[ G.R. No. L-5079, July 31, 1956 ]
J. M. TUASON & CO., INC., REPRESENTED BY ITS MANAGING PARTNER THE GREGORIO ABANETA, INC., PLAINTIFF AND APPELLEE, VS. GERONIMO SANTIAGO, ELENO SANTIAGO PABLO SANTIAGO, CECILIO SANTIAGO AND CONSTANTINO SANTIAGO, DEFENDANTS AND APPELLANTS.
D E C I S I O N
The plaintiff, a domestic corporation, asserts ownership and title to a parcel of land described in the third paragraph of the complaint, as evidenced by transfer certificate of title No. 119 (37679) issued in its .name by the Registrar of Deeds in and for the province of Rizal, which comprises the parcel of land described in the fourth paragraph thereof, and the defendants having taken possession of the smaller parcel of land without any right so to do, the plaintiff brought this action to recover possession thereof, and prayed that the defendants be ordered to vacate it and to desis from asserting any right to the parcel of land or any part thereof and to pay jointly and severally to the plaintiff the sum of 10,000 as damages; and that the buildings constructed thereon claimed by the defendants be demolished and removed at their expense; and for such further and other relief as the Court may deem just and proper.
In their fourth amended answer the defendants deny the allegations in paragraphs 4, 5 and 6 of the complaint and allege that the parcel of land occupied by them, of which they claim to be the owners, contains 46 hectares more or less, and has been continuously and uninterruptedly in, their possession and of their predecessors-in-interest for a period of over 100 years under and by virtue of a titulo de information posesoria duly issued by the Spanish Government; that the parcel of land belonging to them must have been included in the transfer certificate of title of the plaintiff erroneously, maliciously illegally, by false and fraudulent representations and without their knowledge or of their predeeessors-in-interest; that they learned for the first time that the parcel of land had been included in the tract of land registered in the name of the plaintiff when this action was brought in March 1949 and in the following month when the plaintiff forcibly entered upon the parcel of land by means of bulldozers and other grading implements; that after the issuance of original certificate of title No. 735 the parcel of land has not been conveyed or transferred to innocent third persons; that upon learning of the fact that their parcel of land had been included in the tract of land registered in the name of the plaintiff they demanded from the latter the cancellation of transfer certificate title Nor 119 (37679) and asked for the reconveyance of the parcel of land but the plaintiff ignored their demand; that the fraudulent and illegal registration by the plaintiff of the parcel of land belonging to them in G.L.R.O. Rec. No. 7681 has caused them damage in the sum of P6,900,000. As affirmative defense they allege that the plaintiff has no legal capacity to sue. By way of counterclaim they ask for P10,000 as damages caused by the filing of this unnecessary, unjustified and malicious complaint; P20,000 for the destruction of lands, trees, rice paddies and ridges owned by the defendants; P10,000 for the annual loss of crops due to such destruction; P6,900,000 for the value of the land at the rate of P15 per square meter in the event that a judgment be rendered against them; that the registration of title secured by the plaintiff which includes 46 hectares of land claimed by them be deemed a trust; and that the plaintiff be required to reconvey the parcel of land. Upon the foregoing, they pray that the complaint be dismissed; that they be declared the absolute owners of 46 hectares of land described in paragraph 4 of the complaint, ordering the plaintiff to execute a deed of reconveyance of the parcel of land in their favor, to pay them the sum of P40,000 or the sum of P6,900,000 for the value of the land, P10,000 for attorney's fees and double costs, and the Registrar of Deeds in and for the province of Rizal to cancel transfer certificate of title No. 119 (37679) issued in the name of the plaintiff.
The plaintiff's reply to the defendant's counterclaim admits that in April 1949 it bulldozed parts of the land involved in the litigation the possession of which had been restored to it by its tenants and were not in possession of the defendants; that the damages the latter claim to have suffered, as alleged in paragraph 3 of their counterclaim, cannot be recovered because they are not entitled to the crops of the parcel of land in litigation, the same being owned by it (the plaintiff) ; and denies the rest of the allegations of the counterclaim. By way of affirmative defense, it alleges that it is an innocent purchaser for value, it having bought in 1938 the tract of land in which the litigated parcel of land lies from the Heirs of D. Tuazon, Inc.; that an action for damages and reconveyance to the defendants of the parcel of land had long prescribed, the tract of land having been registered in the name of its predecessors-in-interest on 8 July 1914, as evidenced by original certificate of title No. 735 issued by the Registrar of Deeds in and for the province of Rizal.
