Bogo-Medellin Milling Co., Inc. vs. Court of Appeals and Heirs of Magdaleno Valdez Sr.

A railroad right of way is a discontinuous easement that, under Article 622 of the Civil Code, can be acquired only by title and not by prescription. Continuous and apparent easements may be acquired by prescription of ten years under Article 620, but an easement is continuous or discontinuous according to the manner of its exercise, not according to the presence of permanent physical structures. Because the passage of trains depends on the act of man, the easement is discontinuous. Further, possession by virtue of an expired easement that continues by mere tolerance does not become adverse by the mere lapse of time; an unequivocal act of hostility toward the true owner’s title is required to start the prescriptive period for extraordinary acquisitive prescription.

Magdaleno Valdez Sr. purchased a 1.3416-hectare unregistered parcel of land in Barrio Dayhagon, Medellin, Cebu, from Feliciana Santillan on December 9, 1935. Before the sale, in 1929, Santillan granted Bomedco a 30-year right of way over the middle portion of the land, where Bomedco constructed railroad tracks to haul sugarcane. Valdez Sr. respected the grant. He died in 1948, and the property passed to his heirs. Unknown to them, during the 1965 Cadastral Survey of Medellin, the narrow strip occupied by the tracks was separately designated as Cadastral Lot No. 954 and claimed by Bomedco as its own. The heirs learned of Bomedco’s adverse claim only in 1989 upon inquiry with the Bureau of Lands, and immediately demanded return of the land or compensation. When Bomedco refused, they filed a complaint for recovery of possession and damages.

• Nature: The heirs of Magdaleno Valdez Sr. filed a complaint for recovery of possession and payment of compensation over a strip of land denominated as Cadastral Lot No. 954, traversed by Bomedco’s railroad tracks, alleging that Bomedco’s right to use the land as an easement had expired and that its continued occupation was without legal basis.
• Transfer to Valdez Sr.: On December 9, 1935, Magdaleno Valdez Sr. purchased from Feliciana Santillan a 1.3416-hectare unregistered parcel of land in Barrio Dayhagon, Medellin, Cebu, covered by Tax Declaration No. 3935. He took possession and declared it in his name for tax purposes.
• The 1929 right of way grant: Prior to the 1935 sale, Santillan granted Bomedco, in 1929, a 30-year railroad right of way over the middle portion of the land. Bomedco constructed permanent railroad tracks that traversed the entire length of the land from north to south, used for hauling sugarcane. Valdez Sr. respected the grant.
• Post-1959 occupation: The 30-year grant expired in 1959, but Bomedco continued occupying and using the strip. The heirs tolerated this continued use because one of them was an employee of Bomedco.
• 1965 Cadastral Survey: During the 1965 Cadastral Survey of Medellin, the entire property was divided into three lots. Lot Nos. 953 and 955 remained in the heirs’ names. Lot No. 954, the narrow strip occupied by the railroad tracks, was claimed by Bomedco and declared in its name for tax purposes. The heirs were unaware of this claim until they inquired with the Bureau of Lands in 1989.
• Discovery and demand: Upon discovering Bomedco’s adverse claim, the heirs, through counsel, sent letters dated March 1, 1989 and April 6, 1989, demanding an explanation and compensation for the use of the land. Bomedco ignored both letters.
• Proceedings before the RTC: The heirs presented the original 1935 deed of sale in Spanish, real estate tax receipts (including a 1922 receipt in the name of Santillan’s husband and a 1963 receipt in Valdez Sr.’s name), and the testimony of Magdaleno Valdez Jr. Bomedco submitted a xerox copy of an unsigned 1929 Deed of Sale purportedly conveying the strip to it, tax receipts from 1930 to 1985, a 1929 survey plan, and cadastral documents. Bomedco’s tax receipts for 1930, 1937, 1949, 1962, and 1963 described the property as “central railroad right of way” or “sugar central railroad right of way.” Only for 1975 and 1985 was it declared as “industrial land.” The RTC rejected Bomedco’s claim of prior sale as inadmissible, but held that Bomedco acquired ownership through 10-year prescription under Article 620, finding the easement continuous and apparent.

