YOLANDA ROSELLO-BENTIR, SAMUEL PORMIDA and CHARITO PORMIDA, petitioners, vs. HONORABLE MATEO M. LEANDA, in his capacity as Presiding Judge of RTC, Tacloban City, Branch 8, and LEYTE GULF TRADERS, INC., respondents.

D E C I S I O N

KAPUNAN, J.:

Reformation of an instrument is that remedy in equity by means of which a written instrument is made or construed so as to express or conform to the real intention of the parties when some error or mistake has been committed.[1] It is predicated on the equitable maxim that equity treats as done that which ought to be done.[2] The rationale of the doctrine is that it would be unjust and unequitable to allow the enforcement of a written instrument which does not reflect or disclose the real meeting of the minds of the parties.[3] However, an action for reformation must be brought within the period prescribed by law, otherwise, it will be barred by the mere lapse of time. The issue in this case is whether or not the complaint for reformation filed by respondent Leyte Gulf Traders, Inc. has prescribed and in the negative, whether or not it is entitled to the remedy of reformation sought. Oldmiso

On May 15, 1992, respondent Leyte Gulf Traders, Inc. (herein referred to as respondent corporation) filed a complaint for reformation of instrument, specific performance, annulment of conditional sale and damages with prayer for writ of injunction against petitioners Yolanda Rosello-Bentir and the spouses Samuel and Charito Pormida. The case was docketed as Civil Case No. 92-05-88 and raffled to Judge Pedro S. Espina, RTC, Tacloban City, Branch 7. Respondent corporation alleged that it entered into a contract of lease of a parcel of land with petitioner Bentir for a period of twenty (20) years starting May 5, 1968. According to respondent corporation, the lease was extended for another four (4) years or until May 31, 1992. On May 5, 1989, petitioner Bentir sold the leased premises to petitioner spouses Samuel Pormada and Charito Pormada. Respondent corporation questioned the sale alleging that it had a right of first refusal. Rebuffed, it filed Civil Case No. 92-05-88 seeking the reformation of the expired contract of lease on the ground that its lawyer inadvertently omitted to incorporate in the contract of lease executed in 1968, the verbal agreement or understanding between the parties that in the event petitioner Bentir leases or sells the lot after the expiration of the lease, respondent corporation has the right to equal the highest offer. Ncm

In due time, petitioners filed their answer alleging that the inadvertence of the lawyer who prepared the lease contract is not a ground for reformation. They further contended that respondent corporation is guilty of laches for not bringing the case for reformation of the lease contract within the prescriptive period of ten (10) years from its execution.

Respondent corporation then filed its reply and on November 18, 1992, filed a motion to admit amended complaint. Said motion was granted by the lower court.[4]

Thereafter, petitioners filed a motion to dismiss reiterating that the complaint should be dismissed on the ground of prescription.

On December 15, 1995, the trial court through Judge Pedro S. Espina issued an order dismissing the complaint premised on its finding that the action for reformation had already prescribed. The order reads: Scjuris

ORDER

Resolved here is the defendants’ MOTION TO DISMISS PLAINTIFF’S complaint on ground of prescription of action.

It is claimed by plaintiff that he and defendant Bentir entered into a contract of lease of a parcel of land on May 5, 1968 for a period of 20 years (and renewed for an additional 4 years thereafter) with the verbal agreement that in case the lessor decides to sell the property after the lease, she shall give the plaintiff the right to equal the offers of other prospective buyers. It was claimed that the lessor violated this right of first refusal of the plaintiff when she sureptitiously (sic) sold the land to co-defendant Pormida on May 5, 1989 under a Deed of Conditional Sale. Plaintiff’s right was further violated when after discovery of the final sale, plaintiff ordered to equal the price of co-defendant Pormida was refused and again defendant Bentir surreptitiously executed a final deed of sale in favor of co-defendant Pormida in December 11, 1991.

The defendant Bentir denies that she bound herself to give the plaintiff the right of first refusal in case she sells the property. But assuming for the sake of argument that such right of first refusal was made, it is now contended that plaintiff’s cause of action to reform the contract to reflect such right of first refusal, has already prescribed after 10 years, counted from May 5, 1988 when the contract of lease incepted. Counsel for defendant cited Conde vs. Malaga, L-9405 July 31, 1956 and Ramos vs. Court of Appeals, 180 SCRA 635, where the Supreme Court held that the prescriptive period for reformation of a written contract is ten (10) years under Article 1144 of the Civil Code.

This Court sustains the position of the defendants that this action for reformation of contract has prescribed and hereby orders the dismissal of the case.

SO ORDERED.[5]

On December 29, 1995, respondent corporation filed a motion for reconsideration of the order dismissing the complaint. Juris

On January 11, 1996, respondent corporation filed an urgent ex-parte motion for issuance of an order directing the petitioners, or their representatives or agents to refrain from taking possession of the land in question.

Considering that Judge Pedro S. Espina, to whom the case was raffled for resolution, was assigned to the RTC, Malolos, Bulacan, Branch 19, Judge Roberto A. Navidad was designated in his place. Manikan

On March 28, 1996, upon motion of herein petitioners, Judge Navidad inhibited himself from hearing the case. Consequently, the case was re-raffled and assigned to RTC, Tacloban City, Branch 8, presided by herein respondent judge Mateo M. Leanda.

On May 10, 1996, respondent judge issued an order reversing the order of dismissal on the grounds that the action for reformation had not yet prescribed and the dismissal was "premature and precipitate", denying respondent corporation of its right to procedural due process. The order reads: Suprema

O R D E R

Stated briefly, the principal objectives of the twin motions submitted by the plaintiffs, for resolution are:

(1) for the reconsideration of the Order of 15 December 1995 of the Court (RTC, Br. 7), dismissing this case, on the sole ground of prescription of one (1) of the five (5) causes of action of plaintiff in its complaint for "reformation" of a contract of lease; and,

(2) for issuance by this Court of an Order prohibiting the defendants and their privies-in-interest, from taking possession of the leased premises, until a final court order issues for their exercise of dominical or possessory right thereto.

The records of this case reveal that co-defendant BENTER (Yolanda) and plaintiff Leyte Gulf Traders Incorporation, represented by Chairman Benito Ang, entered into a contract of lease of a parcel of land, denominated as Lot No. 878-D, located at Sagkahan District, Tacloban City, on 05 May 1968, for a period of twenty (20) years, (later renewed for an additional two (2) years). Included in said covenant of lease is the verbal understanding and agreement between the contracting parties, that when the defendant (as lessor) will sell the subject property, the plaintiff as (lessee) has the "right of first refusal", that is, the right to equal the offer of any other prospective third-party buyer. This agreement (sic) is made apparent by paragraph 4 of the lease agreement stating:

"4. IMPROVEMENT. The lessee shall have the right to erect on the leased premises any building or structure that it may desire without the consent or approval of the Lessor x x x provided that any improvements existing at the termination of the lease shall remain as the property of the Lessor without right to reimbursement to the Lessee of the cost or value thereof."

That the foregoing provision has been included in the lease agreement if only to convince the defendant-lessor that plaintiff desired a priority right to acquire the property (ibid) by purchase, upon expiration of the effectivity of the deed of lease.

In the course of the interplay of several procedural moves of the parties herein, the defendants filed their motion to admit their amended answer to plaintiff’s amended complaint. Correspondingly, the plaintiff filed its opposition to said motion. The former court branch admitted the amended answer, to which order of admission, the plaintiff seasonably filed its motion for reconsideration. But, before the said motion for reconsideration was acted upon by the court, the latter issued an Order on 15 December 1995, DISMISSING this case on the lone ground of prescription of the cause of action of plaintiff’s complaint on "reformation" of the lease contract, without anymore considering the remaining cause of action, viz.: (a) on Specific Performance; (b) an Annulment of Sale and Title; (c) on Issuance of a Writ of Injunction, and (d) on Damages.

With due respect to the judicial opinion of the Honorable Presiding Judge of Branch 7 of this Court, the undersigned, to whom this case was raffled to after the inhibition of Judge Roberto Navidad, as acting magistrate of Branch 7, feels not necessary any more to discuss at length that even the cause of action for "reformation" has not, as yet, prescribed.

To the mind of this Court, the dismissal order adverted to above, was obviously premature and precipitate, thus resulting denial upon the right of plaintiff that procedural due process. The other remaining four (4) causes of action of the complaint must have been deliberated upon before that court acted hastily in dismissing this case.

WHEREFORE, in the interest of substantial justice, the Order of the court, (Branch 7, RTC) dismissing this case, is hereby ordered RECONSIDERED and SET ASIDE.

Let, therefore, the motion of plaintiff to reconsider the Order admitting the amended answer and the Motion to Dismiss this case (ibid), be set for hearing on May 24, 1996, at 8:30 o’clock in the morning. Service of notices must be effected upon parties and counsel as early as possible before said scheduled date.

Concomitantly, the defendants and their privies-in-interest or agents, are hereby STERNLY WARNED not to enter, in the meantime, the litigated premises, before a final court order issues granting them dominical as well as possessory right thereto.

To the motion or petition for contempt, filed by plaintiff, thru Atty. Bartolome C. Lawsin, the defendants may, if they so desire, file their answer or rejoinder thereto, before the said petition will be set for hearing. The latter are given ten (10) days to do so, from the date of their receipt of a copy of this Order.

SO ORDERED.[6]

On June 10, 1996, respondent judge issued an order for status quo ante, enjoining petitioners to desist from occupying the property.[7]

Aggrieved, petitioners herein filed a petition for certiorari to the Court of Appeals seeking the annulment of the order of respondent court with prayer for issuance of a writ of preliminary injunction and temporary restraining order to restrain respondent judge from further hearing the case and to direct respondent corporation to desist from further possessing the litigated premises and to turn over possession to petitioners.

On January 17, 1997, the Court of Appeals, after finding no error in the questioned order nor grave abuse of discretion on the part of the trial court that would amount to lack, or in excess of jurisdiction, denied the petition and affirmed the questioned order.[8] A reconsideration of said decision was, likewise, denied on April 16, 1997.[9]

Thus, the instant petition for review based on the following assigned errors, viz:

6.01 THE COURT OF APPEALS ERRED IN HOLDING THAT AN ACTION FOR REFORMATION IS PROPER AND JUSTIFIED UNDER THE CIRCUMSTANCES OF THE PRESENT CASE;

6.02 THE COURT OF APPEALS ERRED IN HOLDING THAT THE ACTION FOR REFORMATION HAS NOT YET PRESCRIBED;

6.03 THE COURT OF APPEALS ERRED IN HOLDING THAT AN OPTION TO BUY IN A CONTRACT OF LEASE IS REVIVED FROM THE IMPLIED RENEWAL OF SUCH LEASE; AND,

6.04 THE COURT OF APPEALS ERRED IN HOLDING THAT A STATUS QUO ANTE ORDER IS NOT AN INJUNCTIVE RELIEF THAT SHOULD COMPLY WITH THE PROVISIONS OF RULE 58 OF THE RULES OF COURT.[10]

The petition has merit. Scsdaad

The core issue that merits our consideration is whether the complaint for reformation of instrument has prescribed. Sdaad

The remedy of reformation of an instrument is grounded on the principle of equity where, in order to express the true intention of the contracting parties, an instrument already executed is allowed by law to be reformed. The right of reformation is necessarily an invasion or limitation of the parol evidence rule since, when a writing is reformed, the result is that an oral agreement is by court decree made legally effective.[11] Consequently, the courts, as the agencies authorized by law to exercise the power to reform an instrument, must necessarily exercise that power sparingly and with great caution and zealous care.

