Civil Law

Possession

RESUENA v. CA

G.R. No. 128338. March 28, 2005

 

FACTS:

Juanito Borromeo, Sr. (respondent), is the co-owner and overseer of certain parcels of land located in Talisay, Cebu and  owns six-eighths (6/8) of Lot No. 2587 while the late spouses Bascon own two-eights (2/8) thereof. Lot No. 2592 is owned in common by respondent and the heirs of one Nicolas Maneja. However, the proportion of their undivided shares was not determined a quo.

Initially, petitioners Tining Resuena, Alejandra Garay, Lorna Resuena, Eleuterio Resuena, and Unisima Resuena resided in the upper portion of Lot No. 2587, allegedly under the acquiescence of the Spouses Bascon and their heir, Andres Bascon.

While petitioner Eutiquia Rosario occupied a portion of Lot No. 2592, allegedly with the permission of the heirs of Nicolas Maneja, one of the original co-owners of Lot No. 2587. Respondent claims that all petitioners have occupied portions of the subject property by virtue of his own liberality.

Respondent developed portions of Lots Nos. 2587 and 2592 occupied by him into a resort. In his desire to expand and extend the facilities of the resort that he established on the subject properties, respondent demanded that petitioners vacate the property. Petitioners, however, refused to vacate their homes.

Respondent filed a Complaint for ejectment with the MTC against the petitioners. The MTC ruled that respondent did not have a preferential right of possession over the portions occupied by petitioners, since Lots Nos. 2587 and 2592 were not yet partitioned nor the disputed portions assigned to respondent as his determinate share. Thus, the MTC held that respondent had no right to evict petitioners therefrom.

On appeal, the RTC reversed the Decision of the MTC. It held that Article 487 of the Civil Code, which allows any one of the co-owners to bring an action in ejectment, may successfully be invoked by the respondent because, in a sense, a co-owner is the owner and possessor of the whole, and that the suit for ejectment is deemed to be instituted for the benefit of all co-owners

The Court of Appeals affirmed the Decision of the RTC.

 

ISSUE:

Whether or not respondent is estopped in filing this ejectment case against petitioners.

 

RULING:

The petition cannot prosper.

Article 487 of the Civil Code, which provides simply that [a]ny one of the co-owners may bring an action in ejectment, is a categorical and an unqualified authority in favor of respondent to evict petitioners from the portions of Lot. No. 2587.

This provision is a departure from Palarca v. Baguisi, which held that an action for ejectment must be brought by all the co-owners. Thus, a co-owner may bring an action to exercise and protect the rights of all. When the action is brought by one co-owner for the benefit of all, a favorable decision will benefit them; but an adverse decision cannot prejudice their rights.

Respondents action for ejectment against petitioners is deemed to be instituted for the benefit of all co-owners of the property since petitioners were not able to prove that they are authorized to occupy the same.

Petitioners lack of authority to occupy the properties, coupled with respondent’s right under Article 487, clearly settles respondent’s prerogative to eject petitioners from Lot No. 2587. Time and again, this Court has ruled that persons who occupy the land of another at the latter’s tolerance or permission, without any contract between them, are necessarily bound by an implied promise that they will vacate the same upon demand, failing in which a summary action for ejectment is the proper remedy against them.

Thus, in order that the petition may acquire any whiff of merit, petitioners are obliged to establish a legal basis for their continued occupancy of the properties. The mere tolerance of one of the co-owners, assuming that there was such, does not suffice to establish such right. Tolerance in itself does not bear any legal fruit, and it can easily be supplanted by a sudden change of heart on the part of the owner. Petitioners have not adduced any convincing evidence that they have somehow become successors-in-interest of the Spouses Bascon, or any of the owners of Lot No. 2587

The lower courts have made a common factual finding that petitioners are occupying portions of Lots No. 2587 and 2592 by mere tolerance. Thus, petitioners have no right to get reimbursed for the expenses they incurred in erecting their houses thereon.

 

 

VARELA v. FINNICK

G.R. No. L-3890. January 2, 1908

 

FACTS:

Nicolasa Pascual received from Josefa Varela several jewels, some owned by Varela and other belonged to strangers; and were delivered to Pascual to be sold on commission, with the express obligation on the part of the latter to pay to the former the proceeds of the sale of said jewels, or to return them if unsold.