By agreement of the parties, the area of land in possession of the defendants is delimited in the plan marked Exhibit B by broken lines in red ink. There is no dispute as to the fact that the parcel of land occupied and claimed by the defendants is comprised within the tract of land as delimited and described in transfer certificate of title No. 119 (37679) issued by the Registrar of Deeds in and for the province of Rizal (Exhibit C), and that the title of plaintif's predecessors-in-interest to the tract of land within which the litigated parcel of land is comprised was confirmed by the Land Registration Court and the decree was entered on 8 July 1914, as evidenced by the issuance of original certificate of title No. 735, pursuant to decree No. 17431 issued in G. L. R. 0. Rec. No. 7681. Transfer certificate of title No. 119 (37679) is a transfer from transfer certificate of title No. 35073 (Exhibit C). Previous certificates were transfer certificates of title Nos. 34853 and 31997 (Exhibits J and I).
The preponderance of evidence shows that Isaias Santiago, who together with his brother and sister claimed to have inherited the parcel of land in litigation from Inocencio Santiago and the latter from Baldomero Santiago, worked and cultivated part of the parcel of land in dispute from 1915 to 1918 as tenant of Augusto Tuason. From 1930 to 1932 Isaias Santiago together with his children, the herein defendants, worked part of the parcel of land as tenant of Trinidad Icasiano who had leased it from the Tuasons. After Isaias Santiago and his children ceased to be tenants of Icasiano, Petronilo Paguia succeeded them as tenant. Before Icasiano ceased to be a tenant of the Tuasons, Isaias Santiago and his children worked and cultivated another part of the parcel of land leased by Epifanio de la Cruz from the Tuasons. The part leased by Epifanio de la Cruz adjoined another part of the parcel of land containing an area of 20 hectares leased in 1934 by Ambrosio Pablo from the Bank of the Philippine Islands, then administering the tract of land for the Tuasons. Isaias Santiago was one of the six tenants of Ambrosio Pablo from 1934 until the Japanese occupation when Isaias Santiago, encouraged and aided by Gaudencio Bautista, a member of the Ganap Party, claimed the parcel of land as his and made it so difficult for Gavino Pablo, who was managing the part of the parcel of land leased by his brother Ambrosio, to stay in it and for that reason abandoned it.
The evidence for the appellants imputes to Demetrio Tuason, Auguato Tuason; Mariano Tuason and Juan Tuason, four of the predecessors-in-interest of the plaintiff who had applied and secured the registration of title to the tract of land delimited and described in Exhibit C, and who are now dead, certain statements acknowledging that Isaias Santiago was claiming ownership and was in possession of the parcel of land in litigation, and that being a bully (maton) of violent temper, said Isaias Santiago made it dangerous for anyone to go into, work and cultivate any part of the parcel of land under a lease contract from or permission of the Tuasons. Such evidence, aside from being of the weakest character because it can no longer be contradicted or denied by the deceased, is not an acknowledgment of the title of Isaias Santiago to the parcel of land but only an admission of such claim of ownership which cannot, however, derogate the title of the registered owner. Prescription and adverse possession of a registered land cannot divest the registered owner of his title there of.  It cannot be believed or it is hard to believe that the registered owners of a parcel of land would admit title of another to the same when they knew that they had the title thereto. The testimony of Vicente del Rosario and Albina Santiago only shows that the appellants' claim and that of their predecessors-in-interest and their possession of the parcel of land were tolerated by the registered owner and its predecessors-in-interest.
The appellants cannot successfully assail the decree of registration entered on 8 July 1914, because it was the result of proceedings in rem (G.L.R.O. Rec. No. 7681) and the reopening thereof on the ground of
fraud may only be had with one year from the date of the decree.
