Marcelo vs. Court of Appeals

Ordinary acquisitive prescription over immovable property is completed through ten years of possession in good faith and with just title. Good faith consists in the reasonable belief that the transferor owned the property and could transmit ownership; just title exists when the adverse claimant acquires possession through a mode recognized by law for acquiring ownership, even though the grantor was not the owner. A public instrument of sale, coupled with prior tax declarations and survey plans in the seller's name, serves as just title sufficient to support ordinary prescription.

Spouses Jose Marcelo and Sotera Paulino possessed a parcel of unregistered land in Sta. Lucia, Angat, Bulacan, covered by Tax Declaration No. 2882, since 1939. An adjoining property was owned by the Sarmiento family. On 19 March 1960, Engracia de la Cruz (widow of Jorge Sarmiento) and her children executed a "Kasulatan ng Partisyon sa Labas ng Hukuman at Bilihang Patuluyan" conveying to respondent Fernando Cruz a parcel consisting of 6,000 square meters of riceland ("palayero") and 7,856 square meters of pasture land ("parang"), for a total of 13,856 square meters. Respondent Cruz declared the entire property for taxation and obtained a tax declaration in his name. On 3 November 1968, respondent Cruz sold the entire 13,856-square-meter property to respondent Servando Flores under a "Kasulatan ng Bilihan." Flores immediately took possession and paid realty taxes. Petitioners, who discovered the alleged encroachment in 1967, filed an action for recovery of a 7,540-square-meter portion in 1982.

• The Property: The disputed land is a 7,540-square-meter portion of an unregistered parcel designated as Lot 3098, located in Sta. Lucia, Angat, Bulacan. It formed part of a larger tract covered by Tax Declaration No. 2882 in the names of spouses Jose Marcelo and Sotera Paulino-Marcelo, who had been in continuous possession since 1939.

• Petitioners' Claim: Following Jose Marcelo's death in 1965, petitioners discovered in 1967 that respondent Fernando Cruz had encroached upon a portion of their property. A relocation survey (Plan of Lot 3096 and Lot 3098 of the Angat Cadastre) identified 7,540 square meters of Lot 3098 as the encroached area. Petitioners alleged that when they attempted to cultivate the disputed portion in 1968, respondent Servando Flores barred them, claiming it was part of the land he purchased from Cruz.

• Respondents' Chain of Title: On 19 March 1960, Engracia de la Cruz and her children (the Sarmientos) executed a "Kasulatan ng Partisyon sa Labas ng Hukuman at Bilihang Patuluyan" conveying to respondent Fernando Cruz both the 6,000-square-meter riceland ("palayero") covered by Tax Declaration No. 4482 and the adjoining 7,856-square-meter pasture land ("parang"). The deed explicitly stated that although Tax Declaration No. 4482 mentioned only the riceland, the property included the pasture land that had not been separately declared. Shortly after the sale, respondent Cruz declared both parcels for taxation, obtaining a new tax declaration for the entire 13,856 square meters. He also caused a survey of the property in 1967. On 3 November 1968, respondent Cruz sold the entire 13,856-square-meter property to respondent Servando Flores under a "Kasulatan ng Bilihan." Flores immediately took possession, cultivated the land, and paid realty taxes.

• The Trial Court's Findings: The RTC found that the pasture land was not included in Tax Declaration No. 4482 of the Sarmientos at the time of sale and that respondent Cruz declared it in his name only in 1961. The court concluded that the pasture land was actually part of petitioners' property, which they had possessed since before World War II, and that respondent Cruz's declaration of it in 1961 explained the unexplained increase in his holdings from 6,000 to 13,856 square meters.

• The Trial Court's Own Contrary Finding: Notably, the trial court itself acknowledged in its decision that the deed of sale from the Sarmientos to respondent Cruz covered both the riceland (6,000 square meters) and the pasture land (7,856 square meters), as expressly stated in the "Kasulatan ng Partisyon."

• Applicability of Tero vs. Tero: Petitioners argued that the doctrine in Tero vs. Tero, 131 SCRA 105, should apply because respondents could not account for how they lawfully acquired the 7,540 square meters. Since the appellate court itself stated that only 6,800 square meters was sold to respondent Cruz, respondents could not explain the acquisition of the remainder, whereas petitioners proved the disputed portion formed part of their parents' 19,231-square-meter property held since 1939.

• Scope of the Deed of Sale: Petitioners asserted that the "Kasulatan ng Partisyon sa Labas ng Hukuman at Bilihang Patuluyan" covered only the riceland measuring approximately 6,000 square meters and did not include the 7,856-square-meter pasture land.

• Weight of Trial Court Findings: Petitioners contended that the Court of Appeals erred in disregarding the trial court's factual findings and substituting its own perception contrary to incontrovertible evidence.

• Ownership by Acquisitive Prescription: Respondents argued that the action for recovery filed in 1982 could not prosper because respondent Flores had already acquired ownership of the disputed land through ordinary acquisitive prescription, having possessed it in good faith and with just title for over ten years.

• Jurisdictional Challenge: In their answer before the trial court, respondents assailed jurisdiction, claiming the complaint effectively asserted a cause of action for ejectment (unlawful detainer) rather than recovery of possession.

• Scope of the 1960 Deed of Sale: Whether the "Kasulatan ng Partisyon sa Labas ng Hukuman at Bilihang Patuluyan" covered only the riceland or included the pasture land as well.

• Acquisitive Prescription: Whether respondent Flores acquired ownership of the disputed 7,540-square-meter portion through ordinary acquisitive prescription.

• Applicability of Tero vs. Tero: Whether the doctrine in Tero vs. Tero precluded respondents from claiming ownership over property they could not account for having lawfully acquired.

