Echanes vs. Spouses Hailar

In an unlawful detainer case premised on tolerance, the plaintiff must prove the acts of tolerance by showing overt acts establishing when and how the defendants entered the property and who specifically allowed them to occupy the same; bare allegations of tolerance unsubstantiated by evidence cannot prevail over decades-long adverse possession evidenced by tax declarations and realty tax payments. Where the issue of ownership is raised in an ejectment case, the court may provisionally resolve it solely to determine who has the better right to physical possession, but such resolution is not conclusive on title.

Eduardo Cuenta was the owner of an unregistered parcel of land designated as Lot No. 2297 of the Cadastral Survey of Sta. Lucia, Ilocos Sur, covered by Tax Declaration No. 7622-C. On July 8, 1996, his heirs executed an Extrajudicial Settlement dividing the property among themselves, with a 495-square-meter portion (Lot No. 2297-A) adjudicated to petitioner Victoria Echanes, a granddaughter of Eduardo Cuenta. Petitioner subsequently applied for a free patent and was issued Original Certificate of Title No. P-43056 on October 15, 1996. Respondents Spouses Patricio and Adoracion Hailar occupy an approximately 80-square-meter portion of the lot, claiming that Adoracion's father, Domingo Joven, purchased the property from Eduardo Cuenta after World War II. The dispute centers on whether respondents' occupation was by tolerance or by virtue of a prior purchase, which determines the better right to physical possession in the ejectment action.

Eduardo Cuenta owned an unregistered parcel of land measuring approximately 1,447 square meters located at Poblacion Anquileng (now Burgos), Sta. Lucia, Ilocos Sur, designated as Lot No. 2297 of the Cadastral Survey of Sta. Lucia, covered by Tax Declaration No. 7622-C. On July 8, 1996, the heirs of Eduardo Cuenta executed an Extrajudicial Settlement dividing and adjudicating the property among themselves. A 495-square-meter portion denominated as Lot No. 2297-A was adjudicated to petitioner Victoria Echanes, one of Eduardo Cuenta's granddaughters. Petitioner thereafter applied for a free patent over Lot No. 2297-A, and Original Certificate of Title No. P-43056 was issued in her name by the Register of Deeds of Ilocos Sur on October 15, 1996.

Respondents Spouses Patricio and Adoracion Hailar currently occupy a portion of Lot No. 2297-A measuring approximately 80 square meters. Petitioner alleged that during the lifetime of her parents, respondents asked her parents for permission to build a nipa house on the subject lot, and that the request was granted on the condition that respondents would voluntarily vacate when petitioner's family needed the property. According to petitioner, respondents' continued possession was by tolerance and permission granted by petitioner and her parents.

Respondents presented a different account. They claimed that the late Domingo Joven, father of respondent Adoracion Joven Hailar, purchased the subject lot from Eduardo Cuenta after World War II. Tax Declaration No. 12141-C, derived from and partly cancelling Tax Declaration No. 7622-C, was issued in 1959 in the name of Domingo Joven, covering 231 square meters. From that time, respondent Adoracion and her siblings occupied and exercised acts of dominion over the land, building their family house thereon and later constructing a concrete house valued at not less than ₱50,000.00. They declared the property for taxation purposes consistently from 1959 to 2007 and paid realty taxes thereon.

Because petitioner's children needed the area occupied by respondents, petitioner sent a Notice to Vacate dated March 12, 2009, which respondents received on March 13, 2009. Respondents refused to vacate. On April 14, 2009, petitioner filed a Complaint for Ejectment with Damages before the MCTC. The MCTC dismissed the complaint, finding respondents' version more credible. The RTC reversed, reasoning that Eduardo Cuenta died in 1941 and could not have sold the property after World War II, thus making petitioner's allegation of tolerance more believable. The CA reversed the RTC and reinstated the MCTC dismissal, holding that petitioner failed to substantiate her claim of tolerance and that the RTC erred in treating allegations as proof.

• Tolerance: Petitioner contended that respondents occupied the subject lot by tolerance and permission granted by petitioner and her parents, on the condition that respondents would voluntarily vacate when petitioner's family needed the property.
• Title as Evidence of Prior Possession: Petitioner argued that the issuance of Original Certificate of Title No. P-43056 in her name presupposes that she had been in possession of the property at one time or another.
• CA Error on Tolerance Finding: Petitioner maintained that the CA erred in holding that she failed to prove tolerance by preponderance of evidence with respect to respondents' possession.
• CA Error on Burden of Proof: Petitioner asserted that the CA erred in holding that she failed to discharge her burden of proving her ejectment complaint by preponderance of evidence.
• CA Error in Reversing RTC: Petitioner argued that the CA erred when it reversed and set aside the RTC decision.

