Property Cases Finals

8/11/2019 Property Cases Finals

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Finals: Property Cases

Lykah Honra

1

[G.R. No. 149295. September 23, 2003]PHILIPPINE NATIONAL BANK, peti t ioner, vs. GENEROSO DE JESUS, represented by hisAttorney-in-Fact, CHRISTIAN DE JESUS, respondent.D E C I S I O NVITUG, J.:Petitioner Philippine National Bank disputes the decision handed down by the Court of Appeals

promulgated on 23 March 2001 in CA-G.R. CV No. 56001, entitled Generoso De Jesus,represented by his Attorney-in-Fact, Christian De Jesus, versus Philippine National Bank. Theassailed decision has affirmed the judgment rendered by the Regional Trial Court, Branch 44, ofMamburao, Occidental Mindoro, declaring respondent Generoso de Jesus as being the true andlawful owner of the 124-square-meter portion of the land covered by Transfer Certificate of Title(TCT) No. T-17197 and ordering petitioner bank to vacate the premises, to deliver possessionthereof to respondent, and to remove the improvement thereon.It would appear that on 10 June 1995, respondent filed a complaint against petitioner before theRegional Trial Court of Occidental Mindoro for recovery of ownership and possession, withdamages, over the questioned property. In his complaint, respondent stated that he had acquireda parcel of land situated in Mamburao, Occidental Mindoro, with an area of 1,144 square meterscovered by TCT No. T-17197, and that on 26 March 1993, he had caused a verification survey ofthe property and discovered that the northern portion of the lot was being encroached upon by abuilding of petitioner to the extent of 124 square meters. Despite two letters of demand sent byrespondent, petitioner failed and refused to vacate the area.Petitioner, in its answer, asserted that when it acquired the lot and the building sometime in 1981from then Mayor Bienvenido Ignacio, the encroachment already was in existence and to remedythe situation, Mayor Ignacio offered to sell the area in question (which then also belonged toIgnacio) to petitioner at P100.00 per square meter which offer the latter claimed to haveaccepted. The sale, however, did not materialize when, without the knowledge and consent ofpetitioner, Mayor Ignacio later mortgaged the lot to the Development Bank of the Philippines.The trial court decided the case in favor of respondent declaring him to be the rightful owner ofthe disputed 124-square-meter portion of the lot and ordering petitioner to surrender possessionof the property to respondent and to cause, at its expense, the removal of any improvementthereon.The Court of Appeals, on appeal, sustained the trial court but it ordered to be deleted the awardto respondent of attorneys fees, as well as moral and exemplary damages, and litigation

expenses.Petitioner went to this Court, via a petition for review, after the appellate court had denied thebanks motion for reconsideration, here now contending that -1. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN ADJUDGING PNB A BUILDER IN

BAD FAITH OVER THE ENCROACHED PROPERTY IN QUESTION;

2. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN NOT APPLYING IN FAVOR OF PNB

THE PROVISION OF ARTICLE 448 OF THE CIVIL CODE AND THE RULING IN TECNOGAS

PHILIPPINES MANUFACTURING CORP. VS. COURT OF APPEALS, G.R. No. 108894, February 10,

1997, 268 SCRA 7.[if !supportFootnotes][1][endif]

The Regional Trial Court and the Court of Appeals have both rejected the idea that petitioner canbe considered a builder in good faith. In the context that such term is used in particular referenceto Article 448, et seq., of the Civil Code, a builder in good faith is one who, not being the owner ofthe land, builds on that land believing himself to be its owner and unaware of any defect in his title

or mode of acquisition.The various provisions of the Civil Code, pertinent to the subject, read:Article 448. The owner of the land on which anything has been built, sown, or planted in good faith, shall

have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity

provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land,

and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land

if its value is considerably more than that of the building or trees. In such a case, he shall pay reasonable

rent, if the owner of the land does not choose to appropriate the building or trees after proper

indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall

fix the terms thereof.


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Article 449. He who builds, plants, or sows in bad faithon the land of another, loses what is built, planted

or sown without right to indemnity.

Article 450. The owner of the land on which anything has been built, planted or sown in bad faith may

demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in

their former condition at the expense of the person who built, planted or sowed; or he may compel the

builder or planter to pay the price of the land, and the sower the proper rent.

A builder in good faith can, under the foregoing provisions, compel the landowner to make achoice between appropriating the building by paying the proper indemnity or obliging the builderto pay the price of the land. The choice belongs to the owner of the land, a rule that accords withthe principle of accession, i.e., that the accessory follows the principal and not the other wayaround.

[if !supportFootnotes][2][endif] Even as the option lies with the landowner, the grant to him,

nevertheless, is preclusive. He much choose one. He cannot, for instance, compel the owner ofthe building to instead remove it from the land.

[if !supportFootnotes][3][endif] In order, however, that the

builder can invoke that accruing benefit and enjoy his corresponding right to demand that achoice be made by the landowner, he should be able to prove good faith on his part.Good faith, here understood, is an intangible and abstract quality with no technical meaning orstatutory definition, and it encompasses, among other things, an honest belief, the absence ofmalice and the absence of design to defraud or to seek an unconscionable advantage. Anindividuals personal good faith is a concept of his own mind and, therefore, may not conclusivelybe determined by his protestations alone. It implies honesty of intention, and freedom from

knowledge of circumstances which ought to put the holder upon inquiry. [if !supportFootnotes][4][endif]Theessence of good faith lies in an honest belief in the validity of ones right, ignorance of a superiorclaim, and absence of intention to overreach another.

[if !supportFootnotes][5][endif]Applied to possession,

one is considered in good faith if he is not aware that there exists in his title or mode ofacquisition any flaw which invalidates it.