Moreover, the remedy, being an extraordinary one, must be subject to limitations as may be provided by law. Our law and jurisprudence set such limitations, among which is laches. A suit for reformation of an instrument may be barred by lapse of time. The prescriptive period for actions based upon a written contract and for reformation of an instrument is ten (10) years under Article 1144 of the Civil Code.[12] Prescription is intended to suppress stale and fraudulent claims arising from transactions like the one at bar which facts had become so obscure from the lapse of time or defective memory. [13] In the case at bar, respondent corporation had ten (10) years from 1968, the time when the contract of lease was executed, to file an action for reformation. Sadly, it did so only on May 15, 1992 or twenty-four (24) years after the cause of action accrued, hence, its cause of action has become stale, hence, time-barred. Sdaamiso

In holding that the action for reformation has not prescribed, the Court of Appeals upheld the ruling of the Regional Trial Court that the 10-year prescriptive period should be reckoned not from the execution of the contract of lease in 1968, but from the date of the alleged 4-year extension of the lease contract after it expired in 1988. Consequently, when the action for reformation of instrument was filed in 1992 it was within ten (10) years from the extended period of the lease. Private respondent theorized, and the Court of Appeals agreed, that the extended period of lease was an "implied new lease" within the contemplation of Article 1670 of the Civil Code,[14] under which provision, the other terms of the original contract were deemed revived in the implied new lease.

We do not agree. First, if, according to respondent corporation, there was an agreement between the parties to extend the lease contract for four (4) years after the original contract expired in 1988, then Art. 1670 would not apply as this provision speaks of an implied new lease (tacita reconduccion) where at the end of the contract, the lessee continues to enjoy the thing leased "with the acquiescence of the lessor", so that the duration of the lease is "not for the period of the original contract, but for the time established in Article 1682 and 1687." In other words, if the extended period of lease was expressly agreed upon by the parties, then the term should be exactly what the parties stipulated, not more, not less. Second, even if the supposed 4-year extended lease be considered as an implied new lease under Art. 1670, "the other terms of the original contract" contemplated in said provision are only those terms which are germane to the lessee’s right of continued enjoyment of the property leased .[15] The prescriptive period of ten (10) years provided for in Art. 1144[16] applies by operation of law, not by the will of the parties. Therefore, the right of action for reformation accrued from the date of execution of the contract of lease in 1968.

Even if we were to assume for the sake of argument that the instant action for reformation is not time-barred, respondent corporation’s action will still not prosper. Under Section 1, Rule 64 of the New Rules of Court,[17] an action for the reformation of an instrument is instituted as a special civil action for declaratory relief. Since the purpose of an action for declaratory relief is to secure an authoritative statement of the rights and obligations of the parties for their guidance in the enforcement thereof, or compliance therewith, and not to settle issues arising from an alleged breach thereof, it may be entertained only before the breach or violation of the law or contract to which it refers.[18] Here, respondent corporation brought the present action for reformation after an alleged breach or violation of the contract was already committed by petitioner Bentir. Consequently, the remedy of reformation no longer lies. Ncmmis

We no longer find it necessary to discuss the other issues raised considering that the same are predicated upon our affirmative resolution on the issue of the prescription of the action for reformation.

WHEREFORE, the petition is hereby GRANTED. The Decision of the Court of Appeals dated January 17, 1997 is REVERSED and SET ASIDE. The Order of the Regional Trial Court of Tacloban City, Branch 7, dated December 15, 1995 dismissing the action for reformation is REINSTATED. Scncm

SO ORDERED.

CONCEPCION R. AINZA, substituted by her legal heirs, DR. NATIVIDAD A. TULIAO, CORAZON A. JALECO and LILIA A. OLAYON, petitioners, vs. SPOUSES ANTONIO PADUA and EUGENIA PADUA, respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the February 24, 2004 decision of the Court of Appeals in CA-G.R. CV No. 70239,[1] and its September 28, 2004 resolution, denying reconsideration thereof.[2]

In her complaint for partition of real property, annulment of titles with damages,[3] Concepcion Ainza (Concepcion) alleged that respondent-spouses Eugenia Padua (Eugenia Padua) and Antonio Padua (Antonio Padua) owned a 216.40 sq. m. lot with an unfinished residential house located at No. 85-A Durian corner Pajo Sts., Barangay Quirino 2-C, Project 2, Quezon City, covered by Transfer Certificate of Title No. 271935.  Sometime in April 1987, she bought one-half of an undivided portion of the property from her daughter, Eugenia Padua and the latter’s husband, Antonio Padua, for One Hundred Thousand Pesos (P100,000.00).

No Deed of Absolute Sale was executed to evidence the transaction, but cash payment was received by the respondents, and ownership was transferred to Concepcion through physical delivery to her attorney-in-fact and daughter, Natividad Tuliao (Natividad).  Concepcion authorized Natividad and the latter’s husband, Ceferino Tuliao (Ceferino) to occupy the premises, and make improvements on the unfinished building.

Thereafter, Concepcion alleged that without her consent, respondents caused the subdivision of the property into three portions and registered it in their names under TCT Nos. N-155122, N-155123 and N-155124 in violation of the restrictions annotated at the back of the title.

On the other hand, Antonio Padua averred that he bought the property in 1980 and introduced improvements thereon.  Between 1989 and 1990, he and his wife, Eugenia Padua, allowed Natividad and Ceferino to occupy the premises temporarily.  In 1994, they caused the subdivision of the property and three (3) separate titles were issued.

Thereafter, Antonio Padua requested Natividad to vacate the premises but the latter refused and claimed that Concepcion owned the property.  Antonio Padua thus filed an ejectment suit on April 1, 1999.  Concepcion, represented by Natividad, also filed on May 4, 1999 a civil case for partition of real property and annulment of titles with damages.

Antonio Padua claimed that his wife, Eugenia Padua, admitted that Concepcion offered to buy one third (1/3) of the property who gave her small amounts over several years which totaled P100,000.00 by 1987 and for which she signed a receipt.

On January 9, 2001, the Regional Trial Court of Quezon City, Branch 85, rendered judgment[4] in favor of Concepcion, the dispositive portion of which states:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants and ordering:

1.  the subdivision of the subject property between the said plaintiff and defendants in equal shares with one-half of the property, including the portion occupied by the spouses Severino and Natividad Tuliao to be awarded to the plaintiff;

2.  the cancellation of Transfer Certificates of Title Nos. N-155122, N-155123, N-155124 of the Registry of Deeds of Quezon City;

3.  the defendants to pay to the plaintiff P50,000.00 as attorney’s fees.

SO ORDERED.[5]

The trial court upheld the sale between Eugenia Padua and Concepcion.  It ruled that the sale was consummated when both contracting parties complied with their respective obligations.  Eugenia Padua transferred possession by delivering the property to Concepcion who in turn paid the purchase price.  It also declared that the transfer of the property did not violate the Statute of Frauds because a fully executed contract does not fall within its coverage.

On appeal by the respondents, the Court of Appeals reversed the decision of the trial court, and declared the sale null and void.  Applying Article 124 of the Family Code, the Court of Appeals ruled that since the subject property is conjugal, the written consent of Antonio Padua must be obtained for the sale to be valid.  It also ordered the spouses Padua to return the amount of P100,000.00 to petitioners plus interest.[6]

The sole issue for resolution in this petition for review is whether there was a valid contract of sale between Eugenia Padua and Concepcion.

A contract of sale is perfected by mere consent, upon a meeting of the minds on the offer and the acceptance thereof based on subject matter, price and terms of payment.[7]

In this case, there was a perfected contract of sale between Eugenia Padua and Concepcion.  The records show that Eugenia Padua offered to sell a portion of the property to Concepcion, who accepted the offer and agreed to pay P100,000.00 as consideration.  The contract of sale was consummated when both parties fully complied with their respective obligations.  Eugenia Padua delivered the property to Concepcion, who in turn, paid Eugenia Padua the price of One Hundred Thousand Pesos (P100,000.00), as evidenced by the receipt which reads:

R E C E I P T

Received the amount of ONE HUNDRED THOUSAND PESOS (P100,000.00) as payment for the lot on 85-A Durian St., Project 2, Quezon City, from Mrs. Concepcion R. Ainza, on April, 1987.

_______(Sgd.)______

Mrs.. Eugenia Padua A. Padua[8]

The verbal contract of sale between Eugenia Padua and Concepcion did not violate the provisions of the Statute of Frauds that a contract for the sale of real property shall be unenforceable unless the contract or some note or memorandum of the sale is in writing and subscribed by the party charged or his agent.[9] When a verbal contract has been completed, executed or partially consummated, as in this case, its enforceability will not be barred by the Statute of Frauds, which applies only to an executory agreement.[10] Thus, where one party has performed his obligation, oral evidence will be admitted to prove the agreement.[11]

In the instant case, the oral contract of sale between Eugenia Padua and Concepcion was evidenced by a receipt signed by Eugenia Padua.  Antonio Padua also stated that his wife admitted to him that she sold the property to Concepcion. 

It is undisputed that the subject property was conjugal and sold by Eugenia Padua in April 1987 or prior to the effectivity of the Family Code on August 3, 1988, Article 254 of which repealed Title V, Book I of the Civil Code provisions on the property relations between husband and wife.  However, Article 256 thereof limited its retroactive effect only to cases where it would not prejudice or impair vested or acquired

rights in accordance with the Civil Code or other laws.  In the case at bar, vested rights of Concepcion will be impaired or prejudiced by the application of the Family Code; hence, the provisions of the Civil Code should be applied.

In Felipe v. Heirs of Aldon, et al.,[12] the legal effect of a sale of conjugal properties by the wife without the consent of the husband was clarified, to wit:

The legal ground which deserves attention is the legal effect of a sale of lands belonging to the conjugal partnership made by the wife without the consent of the husband. 