The action allowed to be brought by .section 55, Act No. 469, as amended by Act No. 3322, cannot be invoked and availed of because fraud has not been proved. Section 32, Act No. 496, provides: "The certificate of the clerk that he has served the notice as directed by the court, by publishing or mailing, shall be filed in the case before the return day, and shall be conclusive proof of such service." The testimony of Geronimo Santiago to the effect that he was not notified of the application for the registration of the parcel of land by the predecessors-in-interest of the appellee who had applied for such registration cannot prevail over the presumption of regularity of the proceedings in the land registration case, not only because the return of the clerk of court is conclusive proof of such service but also because the fact that Geronimo Santiago was not notified of the application for the registration of the parcel of land by the predecessors-in-interest of the appellee who had applied for such registration does not mean and imply that his father Isaias Santiago who was still living at the time of the registration proceedings was not notified thereof. In any event, the decree "shall be conclusive upon and against all persons, including the Insular Government and all branches thereof, whether mentioned by name in the application, notice, or citation, or included in the general description. "To All Whom It May Concern."
Geronimo Santiago and his aunt Albina Santiago claim and testify that they had a titulo de informaddn posesoria which Isaias Santiago left, together with the land tax receipts evidencing payments by him of tax on the parcel of land from 1903 to 1939, in the hands of Attorney Ananias Galimba for the purpose of applying for registration of the parcel of land claimed by them. The documentary evidence on payment of taxes shows that Isaias Santiago paid only for 1941, 1942, 1943, 1945 and 1946 for a parcel of land in Diliman, assessed at P18,860, Assessment No. 1288 (Exhibits 2-A, 2-B, 2-C, 2-D, 2-E, 2-F and 2-G). The alleged receipts evidencing tax payments on the parcel of land which Geronimo Santiago claims were turned over by his father Isaias to Attorney Ananias Galimba together with the alleged titulo de information posesoria cannot be true, because in the declaration of real property for assessment purposes on the same parcel of land which Isaias Santiago claimed to be his and for which he paid land taxes from 1941 to 1.946 except 1944, subscribed and sworn to by him on 25 September 1940, the following appears: "Duplicate of the land under tax No. 988 in the name of J. M. Tuason, Inc." (Exhibits 3 and 4). It appears also in Exhibit 3 that it is a new declaration. So all the testimony of Geronimo Santiago regarding land tax receipts from 1903 to 1939 and the reason given why his father Isaias had to declare the parcel of land for assessment purposes as new, which, according to him, was due to the transfer of the parcel of land from the province of Rizal to Quezon City, cannot be true.
The appellants &lso claim that they had a titulo de information posesoria which, together with the land tax receipts from 1903 to 1939, was turned over to Attorney Ananias Galimba for the purpose of applying for the registration of the parcel of land; that unfortunately Attorney Ananias Galimba had to abandon his house because he was hunted by the Japanese on account of his guerrilla activities and the document and the land tax receipts were left in the house which was burned and razed to the ground sometime in February 1945. The trial court correctly found that the existence of the tituio de information posesoria has not been established sufficiently and that even if such possessory information title had been in existence it did not vest title of ownership to the parcel of land citing the rule laid down in the case of Modesto vs. Leyva, 6 Phil., 186. The wife of Attorney Ananias Galimba testified that the titulo de information posesoria was in the name of Inocencio Santiago, whereas Geronimo Santiago testified that it was in the name of his father Isaias Santiago.
During the pendency of this case in this Court, the appellants filed a motion for new trial" alleging that they had discovered among the dossiers in the "Legajo de Terrenos de Varias Provincias" a Composition col el Estado, a true copy of which is marked as Annex C and attached to the motion, issued in favor of Inocencio Santiago, and that aside from the Composiddn con el Estado, the Division of Archives of the National Library found the following documents: one of the "Tribunal Municipal de Caloocan" dated 21 July 1894 where the boundaries and area of the "Hacienda de Santa Mesa"' owned by the Tuasons appear (Annex D) ; and another where a petition of the "Procurador de Camara de los del numero de la Real Audiencia," as representative of the "Procurador del Colegio de Nuestro Padre San Ignacio de Manila;" minutes or certificate of a survey and monumenting made in 1708 by the Father Procurator, "Escribano Preceptor," chamber secretary of Capitan Lucas Manzano de Ochoa and attorney-in-fact of the Hacienda of Santa Mesa of Capitan Don Francisco Xavier Monilla and other persons; and the boundary limits of the Hacienda (estate) known as "Mesa de la Santa Misericordia," appear (Annex E). In the last document it appears that one of the boundaries of the Hacienda (estate) known as "Mesa de la Santa Misericordia" was a land known as "Santiago" (Annex E).
