A.M. No. P-1158 - Abejaron vs. Panes

The subject matter involves a 911-square meter parcel of land located in the District of Toril, Davao City.
The land is part of the former Y. Furukawa Daliao Plantation, which was turned over to the Philippine government and subsequently administered first by the National Abaca and Other Fibers Corporation (NAFCO) and later by the Board of Liquidators (BOL) under Republic Act No. 477, as amended.
The land is currently registered in the name of respondent Elena Arciaga under Transfer Certificate of Title No. T-139473.

Loreto Luga, originally a tenant of NAFCO at the Furukawa Plantation, began occupying the disputed parcel in 1957.
During his occupancy, Loreto constructed a house with light materials on the property.
An Occupant’s Affidavit was executed on 28 July 1960 by Honorio Romero, a former employee of NAFCO, covering a 2.5-hectare landholding which included the disputed parcel.
Subsequent transactions:

On 3 December 1970, Honorio executed a deed transferring a 600-square meter portion of the land to Rogelio Arciaga for P10,000.00.
On 23 March 1972, a similar deed was executed transferring an adjacent 340-square meter portion for P2,000.00.

The Board of Liquidators issued a Notice on 16 November 1987, inviting adverse claims.
Elena supported her application with an Occupant’s Affidavit of Application, a Joint-Affidavit by her witnesses, and a certification by the Barangay Chairman of Toril affirming her actual possession.

The application received a favorable recommendation and, on 8 March 1988, a Board Resolution (No. 60, Series of 1988) approved her claim subject to the payment of P14,235.00.
Payment was made on 24 March 1988, and the subsequent execution of a Deed of Absolute Sale on 12 May 1988 led to the issuance of the title on 29 November 1988.
Following issuance, Elena declared the land under her name for taxation, and real estate taxes were duly paid.

On 2 March 1994, Loreto Luga filed a complaint for reconveyance of title and damages against Elena and Rogelio Arciaga in the Regional Trial Court (RTC) of Davao City.

Loreto alleged that he had occupied the land since 1957 and contended that he discovered its titling in another’s name only in 1993.
He accused Elena of fraudulent misrepresentation and of misleading the BOL.

Respondents Elena and Rogelio Arciaga, served with summons, filed an answer on 16 April 1994 denying the allegations and asserting that they acquired the property through transactions originating from Honorio Romero.
Evidence and testimonies were presented by both parties:

Loreto’s evidence included his own testimony, as well as that of neighbors, a BOL employee, and local officials.
The defense presented testimonies from Elena, Rogelio, Honorio, and BOL’s Operation Manager.
A subsequent rebuttal was made by Loreto.

The RTC rendered a decision on 9 October 1995 in favor of Loreto, ordering reconveyance of the title from Elena and awarding relief under a reconveyance remedy, while denying claims for moral, exemplary damages, and litigation expenses.
On appeal, the CA reversed and set aside the RTC decision in its 25 October 2005 decision:

The reversal was based on evidentiary findings that Loreto’s possession was only by tolerance and not as an owner.
The CA held that the evidence did not meet the “well-nigh incontrovertible” standard needed for acquisition by adverse possession.

Loreto died on 6 October 1998 and was substituted in the case by his wife, Celerina Luga, and their children (Purificacion Luga-Biong, Elizabeth Luga-Cabana, Rosalie Luga-Tanutan, Ledia Luga-Guy-ab, Marites Luga-Gravino, Nestor Luga, and David Luga).
The motion for reconsideration filed by the Public Attorney’s Office was denied in a CA resolution dated 27 October 2006.
Rogelio Arciaga later died on 6 July 2006, leaving Elena and their remaining children as survivors.

Loreto (and subsequently his estate) claimed adverse possession based on continuous occupation since 1957.
The Spouses Arciaga contended that:

Their acquisition was via valid deeds and transfer from Honorio, backed by evidence of tax declarations and payment.
Loreto’s occupation was mere tolerance extended by Honorio and not a bona fide claim of ownership.

Evidence presented highlighted discrepancies in Loreto’s assertions, including his admission of never having declared the land for taxation until 1993 and the lack of application for the title under administrative proceedings.

Granting the appeal of the respondents (Spouses Arciaga) and thereby affirming their title over the disputed parcel.
Dismissing the complaint for reconveyance and damages filed by the petitioners (substituted heirs of Loreto Luga) who alleged adverse possession and fraudulent misrepresentation.