• Extraordinary Acquisitive Prescription: Petitioner argued that it possessed the strip continuously since 1929, and that even if the original occupation was by easement, its possession became adverse upon expiry of the grant in 1959. Counting from the late 1950s, the 30-year period for extraordinary acquisitive prescription under Article 1137 had already elapsed when the heirs filed their complaint in 1989.
• Laches: Petitioner maintained that the heirs’ claim was barred by laches because Bomedco’s possession had been open, continuous, and undisturbed for more than 50 years, and the heirs’ inaction gave rise to a presumption of abandonment.
• Acquisition of Easement by Prescription: Petitioner contended that, even without ownership, it acquired a legal easement of right of way by prescription under Article 620, given that the railroad tracks constituted a continuous and apparent easement, and more than 10 years had passed since the original grant expired.

• Mere Easement, Not Ownership: Respondents countered that Bomedco’s possession originated solely from a 30-year right of way grant in 1929, which their predecessor-in-interest respected. After the grant expired in 1959, Bomedco’s continued use was by mere tolerance, not adverse possession, and could not ripen into ownership.
• No Prior Sale: Respondents argued that Bomedco’s alleged 1929 purchase from Santillan was spurious; the xerox copy of the deed was unsigned and inadmissible, and Bomedco’s own tax declarations consistently referred to the property as a right of way until 1963, belying any claim of ownership.
• No Prescription: Respondents asserted that tolerance does not start the period of prescription. They had no knowledge of Bomedco’s adverse claim until 1989, and Bomedco performed no unequivocal act of ownership sufficient to commence prescriptive possession.

• Extraordinary Acquisitive Prescription: Whether Bomedco acquired ownership of Cadastral Lot No. 954 through extraordinary acquisitive prescription under Article 1137 of the Civil Code.
• Laches: Whether the heirs’ suit was barred by laches.
• Acquisition of Easement by Prescription: Whether Bomedco acquired an easement of right of way over the lot by prescription under Article 620 of the Civil Code.

• Extraordinary Acquisitive Prescription: Ownership through extraordinary acquisitive prescription was not established. For possession to ripen into ownership, it must be adverse and under a claim of title — requiring open hostility toward the true owner. Bomedco’s possession from 1929 originated in a voluntary easement grant, and its tax declarations until 1963 explicitly acknowledged the property as a “central railroad right of way” or “sugar central railroad right of way,” which was an admission that the land belonged to another. The mere expiration of the grant in 1959 did not automatically transform Bomedco’s possession into adverse possession; acts of possession by mere tolerance of the owner, no matter how long, do not start the period of prescription. The heirs testified that they tolerated the continued occupation to protect a co-heir’s employment at the mill. The first unequivocal act of adverse claim occurred in 1965, when Bomedco registered the lot in its name during the cadastral survey. From 1965 until the filing of the complaint in 1989, only 24 years had elapsed — short of the 30-year period required under Article 1137.
• Laches: Laches did not bar the suit. The essential elements include knowledge of the defendant’s adverse act and unreasonable delay in asserting the right after opportunity to sue. The heirs only learned of Bomedco’s adverse claim of ownership in 1989 upon inquiry with the Bureau of Lands. They promptly sent demand letters on March 1 and April 6, 1989, and filed their complaint on June 8, 1989. The cases of Caro and Vda. de Alberto were inapposite because the petitioners there knew of the adverse claims yet tarried for extraordinary periods before acting. Laches is an equitable doctrine applied to prevent unfairness, not to penalize those who acted with dispatch upon discovery. No unfairness or prejudice to Bomedco existed given the heirs’ vigilance once informed.
• Acquisition of Easement by Prescription: An easement of railroad right of way is discontinuous because its exercise depends on the act of man — the operation and passage of trains — regardless of the permanent nature of the tracks. Under civil law, easements are classified as continuous or discontinuous according to the manner of their exercise, not according to the presence of apparent physical signs. The permanent tracks merely render the easement apparent, not continuous. Under Article 622 of the Civil Code, discontinuous easements, whether apparent or not, can be acquired only by title and never by prescription. Bomedco never acquired title to the use of the land through any juridical mode — contract, donation, succession, or a legal easement judicially conferred under Article 649 — after the original 1929 grant expired. Its occupation was therefore without legal basis and could not evolve into an easement by prescription.