In the document dated 5 May 1848 marked Annex C and attached to the motion for new trial, the "Gobernadorcillo" and the "Juez de Sementeras" of the town of Caloocan and four other signers certified that Inocencio Santiago had prayed for a testimony or certificate on his property located in Santolan containing an area of 16 quinones the boundary limits of which are: on the North, "sementera de la Mesa de la Santa Misericordia y otros;" on the South, a street of the barrio; on the East, Rio San Juan del Monte; and on the West, property of Antonio Tuason, which parcel of land, according to him, he had inherited more than 25 years from that date from his deceased father Eligio Santiago; and that it appearing from the statements made by the owners of adjoining lands and others to the effect that their lands were not included in that of Inocencio Santiago, as verified to be true by the "Juez de Sementeras," the "Gobernadorcillo" authorized the formation of the "testimonio? or certificate by publishing it on the bulletin board of the municipal building and in the barrios of the jurisdiction for the information of all, so that upon that information they could file their opposition, if they had any, within six days from that date, after which those who had not filed any opposition would.be prejudiced (bound) thereby. The next paragraph of the document is a "providencia" (order) reciting that the period of six days provided for in the preceding paragraph having expired without any person filing any opposition against the application of Inocencio Santiago, and all the requisites and formalities of the law having been complied with, upon recommendation of the "Juez de Sementeras," the "testimonio" or certificate was approved and Inocencio Santiago was declared absolute owner of the land applied for without prejudice to a better right of third persons, the "Gobernadorcillo" signing at the bottom thereof. The document marked Annex D and attached to the motion for new trial contains an order dated 1 June 1894 addressed to the 'Capitan Municipal" of the town of Caloocan requiring the mayor of the town to forward to the provincial board a detailed statement of the lands within the jurisdiction of Caloocan, their location, boundaries and area; the compliance therewith on 27 July 1894 by the municipal mayor of Caloocan; and the statement of the area and boundaries of the 'Hacienda de Santa Mesa" owned by the Tuason. The document marked Annex E and attached to the motion is an old document bearing the seal of the years 1796 and 1797 where it appears that a petition was filed by Nicolas Guerrero, who had sufficient power of attorney from Rev. Fr. Joaquin Sanchez, Procurator of the College pf Our Father Saint Ignatius, stating or alleging that as the "Estancia" (estate) of Capitan Juan de Moron mentioned as adjoining land the one then in possession of the "Mesa de la Santa Misericordia," said Procurator together with the "Escribano Preceptor," chamber secretary of Capitan Lucas Manzano de Ochoa and attorney-in-fact of said "Santa Mesa de Capitan Don Francisco Xavier Monilla" and several others went around the boundaries and staked monuments between the "Estancia" (estate) of said Capitan Juan de Moron and the adjoining lands and reached a boundary point called "Sargento" between said "Estancia" of Capitan Juan de Moron and that of the College of Our Father Saint Ignatius, where a monument was placed, and from that point Southwest and North-northwest they reached a "paso" called "2 Calang," meaning broken stone (piedra partida) that led to a road going to the "Estancia" of Escobar, also called Balara, owned by the said College of Our Father Saint Ignatius; thence to a point adjoining a land called Santiago, and thence following a North-northwest direction to the river called San Francisco del Monte, where there was a trail called Maypajo, and was the end of said "Estancia" of Capitan Juan de Moron; and praying that the testimony of said survey by monuments and boundaries be made of record. The next paragraph entitled "Auto" states "In the city of Manila, on 30 March 1708, before the President and 'Oidores' of the 'Audiencia' and Royal Chancellory of the Philippines, who were holding public hearing from their royal seats, the previous petition was filed and after hearing said officers directed: Let the party of the 'Mesa de la Santa Misericordia be cited to appear. The Clerk of the Chamber."