It is useful at this point to re-state some elementary rules: The husband is the administrator of the conjugal partnership. (Art. 165, Civil Code) Subject to certain exceptions, the husband cannot alienate or encumber any real property of the conjugal partnership without the wife’s consent. (Art. 166, Idem.) And the wife cannot bind the conjugal partnership without the husband’s consent, except in cases provided by law. (Art. 172, Idem.).

In the instant case, Gimena, the wife, sold lands belonging to the conjugal partnership without the consent of the husband and the sale is not covered by the phrase “except in cases provided by law.” The Court of Appeals described the sale as “invalid” – a term which is imprecise when used in relation to contracts because the Civil Code uses specific names in designating defective contracts, namely:rescissible (Arts. 1380 et seq.), voidable (Arts. 1390 et seq.), unenforceable (Arts. 1403, et seq.), and void or inexistent (Arts. 1409 et seq.).

The sale made by Gimena is certainly a defective contract but of what category? The answer: it is a voidable contract.

According to Art. 1390 of the Civil Code, among the voidable contracts are “[T]hose where one of the parties is incapable of giving consent to the contract.” (Par. 1.) In the instant case Gimena had no capacity to give consent to the contract of sale. The capacity to give consent belonged not even to the husband alone but to both spouses.

The view that the contract made by Gimena is a voidable contract is supported by the legal provision that contracts entered by the husband without the consent of the wife when such consent is required, are annullable at her instance during the marriage and within ten years from the transaction questioned. (Art. 173, Civil Code).

Gimena’s contract is not rescissible for in such a contract all the essential elements are untainted but Gimena’s consent was tainted. Neither can the contract be classified as unenforceable because it does not fit any of those described in Art. 1403 of the Civil Code.  And finally, the contract cannot be void or inexistent because it is not one of those mentioned in Art. 1409 of the Civil Code. By process of elimination, it must perforce be a voidable contract.

The voidable contract of Gimena was subject to annulment by her husband only during the marriage because he was the victim who had an interest in the contract. Gimena, who was the party responsible for the defect, could not ask for its annulment. Their children could not likewise seek the annulment of the contract while the marriage subsisted because they merely had an inchoate right to the lands sold. (Emphasis supplied)

The consent of both Eugenia Padua and Antonio Padua is necessary for the sale of the conjugal property to be valid.  Antonio Padua’s consent cannot be presumed.[13] Except for the self-serving testimony of petitioner Natividad, there is no evidence that Antonio Padua participated or consented to the sale of the conjugal property.  Eugenia Padua alone is incapable of giving consent to the contract.  Therefore, in the absence of Antonio Padua’s consent, the disposition made by Eugenia Padua is voidable.[14]

The contract of sale between Eugenia Padua and Concepcion being an oral contract, the action to annul the same must be commenced within six years from the time the right of action accrued.[15] Eugenia Padua sold the property in April 1987 hence Antonio Padua should have asked the courts to annul the sale on or before April 1993.  No action was commenced by Antonio Padua to annul the sale, hence his right to seek its annulment was extinguished by prescription.

Even assuming that the ten (10)-year prescriptive period under Art. 173 should apply, Antonio Padua is still barred from instituting an action to annul the sale because since April 1987, more than ten (10) years had already lapsed without any such action being filed. 

In sum, the sale of the conjugal property by Eugenia Padua without the consent of her husband is voidable.  It is binding unless annulled.  Antonio Padua failed to exercise his right to ask for the annulment within the prescribed period, hence, he is now barred from questioning the validity of the sale between his wife and Concepcion.

WHEREFORE, the petition is GRANTED.  The decision dated February 24, 2004 of the Court of Appeals in CA-G.R. CV No. 70239 and its resolution dated September 28, 2004 are REVERSED and SET ASIDE. The decision dated January 9, 2001 of the Regional Trial Court of Quezon City, Branch 85, in Civil Case No. Q-99-37529, is REINSTATED.

SO ORDERED.

JAIME ABALOS and SPOUSES FELIX SALAZAR and CONSUELO SALAZAR, GLICERIO ABALOS, HEIRS OF AQUILINO ABALOS, namely: SEGUNDA BAUTISTA, ROGELIO ABALOS, DOLORES A. ROSARIO, FELICIDAD ABALOS, ROBERTO ABALOS, JUANITO ABALOS, TITA ABALOS, LITA A. DELA CRUZ AND HEIRS OF AQUILINA ABALOS, namely: ARTURO BRAVO, PURITA B. MENDOZA, LOURDES B. AGANON, CONSUELO B. SALAZAR, PRIMA B. DELOS SANTOS, THELMA APOSTOL and GLECERIO ABALOS, Petitioners,

- versus -

 HEIRS OF VICENTE TORIO, namely: PUBLIO TORIO, LIBORIO TORIO, VICTORINA TORIO, ANGEL TORIO, LADISLAO TORIO, PRIMO TORIO and NORBERTO TORIO,

D E C I S I O N

 PERALTA, J.:

Before the Court is a petition for review on certiorari seeking to set aside the Decision1 dated June 30, 2006 and Resolution2 dated November 13, 2006 by the Court of Appeals (CA) in CA-G.R. SP No. 91887. The assailed Decision reversed and set aside the Decision3 dated June 14, 2005 of the Regional Trial Court (RTC) of Lingayen, Pangasinan, Branch 69, while the questioned Resolution denied petitioners' Motion for Reconsideration.

 The factual and procedural antecedents of the case are as follows:

 On July 24, 1996, herein respondents filed a Complaint for Recovery of Possession and Damages with the Municipal Trial Court (MTC) of Binmaley, Pangasinan against Jaime Abalos (Jaime Abalos) and the spouses Felix and Consuelo Salazar. Respondents contended that: they are the children and heirs of one

Vicente Torio (Vicente Torio) who died intestate on September 11, 1973; at the time of the death of Vicente Torio, he left behind a parcel of land measuring 2,950 square meters, more or less, which is located at San Isidro Norte, Binmaley, Pangasinan; during the lifetime of Vicente Torio and through his tolerance, Jaime Abalos and the Spouses Salazar were allowed to stay and build their respective houses on the subject parcel of land; even after the death of Vicente Torio, herein respondents allowed Jaime Abalos and the Spouses Salazar to remain on the disputed lot; however, in 1985, respondents asked Jaime Abalos and the Spouses Salazar to vacate the subject lot, but they refused to heed the demand of respondents forcing respondents to file the complaint.4

 Jaime Abalos and the Spouses Salazar filed their Answer with Counterclaim, denying the material allegations in the Complaint and asserting in their Special and Affirmative Defenses that: respondents' cause of action is barred by acquisitive prescription; the court a quo has no jurisdiction over the nature of the action and the persons of the defendants; the absolute and exclusive owners and possessors of the disputed lot are the deceased predecessors of defendants; defendants and their predecessors-in-interest had been in actual, continuous and peaceful possession of the subject lot as owners since time immemorial; defendants are faithfully and religiously paying real property taxes on the disputed lot as evidenced by Real Property Tax Receipts; they have continuously introduced improvements on the said land, such as houses, trees and other kinds of ornamental plants which are in existence up to the time of the filing of their Answer.5

 On the same date as the filing of defendants' Answer with Counterclaim, herein petitioners filed their Answer in Intervention with Counterclaim. Like the defendants, herein petitioners claimed that their predecessors-in-interest were the absolute and exclusive owners of the land in question; that petitioners and their predecessors had been in possession of the subject lot since time immemorial up to the present; they have paid real property taxes and introduced improvements thereon.6

 After the issues were joined, trial ensued.

 On December 10, 2003, the MTC issued a Decision, the dispositive portion of which reads as follows:

 WHEREFORE, in view of the foregoing consideration[s], the Court adjudged the case in favor of the plaintiffs and against the defendants and defendants-intervenors are ordered to turn over the land in question to the plaintiffs (Lot Nos. 869 and 870, Cad. 467-D. Binmaley Cadastre located in Brgy. San Isidro Norte, Binmaley, Pangasinan with an area of 2,950 sq. m., more or less, bounded and described in paragraph 3 of the Complaint[)]; ordering the defendants and defendants-intervenors to remove their respective houses standing on the land in dispute; further ordering the defendants and defendants-intervenors, either singly or jointly to pay the plaintiffs land rent in the amount of P12,000.00 per year to be reckoned starting the year 1996 until defendants and defendants-intervenors will finally vacate the premises; furthermore, defendants and defendants-intervenors are also ordered to pay, either singly or jointly, the amount of P10,000.00 as and by way of attorney's fees and costs of suit.

 SO ORDERED.7

Jaime Abalos and the Spouses Salazar appealed the Decision of the MTC with the RTC of Lingayen, Pangasinan.8 Herein petitioners, who were intervenors, did not file an appeal.

 In its Decision dated June 14, 2005, the RTC ruled in favor of Jaime Abalos and the Spouses Salazar, holding that they have acquired the subject property through prescription. Accordingly, the RTC dismissed herein respondents' complaint.

 Aggrieved, herein respondents filed a petition for review with the CA assailing the Decision of the RTC.

 On June 30, 2006, the CA promulgated its questioned Decision, the dispositive portion of which reads, thus:

 

WHEREFORE, the petition is GRANTED. The Decision dated June 14, 2005 of the Regional Trial Court, Branch 69, Lingayen, Pangasinan is hereby REVERSED and SET ASIDE. In its stead, a new one is entered reinstating the Decision dated December 10, 2003 of the Municipal Trial Court of Binmaley, Pangasinan.

 

SO ORDERED.9

 Jaime Abalos and the Spouses Salazar filed a Motion for Reconsideration, but the same was denied by the CA in its Resolution dated November 13, 2006.

 Hence, the instant petition based on a sole assignment of error, to wit:

 

THE COURT OF APPEALS ERRED IN NOT APPRECIATING THAT THE PETITIONERS HEREIN ARE NOW THE ABSOLUTE AND EXCLUSIVE OWNERS OF THE LAND IN QUESTION BY VIRTUE OF ACQUISITIVE PRESCRIPTION.10

 

The main issue raised by petitioners is whether they and their predecessors-in-interest possessed the disputed lot in the concept of an owner, or whether their possession is by mere tolerance of respondents and their predecessors-in-interest. Corollarily, petitioners claim that the due execution and authenticity of the deed of sale upon which respondents' predecessors-in-interest derived their ownership were not proven during trial.

 The petition lacks merit.

 Preliminarily, the Court agrees with the observation of respondents that some of the petitioners in the instant petition were the intervenors11 when the case was filed with the MTC. Records would show that they did not appeal the Decision of the MTC.12 The settled rule is that failure to perfect an appeal renders the judgment final and executory.13 Hence, insofar as the intervenors in the MTC are concerned, the judgment of the MTC had already become final and executory.

