Bicol Agro-Industrial Producers Cooperative, Inc. (BAPCI) vs. Edmundo O. Obias, et al.

An easement of right of way is a discontinuous easement that, under Article 622 of the New Civil Code, may be acquired only by virtue of a title and cannot be acquired by prescription or laches; absent proof of title or agreement, the claimant may obtain only a compulsory easement under Article 649 upon payment of proper indemnity, with ownership remaining in the servient estate.

BISUDECO operated a sugar mill at Himaao, Pili, Camarines Sur, and constructed a road used to haul sugarcane to and from its mill site. BAPCI later acquired BISUDECO’s assets. Respondents are landowners and/or tenant-beneficiaries of ricelands traversed by the road, with some claiming rights under Presidential Decree No. 27. The New Civil Code governs easements, including Article 622 on discontinuous easements and Article 649 on compulsory right of way.

Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO) was established at Himaao, Pili, Camarines Sur. In the same year, BISUDECO constructed a road measuring approximately 7 meters wide and 2.9 kilometers long. The road was used by BISUDECO in hauling and transporting sugarcane to and from its mill site (Pensumil) and became indispensable to its sugar milling operations. On October 30, 1992, petitioner Bicol Agro-Industrial Producers Cooperative, Inc. (BAPCI) acquired the assets of BISUDECO.

On April 19, 1993, BAPCI filed a Complaint against respondents Edmundo O. Obias, Perfecto O. Obias, Victor Bagasina, Elena Benosa, Melchor Brandes, Rogelio Montero, Pedro Montero, Claudio Resari, Pilar Galon, Antonio Buison, Prudencio Benosa, Jr., Victor Bagasina, Jr., Maria Villamer, and Roberto Padua. BAPCI alleged that on March 27, 1993 and April 3, 1993, respondents unjustifiably barricaded the disputed road by placing bamboos, woods, placards, and stones across it, preventing BAPCI’s and other sugar planters’ vehicles from passing and causing serious damage and prejudice. BAPCI claimed that BISUDECO constructed the road pursuant to an agreement with the owners of the ricefields traversed, under which BISUDECO would employ the children and relatives of the landowners in exchange for the road’s construction. Through prolonged and continuous use, BISUDECO allegedly acquired a right of way, which BAPCI acquired when it bought BISUDECO’s assets. BAPCI prayed that respondents be permanently restrained from barricading the road and obstructing free passage. The RTC issued a cease-and-desist order on April 19, 1993, and a Writ of Preliminary Injunction on July 21, 1993.

In their Answer, respondents denied any agreement with BISUDECO regarding the construction and use of the road. They alleged that BISUDECO surreptitiously and without their knowledge and consent constructed the road on their properties and had since intermittently and discontinuously used it for hauling sugarcane despite their repeated protests. Respondents claimed they tolerated the construction and use because BISUDECO was a government-owned and controlled corporation and the country was then under Martial Law. They denied that the road had become public, since no public funds were used for its construction and maintenance. With the exception of Edmundo and Perfecto Obias, respondents alleged they were actual tillers of the ricelands and had acquired rights under Presidential Decree No. 27 (PD 27); Edmundo and Perfecto Obias were the owners of the eastern portion of the property on which a portion of the road was constructed. Respondents denied barricading the road. Jaime Manubay and Manolito Maralit, for themselves and in representation of other sugarcane planters, filed the first complaint-in-intervention; on June 28, 1994, nine other cooperatives filed their Complaint-in-Intervention.

BAPCI later filed an Amended Complaint and, with leave of court, a Re-Amended Complaint, averring as an alternative cause of action that, if the lower court did not find merit in its causes of action, it would avail of the benefits under Article 649 of the New Civil Code and demanded a right of way over the disputed road. Respondents filed an Answer to the alternative cause of action, claiming that the road from the sugarmill to the Maharlika Highway at Barangay Romero, Bula, Camarines Sur, exiting at the Rural Bank of Bula site, had a distance of only about 15 kilometers and was shorter and more appropriate than the disputed road.