[if !supportFootnotes][6][endif]

Given the findings of both the trial court and the appellate court, it should be evident enough thatpetitioner would fall much too short from its claim of good faith. Evidently, petitioner was quiteaware, and indeed advised, prior to its acquisition of the land and building from Ignacio that a partof the building sold to it stood on the land not covered by the land conveyed to it.Equally significant is the fact that the building, constructed on the land by Ignacio, has in actualitybeen part of the property transferred to petitioner. Article 448, of the Civil Code refers to a pieceof land whose ownership is claimed by two or more parties, one of whom has built some works(or sown or planted something) and not to a case where the owner of the land is the builder,

sower, or planter who then later loses ownership of the land by sale or otherwise for,elsewise stated, where the true owner himself is the builder of works on his own land, the

issue of good faith or bad faith is entirely irrelevant .[if !supportFootnotes][7][endif]

In fine, petitioner is not in a valid position to invoke the provisions of Article 448 of the CivilCode. The Court commiserates with petitioner in its present predicament; upon the other hand,respondent, too, is entitled to his rights under the law, particularly after having long been deprivedof the enjoyment of his property. Nevertheless, the Court expresses hope that the parties will stillbe able to come up with an arrangement that can be mutually suitable and acceptable to them.

WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 56001 isAFFIRMED. No costs.

SO ORDERED.


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Lykah Honra

3

G.R. No. 168747 October 19, 2007

VICTORIA REGNER,Petitioner,

vs.

CYNTHIA R. LOGARTA, TERESA R. TORMIS and CEBU COUNTRY CLUB, Inc.,Respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

This Petition for Review on Certiorari seeks to reverse the Decision1 dated 6 May 2005 of the

Court of Appeals in CA-G.R. CV No. 71028 entitled, "Victoria Regner v. Cynthia Logarta, TeresaR. Tormis and Cebu Country Club, Inc.," which affirmed the Order dated 9 November 2000 of theRegional Trial Court (RTC) of Cebu, granting herein respondents motion to dismiss Civil CaseNo. CEB 23927. The Order dated 9 November 2000 of the RTC dismissed herein petitionerscomplaint for declaration of nullity of a deed of donation, for failure to serve summons on CynthiaLogarta, an indispensable party therein.

Civil Case No. CEB. 23927 arose from the following factual antecedents:

Luis Regner (Luis) had three daughters with his first wife, Anicita C. Regner, namely, CynthiaLogarta (Cynthia) and Teresa Tormis (Teresa), the respondents herein, and Melinda Regner-Borja (Melinda).

Herein petitioner Victoria Regner (Victoria) is the second wife of Luis.

During the lifetime of Luis, he acquired several properties, among which is a share at CebuCountry Club Inc., evidenced by Proprietary Ownership Certificate No. 0272. On 15 May 1998,Luis executed a Deed

2 of Donation in favor of respondents Cynthia and Teresa covering

Proprietary Ownership Certificate No. 0272 of the Cebu Country Club, Inc.

Luis passed away on 11 February 1999.

On 15 June 1999, Victoria filed a Complaint3 for Declaration of Nullity of the Deed of Donation

with Prayer for Issuance of a Writ of Preliminary Injunction and Temporary Restraining Orderagainst Cynthia and Teresa with the RTC, docketed as Civil Case No. CEB. 23927. Victoriaalleged in her complaint that: on 17 March 1997, Luis made a written declaration wherein hestated that due to his illness and forgetfulness, he would not sign any document without theknowledge of his lawyer, Atty. Francis Zosa; on 15 May 1998, when Luis was already very ill andno longer of sound and disposing mind, Cynthia and Teresa , conspiring and confederating witheach other, fraudulently made or caused to be fraudulently made a Deed of Donation wherebythey made it appear that Luis donated to them Proprietary Ownership Certificate No. 0272; sinceLuis no longer had the ability to write or affix his signature, Melinda, acting under the influence ofher sisters, Cynthia and Teresa, fraudulently manipulated the hand of Luis so that he could affixhis thumbmark on the assailed Deed of Donation; on 8 February 1998, or three days before thedeath of Luis, and when he was already in comatose condition at the Cebu Doctors Hospital,Melinda, Teresa, and Cynthia caused the preparation of an affidavit to the effect that Luis

affirmed the Deed of Donation he allegedly executed earlier by lifting his hand to affix histhumbmark on the said affidavit.

Sheriff Melchor A. Solon served the summonses on Cynthia and Teresa at the Borja Family Clinicin Tagbilaran City wherein Melinda worked as a doctor, but Melinda refused to receive thesummonses for her sisters and informed the sheriff that their lawyer, Atty. Francis Zosa, would bethe one to receive the same.

Upon her arrival in the Philippines, on 1 June 2000, Teresa was personally served the summons


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at Room 304, Regency Crest Condominium, Banilad, Cebu City. She filed her Answer4 with

counterclaim with the RTC on 6 June 2000.

Subsequently, on 12 September 2002, Teresa filed a motion to dismiss Civil Case No. CEB23927 because of petitioners failure to prosecute her action for an unreasonable length of time.

Petitioner opposed5 the motion and filed her own motion to set the case for pre-trial, to which

Teresa filed her rejoinder on the ground that their sister, Cynthia, an indispensable party, had notyet been served a summons. Thus, Teresa prayed for the dismissal of petitioners complaint, asthe case would not proceed without Cynthias presence.

On 9 November 2000, the RTC issued an Order6granting respondent Teresas motion to dismiss,

pertinent portions of which read:

Considering that the donees in the Deed of Donation are Cynthia R. Logarta and Teresa R.Tormis, they are therefore an (sic) indispensable party (sic). In the case of Quisumbing vs. Courtof Appeals, 189 SCRA 325, indispensable parties are those with such an interest in thecontroversy that a final decree would necessarily affect their rights so that the court could notproceed without their presence

Wherefore, in view of the foregoing, the instant case is hereby dismissed without prejudice.

A motion for reconsideration was filed by petitioner, but the same was denied in an Order dated14 February 2001.