 It also bears to point out that the main issue raised in the instant petition, which is the character or nature of petitioners' possession of the subject parcel of land, is factual in nature.

 Settled is the rule that questions of fact are not reviewable in petitions for review on certiorari under Rule 45 of the Rules of Court.14 Section 1 of Rule 45 states that petitions for review on certiorari “shall raise only questions of law which must be distinctly set forth.”

Doubtless, the issue of whether petitioners possess the subject property as owners, or whether they occupy the same by mere tolerance of respondents, is a question of fact. Thus, it is not reviewable.

 Nonetheless, the Court has, at times, allowed exceptions from the abovementioned restriction. Among the recognized exceptions are the following:

(a) When the findings are grounded entirely on speculation, surmises, or conjectures;

(b) When the inference made is manifestly mistaken, absurd, or impossible;

(c) When there is grave abuse of discretion;

(d) When the judgment is based on a misapprehension of facts;

(e) When the findings of facts are conflicting;

(f) When in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee;

(g) When the CA’s findings are contrary to those by the trial court;

(h) When the findings are conclusions without citation of specific evidence on which they are based;

(i) When the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent;

(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or

(k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.15

 In the present case, the findings of fact of the MTC and the CA are in conflict with those of the RTC.

 After a review of the records, however, the Court finds that the petition must fail as it finds no error in the findings of fact and conclusions of law of the CA and the MTC.

 Petitioners claim that they have acquired ownership over the disputed lot through ordinary acquisitive prescription.

Acquisitive prescription of dominion and other real rights may be ordinary or extraordinary.16 Ordinary acquisitive prescription requires possession in good faith and with just title for ten (10) years.17 Without good faith and just title, acquisitive prescription can only be extraordinary in character which requires uninterrupted adverse possession for thirty (30) years.18

 Possession “in good faith” consists in the reasonable belief that the person from whom the thing is received has been the owner thereof, and could transmit his ownership.19 There is “just title” when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right.20

 In the instant case, it is clear that during their possession of the property in question, petitioners acknowledged ownership thereof by the immediate predecessor-in-interest of respondents. This is clearly shown by the Tax Declaration in the name of Jaime Abalos for the year 1984 wherein it contains a statement admitting that Jaime Abalos's house was built on the land of Vicente Torio, respondents' immediate predecessor-in-interest.21 Petitioners never disputed such an acknowledgment. Thus, having knowledge that they nor their predecessors-in-interest are not the owners of the disputed lot, petitioners' possession could not be deemed as possession in good faith as to enable them to acquire the subject land by ordinary prescription. In this respect, the Court agrees with the CA that petitioners' possession of the lot in question was by mere tolerance of respondents and their predecessors-in-interest. Acts of possessory character executed due to license or by mere tolerance of the owner are inadequate for purposes of acquisitive prescription.22 Possession, to constitute the foundation of a prescriptive right, must be en concepto de dueño, or, to use the common law equivalent of the term, that possession should be adverse, if not, such possessory acts, no matter how long, do not start the running of the period of prescription.23

 Moreover, the CA correctly held that even if the character of petitioners' possession of the subject property had become adverse, as evidenced by their declaration of the same for tax purposes under the names of their predecessors-in-interest, their possession still falls short of the required period of thirty (30) years in cases of extraordinary acquisitive prescription. Records show that the earliest Tax Declaration in the name of petitioners was in 1974. Reckoned from such date, the thirty-year period was completed in 2004. However, herein respondents' complaint was filed in 1996, effectively interrupting petitioners' possession upon service of summons on them.24 Thus, petitioners’ possession also did not ripen into ownership, because they failed to meet the required statutory period of extraordinary prescription.

 This Court has held that the evidence relative to the possession upon which the alleged prescription is based, must be clear, complete and conclusive in order to establish the prescription.25 In the present case, the Court finds no error on the part of the CA in holding that petitioners failed to present competent evidence to prove their alleged good faith in neither possessing the subject lot nor their adverse claim thereon. Instead, the records would show that petitioners' possession was by mere tolerance of respondents and their predecessors-in-interest.

Finally, as to the issue of whether the due execution and authenticity of the deed of sale upon which respondents anchor their ownership were not proven, the Court notes that petitioners did not raise this matter in their Answer as well as in their Pre-Trial Brief. It was only in their Comment to respondents' Petition for Review filed with the CA that they raised this issue. Settled is the rule that points of law, theories, issues, and arguments not adequately brought to the attention of the trial court need not be, and ordinarily will not be, considered by a reviewing court.26 They cannot be raised for the first time on appeal. To allow this would be offensive to the basic rules of fair play, justice and due process.27

 Even granting that the issue of due execution and authenticity was properly raised, the Court finds no cogent reason to depart from the findings of the CA, to wit:

x x x x

 

Based on the foregoing, respondents [Jaime Abalos and the Spouses Felix and Consuelo Salazar] have not inherited the disputed land because the same was shown to have already been validly sold to Marcos Torio, who, thereupon, assigned the same to his son Vicente Torio, the father of petitioners [herein respondents]. A valid sale was amply established and the said validity subsists because the deed evidencing the same was duly notarized.

 

There is no doubt that the deed of sale was duly acknowledged before a notary public. As a notarized document, it has in its favor the presumption of regularity and it carries the evidentiary weight conferred upon it with respect to its due execution. It is admissible in evidence without further proof of its authenticity and is entitled to full faith and credit upon its face.28

 Indeed, settled is the rule in our jurisdiction that a notarized document has in its favor the presumption of regularity, and to overcome the same, there must be evidence that is clear, convincing and more than merely preponderant; otherwise, the document should be upheld.29 In the instant case, petitioners' bare denials will not suffice to overcome the presumption of regularity of the assailed deed of sale.

 WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 91887 are AFFIRMED.

 

SO ORDERED.

CELERINO E. MERCADO, Petitioner,    versus 

BELEN* ESPINOCILLA** AND FERDINAND ESPINOCILLA, Respondents.

VILLARAMA, JR., J.: The case

         Petitioner Celerino E. Mercado appeals the Decision[1] dated April 28, 2008 and Resolution[2] dated July 22, 2008 of the Court of Appeals (CA) in CA-G.R. CV No. 87480.  The CA dismissed petitioner’s complaint[3] for recovery of possession, quieting of title, partial declaration of nullity of deeds and documents, and damages, on the ground of prescription.        

The antecedent facts

         Doroteo Espinocilla owned a parcel of land, Lot No. 552, with an area of 570 sq. m., located at Magsaysay Avenue, Zone 5, Bulan, Sorsogon.  After he died, his five children, Salvacion, Aspren

Espinocilla, Isabel, Macario Espinocilla, and Dionisia Espinocilla divided Lot No. 552 equally among themselves.  Later, Dionisia Espinocilla died without issue ahead of her four siblings, and Macario Espinocilla took possession of Dionisia Espinocilla’s share.  In an affidavit of transfer of real property[4] dated November 1, 1948, Macario Espinocilla claimed that Dionisia Espinocilla had donated her share to him in May 1945.

         Thereafter, on August 9, 1977, Macario Espinocilla and his daughters Betty Gullaba and Saida Gabelo sold[5] 225 sq. m. to his son Roger Espinocilla, husband of respondent Belen Espinocilla and father of respondent Ferdinand Espinocilla.  On March 8, 1985, Roger Espinocilla sold[6] 114 sq. m. to Caridad Atienza.  Per actual survey of Lot No. 552, respondent Belen Espinocilla occupies 109 sq. m., Caridad Atienza occupies 120 sq. m., Caroline Yu occupies 209 sq. m., and petitioner, Salvacion's son, occupies 132 sq. m.[7]

        The case for petitioner

         Petitioner sued the respondents to recover two portions: an area of 28.5[8] sq. m. which he bought from Aspren Espinocilla and another 28.5 sq. m. which allegedly belonged to him but was occupied by Macario Espinocilla’s house.[9]  His claim has since been modified to an alleged encroachment of only 39 sq. m. that he claims must be returned to him.  He avers that he is entitled to own and possess 171 sq. m. of Lot No. 552, having inherited 142.5 sq. m. from his mother Salvacion and bought 28.5 sq. m. from his aunt Aspren Espinocilla.  According to him, his mother’s inheritance is 142.5 sq. m., that is, 114 sq. m. from Doroteo plus 28.5 sq. m. from Dionisia Espinocilla.  Since the area he occupies is only 132 sq. m.,[10] he claims that respondents encroach on his share by 39 sq. m.[11]

 The case for respondents

         Respondents agree that Doroteo’s five children each inherited 114 sq. m. of Lot No. 552.  However, Macario Espinocilla’s share increased when he received Dionisia Espinocilla’s share. Macario Espinocilla’s increased share was then sold to his son Roger, respondents’ husband and father.  Respondents claim that they rightfully possess the land they occupy by virtue of acquisitive prescription and that there is no basis for petitioner’s claim of encroachment.[12]

 The trial court’s decision          On May 15, 2006, the Regional Trial Court (RTC) ruled in favor of petitioner and held that he is entitled to 171 sq. m.  The RTC found that petitioner inherited 142.5 sq. m. from his mother Salvacion and bought 28.5 sq. m. from his aunt Aspren Espinocilla.  The RTC computed that Salvacion, Aspren Espinocilla, Isabel and Macario Espinocilla each inherited 142.5 sq. m. of Lot No. 552.  Each inherited 114 sq. m. from Doroteo and 28.5 sq. m. from Dionisia Espinocilla.  The RTC further ruled that Macario Espinocilla was not entitled to 228 sq. m.  Thus, respondents must return 39 sq. m. to petitioner who occupies only 132 sq. m.[13]

         There being no public document to prove Dionisia Espinocilla’s donation, the RTC also held that Macario Espinocilla’s 1948 affidavit is void and is an invalid repudiation of the shares of his sisters Salvacion, Aspren Espinocilla, and Isabel in Dionisia Espinocilla’s share.  Accordingly, Macario Espinocilla cannot acquire said shares by prescription.  The RTC further held that the oral partition of Lot No. 552 by Doroteo’s heirs did not include Dionisia Espinocilla’s share and that partition should have been the main action.  Thus, the RTC ordered partition and deferred the transfer of possession of the 39 sq. m. pending partition.[14]  The dispositive portion of the RTC decision reads:

    WHEREFORE, in view of the foregoing premises, the court issues the following ORDER, thus -

a)   Partially declaring the nullity of the Deed of Absolute Sale of Property dated August 9, 1977 x x x executed by Macario Espinocilla Espinocilla, Betty E.