The documents just described are not and do not constitute a titulo de information posesoria, because they are merely a certification of possession of the applicant Inocencio Santiago and although the certificate states that it declared Inocencio Santiago the owner of the land which was the subject matter thereof, it was still without prejudice to a third party or parties having or holding a better right. It was a step to be taken preparatory or leading to an application for the grant of a title to lands of the public domain (baldios y realengos) by the Spanish Government under the Royal and Government Decrees or laws then in force. It cannot be an information posesoria, because the proceedings leading to the grant of title was authorized only by the Royal Decree of 13 February 1894, known as the Maura Law, superseding the provisions of the Royal Decree of 25 June 1880 which had authorized the issuance of Composition con el Estado titles by the "Direccion General de Administracion Civil" after compliance with the requirements of the Royal Decree.1 Annex C of the motion for new trial incorrectly referred to and called in the motion for new trial as a Composicion con el Estado title is not yet a Composicion con el Estado title. The Composicion con el Estado title was that granted by the Spanish Government through the "Bireceion General de Administracion Civil," pursuant to the provisions of the Royal Decree of 25 June 1880; that granted by the Chief of the Province by delegation pursuant to the provisions of Royal Decree of 31 August 1888; and that granted also under the Royal Decree of 13 February 1894, because aside from the possessory information proceedings leading to the grant of title to the crown lands (baldios y realengos), the grant by Composicion con el Estado proceedings was still permitted under the provisions of the last royal decree.
There was also an informacidn posesoria proceedings under the provisions of the Mortgage Law which was made effective and in force in the Philippines on 1 December 1889 for the purpose of allowing those who had claim to lands to have their possession recorded in the Registry of Deeds. But such recorded possessory information proceedings did not ripen into ownership except under certain conditions, the most important of which was the expiration of 20 years after the entry or record in the Registry of Deeds of the possessory information proceedings. And under article 394 of the Mortgage Law, the entry or record of possession in the Registry of Deeds did not prejudice the owners who held or had a better right to the ownership of the property although his title had not been recorded, unless prescription had confirmed and secured the claim recorded.
The document marked as Annex E and attached to the motion for new trial is valueless, because while it contains a petition to record a survey by boundaries and the staking of monuments around the "Estancia" of Capitan Juan de Moron in 1708 and an order of the President, the "Oidores" of the "Audiencia" and the Royal Chancellory of the Philippines entered also in 1708, it bears seals of the years 1796 and 1797. The act which was to be certified and made of record took place sometime in 1708, and yet the official paper used wast one for the years 1796 and 1797, or 88 years later. This circumstance renders the documnet unreliable. It may have been done for some purpose but certainly it cannot be given any value. The Northnorthwest course followed by the survey party from the contact point between the "Estancia" of Capitan Juan de Moron and the land known as Santiago, and the fact that the survey party reached a river called or known as San Francisco del Monte, indicate that the land referred to in Annex C was not the one now claimed by the Santiagos. Moreover, laHd known or named "Santiago" does .. not necessarily mean that it was the land owned by Inocencio Santiago or his predecessor-in-interest Eligio Santiago. If it was it would have so stated. For these reasons the motion for new trial, the resolution of which was deferred until the case be decided on the merits, is denied.
The only remaining point to be decided is the amount of damages.. The trial court allows the plaintiff to recover P40,000 a year for damages from 25 March 1949 until possession of the parcel of land is restored to the plaintiff. Damages that are allowable under article 1106 of the Civil Code include the actual losses (dano emergente) which, in this case, are the rentals of the residential part of the parcel of land and the share of the owner in the produce of the agricultural part of the parcel of land, which he failed to collect or receive during the period the usurper was in possession of the parcel of land, and the profits which the owner failed to realize (lucro cesante). What the plaintiff could have realized by laying out streets, filing up low lands, subdividing the parcel of land and other incidental expenses, in order to make it suitable for residential purposes, is speculative. To realize those profits would require investment of additional capital. It is, therefore, the actual damages or loss (danos emergente) that the plaintiff has suffered by reason of its failure to collect or receive the rentals and fruits or produce of the parcel of land and the interest (buero cesante) on the amount of such rentals and share in the agricultural products at the legal rate of interest, to which it is entitled. The trial court arrived at the amount awarded as damages by allowing 10 per cent annually on the estimated value of the parcel of land. Although this process followed by the trial court in estimating the amount of damages to be awarded is not necessarily unfounded or incorrect, yet the trial court overlooked the amount demanded in the prayer of the plaintiff's complaint which is only P10,000. And taking into consideration the fact that the evidence on the amount of recoverable damages is unsatisfactory, to enable the court to make a fair award for damages, and there being no petition by the appellee for leave to amend the prayer of its complaint on the amount of damages so as to make it conform to the evidence, we are of the opinion that the amount demanded in the prayer of the plaintiff's complaint should be awarded for damages. The amount of income received or collected in any form by the receiver which will be turned over to the appellee after accounting must be deducted from the amount of the award for damages.