Aggrieved, petitioner appealed to the Court of Appeals. On 6 May 2005, the Court of Appealsrendered a Decision denying the appeal and affirming in toto the order of dismissal of thecomplaint by the RTC and the denial of the motion for reconsideration thereof. The Court ofAppeals ratiocinated that petitioners failure to move for an extraterritorial service of summonsconstitutes failure to prosecute for an unreasonable length of time, thus:

[T]he plaintiff-appellant [Victoria Regner] should have moved for the extraterritorial service ofsummons for both defendants-appellees Teresa R. Tormis and Cynthia R. Logarta as they werenot residing and were not found in the Philippines when plaintiff-appellant [Victoria Regner] filedthis case below. Although defendant-appellant Teresa Tormis was personally served withsummons on June 1, 2000 when she came to the Philippines but the same was only effectedafter a long wait or after the lapse of almost one year from the date the complaint was filed onJune 15, 1999. To allow this practice would be to make the continuation of like proceedingsbefore the courts dependent on when the defendants would be personally served with summonsby the time they would come to the Philippines, which would only unnecessarily delay theproceedings and clog the court dockets as well. The afore-cited rule was precisely crafted to meetsituations similar to the present case to avoid unnecessary delays.

It has to be emphasized that it is incumbent upon the plaintiff [Victoria Regner] to move with leaveof court for the extraterritorial service of summons. Taking into account the considerable time thathad elapsed from the filing of the complaint on June 15, 1999 until defendant-appellee Teresa R.Tormis, through counsel, filed a motion to dismiss on September 12, 2000, or approximatelyfifteen (15) months, without any act on the part of plaintiff-appellant [Victoria Regner] to move forextraterritorial service of summons upon the person of defendant-appellee Cynthia Logartarenders plaintiff-appellants [Victoria Regner] complaint dismissible for failure to prosecute he raction for unreasonable length of time under Section 3, Rule 17, Revised Rules of Court, x x x.

7

Hence, this appeal via petition8 for review on certiorari filed by petitioner raising the following

assignment of errors:

THE COURT OF APPEALS ERRED IN HOLDING THAT THE DELAY IN SERVING SUMMONS


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Lykah Honra

5

ON ONE OF THE DEFENDANTS CONSTITUTES A FAILURE TO PROSECUTENOTWITHSTANDING THAT THE REST OF THE CO-DEFENDANTS WERE DULY SERVEDWITH SUMMONSES

THE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT THE ANSWER FILED BYONE INDIVIDUAL DEFENDANT REDOUNDS TO THE BENEFIT OF THE OTHER DEFENDANT

WHO HAS NOT BEEN SERVED WITH SUMMONS, THE NATURE OF ACTION BEINGADMITTEDLY COMMON AMONG ALL DEFENDANTS.

9

From the foregoing, this Court identifies the issues to be resolved in this petition as: (1) Whethera co-donee is an indispensable party in an action to declare the nullity of the deed of donation,and (2) whether delay in the service of summons upon one of the defendants constitutes failure toprosecute that would warrant dismissal of the complaint.

A Court must acquire jurisdiction over the persons of indispensable parties before it can validlypronounce judgments personal to the parties. Courts acquire jurisdiction over a party plaintiffupon the filing of the complaint. On the other hand, jurisdiction over the person of a partydefendant is assured upon the service of summons in the manner required by law or otherwise byhis voluntary appearance. As a rule, if a defendant has not been summoned, the court acquiresno jurisdiction over his person, and a personal judgment rendered against such defendant is nulland void.

10A decision that is null and void for want of jurisdiction on the part of the trial court is

not a decision in the contemplation of law and, hence, it can never become final and executory.11

Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interestwithout whom there can be no final determination of an action. As such, they must be joinedeither as plaintiffs or as defendants. The general rule with reference to the making of parties in acivil action requires, of course, the joinder of all necessary parties where possible, and the joinderof all indispensable parties under any and all conditions, their presence being a sine qua non forthe exercise of judicial power.

12It is precisely "when an indispensable party is not before the court

[that] the action should be dismissed."13

The absence of an indispensable party renders allsubsequent actions of the court null and void for want of authority to act, not only as to the absentparties but even as to those present.

14

As we ruled in Alberto v. Mananghala15

:

In an action for recovery of property against a person who purchased it from another who in turnacquired it from others by the same means or by donation or otherwise, the predecessors ofdefendants are indispensable parties if the transfers, if not voided, may bind plaintiff. (Garcia vs.Reyes, 17 Phil. 127.) In the latter case, this Court held:

In order to bring this suit duly to a close, it is imperative to determine the only question raised inconnection with the pending appeal, to wit, whether all the persons who intervened in the matterof the transfers and donation herein referred to, are or are not necessary parties to this suit, sinceit is asked in the complaint that the said transfers and donation be declared null and void anindispensable declaration for the purpose, in a proper case, of concluding the plaintiff to be the

sole owner of the house in dispute.

If such a declaration of annulment can directly affect the persons who made and who wereconcerned in the said transfers, nothing could be more proper and just than to hear them in thelitigation, as parties interested in maintaining the validity of those transactions, and therefore,whatever be the nature of the judgment rendered, Francisco Reyes, Dolores Carvajal, AlfredoChicote, Vicente Miranda, and Rafael Sierra, besides the said minors, must be included in thecase as defendants." (Garcia vs. Reyes, 17 Phil., 130-131.)


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It takes no great degree of legal sophistication to realize that Cynthia and Teresa areindispensable parties to Civil Case No. CEB 23927. Cynthia and Teresa allegedly derived theirrights to the subject property by way of donation from their father Luis. The central thrust of thepetitioners complaint in Civil Case No. CEB 23927 was that Luis could not have donatedProprietary Ownership Certificate No. 0272 to his daughters Cynthia and Teresa, as Luis wasalready very ill and no longer of sound and disposing mind at the time of donation on 15 May1997. Accordingly, the prayer in petitioners complaint was for the trial court to declare null andvoid the Deed of Donation and to restrain the Cebu Country Club, Inc. from transferring title andownership of Proprietary Ownership Certificate No. 0272 to Cynthia and Teresa.

Thus, based on the Deed of Donation, Teresa and Cynthia are co-owners of ProprietaryMembership Certificate No. 0272 of Cebu Country Club, Inc. The country club membershipcertificate is undivided and it is impossible to pinpoint which specific portion of the propertybelongs to either Teresa or Cynthia. Indeed, both Teresa and Cynthia are indispensable parties inCivil Case No. CEB 23927.