The RTC found that BAPCI failed to present concrete evidence to prove the alleged agreement between BISUDECO and respondents. It disbelieved the testimonies of BAPCI’s witnesses, which were mainly hearsay and did not show personal knowledge of any agreement; the list of employees’ relatives (Exhibit H) did not prove the agreement. The RTC also found that BAPCI did not acquire the road by prescription. On the barangay road issue, the RTC found that while a portion of the road inside Edmundo Obias’s property—Lots A, B, and C, totaling 1,497 square meters—was a barangay road, the disputed road pertained to different lots (Lots E to P) covering a total area of 10,774 square meters. The CA affirmed that there was no conclusive proof of an agreement, that the circumstantial evidence was susceptible of diverse interpretations, and that the testimonies were mainly hearsay.

• Existence of Agreement: Petitioner argued that the CA erred in not finding that BISUDECO and respondents forged an agreement for the construction of the disputed road, and asserted entitlement to an easement of right of way by virtue of that agreement. It relied on circumstantial evidence: the agreement was of public knowledge; BISUDECO and the public continuously used the road; respondents did not protest for almost two decades; portions of respondents’ land affected by the road were segregated and surveyed; and the road was already a barangay road.
• Prescription, Laches, and Estoppel: Petitioner maintained that the CA erred in not considering prescription, laches, and estoppel. It contended that BISUDECO had peacefully and continuously used the road without complaint or opposition for almost twenty years, and that estoppel and laches barred respondents from exercising ownership rights. It also asked the Court to re-examine Costabella and argued that some authorities recognize that a right of way may be acquired by prescription.
• Barangay Road Classification: Petitioner argued that the CA disregarded the classification of the road as a barangay road, citing Exhibit Q, a 1991 Tax Declaration or Field Appraisal and Assessment Sheet with Survey No. 1688-40 and PIN No. 026-01-009-08-037, dated April 30, 1991.
• Amount of Indemnity: In its alternative cause of action, petitioner argued that the CA erred in considering the valuation of the lands affected in 1994 rather than in 1974, when the road was constructed, likening the case to expropriation where just compensation is based on the value at the time of taking.
• Unjust Enrichment: Petitioner argued that the CA erred in failing to consider the legal principle of unjust enrichment at the expense of another.

• No Agreement and Tolerance: Respondents denied entering into an agreement with BISUDECO regarding the construction and use of the disputed road. They alleged that BISUDECO surreptitiously and without their knowledge and consent constructed the road on their properties and used it intermittently and discontinuously despite repeated protests; they tolerated it only because BISUDECO was a government-owned and controlled corporation and the country was under Martial Law.
• Public Road and Funding: Respondents denied that the road had become a public road, since no public funds were used for its construction and maintenance.
• Tenancy and Ownership under PD 27: Respondents alleged that, except for Edmundo and Perfecto Obias, they were actual tillers of the ricelands and had acquired rights under Presidential Decree No. 27; Edmundo and Perfecto Obias owned the eastern portion of the property on which a portion of the road was constructed.
• Alternative Right of Way: In response to petitioner’s alternative cause of action, respondents claimed that the road from the sugarmill to the Maharlika Highway at Barangay Romero, Bula, Camarines Sur, exiting at the Rural Bank of Bula site, had a distance of only about 15 kilometers and was shorter and more appropriate than the disputed road.
• Barangay Road Classification: Respondents argued that petitioner’s Exhibit Q was an erroneous tax declaration and that Tax Declaration No. 009-828 was in the name of Edmundo Obias, with the actual use described as “Road Lot (BISUDECO Road)” and a memorandum stating that the property was revised in the name of the rightful owner, Edmundo Obias, based on the approved subdivision plan; this negated the claim that the road was owned by the Municipality of Pili and was a barangay road.
• Indemnity and Ownership: In their motion for reconsideration before the RTC, respondents alleged that the trial court erred in declaring the persons mentioned in the dispositive portion entitled to indemnity, that BAPCI should not be declared absolute owner of the road upon full payment, and that the decision failed to award damages.

