G.R. No. 56838 - Navera vs. Court of Appeals

Case Summary (G.R. No. 56838)

Factual Background

Leocadio Navera had five children, namely Elena, Mariano, Basilio, Eduarda, and Felix, all surnamed Navera. Mariano Navera was the father of petitioner Genaro. Elena Navera had three children by Antonio Nares, two of whom were respondents Arsenio and Felix. A third child, Dionisia, was already deceased and left children. Petitioners and respondents were thus first cousins.

In 1916, Leocadio Navera executed a donation propter nuptias in a private instrument in favor of Fausto Mustar, in consideration of the marriage of Leocadio’s son, Mariano Navera, to Mustar’s daughter, Restituta Mustar. The donated property was described as land in Caguiba, Camalig, Albay. Subsequently, Original Certificate of Title No. RO-154(NA) was issued on July 19, 1927 in the name of “Elena Navera, et al.,” covering Lot 1460 with an area of 26,995 square meters. Lot 1460 was described as the parcel bounded by other lots and natural features as set forth in the title.

Elena Navera died in 1924. In 1947, Eduarda Navera sold to respondent Arsenio Nares all of her share in Lot 1460 by a public instrument executed on May 14, 1947, covering one-half of the total area of Lot 1460. In 1948, Eduarda Navera again sold a portion of Lot 1460 to Mariano Navera by a public instrument executed on June 26, 1948. In 1953, Arsenio Nares sold a portion of Lot 1460 to Perpetua Dacillo, and the latter subsequently donated it to Francisco Dacillo. Thereafter, in 1955, Mariano Navera sold to his brother-in-law Serapio Mustar the parcel he had purchased from Eduarda Navera, and on February 11, 1956 the deed was supplemented to correct the area and clarify that the sold property pertained to Cadastral Lot No. 1460. In 1959, Serapio Mustar sold Lot 1460 to petitioner Genaro Navera (buying through the chain originating from Mariano Navera). In 1971, Francisco Dacillo sold to petitioner Genaro Navera the land he received by donation from Perpetua Dacillo.

All the transfers of Lot 1460 were not annotated and inscribed in the Original Certificate of Title.

Complaint and Trial Court Decision

On March 14, 1971, respondents Arsenio Nares and Felix Nares filed a complaint with the then Court of First Instance of Albay (Civil Case No. 4359), alleging ownership and entitlement to possession of the entire Lot 1460 covered by OCT No. RO-154(NA). They alleged that Lot 1460 was titled in the name of “Elena Navera, et al.” with the “et al.” referring to Eduarda Navera, and that respondents acquired their right by inheritance from Elena Navera, their deceased mother. They further alleged that Eduarda’s portion had been sold to Arsenio Nares, while Mariano Navera later purportedly sold the land to Mustar and, through subsequent conveyances, petitioners entered the land and obtained its produce since 1957.

Respondents insisted that the sales orchestrated through Mariano Navera were sham and manipulated and that Mariano knew he had no right to sell the property. They admitted, however, that Arsenio Nares and Felix Nares sold a portion totaling 5,726 square meters to Perpetua Dacillo, so that their remaining right covered the balance. They also alleged efforts toward compromise, which petitioners refused by instead challenging them to go to court.

Petitioners Genaro Navera and Emma Amador denied the claims and countered that the remaining area of Lot 1460, after deducting 12,415 square meters donated in 1916 to Fausto Mustar, was divided equally among Elena, Mariano, and Eduarda, each receiving 4,860 square meters. They also posited that the “et al.” in the title referred to a set of specific portions allocated among Fausto Mustar, Eduarda, Mariano, and Elena. Petitioners further claimed that Eduarda sold 2,695 square meters to Mariano and the remaining 2,166 square meters to Arsenio, and that Arsenio’s property totaled 7,026 square meters, which Arsenio later sold to Perpetua Dacillo. Petitioners claimed continuing possession of Lot 1460, tacked to their predecessors as early as 1916, and further asserted prescription and lack of cause of action.

During pre-trial on December 14, 1973, the parties stipulated the identity of the land and parties, that 5,726 square meters had already been sold to Perpetua Dacillo, and that defendants were in possession.

On February 28, 1978, the trial court ruled that respondents were owners of the lot described in OCT No. RO-15480, except 5,726 square meters, which it declared belonged to petitioner Genaro Navera.

The petitioners appealed.

On December 16, 1980, the Court of Appeals affirmed in toto the trial court’s decision.

Issues Raised in the Petition

Petitioners assigned three errors. First, they claimed the Court of Appeals failed to appreciate acquisitive prescription in favor of defendants (petitioners), based on alleged possession of the whole Lot 1460 for more than forty-six (46) years. Second, they asserted that the lower court failed to apply the rule that actual knowledge is equivalent to, or serves the purpose of, registration. Third, they contended that the courts erred in finding petitioners in bad faith rather than respondents.