Nicolasa Pascual, however, pawned the said jewels at various dates, as appears from the pawn tickets issued by the owner of H.J. Finnick’s pawnshop, where the jewels had been pledged; the jewels were thus misappropriated, and the amount of the loan granted thereon embezzled, to the prejudice of Josefa Varela.

The representative of Josefa Varela claimed, in writing, the return of the jewels above referred to, which were the subject matter of said prosecution, and the manager of the property of Finnick was made a party thereto.

The manager denied all that had been alleged and stated that Finnick was provided with a license to engage in the loan business under the laws in force, and that he accepted the said jewels in good faith because Nicolasa Pascual was fully and duly authorized to pledge the same; therefore, the defendant was entitled to their possession, and asked that the request of Josefa Varela be dismissed.

Neither in the said cause nor in the present proceedings does it appear as proven that Josefa Varela authorized Nicolasa Pascual to pledge the jewels or to dispose of the pawn tickets issued by the pawnshop, and the mere affirmation of Nicolasa Pascual is insufficient when the same is contradicted and denied by Josefa Varela.

Nicolasa Pascual was convicted of estafa, and as the sentence became final, she served her term of imprisonment, the balance of the judgment must be complied with — that is, the restitution of the jewels misappropriated, because they are at hand and have not disappeared.

This restitution must be made even if the jewels are in the possession of a third party, such as a pawnshop, and notwithstanding the fact that they were lawfully acquired by it, its right to institute proceedings against whoever may be liable therefor being reserved as provided by law.

 

ISSUE:

Whether or not Varela is entitled to the recovery of the jewels from the pawnshop.

 

RULING:

A pawnshop does not enjoy the privilege established by article 464 of the Civil Code. The owner of the loan office of Finnick Brothers, notwithstanding the fact that he acted in good faith, did not acquire the jewels at a public sale; it is not a question of public property, securities, or other such effects, the transfer, sale, or disposal of which is subject to the provisions of the Code of Commerce.

Josefa Varela, who lost said jewels and was deprived of the same in consequence of a crime, is entitled to the recovery thereof from the pawnshop of Finnick Brothers, where they were pledged; the latter can not lawfully refuse to comply with the provisions of article 120 of the Penal Code, as it is a question of jewels which have been misappropriated by the commission of the crime of estafa, and the execution of the sentence which orders the restitution of the jewels can not be avoided because of the good faith with which the owner of the pawnshop acquired them, inasmuch as they were delivered to the accused, who was not the owner nor authorized to dispose of the same.

Article 1857 of the Civil Code provides that —

“The following are essential requisites of the contracts of pledge and of mortgage:

“1. . . .

“2. That the thing pledged or mortgaged be owned by the person who pledges or mortgages it.

Nicolasa Pascual was not the owner of the jewels pledged at the pawnshop of Finnick.

Article 1859 of said code provides that –

“A creditor can not appropriate to himself the things given in pledge or under mortgage, nor dispose of them.”

While actual possession of personal property is equivalent to a title thereto, so long as no proof is offered that the same was acquired in bad faith, yet from the time that the latter condition is proven, such as the loss of the thing, or that the owner was unlawfully deprived of it, the latter is entitled to the recovery thereof within the limits fixed by law, because the holder lacks the good faith indispensable to the protection of his possession.

Article 1955 of said code prescribes:

“The ownership of personal property prescribes by uninterrupted possession in good faith for a period of three years.

“That ownership of personal property also prescribed by uninterrupted for six years, without the necessity of any other condition.

“The provisions of article 464 of this code shall be observed with regard to the rights of the owner to recover the personal property lost or of which he may have been illegally deprived, and also with regard to those acquired at an auction, on exchanges, at fairs or markets, or from a merchant legally established or customarily engaged in the traffic of similar objects.”

In the present case not only has the ownership and the origin of the jewels misappropriated been unquestionably proven but also that the accused, acting fraudulently and in bad faith, disposed of them and pledged them contrary to agreement, with no right of ownership, and to the prejudice of the injured party, who was thereby illegally deprived of said jewels; therefore, in accordance with the provisions of article 464, the owner has an absolute right to recover the jewels from the possession of whosoever holds them, in accordance with the judgment entered in the aforesaid cause for estafa, wherein, the accused having been found guilty, the right of Josefa Varela to recover the jewels in question is expressly acknowledged.