Gullaba and Saida E. Gabelo in favor of Roger Espinocilla, insofar as it affects the portion or the share belonging to Salvacion Espinocilla, mother of [petitioner,] relative to the property left by Dionisia Espinocilla Espinocilla, including [Tax Declaration] No. 13667 and other documents of the same nature and character which emanated from the said sale;

b) To leave as is the Deeds of Absolute Sale of May 11, 1983 and March 8, 1985, it having been determined that they did not involve the portion belonging to [petitioner] x x x.

c)   To effect an effective and real partition among the heirs for purposes of determining the exact location of the share (114 sq. m.) of the late Dionisia Espinocilla Espinocilla together with the 28.5 sq. m. belonging to [petitioner’s] mother Salvacion, as well as, the exact location of the 39 sq. m. portion belonging to the [petitioner] being encroached by the [respondents], with the assistance of the Commissioner (Engr. Fundano) appointed by this court.

d)   To hold in abeyance the transfer of possession of the 39 sq. m. portion to the [petitioner] pending the completion of the real partition above-mentioned.[15]

 The CA decision          On appeal, the CA reversed the RTC decision and dismissed petitioner’s complaint on the ground that extraordinary acquisitive prescription has already set in in favor of respondents.  The CA found that Doroteo’s four remaining children made an oral partition of Lot No. 552 after Dionisia Espinocilla’s death in 1945 and occupied specific portions.  The oral partition terminated the co-ownership of Lot No. 552 in 1945.  Said partition also included Dionisia Espinocilla’s share because the lot was divided into four parts only.  And since petitioner’s complaint was filed only on July 13, 2000, the CA concluded that prescription has set in.[16]  The CA disposed the appeal as follows:

         WHEREFORE, the appeal is GRANTED.  The assailed May 15, 2006 Decision of the Regional Trial Court (RTC) of Bulan, Sorsogon is hereby REVERSED and SET ASIDE.  The Complaint of the [petitioner] is hereby DISMISSED.  No costs.[17]

        The instant petition          The core issue to be resolved is whether petitioner’s action to recover the subject portion is barred by prescription. 

         Petitioner confirms oral partition of Lot No. 552 by Doroteo's heirs, but claims that his share increased from 114 sq. m. to 171 sq. m. and that respondents encroached on his share by 39 sq. m.  Since an oral partition is valid, the corresponding survey ordered by the RTC to identify the 39 sq. m. that must be returned to him could be made.[18] Petitioner also alleges that Macario Espinocilla committed fraud in acquiring his share; hence, any evidence adduced by him to justify such acquisition is inadmissible.  Petitioner concludes that if a person obtains legal title to property by fraud or concealment, courts of equity will impress upon the title a so-called constructive trust in favor of the defrauded party.[19]

 The Court’s ruling          We affirm the CA ruling dismissing petitioner’s complaint on the ground of prescription.

         Prescription, as a mode of acquiring ownership and other real rights over immovable property, is concerned with lapse of time in the manner and under conditions laid down by law, namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted, and adverse.  Acquisitive prescription of real rights may be ordinary or extraordinary.  Ordinary acquisitive

prescription requires possession in good faith and with just title for 10 years.  In extraordinary prescription, ownership and other real rights over immovable property are acquired through uninterrupted adverse possession for 30 years without need of title or of good faith.[20]

         Here, petitioner himself admits the adverse nature of respondents’ possession with his assertion that Macario Espinocilla’s fraudulent acquisition of Dionisia Espinocilla’s share created a constructive trust.  In a constructive trust, there is neither a promise nor any fiduciary relation to speak of and the so-called trustee (Macario Espinocilla) neither accepts any trust nor intends holding the property for the beneficiary (Salvacion, Aspren Espinocilla, Isabel).  The relation of trustee and cestui que trust does not in fact exist, and the holding of a constructive trust is for the trustee himself, and therefore, at all times adverse.[21]  Prescription may supervene even if the trustee does not repudiate the relationship.[22]

         Then, too, respondents’ uninterrupted adverse possession for 55 years of 109 sq. m. of Lot No. 552 was established.  Macario Espinocilla occupied Dionisia Espinocilla’s share in 1945 although his claim that Dionisia Espinocilla donated it to him in 1945 was only made in a 1948 affidavit.   We also agree with the CA that Macario Espinocilla’s possession of Dionisia Espinocilla’s share was public and adverse since his other co-owners, his three other sisters, also occupied portions of Lot No. 552.  Indeed, the 1977 sale made by Macario Espinocilla and his two daughters in favor of his son Roger confirms the adverse nature of Macario Espinocilla’s possession because said sale of 225 sq. m.[23] was an act of ownership over Macario Espinocilla’s original share and Dionisia Espinocilla’s share.  In 1985, Roger also exercised an act of ownership when he sold 114 sq. m. to Caridad Atienza.  It was only in the year 2000, upon receipt of the summons to answer petitioner’s complaint, that respondents’ peaceful possession of the remaining portion (109 sq. m.) was interrupted.  By then, however, extraordinary acquisitive prescription has already set in in favor of respondents.  That the RTC found Macario Espinocilla’s 1948 affidavit void is of no moment.  Extraordinary prescription is unconcerned with Macario Espinocilla’s title or good faith. Accordingly, the RTC erred in ruling that Macario Espinocilla cannot acquire by prescription the shares of Salvacion, Aspren Espinocilla, and Isabel, in Dionisia Espinocilla’s 114-sq. m. share from Lot No. 552.

         Moreover, the CA correctly dismissed petitioner’s complaint as an action for reconveyance based on an implied or constructive trust prescribes in 10 years from the time the right of action accrues. [24]  This is the other kind of prescription under the Civil Code, called extinctive prescription, where rights and actions are lost by the lapse of time.[25] Petitioner’s action for recovery of possession having been filed 55 years after Macario Espinocilla occupied Dionisia Espinocilla’s share, it is also barred by extinctive prescription.  The CA while condemning Macario Espinocilla’s fraudulent act of depriving his three sisters of their shares in Dionisia Espinocilla’s share, equally emphasized the fact that Macario Espinocilla’s sisters wasted their opportunity to question his acts. 

         WHEREFORE, we DENY the petition for review on certiorari for lack of merit and AFFIRM the assailed Decision dated April 28, 2008 and Resolution dated July 22, 2008 of the Court of Appeals in CA-G.R. CV No. 87480.

         No pronouncement as to costs.

SO ORDERED.

G.R. No. 187451               August 29, 2012

JESUS VIRTUCIO, represented by ABDON VIRTUCIO, Petitioner, vs.

JOSE ALEGARBES, Respondent.

D E C I S I O N

MENDOZA, J.:

This petition for review on certiorari under Rule 45 seeks to reverse and set aside the February 25, 2009 Decision1 of the Court of Appeals (CA), in CA-G.R. CV No. 72613, reversing and setting aside the February 19, 2001 Decision2 of the Regional Trial Court, Branch 1, Isabela, Basi Ian (RTC), in Civil Case No. 685-627, an action for "Recovery of Possession and Ownership with Preliminary Injunction."

The Facts

Respondent Jose Alegarbes (Alegarbes) filed Homestead Application No. V-33203 (E-V-49150) for a 24-hectare tract of unsurveyed land situated in Bañas, Lantawan, Basilan in 1949. His application was approved on January 23, 1952.3 In 1955, however, the land was subdivided into three (3) lots – Lot Nos. 138,139 and 140, Pls-19 - as a consequence of a public land subdivision. Lot 139 was allocated to Ulpiano Custodio (Custodio), who filed Homestead Application No. 18-4493 (E-18-2958). Lot 140 was allocated to petitioner Jesus Virtucio (Virtucio), who filed Homestead Application No. 18-4421 (E-18-2924).4

Alegarbes opposed the homestead applications filed by Custodio and Virtucio, claiming that his approved application covered the whole area, including Lot Nos. 139 and 140.5

On October 30, 1961, the Director of Lands rendered a decision denying Alegarbes' protest and amending the latter's application to exclude Lots 139 and 140. Only Lot 138 was given due course. The applications of Custodio and Virtucio for Lots 139 and 140, respectively, were likewise given due course.6

Alegarbes then appealed to the Secretary of Agriculture and Natural Resources, who dismissed his appeal on July 28, 1967. He then sought relief from the Office of the President (OP), which, however, affirmed the dismissal order of the Secretary of Agriculture and Natural Resources in a decision, dated October 25, 1974. Alegarbes moved for a reconsideration, but the motion was subsequently denied.7

On May 11, 1989, an order of execution8 was issued by the Lands Management Bureau of the Department of Environment and Natural Resources to enforce the decision of the OP. It ordered Alegarbes and all those acting in his behalf to vacate the subject lot, but he refused.

On September 26, 1997, Virtucio then filed a complaint9 for "Recovery of Possession and Ownership with Preliminary Injunction" before the RTC.

In his Answer,10 Alegarbes claimed that the decision of the Bureau of Lands was void ab initio considering that the Acting Director of Lands acted without jurisdiction and in violation of the provisions of the Public Land Act. Alegarbes argued that the said decision conferred no rights and imposed no duties and left the parties in the same position as they were before its issuance. He further alleged that the patent issued in favor of Virtucio was procured through fraud and deceit, thus, void ab initio.

Alegarbes further argued, by way of special and/or affirmative defenses, that the approval of his homestead application on January 23, 1952 by the Bureau of Lands had already attained finality and could not be reversed, modified or set aside. His possession of Lot Nos. 138, 139 and 140 had been open, continuous, peaceful and uninterrupted in the concept of an owner for more than 30 years and had acquired such lots by acquisitive prescription.

In his Amended and Supplemental Answer,11 Alegarbes also averred that his now deceased brother, Alejandro Alegarbes, and the latter's family helped him develop Lot 140 in 1955. Alejandro and his family, as well as Alegarbes' wife and children, had been permanently occupying the said lot and, introducing permanent improvements thereon since 1960.

The RTC Ruling

The RTC rendered its decision on February 19, 2001, favoring Virtucio. The decretal portion of which reads:

WHEREFORE, upon the merit of this case, this court finds for the plaintiff and against the defendant by:

1. Ordering the defendant and all those acting in his behalf to vacate Lot No. 140, Pls-19, located at Lower Bañas, Lantawan, Basilan and surrender the possession and ownership thereof to plaintiff;

2. Ordering the defendant to pay the plaintiff the amount of Fifteen Thousand Pesos (P 15,000.00) as attorney's fees and another Ten Thousand Pesos (P 10,000.00) as expenses for litigation; and

3. To pay the cost of the suit in the amount of Five Hundred Pesos (₱500.00).

SO ORDERED.12

Not in conformity, Alegarbes appealed his case before the CA.

The CA Ruling

On February 25, 2009, the CA promulgated its decision declaring Alegarbes as the owner of Lot No. 140, Pls-19, thereby reversing and setting aside the decision of the RTC. The CA ruled that Alegarbes became ipso jure owner of Lot 140 and, therefore, entitled to retain possession of it.

