G.R. No. 11680 - Government of the Philippine Islands vs. Memije

In 1902, the defendant, Jose M.A. Memije, took possession of a tract of land within the San Lazaro Estate, as evidenced by public and private documents.
On July 22, 1902, and subsequently on September 24, 1902, and February 1, 1904, he acquired a house built on about 527.67 square meters of land for the sum of P6,300.
The transaction, which included a right of lease originally held by the seller, was executed through a sale with a right of repurchase clause that eventually lapsed.

The Bureau of Lands undertook a subdivision of the San Lazaro Estate beginning in 1907 and completed by 1911.
The original tract occupied by the defendant (marked by the perimeter ABCD in plan A) was divided into three lots:

Lot 8-A (marked AEFD), conveyed to the defendant through a contract of purchase and sale.
The remaining portions, now forming parts of lots numbered 5 and 6, were separated from the area the defendant originally occupied.

A subsequent contract of sale, executed on November 28, 1914, by the Director of Lands, confirmed the sale of lot 8-A, Block 2, covering 350 square meters, even though the instrument was drafted in English—a language the defendant professed not to understand fully.

Up to 1909, the defendant paid an annual rental of P160 for the entirety of the occupied lot (ABCD); this amount decreased to P140 for rentals from 1910 to 1913.
In 1914, the rental was adjusted to P148 for a now reduced area—only the extent of lot 8-A—as the Bureau of Lands reassigned parts of his formerly occupied land to newly created lots.
The defendant protested this reduction, contending that he had occupied a larger area and that he intended to preserve his original holding.

Act No. 2360, as amended by Act No. 2478, granted bona fide occupants of the San Lazaro Estate the right to purchase the land they occupied, subject to limits on area and terms fixed by the Director of Lands and the Secretary of the Interior.
The statute provided that these occupants could not be ejected for non-compliance unless there was clear evidence of failure to meet the prescribed conditions.
The accused error by the Bureau’s surveyors, which led to a subdividing line cutting across the defendant’s house, further fueled the controversy regarding the exact boundaries and extent of the defendant’s rights.

The Government of the Philippine Islands, as plaintiff, sought to recover possession of the two disputed lots that were not included in the deed of sale for lot 8-A.
Although the defendant continued in possession without clear evidence of any failure to follow the statutory requirements, he nonetheless believed erroneously that his purchase included the larger tract he had long occupied.
The trial court acknowledged that while the defendant’s right to remain in possession was secured by the statute, the deed of sale unequivocally covered only lot 8-A.
An order was rendered directing the Director of the Bureau of Lands to sell the remaining disputed lots to the defendant—a remedy neither of the parties had requested and which did not bind the defendant to purchase if the terms set forth were unacceptable.

The appellate decision modified the trial court’s judgment by striking out the directive to sell the disputed lots.
The judgment was affirmed on the basis that the defendant retained his possession rights under the statute solely for lot 8-A, and his claim over the extra portions was unsupported by the deed and evidentiary record.
Costs of the instance were assessed against the appellant, the Government of the Philippine Islands.

Whether the defendant’s continued possession of a larger tract, despite a surveying error dividing his house between lot 8-A and another lot, should still fall under the protective ambit of Act No. 2360, as amended.
If a mistake in the survey’s delineation could alter the actual rights guaranteed to the bona fide occupant.

Whether the defendant’s actions—specifically, his protest against the recalculated rental and his acceptance of the deed for only lot 8-A—constituted a forfeiture of the right to later claim ownership of the extra land.
Whether the dispute regarding rental collection and land subdivision amounts to a failure to adhere to the conditions mandated by the statute.

Whether the trial court’s order compelling the Director of the Bureau of Lands to sell the disputed lots to the defendant was legally sustainable.
The appropriateness of such an order when it was neither requested by the parties nor did it reflect the true nature of the contractual and statutory rights involved.