German Management and Services, Inc. vs. Court of Appeals

Factual Background

The spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose held title to a 232,942 square meter parcel in Sitio Inarawan, San Isidro, Antipolo, Rizal, covered by Transfer Certificate of Title No. 50023 issued September 11, 1980, which had replaced earlier title TCT No. 56762/T-560 and followed original registration as OCT No. 19 dated August 5, 1948 pursuant to a Homestead Patent of July 27, 1948. The spouses executed a special power of attorney in favor of GERMAN MANAGEMENT & SERVICES, INC. on February 26, 1982 authorizing development of the property into a residential subdivision. Petitioner obtained Development Permit No. 00424 from the Human Settlements Regulatory Commission on February 9, 1983. Portions of the property were, however, occupied and cultivated by private respondents and about twenty other persons, who described themselves as mountainside farmers and members of the Concerned Citizens of Farmer's Association and who alleged that they had tilled the land for twelve to fifteen years prior to the promulgation of P.D. No. 27.

Immediate Events Leading to Litigation

In the first week of August 1983 petitioner undertook improvement of a barangay road at Sitio Inarawan pursuant to a permit from the Office of the Provincial Governor of Rizal and allegedly subject to securing right of way from affected landowners. On or about August 15, 1983 petitioner removed barbed wire fences enclosing farmholdings, bulldozed rice, corn, fruit-bearing trees and other crops, and engaged in acts that private respondents characterized as forcible ejection, destruction of property, trespass, coercion, threats, and harassment, and alleged violations of P.D. No. 1038 and several other decrees.

Trial Court Proceedings

Private respondents filed a complaint for forcible entry against petitioner before the Municipal Trial Court of Antipolo, Rizal. The Municipal Trial Court dismissed the complaint on January 7, 1985. The Regional Trial Court, Branch LXXI, affirmed the dismissal on appeal. Both courts accepted petitioner's purported justification for its acts and treated them within the ambit of self-help under Article 429 of the New Civil Code.

Proceedings in the Court of Appeals and Relief Sought

Private respondents filed a petition for review with the Court of Appeals. On July 24, 1986 the Court of Appeals gave due course to the petition and reversed the rulings of the Municipal Trial Court and the Regional Trial Court, holding that private respondents, as actual possessors at the time of forcible ejection, had the right to institute an action for forcible entry irrespective of the title or legality of their possession. Petitioner moved for reconsideration, which the Court of Appeals denied in a September 26, 1986 resolution. Petitioner then sought relief in the Supreme Court.

Issues Presented to the Supreme Court

The Supreme Court framed the controversy as whether the Court of Appeals denied petitioner due process by reversing the courts below without giving petitioner opportunity to file an answer, and whether private respondents were entitled to maintain a forcible entry action against petitioner despite petitioner's claim of authority from the titled owners to develop the property.

Parties' Contentions

Petitioner contended that it was authorized by the titled owners to develop the property, that it obtained the necessary development permit and that the Court of Appeals erred procedurally by not requiring an answer before reversing the lower courts. Private respondents maintained that they were in actual, peaceable possession for twelve to fifteen years before petitioner entered; that petitioner forcibly removed fences and destroyed crops; and that possession precedes title for purposes of an action for forcible entry so that they were entitled to relief regardless of the owner’s title or petitioner’s development authority.

Ruling

The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals dated July 24, 1986. The Court assessed the procedural and substantive issues against the record and imposed costs against petitioner.

Legal Basis and Reasoning

The Court first held that the Court of Appeals did not violate due process by not requiring petitioner to file an answer because petitioner had filed a comment on February 26, 1986 which sufficiently addressed the issues raised by private respondents’ petition for review. The Court observed that the Appellate Court had heard both parties and that petitioner’s opportunity to be heard was further evidenced by the Court of Appeals’ consideration of petitioner’s motion for reconsideration. On the substantive point the Court reiterated that an action for forcible entry is a possessory remedy that does not adjudicate title. The Court reaffirmed the principle that the person in peaceable and prior actual possession is entitled to recover possession even against the record owner, and that title is not involved in such a remedy. Citing precedent, the Court explained that the party with priority in time of possession has the right to remain in the property until lawfully ejected by