Lex Rex Ph

Ten Forty Realty v. Cruz Digest

Forcible Entry vs. Unlawful Detainer

PARTIES:
TEN FORTY REALTY AND DEVELOPMENT CORP., Represented by its President, VERONICA G. LORENZANA, petitioner, vs. MARINA CRUZ, respondent.

GR NUMBER, DATE
G.R. No. 151212, [September 10, 2003], 457 PHIL 603-620

MY TITLE
Double Sale, first possessor in good faith had a better right.

FACTS

Ten Forty, represented by Pres. Lorenzana, filed a complaint for ejectment against Marina Cruz before MTCC of Olongapo in October 16, 1998. Grounds:

  • Ten Forty is the true and absolute owner.
  • Acquired the same on Dec 5, 1996 from Barbara Galino
  • by virtue of DoAS
  • Sale acknowledged by Barbara through Katunayan
  • Payment of capital gains tax evidenced by CAR issued BIR

Ten Forty came to know that Barbara Galino sold the same property on April 24, 1998 to Cruz. Cruz immediately occupied the property. Ten Forty merely tolerated Cruz but then filed the said complaint for ejectment. Demand letter was sent to Cruz to vacate and pay for her use. Cruz ignored.

Parties have conflicting versions of the facts. Cruz’s answer:

Respondent Cruz

“Ten Forty is not qualified to own residential land. Land is public land.”

“Barbara Galino did not sell the house to Ten Forty, but merely obtained a loan from the President”

“Cruz occupied when Galino vacated. No proof that Ten Forty occupied the premises. Obtained a tax declaration under me in April 1998.”

“Ten Forty filed for a miscellaneous sales application with DENR for the subject land (not bought it). Action for ejectment won’t succeed because Cruz had been in possession prior to Ten Forty”

Petitioner Ten Forty Realty

Grounds:
– Ten Forty is the true and absolute owner.
– Acquired the same on Dec 5, 1996 from Barbara Galino
– by virtue of DoAS
– Sale acknowledged by Barbara through Katunayan
– Payment of capital gains tax evidenced by CAR issued BIR

Being the first buyer, I have the better right to own the realty.

MTCC favored Ten Forty. Ordered Cruz to vacate and pay. Who filed? Ten Forty.

RTC reversed MTCC. Favored Cruz.

  1. Cruz’s entry was not tolerance of Ten Forty, but Waiver and Transfer of Possessory Rights and Deed of Sale in Cruz’s favor;
  2. Execution of DoAS without actual transfer of physical possession did not have the effect of transferring ownership. Article 1428 of the Civil Code. There must be delivery of the object of the sale for the sale to be valid.
  3. Being a corporation, petitioner cannot own public land.

CA sustained RTC. Favored Cruz.

  1. Ten Forty failed to make a case for unlawful detainer.
    • Reason: No contract – express or implied – had been entered into by the parties with regard to possession of the property.
    • Action should have been forcible entry, in which prior physical possession was indispensable. But Ten Forty have not shown it possessed the property.
  2. “RTC ruling is challenged by Cruz”

SC favored Cruz.
Who filed to SC? Petitioner. Seeking to nullify CA decision.

Issues

ISSUE 1: Ten Forty’s rationale that “Cruz’s possession is merely through our tolerance or permission” is not support by evidence. Possession by Cruz deemed ILLEGAL from the beginning. Action should have been forcible entry, however, it prescribed. (Actual entry was April 24, 1998, Complaint was filed May 12, 1999) <—ALLEGED OCCUPATION BY TOLERANCE

THERE IS NO CASE FOR UNLAWFUL DETAINER BECAUSE NO EXPRESS CONTRACT BETWEEN PARTIES. Ten Forty failed to substantiate that there was a contract. No evidence that corporation tolerated the possession.

  • The permission or tolerance must have been present at the beginning of the possession.
  • What is tolerance? Initially be lawful, it ceases to be so upon the owner’s demand that the possessor by tolerance vacate the property.
  • if the possession was unlawful from the start, an action for unlawful detainer would be an improper remedy.

Sarona v. Villegas elucidates:

Unlawful detainer: Tolerance/permission/sufferance must exist from the start of possession

Tolerance must be a cause of unlawful detainer, not of forcible entry. Why?

  • Forcible entry is an open challenge to the right of the possessor. Speedy redress is authorized when it is committed. In the ROC, one year is allowed before a suit is filed. <– this will not make it speedy.
  • If allowed after a number of years, it will result to a case where no action for forcible entry can prescribe. No matter how long a defendant is in possession, the plaintiff can just make a demand and through him out.

Here, Ten Forty did not substantiate their claims. Just merely allegations. Their allegations contradict their theory that it is for unlawful detainer. Why?

  • Unlawful at inception –> does not support unlawful detainer. This supports forcible entry.
  • Unlawful detainer’s essential element: Petitioner’s tolerance or sufferance or permission from the start of possession.

ISSUE 2: Root of the problem: Was it for unlawful detainer or for forcible entry? THE ACTUAL CAUSE WAS FORCIBLE ENTRY, BUT PETITIONER WAS NOT PROVEN TO BE IN PRIOR PHYSICAL POSSESSION. ACTION FOR UNLAWFUL DETAINER MERELY A SUBTERFUGE.

