G.R. No. 131803 - Marcelo vs. Court of Appeals

Case Summary (G.R. No. 131803)

Factual background

Petitioners alleged ownership and continuous possession since 1939 of two parcels declared for taxation under Tax Declarations Nos. 2880 and 2882. They claimed respondents Cruz and Flores had encroached upon 7,540 (also variously stated as 7,856) square meters of Lot 3098. A relocation survey (Angat Cadastre, Lots 3096 and 3098) was introduced showing the encroached portion. Cruz acquired property by an extrajudicial partition and sale from the Sarmiento heirs (document stating a palayero of 6,000 sq.m. “with included parang” of 7,856 sq.m.) and subsequently declared the entire parcel in his name for taxation, increasing his declared landholding to roughly 13,856 sq.m. Cruz sold the whole parcel to Flores on 3 November 1968; Flores took possession, cultivated, and paid realty taxes.

Trial court findings and disposition

The Regional Trial Court found petitioners had been in possession of the subject property prior to World War II and that a 7,540 sq.m. portion (the parang) had been encroached by Cruz. The trial court concluded the partition sale from the Sarmientos did not include the parang, and that the relocation plan established plaintiffs’ title and possession. The RTC ordered defendants to return ownership and possession of the 7,540 sq.m. to petitioners and awarded attorney’s fees of P5,000; counterclaim was dismissed and no actual or moral damages were awarded for lack of proof.

Court of Appeals holding

On appeal the Court of Appeals reversed the RTC. The CA concluded that Flores had acquired ownership of the disputed portion by ordinary acquisitive prescription. It relied on the sale document showing the parang was included in the sale to Cruz, Cruz’s subsequent tax declaration and survey covering the whole tract, and the deed of sale from Cruz to Flores which explicitly included the disputed portion. The CA found Flores’s possession to be in the concept of an owner, public, peaceful and uninterrupted; he had paid taxes and had held the property for nearly fourteen years prior to the 1982 complaint. Although the CA noted that Cruz’s earlier possession may have involved violence, it found no evidence that Flores’s possession was not peaceful.

Issues presented on petition for review

Petitioners principally argued that: (1) the appellate court erred in not applying this Court’s doctrine in Tero v. Tero, because respondents never lawfully acquired the 7,540 sq.m.; and (2) the CA disregarded and improperly substituted its factual findings for those of the trial court, particularly concerning the scope of the Sarmiento sale and the continuity of petitioners’ possession since 1939.

Legal principles on acquisitive prescription applied by the courts

The decision recited the law on acquisitive prescription. Ordinary acquisitive prescription of real rights requires possession for ten years that is in good faith and based on just title (Art. 1134). Possession must be in the concept of an owner, public, peaceful and uninterrupted (Art. 1118). Acts of possession by tolerance or license do not constitute adverse possession for prescription (Art. 1119). Good faith is a reasonable belief that the transferor was owner and could convey title (Art. 1127); just title exists when possession commenced under a mode recognized by law even if the grantor was not actually owner (Art. 1129). The Court reiterated the distinction between a “título colorado” (a colored title sufficient to support ordinary prescription) and a merely putative title, as explained in Doliendo v. Biarnesa.

Applicati

Case Syllabus (G.R. No. 131803)

Procedural Posture

Petition for review on certiorari filed in the Supreme Court seeking reversal of the Court of Appeals decision dated 28 November 1996 which set aside the judgment of the Regional Trial Court (RTC), Branch 19, Malolos, Bulacan.
Petitioners sought reinstatement of the RTC decision ordering respondents Fernando Cruz and Servando Flores to return ownership and possession of a portion of unregistered and untitled land in Sta. Lucia, Angat, Bulacan.
Case originated from an action for recovery of a portion of unregistered land filed in the RTC on 06 October 1982 by petitioners (heirs of the deceased Jose Marcelo); complaint later amended on 12 October 1983.
Respondents appealed the adverse RTC decision to the Court of Appeals; the Court of Appeals reversed. Petitioners filed a motion for reconsideration in the Court of Appeals which was denied, prompting the present petition to the Supreme Court.

Facts (as pleaded and developed in trial)

Petitioners are heirs of the late Jose Marcelo and asserted continuous possession since 1939 of parcels declared for taxation under Tax Declarations No. 2880 and No. 2882.
Petitioners alleged encroachment of 7,540 square meters of Lot 3098 (embraced under Tax Declaration No. 2882) by respondents Fernando Cruz and Servando Flores.
Respondent Fernando Cruz allegedly purchased certain property from Engracia dela Cruz and the Sarmiento heirs pursuant to a "Kasulatan ng Partisyon sa Labas ng Hukuman at Bilihang Patuluyan" dated 19 November 1960 (also later referenced as 19 March 1960 in the decision); the contested parcels include descriptions of "palayero" (riceland) and "parang" (pasture).
Respondent Cruz sold the property to respondent Servando Flores by a deed of sale ("Kasulatan ng Bilihan") dated 03 November 1968, which petitioners contend included the encroached portion.
Respondent Flores took possession of the entire 13,856 square meter lot and paid realty taxes thereon; he occupied and cultivated the lot.
Petitioners attempted to cultivate the disputed portion around 1968 but were barred by respondent Flores who asserted ownership from his purchase from Cruz.

Evidence Presented at Trial

Petitioners: testimony of plaintiff Gabriela Angeles asserting continuous possession since 1939; relocation survey plan of Lot 3096 and Lot 3098 of the Angat Cadastre (Exhs. B and B-1) showing a shaded portion amounting to 7,540 square meters allegedly encroached by defendant Cruz; Tax Declaration No. 2882 (Exh. A).
Respondents: presented documents including the deed of sale from Cruz to Flores dated 3 November 1968 (Exh. C / Exh. I) and the extrajudicial partition with sale dated November 19, 1960 (Exh. D / Exh. 2) showing acquisition by Cruz; tax declaration in Cruz’s name (Exh. F / Exh. 8505) and additional surveys (Exhs. 3 & 4); testimony that the contested portion formed part of the land Cruz acquired and that Flores occupied and cultivated the property.

Trial Court Findings and Rationale

The RTC found plaintiffs (petitioners) in continuous possession of Lot 3098 since 1939 and that plaintiffs discovered the encroachment by Cruz in 1967.
The RTC accepted the relocation survey plan (Exhs. B and B-1) showing 7,540 square meters of Lot 3098 encroached by Cruz.
The RTC reasoned that the "parang" had been part of petitioners' property prior to World War II and was embraced under Tax Declaration No. 2882, whereas the "parang" was declared in Cruz's name only in 1961 (per tax declaration in his favor), explaining his later increased landholding from 6,000 square meters to 13,856 square meters.
The trial court concluded that Cruz (and by sale, Flores) had encroached upon petitioners’ property and ordered:
- Return of ownership and possession of 7,540 square meters to plaintiffs as indicated in the relocation survey plan;
- Payment of attorney’s fees in the amount of P5,000.00;
- No actual or moral damages awarded for lack of factual evidence;
- Dismissal of respondents' counterclaim for lack of factual and/or legal basis.

Issues Presented on Appeal (as framed by petitioners)

Whether the Court of Appeals erred in applying acquisitive prescription to respondent Flores when, petitioners assert, respondents never legally acquired the 7,540 square meters (petitioners relied on Tero v. Tero and stressed that the parcel sold to Cruz was only 6,800 square meters).
Whether the Court of Appeals disregarded and substituted its own findings for those of the trial court despite the trial court's factual findings in favor of petitioners.

Court of Appeals Decision and Rationale (as summarized in the record)

The Court of Appeals reversed th