The Parties’ Position on Ownership and Double Sale

The Supreme Court accepted the trial court and Court of Appeals factual findings that Lot 1460 was titled in the name of Elena Navera, et al., and that the “et al.” referred only to Eduarda Navera. The record showed that other brothers of Elena and Eduarda—Mariano, Basilio, and Felix—had their shares in other parcels. Because Elena died in 1924, respondents as Elena’s compulsory heirs acquired Elena’s share in Lot 1460 by inheritance, comprising one-half of Lot 1460.

As to the other half owned by Eduarda, the courts treated as decisive the fact that Eduarda sold that portion to Arsenio Nares in 1947 and later executed another sale of a portion in favor of Mariano Navera in 1948. The Court of Appeals upheld that these transactions created a double sale problem, and it agreed with the trial court that the second conveyance could not be validly transmitted because Eduarda had already sold all of her portion to Arsenio Nares. It was thus concluded that Mariano Navera never acquired the portion he later sold to Mustar, and consequently Mustar had nothing to convey to petitioner Genaro.

The Court also addressed petitioners’ claim of good faith, invoking Article 526 of the Civil Code on the distinction between good faith and bad faith possessors, and citing Tacas v. Tabon, 53 Phil. 356 for the proposition that good faith possession becomes bad faith from the moment the possessor becomes aware of the flaw.

Legal Reasoning on Double Sale Under Article 1544

The Court treated Article 1544 of the Civil Code as clearly applicable. Under that provision, when the same immovable is sold to different vendees and the sales are not recorded in the Registry of Property, ownership belongs to the person who in good faith was the first in possession, and in the absence of such possession, to the person presenting the oldest title, provided there is good faith.

The first sale of Eduarda Navera’s share to Arsenio Nares was executed in a public instrument on May 14, 1947. The second sale was executed in a public instrument to Mariano Navera on June 26, 1948, more than a year later. The Court emphasized that both sales were not recorded in the Registry of Property. Thus, the controlling rule vested ownership in favor of the person who, in good faith, was first in possession.

The Court also explained that the “possession” referred to in Article 1544 included symbolic possession, which arises from the execution of a public instrument. It relied on jurisprudence stating that when realty is sold by public instrument, and the seller resells it to another, the second vendee does not acquire rights superior to the first vendee; if the second vendee later takes material possession, that taking is mere detention unjustly protected against the lawful acquisition by the first vendee. The Court cited Quimson vs. Rosete, 87 Phil. 159; Sanchez vs. Ramos, 40 Phil. 614; and Florendo vs. Foz, 20 Phil. 388 for this principle.

Applying these doctrines, the Court found factual support for respondents’ prior actual possession before they were allegedly evicted in 1957, when petitioners and their predecessors allegedly entered. It found no other evidence contradicting respondents’ possession priority. Since respondents were first in time and preferred in right—prior est in tempore, potior est in jure—the Court recognized Arsenio Nares as the proper owner under Article 1544 as to the disputed portion.

Petitioners’ Defense of Acquisitive Prescription Rejected

Petitioners next argued that their long possession—allegedly more than forty-six years—entitled them to ownership by ordinary or extraordinary acquisitive prescription. The Court rejected the argument on two grounds.

First, it held that prescription as a defense must be expressly pleaded in the responsive pleading. It may not be raised later or supported merely by allegations. It cited Hodges vs. Salas, 63 Phil. 567 and Corporacion de PP. Augustinus Recolectos vs. Crisostomo, 32 Phil. 427 for the requirement that acquisitive prescription must be specially pleaded and proved with certainty comparable to other essential allegations. It also cited Morales vs. CFI, et al., No. L-52278, May 29, 1980, 97 SCRA 872 for the requirement that one asserting ownership by adverse possession must prove the essential elements of acquisitive prescription.

Second, after examining the record, the Court found insufficient proof of petitioners’ claim and was more inclined to accept respondents’ version that Arsenio Nares had been evicted in 1957. That factual inference supported a conclusion that petitioners acquired possession in bad faith, which prevented ordinary prescription because good faith is a requirement for such prescription, and it also prevented extraordinary prescription due to insufficient proof of compliance with the thirty-year requireme

Case Syllabus (G.R. No. 56838)

The petitioners, Genaro Navera and Emma Amador, sought a review on certiorari of a Court of Appeals decision that affirmed, in toto, a Court of First Instance of Albay (now Regional Trial Court) judgment in a civil case for ownership and possession over land.
The private respondents were Arsenio Nares and Felix Nares, who claimed ownership of the disputed land under Original Certificate of Title No. RO-154(NA).
The trial court declared the private respondents owners of the whole Lot 1460 covered by the title, except 5,726 square meters which the court declared belonged to petitioner Genaro Navera.
The Court of Appeals affirmed the trial court’s decision, and the petitioners then raised three principal errors on appeal.
The Supreme Court denied the petition but modified the Court of Appeals decision to clarify that the private respondents were rightful owners of Lot 1460, except the 5,726 square meters portion belonging to petitioner Genaro Navera, while leaving issues among compulsory heirs outside its jurisdiction.