• Scope of the 1960 Deed of Sale: The deed of sale expressly covered both the riceland and the pasture land. The "Kasulatan ng Partisyon sa Labas ng Hukuman at Bilihang Patuluyan" explicitly described the property as "Isang parselang lupang PALAYERO na may kasamang PARANG (Cogonales)" and stated the measurements as 6,000 square meters for the riceland and 7,856 square meters for the pasture land. The deed further acknowledged that Tax Declaration No. 4482 reflected only the riceland because the pasture land had not been separately declared in previous tax assessments, and it requested the Provincial Assessor to record the pasture land accordingly. The trial court itself had found that the sale covered both parcels.

• Acquisitive Prescription: Respondent Flores acquired ownership through ordinary acquisitive prescription. Possession for purposes of prescription must be in the concept of an owner, public, peaceful, and uninterrupted. Flores' possession met all these requisites: he took possession immediately after the 1968 sale, cultivated the land, paid realty taxes, and held it to the exclusion of all others for nearly fourteen years before the complaint was filed. The possession was in good faith because Flores reasonably believed that Cruz, as the registered taxpayer with a survey in his favor, was the owner and could transmit ownership. There was just title because Flores acquired possession through a public instrument of sale — a mode recognized by law for acquiring ownership — even if the grantor ultimately may not have been the owner. While the possession of Flores' predecessor-in-interest, Cruz, may have been characterized by violence (resulting in Jose Marcelo's death), no evidence indicated that Flores' own possession was anything other than peaceful and uninterrupted.

• Applicability of Tero vs. Tero: The doctrine in Tero vs. Tero did not apply. Unlike in that case, respondents could and did account for how they acquired the disputed property: through the 1960 deed of sale from the Sarmientos to Cruz, which explicitly included the pasture land, and subsequently through the 1968 deed of sale from Cruz to Flores. The appellate court correctly found that the requirements for ordinary acquisitive prescription had been met.

• Ordinary Acquisitive Prescription over Immovable Property (Article 1134, Civil Code) — Ownership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years. The possession must be in good faith and with just title. Good faith consists in the reasonable belief that the person from whom the thing was received was the owner and could transmit ownership (Article 1127). Just title exists when the adverse claimant came into possession through one of the modes recognized by law for acquiring ownership, but the grantor was not the owner or could not transmit the right (Article 1129). In this case, the public instrument of sale executed in 1968 constituted just title, and Flores' reliance on Cruz's tax declaration and survey plan established good faith.

• Requisites of Possession for Prescription (Article 1118, Civil Code) — Possession for acquisitive prescription must be in the concept of an owner, public, peaceful, and uninterrupted. Acts of possessory character executed by virtue of license or mere tolerance of the owner are insufficient (Article 1119). Possession by a usufructuary, trustee, lessee, agent, or pledgee does not ripen into ownership unless the juridical relation is first expressly repudiated and communicated to the other party. The character of possession is determined by the possessor's own acts; even if the predecessor-in-interest's possession was violent, prescription runs in favor of a successor whose possession is peaceful.

• Just Title as "Titulo Colorado" (Doliendo vs. Biarnesa) — A "true and valid" title for prescription purposes means a "titulo colorado" — one where a person buys a thing in good faith from someone believed to be the owner — and not merely a "titulo putativo," which is based on a supposed but non-existent right. The title need not be sufficient on its own to transfer ownership without prescription. A public instrument of sale, even if executed by a non-owner, qualifies as just title for ordinary acquisitive prescription.

• "Acts of possessory character executed due to license or by mere tolerance of the owner would likewise be inadequate. 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." — This passage articulates the core requirement that possession for prescription must be adverse and in the concept of an owner.

• "The good faith of the possessor consists in the reasonable belief that the person from whom the thing is received has been the owner thereof and could thereby transmit that ownership. There is, upon the other hand, just title when the adverse claimant comes into possession of the property through any of the modes recognized by law for the acquisition of ownership or other real rights, but that the grantor is neither the owner nor in a position to transmit the right." — This excerpt defines the two essential elements of ordinary acquisitive prescription: good faith and just title.

• Doliendo vs. Biarnesa, 7 Phil. 232 — Followed as controlling precedent on the meaning of "true and valid title" (titulo verdadero y valido) for ordinary prescription under Article 1130 of the old Civil Code. The Court adopted its distinction between "titulo colorado" (sufficient for prescription) and "titulo putativo" (insufficient).

• Tero vs. Tero, 131 SCRA 105 — Distinguished. Petitioners invoked this case to argue that respondents could not lawfully account for acquiring the disputed portion. The Court found the case inapplicable because respondents did present evidence of lawful acquisition through documented sales.

• Article 1118, Civil Code — Requires possession for prescription to be in the concept of an owner, public, peaceful, and uninterrupted. Applied to hold that Flores' fourteen-year possession satisfied all requisites.

• Article 1119, Civil Code — Excludes from prescriptive possession acts executed by license or mere tolerance of the owner. Applied to underscore that adverse possession is essential.

• Article 1127, Civil Code — Defines good faith as the reasonable belief that the transferor was the owner and could transmit ownership. Applied to Flores' reliance on Cruz's tax declaration and survey.

• Article 1129, Civil Code — Defines just title for prescription as acquisition through a recognized mode even if the grantor was not the owner. Applied to the 1968 public instrument of sale.

• Article 1134, Civil Code — Fixes the period for ordinary acquisitive prescription of immovable property at ten years. Applied to bar petitioners' 1982 complaint filed fourteen years after Flores' possession began.

• Article 1137, Civil Code — Distinguished. Provides for thirty-year extraordinary acquisitive prescription where good faith and just title are absent. Not applied because ordinary prescription was established.

Justices Romero, Panganiban, Purisima, and Gonzaga-Reyes concurred.

N/A (Decision was unanimous.)