Consequently, the awards of attorney's fees, litigation expenses and costs of suit were deleted.

In so ruling, the CA explained that even if the decision to approve Virtucio's homestead application over Lot 140 had become final, Alegarbes could still acquire the said lot by acquisitive prescription. The decisions on the issues of the approval of Virtucio's homestead application and its validity were impertinent as Alegarbes had earlier put in issue the matter of ownership of Lot 140 which he claimed by virtue of adverse possession.

The CA also found reversible error on the part of the RTC in disregarding the evidence before it and relying entirely upon the decisions of the administrative bodies, none of which touched upon the issue of Alegarbes' open, continuous and exclusive possession of over thirty (30) years of an alienable land. The CA held that the Director of Lands, the Secretary of Agriculture and Natural Resources and the OP did not determine whether Alegarbes' possession of the subject property had ipso jure segregated Lot 140 from the mass of public land and, thus, was beyond their jurisdiction.

Aggrieved, Virtucio filed this petition.

ISSUES

Virtucio assigned the following errors in seeking the reversal of the assailed decision of the CA, to wit:

1. The Court of Appeals erred in setting aside the judgment of the trial court, which awarded the lot in question to the respondent by virtue of acquisitive prescription and ordered herein petitioner to surrender the ownership and possession of the same to them.13

2. The Court of Appeals gravely erred in disregarding the decision in CA-G.R. CV-26286 for Recovery of Possession and Ownership, Custodio vs. Alegarbes which contains same factual circumstances as in this case and ruled against JOSE ALEGARBES.14

3. The Court of Appeals erred in deleting the award of attorney's fees to the petitioner.15

The lone issue in this case is whether or not Alegarbes acquired ownership over the subject property by acquisitive prescription.

Ruling of the Court

The petition must fail.

Indeed, it is fundamental that questions of fact are not reviewable in petitions for review on certiorari under Rule 45 of the Rules of Court. Only questions of law distinctly set forth shall be raised in the petition.16

Here, the main issue is the alleged acquisition of ownership by Alegarbes through acquisitive prescription and the character and length of possession of a party over a parcel of land subject of controversy is a factual issue.17 The Court, however, is not precluded from reviewing facts when the case falls within the recognized exceptions, to wit:

(a) When the findings are grounded entirely on speculation, surmises, or conjectures;

(b) When the inference made is manifestly mistaken, absurd, or impossible;

(c) When there is grave abuse of discretion;

(d) When the judgment is based on a misapprehension of facts;

(e) When the findings of facts are conflicting;

(f) When in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee;

(g) When the CA’s findings are contrary to those by the trial court;

(h) When the findings are conclusions without citation of specific evidence on which they are based;

(i) When the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent;

(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or

(k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.18 [Emphasis supplied]

In the case at bench, the findings and conclusions of the CA are apparently contrary to those of the RTC, hence, the need to review the facts in order to arrive at the proper conclusion.

On Acquisitive Prescription

Virtucio insists that the period of acquisitive prescription was interrupted on October 30, 1961 (or in 1954 when Alegarbes filed the protest) when the Director of Lands rendered a decision giving due course to his homestead application and that of Ulpiano Custodio. Virtucio further claims that since 1954, several extrajudicial demands were also made upon Alegarbes demanding that he vacate said lot. Those demands constitute the "extrajudicial demand" contemplated in Article 1155, thus, tolling the period of acquisitive prescription.19

Article 1106 of the New Civil Code, in relation to its Article 712, provides that prescription is a mode of acquiring ownership through the lapse of time in the manner and under the conditions laid down by law. Under the same law, it states that acquisitive prescription may either be ordinary or extraordinary.20 Ordinary acquisitive prescription requires possession of things in good faith and with just title for a period of ten years,21 while extraordinary acquisitive prescription requires uninterrupted adverse possession of thirty years, without need of title or of good faith.22

There are two kinds of prescription provided in the Civil Code. One is acquisitive, that is, the acquisition of a right by the lapse of time as expounded in par. 1, Article 1106. Other names for acquisitive prescription are adverse possession and usucapcion. The other kind is extinctive prescription whereby rights and actions are lost by the lapse of time as defined in Article 1106 and par. 2, Article 1139. Another name for extinctive prescription is litigation of action.23 These two kinds of prescription should not be interchanged.

Article 1155 of the New Civil Code refers to the interruption of prescription of actions. Interruption of acquisitive prescription, on the other hand, is found in Articles 1120-1125 of the same Code. Thus, Virtucio’s reliance on Article 1155 for purposes of tolling the period of acquisitive prescription is misplaced. The only kinds of interruption that effectively toll the period of acquisitive prescription are natural and civil interruption.24

Civil interruption takes place with the service of judicial summons to the possessor.25 When no action is filed, then there is no occasion to issue a judicial summons against the respondents. The period of acquisitive prescription continues to run.

In this case, Virtucio claims that the protest filed by Alegarbes against his homestead application interrupted the thirty (30)-year period of acquisitive prescription. The law, as well as jurisprudence, however, dictates that only a judicial summons can effectively toll the said period.

In the case of Heirs of Marcelina Azardon-Crisologo v. Rañon,26 the Court ruled that a mere Notice of Adverse Claim did not constitute an effective interruption of possession. In the case of Heirs of Bienvenido and Araceli Tanyag v. Gabriel,27 which also cited the Rañon Case, the Court stated that the acts of declaring again the property for tax purposes and obtaining a Torrens certificate of title in one's name cannot defeat another's right of ownership acquired through acquisitive prescription.28

In the same vein, a protest filed before an administrative agency and even the decision resulting from it cannot effectively toll the running of the period of acquisitive prescription. In such an instance, no civil interruption can take place. Only in cases filed before the courts may judicial summons be issued and, thus, interrupt possession. Records show that it was only in 1997 when Virtucio filed a case before the RTC. The CA was, therefore, correct in ruling that Alegarbes became ipso jure owner of Lot 140 entitling him to retain possession of it because he was in open, continuous and exclusive possession for over thirty (30) years of alienable public land. Virtucio emphasizes that the CA erred in disregarding the decisions of the administrative agencies which amended Alegarbes' homestead application excluding Lot

140 and gave due course to his own application for the said lot, which decisions were affirmed by the RTC.

Well-settled is the rule that factual findings of the lower courts are entitled to great weight and respect on appeal and, in fact, are accorded finality when supported by substantial evidence on the record.29 It appears, however, that the conclusion made by the RTC was not substantially supported. Even the RTC itself noted in its decision:

The approval of a Homestead Application merely authorizes the applicant to take possession of the land so that he could comply with the requirements prescribed by law before a final patent could be issued in his favor – what deprives the government of title to the land is the issuance of a patent and its subsequent registration with the Register of Deeds.30

A perusal of the records would reveal that there was no issuance of any patent in favor of either parties. This simply means that the land subject of the controversy remains to be in the name of the State. Hence, neither Virtucio nor Alegarbes can claim ownership. There was, therefore, no substantial and legal basis for the RTC to declare that Virtucio was entitled to possession and ownership of Lot 140.

It can be argued that the lower court had the decisions of the administrative agencies, which ultimately attained finality, as legal bases in ruling that Virtucio had the right of possession and ownership. In fact, the Department of Environment and Natural Resources (DENR) even issued the Order of Execution31 on May 11, 1989 ordering Alegarbes to vacate Lot 140 and place Virtucio in peaceful possession of it. The CA, however, was correct in finding that:

But appellant had earlier put in issue the matter of ownership of Lot 140 which he claims by virtue of adverse possession. On this issue, the cited decisions are impertinent. Even if the decision to approve appellee's homestead application over Lot 140 had become final, appellant could still acquire the said lot by acquisitive prescription.32

In the case of Heirs of Gamos v. Heirs of Frando,33 the Court ruled that the mere application for a patent, coupled with the fact of exclusive, open, continuous and notorious possession for the required period, is sufficient to vest in the applicant the grant applied for.34 It likewise cited the cases of Susi v. Razon35 and Pineda v. CA,36 where the Court ruled that the possession of a parcel of agricultural land of the public domain for the prescribed period of 30 years ipso jure converts the lot into private property.37

In this case, Alegarbes had applied for homestead patent as early as 1949. He had been in exclusive, open, continuous and notorious possession of Lot 140 for at least 30 years. By the time the DENR issued its order of execution in 1989, Alegarbes had Lot 140 in his possession for more than 30 years. Even more so when Virtucio filed the complaint before the RTC in 1997, Alegarbes was already in possession of the subject property for forty-eight (48) years.

The CA correctly observed that the RTC erred in disregarding the evidence before it and relying entirely upon the decisions of the Director of Lands, the Secretary of Agriculture and Natural Resources and the OP, which never touched the issue of whether Alegarbes’ open, continuous and exclusive possession of over thirty (30) years of alienable land had ipso jure segregated Lot 140 from the mass of public land and beyond the jurisdiction of these agencies.38

When the CA ruled that the RTC was correct in relying on the abovementioned decisions, it merely recognized the primary jurisdiction of these administrative agencies. It was of the view that the RTC was not correct in the other aspects of the case. Thus, it declared Alegarbes as owner ipso jure of Lot 140 and entitled to retain possession of it. There is no reason for the Court to disturb these findings of the CA as they were supported by substantial evidence, hence, are conclusive and binding upon this Court.39

On the CA Decision involving a similar case

Virtucio insists that the CA gravely erred in disregarding its decision in Custodio v. Alegarbes, CA-G.R. CV 26286, for Recovery of Possession and Ownership, which involved the same factual circumstances and ruled against Alegarbes.

It must be noted that the subject property in the said case was Lot 139 allocated to Custodio and that Virtucio was not a party to that case. The latter cannot enjoy whatever benefits said favorable judgment may have had just because it involved similar factual circumstances. The Court also found from the records that the period of acquisitive prescription in that case was effectively interrupted by Custodio's filing of a complaint, which is wanting in this case.

Moreover, it is settled that a decision of the CA does not establish judicial precedent.40 "The principle of stare decisis enjoins adherence by lower courts to doctrinal rules established by this Court in its final decisions. It is based on the principle that once a question of law has been examined and decided, it should be deemed settled and closed to further argument. "41

The Court agrees with the position of Alegarbes that by Virtucio's insistence that it was erroneous for the CA to disregard its earlier decision in CA-G.R. CV 26286, he, in effect, calls upon this Court to adhere to that decision by invoking the stare decisis principle, which is not legally possible because only final decisions of this Court are considered precedents.42

In view of the foregoing, the Court need not dwell on the complaint of Virtucio with regard to the deletion of the award of attorney's fees in his favor. It is ludicrous for the CA to order Alegarbes to pay attorney's fees, as a measure of damages, and costs, after finding him to have acquired ownership over the property by acquisitive prescription.