• Purchase from Eduardo Cuenta: Respondents countered that Domingo Joven purchased the subject lot from Eduardo Cuenta after World War II, as evidenced by Tax Declaration No. 12141-C issued in 1959 in Domingo Joven's name.
• Adverse Possession: Respondents argued that they had occupied and exercised acts of dominion over the property exclusively, publicly, and continuously for more than 40 years, evidenced by tax declarations and realty tax payments, and had built a concrete house thereon valued at not less than ₱50,000.00.
• Impropriety of Rule 45 for Factual Issues: Respondents submitted that the issue on tolerance is a question of fact and is an improper subject of a petition for review under Rule 45, and that the CA's finding on the absence of tolerance is supported by substantial evidence and is conclusive and binding.
• Tax Declaration Disproving RTC's Dating: Respondents argued that the issuance of Tax Declaration No. 7622-C in 1952 in the name of Eduardo Cuenta disproves the RTC's finding that Eduardo Cuenta died in 1941, and that the purchase took place between 1946 and 1952.

• Tolerance: Whether the CA erred in holding that petitioner failed to prove tolerance by preponderance of evidence with respect to respondents' possession of the subject lot.
• Burden of Proof: Whether the CA erred in holding that petitioner failed to discharge her burden of proving her ejectment complaint by preponderance of evidence.
• Reversal of RTC: Whether the CA erred in reversing and setting aside the RTC decision.

• Tolerance: No. The CA correctly held that petitioner failed to prove tolerance, as bare allegations unsubstantiated by evidence are not equivalent to proof under the Rules, and the lone testimony of petitioner's sister in a separate case even contradicted petitioner's claim that her parents were the ones who tolerated respondents' occupation.
• Burden of Proof: No. Petitioner failed to discharge her burden because respondents' decades-long adverse possession, evidenced by tax declarations from 1959 to 2007 and the construction of a concrete house, belied any allegation of permissive occupation.
• Reversal of RTC: No. The CA correctly reversed the RTC, which had erroneously concluded that Eduardo Cuenta died in 1941 and mistook petitioner's allegations of tolerance for proof despite respondents' denial.

• Tolerance: The sole issue in an unlawful detainer case is possession de facto, independent of any claim of ownership. Where the issue of ownership is raised, the court may provisionally resolve it under Section 16, Rule 70 of the Rules of Court solely to determine who has the better right to possess. Petitioner's claim of tolerance required proof of overt acts showing when and how respondents entered the property and who specifically allowed them to occupy it, pursuant to Quijano vs. Amante. Petitioner presented a portion of TSN from a separate Quieting of Title case in which her sister Filomena Carbonell testified that Domingo Joven approached their aunt — not their parents — to beg permission to build a house, contradicting petitioner's own allegation that her parents tolerated the occupation. This lone statement undermined rather than supported petitioner's cause. Without evidence showing when respondents entered, who granted them entry, and how entry was effected, the bare claim of tolerance could not be upheld. The CA correctly found that the RTC mistook allegations for proofs, ignoring that those allegations were denied by respondents.

• Burden of Proof: Respondents demonstrated continuous, open, and adverse possession of the subject property in the concept of an owner from the time of the alleged purchase by Domingo Joven from Eduardo Cuenta. They segregated and declared the 231-square-meter portion for taxation purposes as early as 1959 and consistently did so until 2007. While tax declarations and realty tax payments are not conclusive proofs of possession, they are good indicia of possession in the concept of an owner, based on the presumption that no one would pay taxes for property not in his actual or constructive possession. The fact that respondents' documents traverse several decades indicates they never abandoned their right and continuously exercised rights of ownership, including building a concrete house on the property. This adverse possession belied petitioner's allegation of occupation by tolerance. Additionally, the RTC erred in concluding that petitioner inherited the property in 1941, because the Extrajudicial Settlement was executed by the grandchildren of Eduardo Cuenta and did not reveal when the children of Eduardo Cuenta died or whether they predeceased him; thus, it could not be ascertained that petitioner inherited ahead of the alleged sale to respondents.

• Reversal of RTC: The RTC's reasoning rested on the premise that Eduardo Cuenta died in 1941 and therefore could not have sold the property after World War II. However, respondents pointed out that Tax Declaration No. 7622-C was issued in 1952 in the name of Eduardo Cuenta, which disproves the claim that he died in 1941. The purchase could have taken place between 1946 and 1952. The RTC's conclusion that Eduardo Cuenta retained ownership and possession until his death in 1941 was thus erroneous. The CA correctly reversed the RTC and reinstated the MCTC's finding that respondents' version of acquisition through purchase was more credible than petitioner's bare assertion of tolerance. Although the issue of tolerance is a question of fact and ordinarily not reviewable under Rule 45, the Court resolved the factual issues under the exception that applies when the findings of the lower courts (MTCC and RTC) differ from those of the CA.

• Possession De Facto in Ejectment — The only question in unlawful detainer and forcible entry cases is who between the parties is entitled to physical or material possession (possession de facto), independently of any claim of ownership or possession de jure. The plaintiff must prove prior physical possession in himself until deprived by the defendant. If prior physical possession cannot be proved, there is no right of action even if the plaintiff is the owner. The Court applied this by holding that respondents, having possessed the property openly and continuously since 1959 in the concept of an owner, had priority in time and were entitled to remain until lawfully ejected through an accion publiciana or accion reivindicatoria.

