Deed of Conveyance in favor of the Municipality of Daraga, Albay and TCT No. 4812 were not presented. With clear and affirmative defenses set up by petitioner and Municipality of Daraga, Albay, it is incumbent for them to present these documents. Therefore, the unmistakable inference is that there was indeed no sale and conveyance by Claro Oate of Lot 6849 in favor of the Municipality. Consequently, the TCTs cancelling OCT No. RO-18971 covering Lot Nos. 6849-A, 6849-B, 6849-C, 6849-D, and 6849-E were likewise validly issued. Thus, notwithstanding valid titles over the portions of Lot 6849, respondent Oate cannot now take possession over Lot No. 6849-A for reason of laches. In the recent case of De Vera-Cruz v. Miguel, we reiterated the principle we have consistently applied in laches: The law[55] provides that no title to registered land in derogation of that of the registered owner can be acquired by prescription or adverse possession. Nonetheless, while it is true that a Torrens Title is indefeasible and imprescriptible, the registered landowner may lose his right to recover the possession of his registered property by reason of laches.[56]Thus, with our resolution of the principal issue of applicability of the equitable remedy of laches, the issue of suability of the State has been mooted. A final word. Considering our foregoing disquisition and upon grounds of equity, a modification of the final decision prevailing between respondent Oate and theMunicipality of Daraga, Albay is in order. It would be grossly iniquitous for respondent Oate to pay PhP 50,000 to the Municipality of Daraga, Albay considering that he is not entitled to recover the possession and usufruct of Lot No. 6849-A. WHEREFORE, the instant petition is GRANTED and the January 14, 2004 Decision of the CA in CA-G.R. CV No. 60659 affirming the November 3, 1997 Decision of the Legaspi City RTC is AFFIRMED with the following MODIFICATIONS: 1) Declaring the DepEd (formerly DECS), Division of Albay to have the rights of possession and usufruct over Lot 6849-A with an area of 13,072 square meters under TCT No. T-83946 of the Registry of Deeds of Albay, as a result of laches on the part of respondent Celso Oate and his predecessors-in-interest. Respondent Celso Oate, his heirs, assigns, and successors-in-interest are prohibited from selling, mortgaging, or encumbering Lot 6849-A while the said lot is still being used and occupied by petitioner DECS.However, the rights of possession and usufruct will be restored to respondent the moment petitioner DECS no longer needs the said lot. The Registry of Deeds of Albay is ordered to annotate the aforementioned restrictions and conditions at the back of TCT No. T-83946-A in the name of respondent Celso Oate. Item No. 2 of the November 3, 1997Decision of the Legaspi City RTC is modified accordingly; 2) Declaring Celso Oate as the true and legal owner in fee simple of the following lots a. Lot 6849-C with an area of 10,000 square meters under TCT No. T-83948 of the Registry of Deeds of Albay;b. Lot 6849-D with an area of 1,127 square meters under TCT No. T-83949 of the Registry of Deeds of Albay; andc. Lot 6849-E with an area of 608 square meters under TCT No. T-83950 of the Registry of Deeds of Albay.3) Declaring Mariano M. Lim as true and legal owner of Lot 6849-B with an area of 3,100 square meters under TCT No. T-84049 of the Registry of Deeds of Albay;4) Ordering petitioner DECS and all other persons claiming under said department to return the possession of Lots 6849-C, 6849-D, and 6849-E to respondent Celso Oate and Lot 6849-B to Mariano M. Lim; and5) Deleting Item No. 4 of the November 3, 1997 Decision of the Legaspi City RTC, which ordered respondent Celso Oate to pay Fifty Thousand Pesos (PhP 50,000) to defendant Municipality of Daraga, Albay.The November 3, 1997 Decision of the Legaspi City RTC is AFFIRMED in all other respects. No costs.SO ORDERED.

METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM, petitioner, vs. ACT THEATER, INC., respondent.D E C I S I O NCALLEJO, SR., J.:Before the Court is a petition for review on certiorari filed by the Metropolitan Waterworks and Sewerage System (MWSS), seeking to reverse and set aside the Decision[1] dated January 31, 2001 of the Court of Appeals in CA-G.R. CV No. 58581, which affirmed the civil aspect of the Decision[2] dated May 5, 1997 of the Regional Trial Court of Quezon City, Branch 77, directing the petitioner MWSS to pay the respondent Act Theater, Inc. damages and attorneys fees.The present case stemmed from the consolidated cases of Criminal Case No. Q-89-2412 entitled People of the Philippines v. Rodolfo Tabian, et al., for violation of Presidential Decree (P.D.) No. 401, as amended by Batas Pambansa Blg. 876, and Civil Case No. Q-88-768 entitled Act Theater, Inc. v. Metropolitan Waterworks and Sewerage System. The two cases were jointly tried in the court a quo as they arose from the same factual circumstances, to wit:On September 22, 1988, four employees of the respondent Act Theater, Inc., namely, Rodolfo Tabian, Armando Aguilar, Arnel Concha and Modesto Ruales, were apprehended by members of the Quezon City police force for allegedly tampering a water meter in violation of P.D. No. 401, as amended by B.P. Blg. 876. The respondents employees were subsequently criminally charged (Criminal Case No. Q-89-2412) before the court a quo. On account of the incident, the respondents water service connection was cut off. Consequently, the respondent filed a complaint for injunction with damages (Civil Case No. Q-88-768) against the petitioner MWSS.In the civil case, the respondent alleged in its complaint filed with the court a quo that the petitioner acted arbitrarily, whimsically and capriciously, in cutting off the respondents water service connection without prior notice. Due to lack of water, the health and sanitation, not only of the respondents patrons but in the surrounding premises as well, were adversely affected.The respondent prayed that the petitioner be directed to pay damages.After due trial, the court a quo rendered its decision, the dispositive portion of which reads:In Criminal Case No. Q-89-2412WHEREFORE, for failure of the prosecution to prove the guilt of the accused beyond reasonable doubt, the four (4) above-named Accused are hereby ACQUITTED of the crime charged.[3]In Civil Case No. Q-88-768...1. Ordering defendant MWSS to pay plaintiff actual or compensatory damages in the amount of P25,000.00; and to return the sum of P200,000.00 deposited by the plaintiff for the restoration of its water services after its disconnection on September 23, 1988;2. Defendants counterclaim for undercollection of P530,759.96 is dismissed for lack of merit;3. Ordering defendant MWSS to pay costs of suit;4. Ordering defendant MWSS to pay plaintiff the amount of P5,000.00 as attorneys fees;5. Making the mandatory injunction earlier issued to plaintiff Act Theater, Inc. permanent.SO ORDERED.[4]Aggrieved, the petitioner appealed the civil aspect of the aforesaid decision to the CA. The appellate court, however, dismissed the appeal. According to the CA, the court a quocorrectly found that the petitioners act of cutting off the respondents water service connection without prior notice was arbitrary, injurious and prejudicial to the latter justifying the award of damages under Article 19 of the Civil Code.Undaunted, the petitioner now comes to this Court alleging as follows:IWHETHER OR NOT THE HONORABLE COURT OF APPEAL[S] VALIDLY AFFIRMED THE DECISION OF THE REGIONAL TRIAL COURT IN RESOLVING THE PETITIONERS APPEAL;IIWHETHER OR NOT THE HONORABLE COURT OF APPEALS VALIDLY UPHELD THE AWARD OF ATTORNEYS FEES;IIIWHETHER OR NOT THE HONORABLE COURT OF APPEAL[S] CORRECTLY APPLIED THE PROVISION OF ARTICLE 19 OF THE NEW CIVIL CODE WITHOUT CONSIDERING THE APPLICABLE PROVISION OF ARTICLE 429 OF THE SAME CODE.[5]Preliminarily, the petitioner harps on the fact that, in quoting the decretal portion of the court a quos decision, the CA erroneously typed P500,000 as the attorneys fees awarded in favor of the respondent when the same should only be P5,000. In any case, according to the petitioner, whether the amount is P500,000 or P5,000, the award of attorneys fees is improper considering that there was no discussion or statement in the body of the assailed decision justifying such award. The petitioner insists that in cutting off the respondents water service connection, the petitioner merely exercised its proprietary right under Article 429 of the Civil Code.The petition is devoid of merit.Article 429 of the Civil Code, relied upon by the petitioner in justifying its act of disconnecting the water supply of the respondent without prior notice, reads:Art. 429. The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonable to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.A right is a power, privilege, or immunity guaranteed under a constitution, statute or decisional law, or recognized as a result of long usage,[6] constitutive of a legally enforceable claim of one person against the other.[7]Concededly, the petitioner, as the owner of the utility providing water supply to certain consumers including the respondent, had the right to exclude any person from the enjoyment and disposal thereof. However, the exercise of rights is not without limitations. Having the right should not be confused with the manner by which such right is to be exercised.[8]Article 19 of the Civil Code precisely sets the norms for the exercise of ones rights:Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.When a right is exercised in a manner which discards these norms resulting in damage to another, a legal wrong is committed for which actor can be held accountable.[9] In this case, the petitioner failed to act with justice and give the respondent what is due to it when the petitioner unceremoniously cut off the respondents water service connection. As correctly found by the appellate court:While it is true that MWSS had sent a notice of investigation to plaintiff-appellee prior to the disconnection of the latters water services, this was done only a few hours before the actual disconnection. Upon receipt of the notice and in order to ascertain the matter, Act sent its assistant manager Teodulo Gumalid, Jr. to the MWSS office but he was treated badly on the flimsy excuse that he had no authority to represent Act. Acts water services were cut at midnight of the day following the apprehension of the employees. Clearly, the plaintiff-appellee was denied due process when it was deprived of the water services. As a consequence thereof, Act had to contract another source to provide water for a number of days. Plaintiff-appellee was also compelled to deposit with MWSS the sum of P200,000.00 for the restoration of their water services.[10]There is, thus, no reason to deviate from the uniform findings and conclusion of the court a quo and the appellate court that the petitioners act was arbitrary, injurious and prejudicial to the respondent, justifying the award of damages under Article 19 of the Civil Code.Finally, the amount of P500,000 as attorneys fees in that portion of the assailed decision which quoted the fallo of the court a quos decision was obviously a typographical error. As attorneys fees, the court a quo awarded the amount of P5,000 only. It was this amoun