WHEREFORE, the petition is DENIED.

SO ORDERED.

G.R. No. 159508               August 29, 2012

JUAN B. BANEZ, JR., Petitioner, vs.HON. CRISANTO C. CONCEPCION, IN HIS CAPACITY AS THE PRESIDING JUDGE OF THE RTC-BULACAN, MALOLOS CITY, AND THE ESTATE OF THE LATE RODRIGO GOMEZ, REPRESENTED BY ITS ADMINISTRATRIX, TSUI YUK YING, Respondents.

D E C I S I O N

BERSAMIN, J.:

The petitioner has directly come to the Court via petition for certiorari1 filed on September 4, 2003 to assail the orders dated March 24, 2003 (reversing an earlier order issued on February 18, 2003 granting his motion to dismiss on the ground of the action being already barred by prescription, and reinstating the action),2 April 21, 2003 (denying his motion for reconsideration),3and August 19, 2003 (denying his second motion for reconsideration and ordering him to file his answer within 10 days from notice despite the principal defendant not having been yet validly served with summons and copy of the complaint),4 all issued by the Regional Trial Court (RTC), Branch 12, in Malolos City in Civil Case No. 722-M-2002,5 an action for the recovery of ownership and possession. He alleges that respondent Presiding Judge thereby acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

Antecedents

The present controversy started almost four decades ago when Leodegario B. Ramos (Ramos), one of the defendants in Civil Case No. 722-M-2002, discovered that a parcel of land with an area of 1,233 square meters, more or less, which was a portion of a bigger tract of land with an area of 3,054 square meters, more or less, located in Meycauayan, Bulacan that he had adjudicated solely to himself upon his mother’s death on November 16, 1982 had been earlier transferred by his mother to one Ricardo Asuncion, who had, in turn, sold it to the late Rodrigo Gomez.

On February 1, 1990, Ramos, alleging that Gomez had induced him to sell the 1,233 square meters to Gomez on the understanding that Gomez would settle Ramos’ obligation to three other persons, commenced in the RTC in Valenzuela an action against Gomez, also known as Domingo Ng Lim, seeking the rescission of their contract of sale and the payment of damages, docketed as Civil Case No. 3287-V-90 entitled Leodegario B. Ramos v. Rodrigo Gomez, a.k.a. Domingo Ng Lim.6

On October 9, 1990, before the Valenzuela RTC could decide Civil Case No. 3287-V-90 on the merits, Ramos and Gomez entered into a compromise agreement.7 The RTC approved their compromise agreement through its decision rendered on the same date.8

The petitioner, being then the counsel of Ramos in Civil Case No. 3287-V-90, assisted Ramos in entering into the compromise agreement "to finally terminate this case." The terms and conditions of the compromise agreement were as follows:

COME NOW, the Parties, assisted by their respective counsels, and before this Honorable Court, most respectfully submit this COMPROMISE AGREEMENT for approval, as to finally terminate this case, the terms and conditions of which being as follows:

1. That out of the total area of Three Thousand and Fifty Four (3,054) sq. m., more or less, covered by formerly O.C.T. No. P-2492 (M), Registry of Deeds of Bulacan, known as Lot No. 6821, Cad-337 Lot 4020-E, Csd-04-001618-D, and now by the Reconstituted Transfer Certificate of Title No. T-10179-P (M) defendant shall cause survey of said property, at its own expense, to segregate the area of One Thousand Two Hundred Thirty-Three, (1,233) sq. m. more or less, to take along lines two (2) to three (3), then to four (4) and up to five (5) of said plan, Csd-04-001618-D;

2. That upon completion of the technical survey and plan, defendant shall cause the registration of the Deed of Absolute Sale executed by plaintiff over the 1,233 sq. m. in his favor and that defendant shall deliver the survey and plan pertaining to the 1,821 sq, m. to the plaintiff with both parties defraying the cost of registration and titling over their respective shares;

3. That to carry out the foregoing, plaintiff shall entrust the Owner’s Duplicate of said TCT No. T-10179-P (M), Registry of Deeds of Meycauayan, Bulacan, to the defendant, upon approval of this COMPROMISE AGREEMENT by the Court;

4. That upon the approval of this Compromise Agreement plaintiff shall execute a Deed of Absolute Sale in favor of defendant over the 1,233 sq. m. surveyed and segregated from the 1,821 sq. m. which should remain with the plaintiff and to be titled in his name;

5. That plaintiff obligates himself to return his loan obligation to the defendant, in the principal sum of P 80,000.00 plus P 20,000.00 for the use thereof, and an additional sum of P 10,000.00 in the concept of attorney’s fees, which sums shall be guaranteed by a post-dated check, in the amount of P 110,000.00 in plaintiff’s name with his prior endorsement, drawn and issued by plaintiff’s counsel, for a period of Sixty (60) days from October 9, 1990;

6. That in the event the check issued pursuant to paragraph 5 hereof, is dishonored for any reason whatsoever, upon presentment for payment, then this Compromise Agreement, shall be considered null and void and of no effect whatsoever;

7. That upon faithful compliance with the terms and conditions of this COMPROMISE AGREEMENT and the Decision based thereon, the parties hereto shall have respectively waived, conceded and abandoned all claims and rights of action of whatever kind or nature, against each other over the subject property.

WHEREFORE, premises considered, the parties hereto hereby jointly and severally pray before this Honorable Court to approve this COMPROMISE AGREEMENT and thereupon render its Decision based thereon terminating the case.

One of the stipulations of the compromise agreement was for Ramos to execute a deed of absolute sale in favor of Gomez respecting the parcel of land with an area of 1,233 square meters, and covered by Transfer Certificate of Title (TCT) No. T-13005 P(M) in the name of Ramos.9 Another stipulation was for the petitioner to issue post-dated checks totaling P 110,000.00 to guarantee the payment by Ramos of his monetary obligations towards Gomez as stated in the compromise agreement broken down as follows: (a) P 80,000.00 as Ramos’ loan obligation to Gomez; (b) P 20,000.00 for the use of the loan; and (c) P 10,000.00 as attorney’s fees. Of these amounts, only P 80,000.00 was ultimately paid to Gomez, because the petitioner’s check dated April 23, 1991 for the balance of P 30,000.00 was dishonored for insufficiency of funds.

Gomez meanwhile died on November 7, 1990. He was survived by his wife Tsui Yuk Ying and their minor children (collectively to be referred to as the Estate of Gomez). The Estate of Gomez sued Ramos and the petitioner for specific performance in the RTC in Caloocan City to recover the balance of P 30,000.00 (Civil Case No. C-15750). On February 28, 1994, however, Civil Case No. C-15750 was amicably settled through a compromise agreement, whereby the petitioner directly bound himself to pay to the Estate of Gomez P 10,000.00 on or before March 15, 1994; P 10,000.00 on or before April 15, 1994; and P 10,000.00 on or before May 15, 1994.

The Estate of Gomez performed the obligations of Gomez under the first paragraph of the compromise agreement of October 9, 1990 by causing the survey of the bigger tract of land containing an area of 3,054 square meters, more or less, in order to segregate the area of 1,233 square meters that should be transferred by Ramos to Gomez in accordance with Ramos’ undertaking under the second paragraph of the compromise agreement of October 9, 1990. But Ramos failed to cause the registration of the deed of absolute sale pursuant to the second paragraph of the compromise agreement of October 9, 1990 despite the Estate of Gomez having already complied with Gomez’s undertaking to deliver the approved survey plan and to shoulder the expenses for that purpose. Nor did Ramos deliver to the Estate of Gomez the owner’s duplicate copy of TCT No. T-10179 P(M) of the Registry of Deeds of Meycauayan, Bulacan, as stipulated under the third paragraph of the compromise agreement of October 9, 1990. Instead, Ramos and the petitioner caused to be registered the 1,233 square meter portion in Ramos’s name under TCT No. T-13005-P(M) of the Registry of Deeds of Meycauayan, Bulacan.

Accordingly, on July 6, 1995, the Estate of Gomez brought a complaint for specific performance against Ramos and the petitioner in the RTC in Valenzuela (Civil Case No. 4679-V-95)10 in order to recover the 1,233 square meter lot. However, the Valenzuela RTC dismissed the complaint on April 1, 1996 upon the motion of Ramos and the petitioner on the ground of improper venue because the objective was to recover the ownership and possession of realty situated in Meycauayan, Bulacan, and because the proper recourse was to enforce the judgment by compromise Agreement rendered on October 9, 1990 through a motion for execution.

The Estate of Gomez appealed the order of dismissal to the Court of Appeals (CA), which ruled on July 24, 2001 to affirm the Valenzuela RTC and to dismiss the appeal (CA-G.R. CV No. 54231).

On September 20, 2002, the Estate of Gomez commenced Civil Case No. 722-M-2002 in the Valenzuela RTC, ostensibly to revive the judgment by compromise rendered on October 9, 1990 in Civil Case No. 3287-V-90, praying that Ramos be ordered to execute the deed of absolute sale covering the 1,233 square meter lot pursuant to the fourth stipulation of the compromise agreement of October 9, 1990. The petitioner was impleaded as a party-defendant because of his having guaranteed the performance by Ramos of his obligation and for having actively participated in the transaction.

On January 8, 2003, the petitioner moved for the dismissal of Civil Case No. 722-M-2002, alleging that the action was already barred by res judicata and by prescription; that he was not a real party-in-interest; and that the amount he had guaranteed with his personal check had already been paid by Ramos with his own money.11

Initially, on February 18, 2003,12 the RTC granted the petitioner’s motion to dismiss, finding that the right of action had already prescribed due to more than 12 years having elapsed from the approval of the compromise agreement on October 9, 1990, citing Article 1143 (3) of the Civil Code (which provides a 10-year period within which a right of action based upon a judgment must be brought from).

On March 24, 2003,13 however, the RTC reversed itself upon motion of the Estate of Gomez and set aside its order of February 18, 2003. The RTC reinstated Civil Case No. 722-M-2002, holding that the filing of the complaint for specific performance on July 6, 1995 in the Valenzuela RTC (Civil Case No. 4679-V-95) had interrupted the prescriptive period pursuant to Article 1155 of the Civil Code.

The petitioner sought reconsideration, but the RTC denied his motion for that purpose on April 21, 2003.

On May 12, 2003, the petitioner filed a second motion for reconsideration, maintaining that the Estate of Gomez’s right of action had already prescribed; and that the judgment by compromise of October 9, 1990 had already settled the entire controversy between the parties.

On August 19, 2003,14 the RTC denied the second motion for reconsideration for lack of merit.

Hence, this special civil action for certiorari commenced on September 4, 2003 directly in this Court.