• Provisional Determination of Ownership in Ejectment — Where the parties raise the issue of ownership in an ejectment case, the court may provisionally resolve it solely to determine who has the better right to physical possession, pursuant to Section 16, Rule 70 of the Rules of Court. Such adjudication is merely provisional and does not bar or prejudice an action between the same parties involving title. Section 18, Rule 70 expressly provides that a judgment in forcible entry or unlawful detainer is conclusive only with respect to possession and shall not bind title or affect ownership. The Court stressed that its ruling was limited to determining the better right to possession and would not bar either party from filing an action to conclusively resolve ownership.

• Proof of Tolerance in Unlawful Detainer — Acts of tolerance must be proved by showing overt acts establishing when and how the defendants entered the properties and who specifically allowed them to occupy the same. Without allegations and evidence on when entry was made, who granted permission, and how entry was effected, a bare claim of tolerance cannot be upheld. The one whose stay is merely tolerated becomes a deforciant illegally occupying the land the moment he is required to leave, but the plaintiff's acts of tolerance must have been present right from the start of the possession sought to be recovered. The Court found that petitioner failed to present any such evidence, and that her sister's testimony in a separate case even contradicted her allegation.

• Tax Declarations as Indicia of Possession — Tax declarations and realty tax payments are not conclusive proofs of possession but are good indicia of possession in the concept of an owner, based on the presumption that no one would pay taxes for property not in his actual or constructive possession. At the very least, they constitute proof that the holder has a claim of title over the property. The Court relied on respondents' tax declarations spanning from 1959 to 2007 as evidence of continuous adverse possession that belied petitioner's claim of tolerance.

• Exception to Rule 45 Review of Factual Findings — While a petition for review on certiorari under Rule 45 resolves only questions of law and factual findings of the CA are generally conclusive, the Court may resolve factual issues when the findings of the MTCC and RTC differ from those of the CA. The Court applied this exception because the MCTC and RTC reached opposite conclusions, with the CA siding with the MCTC.

• "The acts of tolerance must be proved showing the overt acts as to when and how the respondents entered the properties and who specifically allowed them to occupy the same. There should be any supporting evidence on record that would show when the respondents entered the properties or who had granted them to enter the same and how the entry was effected. Without these allegations and evidence, the bare claim regarding 'tolerance' cannot be upheld." — This passage articulates the canonical formulation of the proof required to establish tolerance in unlawful detainer cases, drawing from Quijano vs. Amante, and is the ratio decidendi for the Court's rejection of petitioner's claim.

• "In an action for forcible entry and detainer, if plaintiff can prove prior physical possession in himself, he may recover such possession even from the owner, but, on the other hand, if he cannot prove such prior physical possession, he has no right of action for forcible entry and detainer even if he should be the owner of the property." — This passage states the fundamental rule on prior physical possession in ejectment, explaining why petitioner's title alone was insufficient to warrant eviction of respondents who had possessed the property for decades.

• "Bare allegations unsubstantiated by evidence, are not equivalent to proof under our Rules." — This quotation, drawn from the CA's ruling as affirmed by the Court, encapsulates the evidentiary principle that defeated petitioner's cause: allegations of tolerance, denied by the adverse party and unsupported by evidence, cannot sustain an ejectment judgment.

• Quijano vs. Amante, G.R. No. 164277, October 8, 2014, 737 SCRA 552 — Controlling authority on the requirement to prove acts of tolerance by showing overt acts of when, how, and by whom entry was permitted. The Court applied this doctrine to hold that petitioner's bare claim of tolerance was insufficient.
• Florentino Go, Jr. vs. Court of Appeals — Followed for the principle that the one whose stay is merely tolerated becomes a deforciant the moment he is required to leave, but that acts of tolerance must have been present right from the start of possession; the absence of substantiated tolerance defeats the cause of action.
• Dela Cruz vs. Hermano, G.R. No. 160914, March 25, 2015, 754 SCRA 231 — Cited for the exception allowing the Court to review factual findings when the lower courts' findings differ from those of the CA, and for the principle that tax declarations are good indicia of possession in the concept of an owner.
• Pajuyo vs. Court of Appeals, 474 Phil. 557 (2004) — Cited for the principle that the only question in ejectment is possession de facto, independent of any claim of ownership.
• Barrientos vs. Rapal, 669 Phil. 438 (2011) — Cited for the rule that the sole issue in ejectment is physical possession and that title need not be valid for purposes of the ejectment action, and for the provisional nature of ownership determinations in ejectment.

• Section 16, Rule 70, Rules of Court — Allows courts to provisionally determine the issue of ownership in ejectment cases for the sole purpose of resolving the issue of physical possession. The Court applied this provision to resolve the competing claims of ownership (petitioner's title vs. respondents' purchase) only to determine who had the better right to possess.
• Section 18, Rule 70, Rules of Court — Provides that a judgment in forcible entry or unlawful detainer is conclusive only with respect to possession and shall not bind title or affect ownership. The Court cited this to stress that its ruling was limited to possession and would not bar either party from litigating ownership in a proper action.

Velasco, Jr., J. (Chairperson), Perez, J., Reyes, J., and Jardeleza, J., concurred.