With the only modification that the amount of damages to be awarded to the appellee be as above indicated, together with lawful interest from the .date of the filing of the complaint, the rest of the judgment appealed from is affirmed, with costs against the appellants.
Paras, C. J., Bengzon, Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia and Felix, JJ., concur.
Section 46, Act No. 496.
Section 38, Act No. 496.
 Section 38, Act No. 496.
 Under the Laws of Indies, the government officers authorized to make land grants were (1) the Governors of the newly discovered lands; (2) the Viceroys and Presidents with the advice of the chapters of cities and villages; and (3) the Pesidents and Audencias, if they were in charge of the Government, by adjustment and sale at public auction. Land grants made by ministers, who were not authorized and those made by chapters of cities, were invalid, unless confirmed by the King in council and to be annulled by the protecting fiscals, and in their absence by the fiscals of the audencias (courts), to whom the viceroys and presidents and audencias were to lend their aid and assistance to carry out such revocation.
Lands were granted to subjects of the king of Spain, including, of course, the natives inhabiting the territories.
The kinds of lands granted were: (1) caballerlas and peonias; and (2) lands and waters found in places suitable for the establishment of towns.
Within three (3) months, the grantee was required to enter upon and take possession of the land and proceed to improve and cultivate it.
The period of possession required and conditions necessary to be fulfilled by the grantee to vest title in him were four (4) years continuous residence and cultivation. No period of time was provided for land and water grants in places suitable for the establishment of towns which were held subject to the King's will, because no title to land and water grants in such places could vest in the grantee.
By the 16th law, the presidents and audencias were authorized to grant public lands by adjustment and sale.
By Royal Cedula of 1 November 1591, the power of the Governors and Chapters to make land grants was revoked and vested in the Royal Officers; and by Royal Order of 16 February 1858, grant of lands, the value of which exceeded 200 pesos, was to be made at public auction.
The Royal Cedula of 24 November 1735, provided that the possession of public lands by private persons be confirmed by the King within a certain period of time therein set, and failure to do so caused the reversion thereof to the Crown.
The Royal Cedula of 15 October 1754, provided for the appointment by Viceroys and Presidents of Royal Audencias of sub-delegate ministers who were authorized to adjust and see public lands; the checking up of titles to land grants; the confirmation of unconfirmed titles by the Audencias of the districts and other Ministers and Governors, and the protection of occupants of public lands who had acquired them by prescription.
The foregoing provisions of Royal Cedula of 15 October 1754 applied to titles to lands granted by adjustment or sale from
1 Article 390, 891, 392 and 393, Mortgage Law.
1700 to the date of the Royal Cedula by the sub-delegates, if they bore royal confirmation by Viceroys and Presidents of the Audendas of the respective districts. Those who had applied for land grants from 1700 to 15 October 1754, but whose titles were unconfirmed, were required to secure confirmation by the, Audencias of the districts and other ministers authorized to confirm, and upon examination of the area, appraisal of the land and the title issued, and it appearing that no collusion or fraud had been committed and that payment of the corresponding purchase price and the fees (media anata) had been made, said ministers were to issue the royal confirmation of the title (pars. 5, 6 & 9). In distant provinces or those separated by sea from the Audencia, the Governors, with the advice of the Royal Officers and the Advocate Lieutenant-General, were authorized to confirm such titles.
The next important Royal Decree on land grants was that of 25 June 1880, put into effect on 3 August 1880, and published in the "Gaceta de Manila" No. 252 on 10 September 1880, approving the rules for the adjustment of public lands in the Philippines in possession of private persons.
 Article 15, Royal Decree of 25 June 1880.