• Procedural Propriety of Rule 65: Whether the petition, filed under Rule 65 to assail the CA’s final Decision and Resolution, should be treated as a petition for review under Rule 45 in the interest of substantial justice.
• Existence of Agreement: Whether there was an agreement between BISUDECO and respondents for the construction and use of the disputed road.
• Acquisition by Prescription: Whether the easement of right of way over the disputed road may be acquired by prescription.
• Laches and Estoppel: Whether laches and estoppel bar respondents from exercising ownership rights over the properties traversed by the disputed road.
• Barangay Road Classification: Whether the disputed road is a barangay road owned by the Municipality of Pili.
• Amount of Indemnity: Whether the indemnity due respondents should be computed based on the value of the land in 1974, when the road was constructed, rather than in 1994.
• Unjust Enrichment: Whether the CA erred in failing to consider the principle of unjust enrichment at the expense of another.

• Procedural Propriety of Rule 65: Petition was improperly filed under Rule 65, but treated as a petition for review under Rule 45 in the interest of substantial justice because it was filed within the reglementary period and did not allege grave abuse of discretion or lack of jurisdiction.
• Existence of Agreement: No. Both the RTC and CA found no concrete or direct evidence of an agreement; petitioner’s circumstantial evidence and hearsay testimonies were insufficient to prove title or agreement.
• Acquisition by Prescription: No. An easement of right of way is discontinuous and, under Article 622 of the New Civil Code, may be acquired only by title, not by prescription.
• Laches and Estoppel: No. Article 622’s positive mandate precludes acquisition by laches; laches is a factual question not proper for the petition, and no evidence supported estoppel.
• Barangay Road Classification: No. The 1991 FAAS was insufficient; the 1995 FAAS and RTC findings showed the disputed road was not a barangay road, and no expropriation documents were presented.
• Amount of Indemnity: No. Article 649 does not require valuation at the time of taking; the indemnity consists of the value of the land and damage to the servient estate, and P70.00 per square meter was fair and reasonable.
• Unjust Enrichment: No. The Court found no error in the Article 649 indemnity due respondents; the discussion of the fifth assigned error was confined to the amount of indemnity.

• Procedural Propriety of Rule 65: The petition was denominated under Rule 65 although it assailed the CA’s final Decision and Resolution. A petition for certiorari under Rule 65 corrects errors of jurisdiction or grave abuse of discretion and requires no appeal or plain, speedy, adequate remedy; appeal by certiorari under Rule 45 raises only questions of law from a final CA judgment. Because the proper remedy was Rule 45 and was still available, Rule 65 was improper. Nonetheless, the Court considered the petition as one filed under Rule 45 in the interest of substantial justice, since it was filed within the reglementary period and the assigned errors did not allege grave abuse of discretion or lack of jurisdiction.
• Existence of Agreement: Article 622 requires title for a discontinuous easement. Petitioner had to prove a right by title or agreement with the landowners. The RTC found no concrete evidence of the alleged agreement; the testimonies of Romeo Deveterbo, Angel Lobo, David Severo, and Antonio Austria were hearsay or lacked personal knowledge, and Exhibit H did not prove the agreement. The CA likewise found no conclusive proof; the circumstances cited by BAPCI—employment of relatives, silence, public knowledge, continuous use, segregation/survey, and barangay road classification—were susceptible of diverse interpretations. The factual findings of the CA, especially when affirming the RTC, are conclusive absent any exception, and none applied.
• Acquisition by Prescription: Costabella held that a right of way is discontinuous and cannot be acquired by prescription. Bogo-Medellin explained that easements are continuous or discontinuous according to the manner they are exercised, not by apparent signs or physical indications; a road or railroad track may be apparent but remains discontinuous because its use depends on human act. Article 622 states that discontinuous easements, whether apparent or not, may be acquired only by title. Thus, even if the disputed road was improved and maintained for years, it did not become continuous and could not be acquired by prescription.
• Laches and Estoppel: Laches is a rule of equity addressed to the sound discretion of the court and depends on factual circumstances. The CA held that Article 622’s positive mandate requiring title for discontinuous easements precludes acquisition by laches; equity cannot be applied against statutory law. The Court agreed. Whether laches exists is a factual question not proper for the petition, and petitioner presented no evidence of any admission, representation, or conduct by respondents giving rise to estoppel.
• Barangay Road Classification: Petitioner relied on Exhibit Q, a 1991 Tax Declaration or Field Appraisal and Assessment Sheet with Survey No. 1688-40 and PIN No. 026-01-009-08-037, dated April 30, 1991, to prove the road was a barangay road. The Court found this insufficient. The 1995 FAAS covered the same land, with the same PIN and survey number, and annotated a “BISUDECO road,” not a municipal road. The RTC found that only Lots A, B, and C, totaling 1,497 square meters, were barangay road, while the disputed road covered Lots E to P, totaling 10,774 square meters. No expropriation documents were presented.
• Amount of Indemnity: Article 649 allows a compulsory easement upon payment of proper indemnity; if the easement is permanent, the indemnity consists of the value of the land occupied and the damage caused to the servient estate. The law provides no specific formula and does not require valuation at the time of taking. The RTC considered the 1974 market value of P6,500 per hectare too low and the 1994 value of P1,292,880.00 or P120.00 per square meter exorbitant, and adopted P70.00 per square meter based on Exhibit Q. The CA added that respondents had been deprived of the use of their ricelands since 1974, so the indemnity should also cover that deprivation. The Court found the P70.00 per square meter award fair and reasonable.
• Unjust Enrichment: The decision does not separately discuss unjust enrichment beyond the heading “Amount of Indemnity Due & On Unjust Enrichment.” Its analysis under that heading is confined to Article 649 and the amount of indemnity, and the Court found no error in the P70.00 per square meter award.