An indispensable party has been defined as follows:

An indispensable party is a party who has such an interest in the controversy or subject matter

that a final adjudication cannot be made, in his absence, without injuring or affecting that interest,a party who has not only an interest in the subject matter of the controversy, but also has aninterest of such nature that a final decree cannot be made without affecting his interest or leavingthe controversy in such a condition that its final determination may be wholly inconsistent withequity and good conscience. It has also been considered that an indispensable party is a personin whose absence there cannot be a determination between the parties already before the courtwhich is effective, complete, or equitable. Further, an indispensable party is one who must beincluded in an action before it may properly go forward.

A person is not an indispensable party, however, if his interest in the controversy or subjectmatter is separable from the interest of the other parties, so that it will not necessarily be directlyor injuriously affected by a decree which does complete justice between them. Also, a person isnot an indispensable party if his presence would merely permit complete relief between him and

those already parties to the action, or if he has no interest in the subject matter of the action. It isnot a sufficient reason to declare a person to be an indispensable party that his presence willavoid multiple litigation.

16

In Servicewide Specialists, Incorporated v. Court of Appeals,17

this Court held that no finaldetermination of a case could be made if an indispensable party is not legally present therein:

An indispensable party is one whose interest will be affected by the courts action in the lit igation,and without whom no final determination of the case can be had. The partys interest in thesubject matter of the suit and in the relief sought are so inextricably intertwined with the otherparties that his legal presence as a party to the proceeding is an absolute necessity. In hisabsence there cannot be a resolution of the dispute of the parties before the court which iseffective, complete, or equitable.

The rationale for treating all the co-owners of a property as indispensable parties in a suitinvolving the co-owned property is explained in Arcelona v. Court of Appeals

18:

As held by the Supreme Court, were the courts to permit an action in ejectment to be maintainedby a person having merely an undivided interest in any given tract of land, a judgment in favor ofthe defendants would not be conclusive as against the other co-owners not parties to the suit,and thus the defendant in possession of the property might be harassed by as many succeedingactions of ejectment, as there might be co-owners of the title asserted against him. The purpose


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which is, property within the Philippines, in which the defendant has or claims a lien or interest,actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding thedefendant from any interest therein, or the property of the defendant has been attached within thePhilippines, service may, by leave of court, be effected out of the Philippines by personal serviceas under Section 6; or by publication in a newspaper of general circulation in such places and forsuch time as the court may order, in which case a copy of the summons and order of the courtshall be sent by registered mail to the last known address of the defendant, or in any othermanner the court may deem sufficient. Any order granting such leave shall specify a reasonabletime, which shall not be less than sixty (60) days after notice, within which the defendant mustanswer.

As stated above, there are only four instances wherein a defendant who is a non-resident and isnot found in the country may be served a summons by extraterritorial service, to wit: (1) when theaction affects the personal status of the plaintiff; (2) when the action relates to, or the subject ofwhich is property within the Philippines, on which the defendant claims a lien or an interest, actualor contingent; (3) when the relief demanded in such action consists, wholly or in part, in excludingthe defendant from any interest in property located in the Philippines; and (4) when the defendantnon-residents property has been attached within the Philippines. In these instances, service ofsummons may be effected by (a) personal service out of the country, with leave of court; (b)

publication, also with leave of court; or (c) any other manner the court may deem sufficient.

25

In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it hasjurisdiction over the res, i.e., the personal status of the plaintiff who is domiciled in the Philippinesor the property litigated or attached. Service of summons in the manner provided in Section 15,Rule 14 of the Rules of Court is not for the purpose of vesting the court with jurisdiction, but forcomplying with the requirements of fair play or due process, so that the defendant will beinformed of the pendency of the action against him; and the possibility that property in thePhilippines belonging to him, or in which he has an interest, might be subjected to a judgment infavor of the plaintiff and he can thereby take steps to protect his interest if he is so minded.

26

In petitioners Complaint in Civil Case No. CEB No. 23427, she alleged that Cynthia is residing at462 West Vine No. 201, Glendale, California, 912041, U.S.A.; while Teresa is residing at 2408South Hacienda Boulevard, Hacienda Heights, California, but they usually visit here in thePhilippines and can be served summonses and other processes at the Borja Family Clinic, Bohol.

Pertinent portions of the Complaint read:

2. Defendant Cynthia R. Logarta is a Filipino, of legal age, married to Ramon Logarta, resident(sic) 463 West Vine No.201, Glendale, California, 912041, USA. She however usually visits in thePhilippines and can be served with summons and other processes of this Honorable Court atBorja Family Clinic, Tagbilaran, Bohol;

3. Defendant Teresa R. Tormis is likewise a Filipino, of legal age, married to Antonio Tormis, anda resident of 2408 South Hacienda Heights, California, 19745, U.S.A. She however usually visitsin the Philippines and can be served with summons and other processes of this Honorable Courtat Borja Family Clinic, Tagbilaran, Bohol.

27

Petitioner prayed for a declaration of nullity of the deed of donation, to restrain Cebu CountryClub, Inc. from transferring title and ownership of Proprietary Ownership Certificate No. 0272 toCynthia and Teresa, and for moral and exemplary damages. Civil Case No. CEB 23927 isevidently an action against Cynthia and Teresa on the basis of their personal liability for thealleged fraudulent transfer of the subject Country Club membership from Luis to their name. Inthis sense, petitioner questions the participation and shares of Cynthia and Teresa in thetransferred Country Club membership. Moreover, the membership certificate from the CebuCountry Club, Inc. is a personal property. Thus, the action instituted by petitioner before the RTCis in personam.


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Lykah Honra

9

Being an action in personam, the general rule requires the personal service of summons onCynthia within the Philippines, but this is not possible in the present case because Cynthia is anon-resident and is not found within the Philippines.

As Cynthia is a nonresident who is not found in the Philippines, service of summons on her mustbe in accordance with Section 15, Rule 14 of the Rules of Court. Such service, to be effective

outside the Philippines, must be made either (1) by personal service; (2) by publication in anewspaper of general circulation in such places and for such time as the court may order, inwhich case a copy of the summons and order of the court should be sent by registered mail to thelast known address of the defendant; or (3) in any other manner which the court may deemsufficient. The third mode, like the first two, must be made outside the Philippines, such asthrough the Philippine Embassy in the foreign country where Cynthia resides.