 

 

BUKIDNON DOCTORS HOSPITAL v. METROBANK

G.R. No. 161882 July 8, 2005

 

FACTS:

Petitioner Bukidnon Doctors Hospital, Inc., obtained a loan of P25 million from respondent Metropolitan Bank and Trust Company to be used for the construction of its hospital. To secure this loan, the petitioner mortgaged six parcels of land registered in the name of Dr. Rene Sison and Rory P. Roque, President and Administrator, respectively, of the petitioner.

Upon petitioners default in the payment of the loan, the mortgage was extrajudicially foreclosed and the mortgaged lots were sold in a public auction to respondent bank, being the sole and highest bidder. The petitioner failed to redeem the properties within the period of redemption.Hence, the respondent was issued new certificates of title.

Petitioner expressed its desire to continue staying in the subject premises so that the operation of the hospital erected thereon would not be disrupted. For that purpose, the petitioner proposed to pay rent by virtue of a lease contract.

A year and eight months after the agreed effectivity date of the lease contract, the respondent asked the petitioner to vacate the leased premises within fifteen days. The petitioner refused, invoking the subsisting lease agreement.

Respondent filed with the RTC an Ex Parte Motion for a Writ of Possession. The trial court issued an order granting respondents ex parte motion for a writ of possession.

 

 

ISSUE:

Whether or not the court a quo correctly ruled that respondent, a former mortgagee-buyer, was still entitled to a writ of possession as a matter of right as provided under act 3135, despite a lease agreement between itself and the former mortgagor-seller executed after respondent became the absolute owner of the foreclosed properties.

 

RULING:

The law and jurisprudence are clear that in extrajudicial foreclosure proceedings, an order for a writ of possession issues as a matter of course, upon proper motion, after the expiration of the redemption period without the mortgagor exercising the right of redemption, or even during the redemption period provided a bond is posted to indemnify the debtor in case the foreclosure sale is shown to have been conducted without complying with the requirements of the law or without the debtor violating the mortgage contract.

The rationale for the ministerial issuance of a writ of possession is to put the foreclosure buyer in possession of the property sold without delay, since the right to possession is founded on ownership of the property.

However, in the instant case, a writ of possession was not the correct remedy for the purpose of ousting the petitioner from the subject premises. It must be noted that possession is the holding of a thing or the enjoyment of a right.

It is acquired by the material occupation of a thing or the exercise of a right, or by the fact that a thing or right is subject to the action of ones will, or by the proper acts and legal formalities established for acquiring such right.

By material occupation of a thing, it is not necessary that the person in possession should be the occupant of the property; the occupancy can be held by another in his name.

Thus Articles 524 and 525 of the Civil Code provide:

Art. 524. Possession may be exercised in ones own name or in that of another.

Art. 525. The possession of things or rights may be had in one of two concepts: either in the concept of owner, or in that of the holder of the thing or right to keep or enjoy it, the ownership pertaining to another person.

In other words, an owner of a real estate has possession, either when he himself is physically occupying the property, or when another person who recognizes his rights as owner is occupying it.

In the case at bar, it is not disputed that after the foreclosure of the property in question and the issuance of new certificates of title in favor of the respondent, the petitioner and the respondent entered into a contract of lease of the subject properties. This new contractual relation presupposed that the petitioner recognized that possession of the properties had been legally placed in the hands of the respondent, and that the latter had taken such possession but delivered it to the former as lessee of the property.

By paying the monthly rentals, the petitioner also recognized the superior right of the respondent to the possession of the property as owner thereof. And by accepting the monthly rentals, the respondent enjoyed the fruits of its possession over the subject property.

Clearly, the respondent is in material possession of the subject premises. Thus, the trial courts issuance of a writ of possession is not only superfluous, but improper under the law. Moreover, as a lessee, the petitioner was a legitimate possessor of the subject properties under Article 525 of the Civil Code. Thus, it could not be deprived of its lawful possession by a mere ex parte motion for a writ of possession.

In a nutshell, where a lease agreement, whether express or implied, is subsequently entered into by the mortgagor and the mortgagee after the expiration of the redemption period and the consolidation of title in the name of the latter, a case for ejectment or unlawful detainer, not a motion for a writ of possession, is the proper remedy in order to evict from the questioned premises a mortgagor-turned-lessee. The rationale for this rule is that a new relationship between the parties has been created. What applies is no longer the law on extrajudicial foreclosure, but the law on lease. And when an issue arises, as in the case at bar, regarding the right of the lessee to continue occupying the leased premises, the rights of the parties must be heard and resolved in a case for ejectment or unlawful detainer under Rule 70 of the Rules of Court.

 

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