• Easement of Right of Way as Discontinuous Easement — An easement of right of way is discontinuous because it is exercised only at intervals and depends on the act of man. Under Article 622 of the New Civil Code, discontinuous easements, whether apparent or not, may be acquired only by virtue of a title and cannot be acquired by prescription. The Court applied this to the disputed road, holding that BAPCI could not acquire it by prescription despite long use.
• Continuous vs. Discontinuous Easements Determined by Manner of Exercise — Easements are classified as continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications. Physical signs merely classify an easement as apparent or non-apparent. Thus, a road or railroad track may be apparent but remains discontinuous. The Court applied this in rejecting the argument that the road’s improvement and maintenance converted it into a continuous easement.
• Laches Cannot Override Positive Statutory Mandate — Laches is an equitable doctrine applied to avoid unfairness, but equity is applied only in the absence of, and never against, statutory law. Article 622’s categorical requirement of title for discontinuous easements precludes acquisition by laches. The Court applied this to bar petitioner’s laches argument.
• Compulsory Easement of Right of Way under Article 649 — An owner or person with a real right to use an immovable surrounded by other immovables without adequate outlet to a public highway may demand a right of way through neighboring estates after payment of proper indemnity. If the easement is permanent, the indemnity consists of the value of the land occupied and the damage caused to the servient estate. The Court applied this to affirm the compulsory easement and the P70.00 per square meter indemnity.
• Factual Findings of the Court of Appeals Are Conclusive — Factual findings of the CA are conclusive on the parties and carry even more weight when they affirm the trial court’s findings. They are not reviewable in a Rule 45 petition except under recognized exceptions. The Court found no exception applied to the findings on the absence of agreement, laches, or barangay road classification.
• Rule 65 vs. Rule 45 — A petition for certiorari under Rule 65 is proper only to correct errors of jurisdiction or grave abuse of discretion and requires no appeal or other plain, speedy, adequate remedy. Appeal by certiorari under Rule 45 is the proper mode to raise questions of law from a final CA judgment. The availability of appeal proscribes Rule 65. The Court treated the improperly filed Rule 65 petition as a Rule 45 petition in the interest of substantial justice.

• "Continuous non-apparent easements, and discontinuous ones, whether apparent or not, may be acquired only by virtue of a title." — This is Article 622 of the New Civil Code as quoted by the Court; it supplies the statutory basis for holding that the easement of right of way cannot be acquired by prescription.
• "Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements." — Quoted from Bogo-Medellin and applied by the Court to classify the disputed road as discontinuous despite its apparent physical existence.
• "The fact that the law is categorical that discontinuous easements cannot be acquired by prescription militates against petitioner's claim of laches." — This states the Court’s ratio for rejecting laches: the positive statutory requirement of title cannot be overcome by equity.
• "Based on the foregoing, it is clear that the law does not provide for a specific formula for the valuation of the land. Neither does the same state that the value of the land must be computed at the time of taking. The only primordial consideration is that the same should consist of the value of the land and the amount of damage caused to the servient estate." — This defines the Court’s approach to Article 649 indemnity and supports the affirmance of the P70.00 per square meter award.

