Title
Encabo vs. Cebu Portland Cement Co.
Case
G.R. No. L-17571
Decision Date
Dec 17, 1966
Dispute over 17,341 sqm land in Cebu; Encisos alleged 1936 sale forgery, Cepoc claimed ownership via registration. Court upheld Cepoc’s title, rejected forgery, dismissed Encisos’ claim.
ownership dispute
parcel of land
deed of sale
A

Case Summary (G.R. No. L-17571)

Facts and Origin of the Litigation

The Encisos commenced the action on December 2, 1953 to recover ownership and possession of the land and to obtain back rentals due since 1943, as well as expenses, damages, attorneys’ fees, and costs. The complaint alleged that the land in question formed part of a larger tract of 45,611 square meters originally owned by Hospicia Encabo and her deceased husband, Romualdo Enciso. The Encisos claimed that the disputed portion was composed of Lots C and D appearing on Plan Psu-36327 (Exhibit A), with a total area of approximately 17,341 square meters. They further alleged that in 1937 Romualdo Enciso sold a different portion of about 15,000 square meters (Lot B on the same plan) to Cepoc for P2,000.00, and that when Cepoc acquired Lot B, it asked the vendor to allow it to use Lots C and D, promising to pay fair rentals when it had the means and, in reciprocity, to accommodate employment for a member of the vendor’s family. Relying on these assurances, the Encisos alleged that they allowed Cepoc to occupy and use Lots C and D. They stated that in 1943, or about ten years before suit was filed, Cepoc constructed a water tank and two residential houses, and that at the time of filing a recreation hall was being constructed. They asserted that despite repeated demands, Cepoc refused to pay rentals.

Cepoc’s Defenses and Counterclaim

Cepoc’s original answer alleged that more than ten years earlier it had acquired through purchase a parcel corresponding to Lot B of the Encisos’ plan, with an area of 15,000 square meters. Cepoc also claimed ownership over another portion of the lots pursuant to the Law of Waters of August 3, 1866, and asserted that the remaining portion designated Lot D was government property leased by it under Fore-shore Lease FL-164-Amd-3. While the Encisos were presenting evidence, Cepoc, with leave of court, filed an amended answer alleging that it owned Lots B, C, and D in fee simple. It also raised defenses of bar by a prior judgment and by prescription, and filed a counterclaim that the action was unfounded and had caused Cepoc P5,000.00 in damages.

After Cepoc had presented a substantial part of its evidence, the trial court admitted Cepoc’s second amended answer for the purpose of conforming its pleadings to its evidence. Under this posture, Cepoc’s theory was tied to documentary proof that the land covered by the sale to it was larger than 15,000 square meters.

The Central Issue on Appeal: Area of the Sale

Although the Encisos raised numerous assignments of error in their voluminous brief, the Supreme Court treated the main issue as whether the area sold by the Encisos to Cepoc on September 1, 1936 was 15,000 square meters or 30,714.90 square meters. The issue depended first on whether Exhibit 6, the public document presented by Cepoc, was forged, and second on whether the land described in that document had already been registered in Cepoc’s name.

The Encisos admitted the fact of the sale but insisted that the parcel sold had only 15,000 square meters. Cepoc relied on Exhibits 6 and 6-B, a deed of sale executed on September 1, 1936 in consideration of P2,000.00, describing the property by boundaries and listing an area of 30,714.90 square meters, with relevant particulars of kind and tax information. The deed’s stated improvements and description of actual possessors included Romualdo Enciso and Hospicia Encabo.

Registration Proceedings and Decree in Cepoc’s Favor

The Court found it significant that in 1937, in Land Registration Case No. 418, G.L.R.O. Record No. 51665, the land described in the sale deed was decreed in Cepoc’s name. Cepoc’s registration application was based on Plan Psu-102184, described as a reconstructed copy now on record as Exhibit 4. The application proceeded without opposition from the original owners or adjoining owners. On June 8, 1937, the trial court rendered a decision ordering adjudication and registration of three parcels of land, described in the plan and technical description, in favor of Cepoc, free of all charges and encumbrances, and directing the issuance of the corresponding decree and certificate of title. The dispositive language reflected adjudication and registration “firme esta decision bajo la ley,” with issuance of the decree and title thereafter.