Since in the case at bar, the service of summons upon Cynthia was not done by any of theauthorized modes, the trial court was correct in dismissing petitioners complaint.

Section 3, Rule 17 of the 1997 Rules of Civil Procedure, states

SEC. 3. Dismissal due to fault of plaintiff. If, for no justifiable cause, the plaintiff fails to appearon the date of the presentation of his evidence in chief on the complaint, or to prosecute hisaction for an unreasonable length of time, or to comply with these Rules or any order of the court,the complaint may be dismissed upon motion of the defendant or upon the court's own motion,without prejudice to the right of the defendant to prosecute his counterclaim in the same or in aseparate action. This dismissal shall have the effect of an adjudication upon the merits, unlessotherwise declared by the court.

As can be gleaned from the rule, there are three instances when the complaint may be dismisseddue to the plaintiff's fault: (1) if he fails to appear during a scheduled trial, especially on the datefor the presentation of his evidence in chief; (2) if he fails to prosecute his action for anunreasonable length of time; and (3) if he fails to comply with the rules or any order of the court.

28

Considering the circumstances of the case, it can be concluded that the petitioner failed to

prosecute the case for an unreasonable length of time. There is failure to prosecute when theplaintiff, being present, is not ready or is unwilling to proceed with the scheduled trial or whenpostponements in the past were due to the plaintiff's own making, intended to be dilatory orcaused substantial prejudice on the part of the defendant.

29

While a court can dismiss a case on the ground of failure to prosecute, the true test for theexercise of such power is whether, under the prevailing circumstances, the plaintiff is culpable forwant of due diligence in failing to proceed with reasonable promptitude.

30As to what constitutes

an "unreasonable length of time," within the purview of the above-quoted provision, the Court hasruled that it "depends upon the circumstances of each particular case," and that "the sounddiscretion of the court" in the determination of said question "will not be disturbed, in the absenceof patent abuse"; and that "the burden of showing abuse of judicial discretion is upon theappellant since every presumption is in favor of the correctness of the court's action."

31Likewise,

the concept of promptness is a relative term and must not unnecessarily be an inflexible one. Itconnotes an action without hesitation and loss of time. As to what constitutes the term isaddressed to the consideration of the trial court, bearing in mind that while actions must bedisposed of with dispatch, the essential ingredient is the administration of justice and not merespeed.

32

It is well to quote the doctrine laid in Padua v. Ericta,33

as accentuated in the subsequent caseMarahay v. Melicor

34:


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Courts should not brook undue delays in the ventilation and determination of causes. It should betheir constant effort to assure that litigations are prosecuted and resolved with dispatch.Postponements of trials and hearings should not be allowed except on meritorious grounds; andthe grant or refusal thereof rests entirely in the sound discretion of the Judge. It goes withoutsaying, however, that discretion must be reasonably and wisely exercised, in the light of theattendant circumstances. Some reasonable deferment of the proceedings may be allowed ortolerated to the end that cases may be adjudged only after full and free presentation of evidenceby all the parties, especially where the deferment would cause no substantial prejudice to anypart. The desideratum of a speedy disposition of cases should not, if at all possible, result in theprecipitate loss of a partys right to present evidence and either in plaintiff's being non -suited orthe defendant's being pronounced liable under an ex parte judgment.

"[T]rial courts have x x x the duty to dispose of controversies after trial on the merits wheneverpossible. It is deemed an abuse of discretion for them, on their own motion, to enter a dismissalwhich is not warranted by the circumstances of the case (Municipality of Dingras v. Bonoan, 85Phil. 458-59 [1950]). While it is true that the dismissal of an action on grounds specified underSection 3, Rule 17 of the Revised Rules of Court is addressed to their discretion (Flores v. Phil.Alien Property Administrator, 107 Phil. 778 [1960]; Montelibano v. Benares, 103 Phil. 110 [1958];Adorable v. Bonifacio, 105 Phil. 1269 [1959]; Inter-Island Gas Service, Inc. v. De la Gerna, L-

17631, October 19, 1966, 18 SCRA 390), such discretion must be exercised soundly with a viewto the circumstances surrounding each particular case (Vernus-Sanciangco v. Sanciangco, L-12619, April 28, 1962, 4 SCRA 1209). If facts obtain that serve as mitigating circumstances forthe delay, the same should be considered and dismissal denied or set aside (Rudd v. Rogerson,15 ALR 2d 672; Cervi v. Greenwood, 147 Colo. 190, 362 P.2d 1050 [1961]), especially where thesuit appears to be meritorious and the plaintiff was not culpably negligent and no injury results todefendant (27 C.J.S. 235-36; 15 ALR 3rd 680)." (Abinales vs. Court of First Instance ofZamboanga City, Br. I, 70 SCRA 590, 595).

"It is true that the allowance or denial of petitions for postponement and the setting aside oforders previously issued, rest principally upon the sound discretion of the judge to whom they areaddressed, but always predicated on the consideration that more than the mere convenience ofthe courts or of the parties of the case, the ends of justice and fairness would be served thereby

(Camara Vda. de Zubiri v. Zubiri, et al., L-16745, December 17, 1966). When no substantial rightsare affected and the intention to delay is not manifest, the corresponding motion to transfer thehearing having been filed accordingly, it is sound judicial discretion to allow them (Rexwell Corp.v. Canlas, L-16746, December 30, 1961)." x x x.