• Active Realty and Development Corporation vs. Fernandez, G.R. No. 157186, October 19, 2007, 537 SCRA 116 — Cited to distinguish Rule 65 from Rule 45 and to hold that the proper remedy to reverse a judgment on the merits is appeal; the Court used it to treat the petition as one under Rule 45.
• National Irrigation Administration vs. Court of Appeals, G.R. No. 129169, November 17, 1999, 318 SCRA 255 — Cited for the rule that decisions, final orders, or resolutions of the CA may be appealed to the Supreme Court by petition for review under Rule 45, which is a continuation of the appellate process.
• Costabella Corporation vs. Court of Appeals, G.R. No. 80511, January 25, 1991, 193 SCRA 333 — Cited for the holding that a right of way is discontinuous and cannot be acquired by prescription; the Court declined petitioner’s request to re-examine it.
• Bogo-Medellin Milling Co., Inc. vs. Court of Appeals, 455 Phil. 285 (2003) — The controlling precedent applied by the Court; it explained that easements are continuous or discontinuous according to manner of exercise, that a railroad right of way is discontinuous despite permanent tracks, and that Article 622 requires title.
• Insular Life Assurance Company, Ltd. vs. Court of Appeals, G.R. No. 126850, April 28, 2004, 428 SCRA 79 — Cited for the rule that only questions of law may be entertained in a petition for review on certiorari, subject to recognized exceptions; the Court found no exception applied.
• Blanco vs. Quasha, 376 Phil. 480, 491 (1999), citing Bridget Boneng y Bagawili vs. People of the Philippines, 304 SCRA 252 — Cited for the rule that factual findings of the CA are conclusive on the parties and carry more weight when they affirm the trial court’s findings.
• Villanueva-Mijares vs. Court of Appeals, 386 Phil. 555, 565 (2000) — Cited for the rule that there is no absolute rule on laches and that it is addressed to the sound discretion of the court based on particular circumstances.
• Pineda vs. Heirs of Eliseo Guevara, G.R. No. 143188, February 14, 2007, 515 SCRA 627 — Cited for the rule that whether the elements of laches are present is a factual determination by the trial court and cannot be the proper subject of the petition.

• Article 622, New Civil Code — Provides that continuous non-apparent easements and discontinuous ones, whether apparent or not, may be acquired only by virtue of a title. The Court applied it to hold that the easement of right of way over the disputed road could not be acquired by prescription or laches.
• Article 649, New Civil Code — Provides that an owner or person with a real right to use an immovable surrounded by other immovables without adequate outlet to a public highway may demand a right of way through neighboring estates after payment of proper indemnity; if the easement is permanent, the indemnity consists of the value of the land occupied and the damage caused to the servient estate. The Court applied it to affirm the compulsory easement and indemnity.
• Article 630, New Civil Code — Cited by the CA in ruling that owners of the servient estate retain ownership of lands affected by an easement; the Supreme Court affirmed this disposition.
• Rule 65, Rules of Court — Governs petitions for certiorari to correct errors of jurisdiction or grave abuse of discretion. The Court held it was the improper remedy for assailing the CA’s final decision.
• Rule 45, Rules of Court — Governs petitions for review on certiorari raising questions of law from final judgments or orders of the CA. The Court treated the petition as filed under this Rule.
• Presidential Decree No. 27 — The Tenant Emancipation Decree; respondents claimed rights as tenant-beneficiaries, and Edmundo and Perfecto Obias claimed ownership of the eastern portion of the affected property.

Justices Carpio (Chairperson), Carpio Morales, Velasco, Jr., and Nachura concurred. Justice Carpio Morales was designated as an additional member in lieu of Associate Justice Minita V. Chico-Nazario per Special Order No. 720 dated October 5, 2009.