Issues

The petitioner insists that:

xxx the lower court acted with grave abuse of discretion, amounting to lack of, or in excess of jurisdiction, when, after having correctly ordered the dismissal of the case below, on the ground of prescription under Art. 1144, par. 3, of the Civil Code, it reconsidered and set aside the same, on the factually baseless and legally untenable Motion for Reconsideration of Private Respondent, insisting, with grave abuse of discretion, if not bordering on ignorance of law, and too afraid to face reality, that it is Art. 1155 of the same code, as invoked by Private Respondents, that applies, and required herein petitioner to file his answer, despite petitioner’s first Motion for Reconsideration, which it treated as a mere scrap of paper, yet, at the same [sic] again it insisted that Article 1155 of the Civil Code should apply, and, thereafter when, with like, if not greater grave abuse of discretion, amounting to lack, or in excess of jurisdiction, it again denied petitioner’s Second Motion for Reconsideration for lack of merit, and giving petitioner a non-extendible period of ten 10 days from notice, to file his answer.15

In his reply to the Estate of Gomez’s comment,16 the petitioner elucidated as follows:

1) Whether or not, the Honorable public respondent Judge gravely abused his discretion, amounting to lack of, or in excess of jurisdiction, when, after ordered the dismissal of Civil Case No. 722-M-2002, as prescription has set in, under Art. 1143 of the Civil Code, he set aside and reconsidered his said Order,

on motion of plaintiff, by thereafter denied petitioner’s Motion for Reconsideration, and Second Motion for Reconsideration, insisting, despite his being presumed to know the law, that the said action is not barred by prescription, under Art. 1145 of the Civil Code;

2) Whether or not, the present pending action, Civil Case No. 722-M-2002, before Branch 12 of the Regional Trial Court of Malolos, Bulacan, is barred, and should be ordered be dismissed, on the ground of prescription, under the law and the rules, and applicable jurisprudence.

3) Whether or not, the same action may be dismissed on other valid grounds.17

The petitioner submits that Civil Case No. 722-M-2002 was one for the revival of the judgment upon a compromise agreement rendered in Civil Case No. 3287-V-90 that attained finality on October 9, 1990; that considering that an action for revival must be filed within 10 years from the date of finality, pursuant to Article 1144 of the Civil Code,18 in relation to Section 6, Rule 39 of the Rules of Court,19 Civil Case No. 722-M-2002 was already barred by prescription, having been filed beyond the 10-year prescriptive period; that the RTC gravely abused its discretion in reinstating the complaint despite prescription having already set in; that the dismissal of Civil Case No. 722-M-2002 was proper also because the judgment had already been fully satisfied; that the claim relative to the 1,233 square meter lot under the compromise agreement had been waived, abandoned, or otherwise extinguished on account of the failure of the Estate of Gomez’s counsel to move for the issuance of a writ of execution; and that the Estate of Gomez could not rely upon the pendency and effects of the appeal from the action for specific performance after its dismissal had been affirmed by the CA on grounds of improper venue, the plaintiff’s lack of personality, and improper remedy (due to the proper remedy being by execution of the judgment).

The Estate of Gomez countered that the filing on July 6, 1995 of the action for specific performance in the RTC in Valenzuela stopped the running of the prescriptive period; that the period commenced to run again after the CA dismissed that action on July 24, 2001; that the total elapsed period was only five years and 11 months; and that the action for the revival of judgment filed on September 20, 2002 was within the period of 10 years to enforce a final and executory judgment by action.

Ruling

We dismiss the petition for certiorari.

The orders that the petitioner seeks to challenge and to annul are the orders denying his motion to dismiss. It is settled, however, that an order denying a motion to dismiss, being merely interlocutory, cannot be the basis of a petition for certiorari. An interlocutory order is not the proper subject of a certiorari challenge by virtue of its not terminating the proceedings in which it is issued. To allow such order to be the subject of review by certiorari not only delays the administration of justice, but also unduly burdens the courts.20

But a petition for certiorari may be filed to assail an interlocutory order if it is issued without jurisdiction, or with excess of jurisdiction, or in grave abuse of discretion amounting to lack or excess of jurisdiction. This is because as to such order there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. Rule 65 of the Rules of Court expressly recognizes the exception by providing as follows:

Section 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the

proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (1a)

The exception does not apply to this challenge. The petitioner has not demonstrated how the assailed orders could have been issued without jurisdiction, or with excess of jurisdiction, or in grave abuse of discretion amounting to lack or excess of jurisdiction. Nor has he convinced us that he had no plain, speedy, and adequate remedy in the ordinary course of law. In fact and in law, he has, like filing his answer and going to pre-trial and trial. In the end, should he still have the need to seek the review of the decision of the RTC, he could also even appeal the denial of the motion to dismiss. That, in reality, was his proper remedy in the ordinary course of law.

Yet another reason to dismiss the petition for certiorari exists. Although the Court, the CA and the RTC have concurrence of jurisdiction to issue writs of certiorari, the petitioner had no unrestrained freedom to choose which among the several courts might his petition for certiorari be filed in. In other words, he must observe the hierarchy of courts, the policy in relation to which has been explicitly defined in Section 4 of Rule 65 concerning the petitions for the extraordinary writs of certiorari, prohibition and mandamus, to wit:

Section 4. When and where petition filed. - The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of the said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in the aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed in and cognizable only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding fifteen (15) days. (4a)21 (Emphasis supplied)

Accordingly, his direct filing of the petition for certiorari in this Court instead of in the CA should be disallowed considering that he did not present in the petition any special and compelling reasons to support his choice of this Court as the forum.

The Court must enjoin the observance of the policy on the hierarchy of courts, and now affirms that the policy is not to be ignored without serious consequences. The strictness of the policy is designed to shield the Court from having to deal with causes that are also well within the competence of the lower courts, and thus leave time to the Court to deal with the more fundamental and more essential tasks that the Constitution has assigned to it. The Court may act on petitions for the extraordinary writs of certiorari, prohibition and mandamus only when absolutely necessary or when serious and important reasons exist to justify an exception to the policy. This was why the Court stressed in Vergara, Sr. v. Suelto:22

xxx. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the fundamental charter and immemorial tradition. It cannot and should not be burdened with the task of dealing with causes in the first instance. Its original jurisdiction to issue the so-called extraordinary writs should be exercised only where absolutely necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should generally be exercised

relative to actions or proceedings before the Court of Appeals, or before constitutional or other tribunals, bodies or agencies whose acts for some reason or another are not controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action for the writ’s procurement must be presented. This is and should continue to be the policy in this regard, a policy that courts and lawyers must strictly observe. (Emphasis supplied)

In People v. Cuaresma,23 the Court has also amplified the need for strict adherence to the policy of hierarchy of courts. There, noting "a growing tendency on the part of litigants and lawyers to have their applications for the so-called extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and immediately by the highest tribunal of the land," the Court has cautioned lawyers and litigants against taking a direct resort to the highest tribunal, viz:

xxx. This Court’s original jurisdiction to issue writs of certiorari (as well as prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial Courts x x x, which may issue the writ, enforceable in any part of their respective regions. It is also shared by this Court, and by the Regional Trial Court, with the Court of Appeals x x x, although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue the extraordinary writs was restricted to those "in aid of its appellate jurisdiction." This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy that is necessary to prevent inordinate demands upon the Court’s time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the removal of the restriction on the jurisdiction of the Court of Appeals in this regard, supra— resulting from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" — was evidently intended precisely to relieve this Court pro tanto of the burden of dealing with applications for the extraordinary writs which, but for the expansion of the Appellate Court corresponding jurisdiction, would have had to be filed with it.

xxxx

The Court therefore closes this decision with the declaration for the information and evidence of all concerned, that it will not only continue to enforce the policy, but will require a more strict observance thereof. (Emphasis supplied)

There being no special, important or compelling reason that justified the direct filing of the petition for certiorari in this Court in violation of the policy on hierarchy of courts, its outright dismissal is unavoidable.

Still, even granting that the petition for certiorari might be directly filed in this Court, its dismissal must also follow because its consideration and resolution would unavoidably demand the consideration and evaluation of evidentiary matters. The Court is not a trier of facts, and cannot accept the petition for certiorari for that reason.

Although commenced ostensibly for the recovery of possession and ownership of real property, Civil Case No. 722-M-2002 was really an action to revive the judgment by compromise dated October 9, 1990 because the ultimate outcome would be no other than to order the execution of the judgment by compromise. Indeed, it has been held that "there is no substantial difference between an action expressly

called one for revival of judgment and an action for recovery of property under a right adjudged under and evidenced by a final judgment."24 In addition, the parties themselves have treated the complaint in Civil Case No. 722-M-2002 as one for revival. Accordingly, the parties should be fully heard on their respective claims like in any other independent action.1âwphi1

The petitioner’s defense of prescription to bar Civil Case No. 722-M-2002 presents another evidentiary concern. Article 1144 of the Civil Code requires, indeed, that an action to revive a judgment must be brought before it is barred by prescription, which was ten years from the accrual of the right of action.25 It is clear, however, that such a defense could not be determined in the hearing of the petitioner’s motion to dismiss considering that the complaint did not show on its face that the period to bring the action to revive had already lapsed. An allegation of prescription, as the Court put it in Pineda v. Heirs of Eliseo Guevara,26 "can effectively be used in a motion to dismiss only when the complaint on its face shows that indeed the action has already prescribed, [o]therwise, the issue of prescription is one involving evidentiary matters requiring a full blown trial on the merits and cannot be determined in a mere motion to dismiss."

At any rate, the mere lapse of the period per se did not render the judgment stale within the context of the law on prescription, for events that effectively suspended the running of the period of limitation might have intervened. In other words, the Estate of Gomez was not precluded from showing such events, if any. The Court recognized this possibility of suspension in Lancita v. Magbanua:27

In computing the time limited for suing out of an execution, although there is authority to the contrary, the general rule is that there should not be included the time when execution is stayed, either by agreement of the parties for a definite time, by injunction, by the taking of an appeal or writ of error so as to operate as a supersede as, by the death of a party or otherwise. Any interruption or delay occasioned by the debtor will extend the time within which the writ may be issued without scire facias.

Verily, the need to prove the existence or non-existence of significant matters, like supervening events, in order to show either that Civil Case No. 722-M-2002 was batTed by prescription or not was present and undeniable. Moreover, the petitioner himself raised factual issues in his motion to dismiss, like his averment of full payment or discharge of the obligation of Ramos and the waiver or abandonment of rights under the compromise agreement. The proof thereon cannot be received in certiorari proceedings before the Court, but should be established in the RTC.

WHEREFORE, the Court DISMISSES the petition for certiorari; and DIRECTS the petitioner to pay the cost of suit.

SO ORDERED