Parties and Procedural Posture

The petitioners were purchasers and successors-in-interest who asserted ownership through acquisitive prescription and good faith.
The private respondents were heirs who claimed ownership by inheritance and who challenged the validity and effects of later conveyances.
The case began with a complaint filed on March 14, 1971 with the then Court of First Instance of Albay.
The trial court rendered judgment on February 28, 1978.
The Court of Appeals rendered its decision on December 16, 1980, affirming the trial court in toto.
The petitioners filed the instant petition for review on certiorari, assigning errors primarily on prescription, the effect of alleged knowledge, and the question of good faith.

Key Factual Setting

Leocadio Navera had five children: Elena, Mariano, Basilio, Eduarda, and Felix, with both Arsenio and Felix Nares being children of Elena through Antonio Nares.
Genaro Navera was the son of Mariano Navera, making the parties first cousins.
In 1916, Leocadio Navera executed a private instrument donation to Fausto Mustar propter nuptias in consideration of the marriage of Leocadio’s son, Mariano Navera, to Restituta Mustar, involving a described parcel of land in Camalig, Albay.
In 1927, Original Certificate of Title No. RO-154(NA) issued in the name of “Elena Navera, et al.” covering the land in dispute, identified as Lot 1460 with an area of 26,995 square meters.
Elena Navera died in 1924, and thus her share in Lot 1460 passed to her compulsory heirs, including Arsenio and Felix.
Eduarda Navera allegedly owned one-half of Lot 1460 and sold her share to Arsenio Nares on May 14, 1947 via a public instrument.
Later, Eduarda Navera also sold a portion of Lot 1460 to Mariano Navera on June 26, 1948, which the respondents and both lower courts treated as legally ineffective because Eduarda had already sold her entire share to Arsenio.
A series of subsequent transfers followed, including the sale of a portion of Lot 1460 by Arsenio Nares to Perpetua Dacillo on January 30, 1953, the donation of that portion to Francisco Dacillo, and the later sale of Lot 1460 by Serapio Mustar to Genaro Navera on April 7, 1959.
The petitioners and their predecessors claimed that the various transfers were effective and that they possessed the land for decades, while the respondents asserted that the key conveyance chain began with transactions lacking legal right.

Claims in the Complaint

The private respondents alleged that they were the absolute owners of the entire Lot 1460 under OCT No. RO-154(NA) and were entitled to its possession.
They alleged that Lot 1460 was titled in the name of “Elena Navera, et al.”, with the “et al.” referring to Eduarda Navera.
They claimed acquisition by inheritance from their deceased mother, Elena Navera, and then by sale of Eduarda’s portion to Arsenio Nares.
They alleged that a portion later sold by Mariano Navera to Serapio Mustar and then to Genaro Navera was made without legal right and was part of sham and manipulated transactions.
They admitted that they sold 5,726 square meters of Lot 1460 to Perpetua Dacillo, and thus they conceded that portion no longer belonged to them.

Defense and Counterclaim

The petitioners denied the respondents’ claims and asserted their own ownership theory based on alleged division of Lot 1460 among Leocadio’s children after deducting a portion allegedly donated in 1916.
The petitioners contended that the “et al.” in the title referred to Fausto Mustar for the deducted donated portion, and to Eduarda, Mariano, and Elena for the remaining shares, with Basilio and Felix allegedly receiving shares in other parcels.
The petitioners alleged a chain of conveyances: Eduarda allegedly sold part of her share to Mariano and the rest to Arsenio, and thus Mariano’s later sale to Mustar and Mustar’s later sale to Genaro were supported.
The petitioners asserted present possession of Lot 1460 and claimed that their possession, together with that of predecessors, started as early as 1916.
The petitioners also asserted lack of cause of action and prescription, alleging that the respondents’ rights had long prescribed.

Pre-Trial and Narrowing of Issues

During pre-trial on December 14, 1973, the parties stipulated on identity of the land, identity of the parties, the fact that 5,726 square meters of Lot 1460 had already been sold to Perpetua Dacillo, and that the defendants were in possession of the land in question.
This stipulation focused the controversy on ownership and the validity and effect of conveyances affecting the remaining portion of Lot 1460.

Trial Court and Court of Appeals Ruling

The trial court declared the private respondents owners of the lot under OCT No. RO-154(NA) except for 5,726 square meters, which the court declared belonged to petitioner Genaro Navera.
The Court of Appeals affirmed the trial court’s decision in toto.
On further review, the Supreme Court sustained the material factual findings of the lower courts, particularly the interpretation of the title’s “et al.” and the legal effect of the disputed double sale transactions.

Issue One: Prescription Claim

The petitioners argued that their possession of the whole of Lot 1460 for more than forty-six (46) years entitled them to ownership by ordinary or extraordinary acquisitive prescription.
They also argued that the respondents lost whatever rights they had because of the petitioners’ long possession.
The Supreme Court rejected the prescription theory for failure of pleading and proof, and for the absence of legally sufficient showing of adverse possession in the required concept of owner.
The Court emphasized that acquisitive prescription as a defense must be expressly relied upon in the pleadings and cannot be granted on mere allegations.
The Court held that even if prescription were raised, it still required proof of its essential elements with the degree of certainty demanded of essential allegations in civil actions.
The Court found lack of sufficient proof establishing the petitioners’ claim of acquisitive prescription.
The Court