• Discontinuous easement not subject to acquisitive prescription — An easement of right of way, including a railroad right of way, is a discontinuous easement because its use requires the intervention of man. Under Article 622 of the Civil Code, discontinuous easements, whether apparent or not, can only be acquired by title. The presence of permanent railroad tracks classifies the easement as apparent but does not alter its discontinuous character.
• Tolerance prevents prescriptive possession — Acts of possessory character executed by virtue of a license or by mere tolerance of the owner, regardless of duration, do not initiate the running of the period of acquisitive prescription (Article 1119, Civil Code). For possession to be adverse, it must be accompanied by the intent to possess as an owner, unequivocally communicated to the true owner.
• Expiration of easement grant does not automatically convert possession into adverse possession — Mere expiration of a voluntary easement grant followed by continued possession does not, by itself, make such possession adverse. In the absence of express repudiation or hostile acts, possession continues in the same character as when it was acquired. The prescriptive period for ownership commences only from an unequivocal act of adverse claim.
• Laches requires knowledge and unreasonable delay — Laches has four elements: (1) conduct by the defendant giving rise to the situation; (2) delay in asserting the right after knowledge of the defendant’s acts and after opportunity to sue; (3) lack of knowledge or notice by the defendant that the right would be asserted; and (4) injury or prejudice to the defendant if relief is granted. Prompt action upon discovery of the adverse claim negates laches.

• “It is not the presence of apparent signs or physical indications showing the existence of an easement, but rather the manner of exercise thereof, that categorizes such easement into continuous or discontinuous. The presence of physical or visual signs only classifies an easement into apparent or non-apparent.” (Defines the controlling distinction for prescription purposes.)
• “The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets foot on somebody else’s land. Like a road for the passage of vehicles or persons, an easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes over another’s property.” (Applies the Rule to railroad right of way.)
• “It is a fundamental principle of law in this jurisdiction that acts of possessory character executed by virtue of license or tolerance of the owner, no matter how long, do not start the running of the period of prescription.” (Reiterates the effect of tolerance on acquisitive prescription.)
• “An easement or servitude … gives the holder of the easement an incorporeal interest on the land but grants no title thereto. Therefore, an acknowledgment of the easement is an admission that the property belongs to another.” (Explains why tax declarations describing the land as a right of way negate ownership.)

• Caro vs. Court of Appeals, 180 SCRA 401 (1989) — Distinguished. Laches barred the claim there because petitioners knew of the adverse claim but delayed for an extraordinary period; here the heirs acted immediately upon discovery.
• Vda. de Alberto vs. Court of Appeals, 173 SCRA 436 (1989) — Distinguished on the same ground: knowledge and unexplained delay were present there, unlike in this case.
• Manila Electric Company vs. Intermediate Appellate Court, 174 SCRA 313 (1989) — Followed for the principle that possession by mere tolerance cannot ripen into ownership.
• Bacolod-Murcia Milling Co., Inc. vs. Capital Subdivision, Inc., 124 SCRA 128 (1966) and Talisay-Silay Milling Co., Inc. vs. CFI of Negros Occidental, 149 SCRA 676 (1971) — Cited to illustrate the requisites of a legal easement of right of way under Article 649 and to show that title to an easement can be obtained contractually or judicially, options Bomedco failed to pursue.

• Article 620, Civil Code — “Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years.” Held inapplicable because a railroad right of way is discontinuous.
• Article 622, Civil Code — “Discontinuous easements, whether apparent or not, may be acquired only by virtue of a title.” Applied to bar Bomedco’s claimed acquisition by prescription.
• Article 1119, Civil Code — Acts of possessory character executed by virtue of license or tolerance of the owner do not avail for purposes of possession. Applied to negate Bomedco’s claim of adverse possession from 1959.
• Article 1137, Civil Code — Ownership of immovables prescribes through uninterrupted adverse possession for 30 years (extraordinary acquisitive prescription). The 30-year period was not met because adverse possession began only in 1965.
• Article 649, Civil Code — Requisites for a legal easement of right of way, cited to highlight that Bomedco had possible judicial recourse to obtain title to the easement but did not avail itself of it.

Puno (Chairman), Panganiban, Carpio-Morales, JJ. Sandoval-Gutierrez, J., on official leave.