Section 1 Rule 70 of the Rules of Court: “a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, (<<<<—– this is FORCIBLE ENTRY) or a vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after expiration or termination of the right to hold possession, by virtue of any contract (<<<<<<—- UNLAWFUL DETAINER)…may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against the person…for the restitution of such possession, together with damages and costs.”

FORCIBLE ENTRYUNLAWFUL DETAINER
How is possessedPossession of land or building by means of force, intimidation, threat, strategy, or stealth. (FITSS)one unlawfully withholds possession thereof after the expiration or termination of his right to hold possession under any contract, express or implied.
Illegalityillegal from the beginningthe possession was originally lawful but became unlawful by the expiration or termination of the right to possess
EntryIllegalLegal
Filing/Prescriptive period1 year from actual possession1 year from the last demand to vacate
Essential ElementPrior physical possession of the petitioner in the property
Separate and distinct actions against De Facto Possession

Allegations of Ten Forty appeared to show the elements of unlawful detainer.

  • Petitioner acquired
  • Cruz acquired the same afterwards
  • Cruz immediately occupied
  • Tolerated by Petitioner
  • Cruz refused after demand

Filing with MTCC is within prescriptive period. But what was actually proven was that possession by Cruz had been illegal from the beginning. Real cause was forcible entry but already prescribed. CA: “unlawful detainer suit was a mere subterfuge or disguise substitute action for an action which already prescribed.”

To maintain a viable action for forcible entry, plaintiff must have been in prior physical possession of the property; this is an essential element of the suit.

THIRD ISSUE: Is Cruz’s occupation of the property an exercise of a right flowing from a claim of ownership? Yes.

Ten Forty: The only issue to be resolved should be that of possession de facto. Court: OWNERSHIP COMES WITH THE RIGHT TO POSSESS.

Did Ten Forty acquired the property when it executed the Deed of Sale? No. DoAS Not Sufficient as Delivery. Public instrument would have been sufficient if property is incorporeal. But for corporeal property, tradition or the delivery of the thing that is the object of the contract is an essential element of ownership acquisition. Nowhere in the Civil Code is it provided that the execution of a Deed of Sale is a conclusive presumption of delivery of possession of a piece of real estate.

Execution of Public instrument on the sale of real property:

  1. Only a prima facie presumption of delivery
  2. It is not a conclusive presumption
  3. Public instrument is a symbolic delivery which was negatived by failure to take actual possession of the land sold. (Pasagui v. Villablanca)

CA: Highly unbelievable that petitioner — which claims to be the owner of the disputed property — would tolerate possession of the property by respondent from April 24, 1998 up to October 16, 1998. How could it have been so tolerant despite its knowledge that the property had been sold to her?

Petitioner should have likewise been put on guard by respondent’s declaration of the property for tax purposes, an adverse claim, on April 23, 1998,

Who has a better right to the property? Ten Forty Realty or Cruz? Marina Cruz.

The ownership of immovable property sold to two different buyers at different times is governed by Article 1544 of the Civil Code. . . Galino allegedly sold the property in question to Ten Forty on December 5, 1996 and, subsequently, to respondent Cruz on April 24, 1998. Ten Forty Realty thus argues that being the first buyer, it has a better right to own the realty.

FIRST RECORDER IN GOOD FAITH

However, it has not been able to establish that its Deed of Sale was recorded in the Registry of Deeds of Olongapo City. Its claim of an unattested and unverified notation on its Deed of Absolute Sale is not equivalent to registration. It admits that, indeed, the sale has not been recorded in the Registry of Deeds. <— this is absent in this case. Neither of them recorded in the Registry of Deeds of Olongapo. The DoAS has unattested and unverified notation which is not equivalent to registration.

FIRST POSSESSOR IN GOOD FAITH

In the absence of the required inscription, the law gives preferential right to the buyer who in good faith is first in possession. . .

CERTAIN PARAMENTERS:

  1. Article 1544: includes not only material but also symbolic possession.
  2. Possessors in good faith are those who are not aware of any flaw in their title or mode of acquisition.
  3. Buyer-possessor must be wary — they must investigate the rights of the possessors.
  4. Good faith is always presumed. Burden of proof lies on those that allege bad faith.

Earlier, we ruled that the subject property had not been delivered to petitioner; hence, it did not acquire possession either materially or symbolically. As between the two buyers, therefore, respondent was first in actual possession of the property.

Are private corporations are disqualified from acquiring lands of the public domain? Yes.

As provided under Section 3 of Article XII of the Constitution. “Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, and not to exceed one thousand hectares in area.”

However, private corporations may acquire private lands. But is the subject land a private or public land? PUBLIC.

  • It was an Alienable and disposable public land, according to the certification by the City Planning and Development Office of Olongapo City.
  • It was for this reason that respondent Cruz filed a miscellaneous sales application to acquire it.
  • Ten Forty failed to prove that when it purchased the property, it ceased to be of the public domain and was already a private land.

Do persons acquire alienable public lands through prescription? YES.

Alienable and disposable land of the public domain held and occupied by a possessor — personally or through predecessors-in-interest, openly, continuously, and exclusively for 30 years — is ipso jure converted to private property by the mere lapse of time.

Petition of Ten Forty DENIED.

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