This Court recalls that the complaint herein was filed on 15 June 1999. The summonses forCynthia and Teresa were served on their sister Melinda at the Borja Family Clinic in TagbilaranCity, but the latter refused to receive the same. It was only on 1 June 2000 that summons wasserved on Teresa at Room 304, Regency Crest Condominium, Banilad, Cebu City, when she wasin the Philippines for a visit. However, the summons for Cynthia was never served uponher.1wphi1

Although Section 1, Rule 14 of the Rules, imposes upon the clerk of court the duty to serve

summons, this does not relieve the petitioner of her own duty as the plaintiff in a civil case toprosecute the case diligently. If the clerk had been negligent, it was petitioners duty to call thecourts attention to that fact. It must be noted that it was not even petitioner who called the courtsattention that summons had not been served on Cynthia, but Teresa. This despite the fact thatpetitioner was aware, as early as 15 June 1999, when she filed her complaint, that thesummonses could not be served on Teresa and Cynthia, as she admitted therein that Teresa andCynthia were residing abroad. Petitioner as plaintiff should have asked that Cynthia and Teresabe summoned by publication at the earliest possible time. She cannot idly sit by and wait till this isdone. She cannot afterwards wash her hands and say that the delay was not her fault. She


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cannot simply "fold [her] hands" and say that it is the duty of the clerk of court to have thesummonses served on Cynthia and Teresa for the prompt disposition of her case. If there wereno means of summoning any of the defendants, petitioner should have so informed the courtwithin a reasonable period of time, so that the case could be disposed of one way or another andthe administration of justice would not suffer delay. The non-performance of that duty bypetitioner as plaintiff is an express ground for dismissing an action. For, indeed, this duty imposed

upon her was precisely to spur on the slothful.

For failure to diligently pursue the complaint, petitioner trifled with the right of the respondents tospeedy trial. It also sorely tried the patience of the court and wasted its precious time andattention. To allow petitioner to wait until such time that summonses were served on respondentswould frustrate the protection against unreasonable delay in the prosecution of cases and violatethe constitutional mandate of speedy dispensation of justice which would in time erode thepeoples confidence in the judiciary. We take a dim view of petitioners complacent attitude. Exnihilo nihil fit.

35

Likewise, petitioners counsel inexplicably failed to diligently pursue the service of summonses onrespondents. These were acts of negligence, laxity and truancy which the court could have veryeasily avoided or timely remedied. Petitioner and her counsel could not avail themselves of this

Courts sympathy, considering their apparent complacency, if not delinquency, in the conduct oftheir litigation.

Considering the foregoing, we sustain the dismissal by the trial court of the petitioners complaintfor failure to prosecute for a period of more than one year (from the time of filing thereof on 15June 1997 until Teresas filing of a motion to dismiss).

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit and theassailed Decision dated 6 May 2005 of the Court of Appeals in CA-G.R. CV No. 71028 is herebyAFFIRMED. Costs against petitioner.

SO ORDERED.


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G.R. No. 179987 September 3, 2013HEIRS OF MARIO MALABANAN, (Represented by Sally A. Malabanan), Petitioners,vs.REPUBLIC OF THE PHILIPPINES,Respondent.

R E S O L U T I O NBERSAMIN, J.:

For our consideration and resolution are the motions for reconsideration of the parties who bothassail the decision promulgated on April 29, 2009, whereby we upheld the ruling of the Court ofAppeals (CA) denying the application of the petitioners for the registration of a parcel of landsituated in Barangay Tibig, Silang, Cavite on the ground that they had not established bysufficient evidence their right to the registration in accordance with either Section 14(1) or Section14(2) of Presidential Decree No. 1529 (Property Registration Decree).Antecedents

The property subject of the application for registration is a parcel of land situated in BarangayTibig, Silang Cavite, more particularly identified as Lot 9864-A, Cad-452-D, with an area of71,324-square meters. On February 20, 1998, applicant Mario Malabanan, who had purchasedthe property from Eduardo Velazco, filed an application for land registration covering the property

in the Regional Trial Court (RTC) in Tagaytay City, Cavite, claiming that the property formed partof the alienable and disposable land of the public domain, and that he and his predecessors-in-interest had been in open, continuous, uninterrupted, public and adverse possession andoccupation of the land for more than 30 years, thereby entitling him to the judicial confirmation ofhis title.

1

To prove that the property was an alienable and disposable land of the public domain, Malabananpresented during trial a certification dated June 11, 2001 issued by the Community Environmentand Natural Resources Office (CENRO) of the Department of Environment and NaturalResources (DENR), which reads:

This is to certify that the parcel of land designated as Lot No. 9864 Cad 452-D, SilangCadastre as surveyed for Mr. Virgilio Velasco located at Barangay Tibig, Silang, Cavite

containing an area of 249,734 sq. meters as shown and described on the Plan Ap-04-00952 is verified to be within the Alienable or Disposable land per Land ClassificationMap No. 3013 established under Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982.

2

After trial, on December 3, 2002, the RTC rendered judgment granting Malabanans applicationfor land registration, disposing thusly:

WHEREFORE, this Court hereby approves this application for registration and thusplaces under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known asProperty Registration Law, the lands described in Plan Csd-04-0173123-D, Lot 9864-Aand containing an area of Seventy One Thousand Three Hundred Twenty Four (71,324)Square Meters, as supported by its technical description now forming part of the record of

this case, in addition to other proofs adduced in the name of MARIO MALABANAN, whois of legal age, Filipino, widower, and with residence at Munting Ilog, Silang, Cavite.

Once this Decision becomes final and executory, the corresponding decree of registrationshall forthwith issue.

SO ORDERED.3

The Office of the Solicitor General (OSG) appealed the judgment to the CA, arguing thatMalabanan had failed to prove that the property belonged to the alienable and disposable land of


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the public domain, and that the RTC erred in finding that he had been in possession of theproperty in the manner and for the length of time required by law for confirmation of imperfecttitle.

On February 23, 2007, the CA promulgated its decision reversing the RTC and dismissing theapplication for registration of Malabanan. Citing the ruling in Republic v. Herbieto (Herbieto),

4the

CA declared that under Section 14(1) of the Property Registration Decree, any period ofpossession prior to the classification of the land as alienable and disposable was inconsequentialand should be excluded from the computation of the period of possession. Noting that theCENRO-DENR certification stated that the property had been declared alienable and disposableonly on March 15, 1982, Velazcos possession prior to March 15, 1982 could not be tacked forpurposes of computing Malabanans period of possession.

Due to Malabanans intervening demise during the appeal in the CA, his heirs elevated the CAsdecision of February 23, 2007 to this Court through a petition for review on certiorari.