Believing itself to be the absolute owner, Cepoc constructed permanent improvements on the premises, including a hospital, a water intake tank, a recreation hall, and two residential buildings. It was also the Court’s narration that the Encisos did not make any serious demand for rentals until 1941, and that written demands were only later, with the suit filed on December 2, 1953, more than 15 years after Cepoc’s possession had ripened into overt, long-standing occupation under a claim of ownership supported by registration.

The Encisos’ Forgery Theory and the NBI Expert’s Report

The Encisos argued that Exhibit 6 was a forgery. They further contended that Cepoc was bound by the opinion of an expert from the National Bureau of Investigation that allegedly supported their claim because both parties had “promised to abide” by that expert’s findings. The record, however, did not support that assertion. The Court noted that only the Encisos’ side had agreed to be bound by the NBI examination result, while Cepoc had indicated it was reserving the right to accept or dispute the findings. When the NBI report was offered as Exhibit HH, Cepoc’s counsel objected to its admission.

The NBI handwriting expert, Mr. Felipe P. Logan, rendered an opinion adverse to the genuineness of the document. Still, the trial court, and the Supreme Court on review, emphasized that handwriting experts’ opinions are not necessarily binding on courts, particularly where the expert is not presented as a witness and the adverse party has no opportunity to cross-examine the expert. The Supreme Court recounted that the trial court admitted the Logan report but refused to accept it as controlling, and undertook its own comparison and evaluation of signatures.

Trial Court’s Evaluation of Document Authenticity

The trial court ruled that the claim of forgery failed. It found that testimony from Atty. Prospero Panares, who prepared the deed, supported that Exhibit 6-C’s original had been executed and signed accordingly and that archival records remained intact nearly two decades later. It also applied a presumption in favor of the veracity and due execution of public documents. The court acknowledged Logan’s identified differences in questioned signatures but concluded that those differences were not sufficiently intense to warrant a conclusion of forgery, especially when considered alongside the positive testimony of the notary and the existence and presence of the deed copy in the Division of Archives. The trial court reasoned that the evidence, taken as a whole, left no doubt that there was but one deed of sale executed on September 1, 1936 in favor of Cepoc.

The trial court also rejected the Encisos’ claim that a later deed existed for the same lots, noting that aside from the bare and uncorroborated testimony of Hospicia Encabo, no tangible evidence supported such a claim. It further treated the archival circumstance—where only Exhibit 6-C was found in the Division of Archives—as conclusive that only that document had been submitted for record. This factual conclusion was strengthened, in the trial court’s view, by Cepoc’s registration and the Encisos’ knowledge or lack of timely objection to the registration and title issuance.

Cepoc’s Discovery During Trial and Subsequent Pleading Amendments

The Supreme Court also narrated procedural events demonstrating how the deed bearing the larger area was brought into focus during the trial. Cepoc moved to include the Director of Lands as a defendant, and when denied, counsel took the issue to the Supreme Court by certiorari, but the petition was dismissed on April 18, 1955. During that pendency, counsel allegedly discovered documents showing that in 1937 Cepoc had applied for registration of the three lots and obtained a decree and issuance of the corresponding certificate of title. This discovery prompted Cepoc’s filing of a first amended answer on July 15, 1955 asserting ownership in fee simple of the relevant lots based on Appendix A attached to the complaint.

When the trial resumed, Hospicia Encabo admitted on cross-examination that she had actually seen the deed for which Cepoc paid P2,000.00 and that their own copy had been destroyed during the war. She also testified that the deed was notarized before Notary Public Panares and that the price was P0.20 per square meter. Unable to obtain a copy from the notary, Cepoc then made inquiries, found the deed in the Division of Archives in Manila, and obtained a certified copy, which became Exhibit 6. That certified copy reflected an area of 30,714.90 square meters.

The Supreme Court found it “extremely hard to believe” that the document was a forgery, given the documentary presence in archives and the prior registration steps taken by Cepoc. It further observed that Cepoc commenced registration on January 4, 1937, that the application was heard unopposed, and that on June 8, 1937 a judge confirmed Cepoc’s title upon the land purchased from the Encisos, which the lower court found included the lots in dispute. It referenced orders and copies of the decree on subsequent dates, reinforcing the existence of Torrens title issuance based on the same land purchased.

No Improper Change of Cepoc’s Theory Through the Second Amended Answer

The Encisos also alleged it was error to admit Cepoc’s second amended answer, which allegedly adopted a different theory of defense.

...continue reading

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster, building context before diving into full texts. AI-powered analysis, always verify critical details.

About Privacy Terms