The petitioners assert that the ruling in Republic v. Court of Appeals and Corazon Naguit5

(Naguit) remains the controlling doctrine especially if the property involved is agricultural land. Inthis regard, Naguit ruled that any possession of agricultural land prior to its declaration asalienable and disposable could be counted in the reckoning of the period of possession to perfecttitle under the Public Land Act (Commonwealth Act No. 141) and the Property RegistrationDecree. They point out that the ruling in Herbieto, to the effect that the declaration of the landsubject of the application for registration as alienable and disposable should also date back toJune 12, 1945 or earlier, was a mere obiter dictum considering that the land registrationproceedings therein were in fact found and declared void ab initio for lack of publication of thenotice of initial hearing.

The petitioners also rely on the ruling in Republic v. T.A.N. Properties, Inc.6 to support their

argument that the property had been ipso jure converted into private property by reason of theopen, continuous, exclusive and notorious possession by their predecessors-in-interest of analienable land of the public domain for more than 30 years. According to them, what wasessential was that the property had been "converted" into private property through prescription atthe time of the application without regard to whether the property sought to be registered was

previously classified as agricultural land of the public domain.

As earlier stated, we denied the petition for review on certiorari because Malabanan failed toestablish by sufficient evidence possession and occupation of the property on his part and on thepart of his predecessors-in interest since June 12, 1945, or earlier.

Petitioners Motion for Reconsideration

In their motion for reconsideration, the petitioners submit that the mere classification of the landas alienable or disposable should be deemed sufficient to convert it into patrimonial property ofthe State. Relying on the rulings in Spouses De Ocampo v. Arlos,

7 Menguito v. Republic

8 and

Republic v. T.A.N. Properties, Inc.,9they argue that the reclassification of the land as alienable or

disposable opened it to acquisitive prescription under the Civil Code; that Malabanan had

purchased the property from Eduardo Velazco believing in good faith that Velazco and hispredecessors-in-interest had been the real owners of the land with the right to validly transmit titleand ownership thereof; that consequently, the ten-year period prescribed by Article 1134 of theCivil Code, in relation to Section 14(2) of the Property Registration Decree, applied in their favor;and that when Malabanan filed the application for registration on February 20, 1998, he hadalready been in possession of the land for almost 16 years reckoned from 1982, the time whenthe land was declared alienable and disposable by the State.

The Republics Motion for Partial Reconsideration


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disposition unless they are reclassified as agricultural.24

A positive act of the Government isnecessary to enable such reclassification,

25and the exclusive prerogative to classify public lands

under existing laws is vested in the Executive Department, not in the courts.26

If, however, publicland will be classified as neither agricultural, forest or timber, mineral or national park, or whenpublic land is no longer intended for public service or for the development of the national wealth,thereby effectively removing the land from the ambit of public dominion, a declaration of such

conversion must be made in the form of a law duly enacted by Congress or by a Presidentialproclamation in cases where the President is duly authorized by law to that effect.

27Thus, until

the Executive Department exercises its prerogative to classify or reclassify lands, or untilCongress or the President declares that the State no longer intends the land to be used for publicservice or for the development of national wealth, the Regalian Doctrine is applicable.

Disposition of alienable public lands

Section 11 of the Public Land Act (CA No. 141) provides the manner by which alienableand disposable lands of the public domain, i.e., agricultural lands, can be disposed of, towit:

Section 11. Public lands suitable for agricultural purposes can be disposed of only asfollows, and not otherwise:

(1) For homestead settlement;(2) By sale;(3) By lease; and(4) By confirmation of imperfect or incomplete titles;(a) By judicial legalization; or(b) By administrative legalization (free patent).

The core of the controversy herein lies in the proper interpretation of Section 11(4), in relation toSection 48(b) of the Public Land Act, which expressly requires possession by a Filipino citizen ofthe land since June 12, 1945, or earlier, viz:

Section 48. The following-described citizens of the Philippines, occupying lands of the

public domain or claiming to own any such lands or an interest therein, but whose titleshave not been perfected or completed, may apply to the Court of First Instance of theprovince where the land is located for confirmation of their claims and the issuance of acertificate of title thereafter, under the Land Registration Act, to wit:

x x x x

(b) Those who by themselves or through their predecessors-in-interest have been inopen, continuous, exclusive, and notorious possession and occupation of alienable anddisposable lands of the public domain, under a bona fide claim of acquisition ofownership, since June 12, 1945, or earlier, immediately preceding the filing of theapplications for confirmation of title, except when prevented by war or force majeure.These shall be conclusively presumed to have performed all the conditions essential to aGovernment grant and shall be entitled to a certificate of title under the provisions of this

chapter. (Bold emphasis supplied)

Note that Section 48(b) of the Public Land Act used the words "lands of the public domain" or"alienable and disposable lands of the public domain" to clearly signify that lands otherwiseclassified, i.e., mineral, forest or timber, or national parks, and lands of patrimonial or privateownership, are outside the coverage of the Public Land Act. What the law does not include, itexcludes. The use of the descriptive phrase "alienable and disposable" further limits the coverageof Section 48(b) to only the agricultural lands of the public domain as set forth in Article XII,Section 2 of the 1987 Constitution. Bearing in mind such limitations under the Public Land Act,the applicant must satisfy the following requirements in order for his application to come under


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Section 14(1) of the Property Registration Decree,28

to wit:

1. The applicant, by himself or through his predecessor-in-interest, has been inpossession and occupation of the property subject of the application;2. The possession and occupation must be open, continuous, exclusive, and notorious;3. The possession and occupation must be under a bona fide claim of acquisition ofownership;4. The possession and occupation must have taken place since June 12, 1945, or earlier;and5. The property subject of the application must be an agricultural land of the publicdomain.

Taking into consideration that the Executive Department is vested with the authority to classifylands of the public domain, Section 48(b) of the Public Land Act, in relation to Section 14(1) of theProperty Registration Decree, presupposes that the land subject of the application for registrationmust have been already classified as agricultural land of the public domain in order for theprovision to apply. Thus, absent proof that the land is already classified as agricultural land of thepublic domain, the Regalian Doctrine applies, and overcomes the presumption that the land isalienable and disposable as laid down in Section 48(b) of the Public Land Act. However,emphasis is placed on the requirement that the classification required by Section 48(b) of the

Public Land Act is classification or reclassification of a public land as agricultural.

The dissent stresses that the classification or reclassification of the land as alienable anddisposable agricultural land should likewise have been made on June 12, 1945 or earlier,because any possession of the land prior to such classification or reclassification produced nolegal effects. It observes that the fixed date of June 12, 1945 could not be minimized or glossedover by mere judicial interpretation or by judicial social policy concerns, and insisted that the fulllegislative intent be respected.

We find, however, that the choice of June 12, 1945 as the reckoning point of the requisitepossession and occupation was the sole prerogative of Congress, the determination of whichshould best be left to the wisdom of the lawmakers. Except that said date qualified the period ofpossession and occupation, no other legislative intent appears to be associated with the fixing of

the date of June 12, 1945. Accordingly, the Court should interpret only the plain and literalmeaning of the law as written by the legislators.

Moreover, an examination of Section 48(b) of the Public Land Act indicates that Congressprescribed no requirement that the land subject of the registration should have been classified asagricultural since June 12, 1945, or earlier. As such, the applicants imperfect or incomplete title isderived only from possession and occupation since June 12, 1945, or earlier. This means that thecharacter of the property subject of the application as alienable and disposable agricultural landof the public domain determines its eligibility for land registration, not the ownership or title over it.Alienable public land held by a possessor, either personally or through his predecessors-in-interest, openly, continuously and exclusively during the prescribed statutory period is convertedto private property by the mere lapse or completion of the period.

29 In fact, by virtue of this

doctrine, corporations may now acquire lands of the public domain for as long as the lands were

already converted to private ownership, by operation of law, as a result of satisfying the requisiteperiod of possession prescribed by the Public Land Act.30

It is for this reason that the propertysubject of the application of Malabanan need not be classified as alienable and disposableagricultural land of the public domain for the entire duration of the requisite period of possession.To be clear, then, the requirement that the land should have been classified as alienable anddisposable agricultural land at the time of the application for registration is necessary only todispute the presumption that the land is inalienable.

The declaration that land is alienable and disposable also serves to determine the point at whichprescription may run against the State. The imperfect or incomplete title being confirmed under


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Section 48(b) of the Public Land Act is title that is acquired by reason of the applicantspossession and occupation of the alienable and disposable agricultural land of the public domain.Where all the necessary requirements for a grant by the Government are complied with throughactual physical, open, continuous, exclusive and public possession of an alienable anddisposable land of the public domain, the possessor is deemed to have acquired by operation oflaw not only a right to a grant, but a grant by the Government, because it is not necessary that a

certificate of title be issued in order that such a grant be sanctioned by the courts.31

If one follows the dissent, the clear objective of the Public Land Act to adjudicate and quiet titlesto unregistered lands in favor of qualified Filipino citizens by reason of their occupation andcultivation thereof for the number of years prescribed by law

32will be defeated. Indeed, we should

always bear in mind that such objective still prevails, as a fairly recent legislative developmentbears out, when Congress enacted legislation (Republic Act No. 10023)

33 in order to liberalize

stringent requirements and procedures in the adjudication of alienable public land to qualifiedapplicants, particularly residential lands, subject to area limitations.

34

On the other hand, if a public land is classified as no longer intended for public use or for thedevelopment of national wealth by declaration of Congress or the President, thereby convertingsuch land into patrimonial or private land of the State, the applicable provision concerningdisposition and registration is no longer Section 48(b) of the Public Land Act but the Civil Code, inconjunction with Section 14(2) of the Property Registration Decree.35As such, prescription cannow run against the State.

To sum up, we now observe the following rules relative to the disposition of public land or lands ofthe public domain, namely:

(1) As a general rule and pursuant to the Regalian Doctrine, all lands of the publicdomain belong to the State and are inalienable. Lands that are not clearly underprivate ownership are also presumed to belong to the State and, therefore, may notbe alienated or disposed;

(2) The following are excepted from the general rule, to wit:

(a) Agricultural lands of the public domain are rendered alienable and disposablethrough any of the exclusive modes enumerated under Section 11 of the PublicLand Act. If the mode is judicial confirmation of imperfect title under Section 48(b)of the Public Land Act, the agricultural land subject of the application needs onlyto be classified as alienable and disposable as of the time of the application,provided the applicants possession and occupation of the land dated back toJune 12, 1945, or earlier. Thereby, a conclusive presumption that the applicanthas performed all the conditions essential to a government grant arises,

36 and

the applicant becomes the owner of the land by virtue of an imperfect orincomplete title. By legal fiction, the land has already ceased to be part of thepublic domain and has become private property.

37

(b) Lands of the public domain subsequently classified or declared as no longerintended for public use or for the development of national wealth are removed

from the sphere of public dominion and are considered converted into patrimoniallands or lands of private ownership that may be alienated or disposed throughany of the modes of acquiring ownership under the Civil Code. If the mode ofacquisition is prescription, whether ordinary or extraordinary, proof that the landhas been already converted to private ownership prior to the requisite acquisitiveprescriptive period is a condition sine qua non in observance of the law (Article1113, Civil Code) that property of the State not patrimonial in character shall notbe the object of prescription.

To reiterate, then, the petitioners failed to present sufficient evidence to establish that they and


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their predecessors-in-interest had been in possession of the land since June 12, 1945. Withoutsatisfying the requisite character and period of possession - possession and occupation that isopen, continuous, exclusive, and notorious since June 12, 1945, or earlier - the land cannot beconsidered ipso jure converted to private property even upon the subsequent declaration of it asalienable and disposable. Prescription never began to run against the State, such that the landhas remained ineligible for registration under Section 14(1) of the Property Registration Decree.Likewise, the land continues to be ineligible for land registration under Section 14(2) of theProperty Registration Decree unless Congress enacts a law or the President issues aproclamation declaring the land as no longer intended for public service or for the development ofthe national wealth.1wphi1WHEREFORE, the Court DENIES the petitioners' Motion for Reconsideration and therespondent's Partial Motion for Reconsideration for their lack of merit.

SO ORDERED.

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