Naga Centrum, Inc. vs. Spouses Orzales

A party cannot be allowed to influence and manipulate the courts' decisions by performing acts upon the disputed property during the pendency of the case which would allow it to achieve the objectives it desires; structures deliberately erected on a proposed right of way while the case is pending cannot serve as a basis for relocating the easement to a different portion of the servient estate.

Spouses Ramon and Nenita Orzales own a residential lot at No. 28-B Valentin Street, Sabang, Naga City, acquired in 1965, which is surrounded by the properties of Aurora dela Cruz (116 sq m), Bernardo Tawagon (140 sq m), Felisa Estela (90 sq m), and petitioner Naga Centrum, Inc. (1.9 hectares). Petitioner acquired its property from the Leddas on July 7, 1980. The dispute centers on respondents' entitlement to a compulsory easement of right of way under Articles 649 and 650 of the Civil Code, and on the procedural question of whether a pairing judge who heard the case could validly render judgment after a newly appointed presiding judge inhibited himself.

Spouses Ramon and Nenita Orzales acquired their house and lot at No. 28-B Valentin Street, Sabang, Naga City in 1965. Their property is bounded on the north by Aurora dela Cruz's 116-square-meter lot and Felisa Estela's 90-square-meter lot, on the west by Bernardo Tawagon's 140-square-meter lot and a lot owned by the Cecilio family, and on the northeast, east, and south by what would become petitioner Naga Centrum, Inc.'s 1.9-hectare property. When respondents bought their property, they accessed the public highway, Valentin Street, by passing through the open spaces within Estela and Dela Cruz's lots. After personal disagreements arose with Estela and Dela Cruz, respondents began using Rizal Street instead — a passageway created by informal settlers who had occupied portions of the 1.9-hectare property then owned by Felix Ledda.

Petitioner acquired the property from the Leddas on July 7, 1980. Respondents continued using Rizal Street as their access to and from Valentin Street. In 2003, petitioner evicted the informal settlers and closed Rizal Street by enclosing its property with a concrete fence. Although respondents were allowed to pass through a steel gate, access was restricted to a daily schedule of 6:00 a.m. to 9:00 p.m. Burdened by this limitation, respondents made a formal demand to acquire a portion of petitioner's property to serve as a permanent right of way. Petitioner rejected the demand, prompting respondents to file Civil Case No. 2004-0036 before the Regional Trial Court of Naga City, Branch 22.

During the pendency of the case, petitioner deliberately obstructed Rizal Street by constructing a residential building thereon, dumping earth fill and junk on the main gate of respondents' home, and converting portions of the street into an auto repair shop and parking space. The trial court conducted two ocular inspections and confirmed that respondents' property was indeed isolated, with no other adequate outlet to a public highway except through petitioner's property. The trial court issued a writ of preliminary injunction on August 26, 2005, ordering petitioner to clear respondents' access. The case was heard by Pairing Judge Pablo Formaran III, who, after the newly appointed Presiding Judge Efren G. Santos inhibited himself and the Presiding Judge of Branch 26 refused to take cognizance, was directed by the Office of the Court Administrator to decide the case pursuant to OCA Circular No. 90-2004. Petitioner did not object to Judge Formaran III's authority at any point before the decision was rendered.

On December 23, 2008, the trial court granted respondents a legal easement of right of way two meters wide and twenty meters long, to be established alongside the boundary line of petitioner's property and the properties of Estela and Dela Cruz towards Valentin Street. The court ordered respondents to pay ₱200,000 as indemnity for the value of the land plus ₱10,000 for damages to the servient estate, and directed petitioner to remove all portions of its building obstructing the easement. Petitioner appealed to the Court of Appeals, which affirmed on May 23, 2012 and denied reconsideration on August 28, 2012. Petitioner then filed the present Petition, raising both procedural and substantive issues.

• Pairing Judge's Jurisdiction: Petitioner argued that Judge Formaran III, as pairing judge, had no jurisdiction to render the December 23, 2008 Decision because a regular judge, Judge Santos, had already been appointed and assumed office for Branch 22, rendering the decision null and void.
• Respondents' Fault for Isolation: Petitioner maintained that respondents should have secured a right of way from the seller when they bought the property in 1965, knowing it was surrounded by private properties with no adequate outlet; thus, under Article 649 of the Civil Code, the easement is not compulsory if the isolation is due to the proprietor's own acts.
• Indispensable Parties: Petitioner contended that Estela and Dela Cruz, whose properties respondents had previously used for ingress and egress, were indispensable parties whose non-inclusion rendered Civil Case No. 2004-0036 defective and void for want of authority to act.
• Least Prejudicial Location: Petitioner argued that the designated right of way already contained permanent structures, and that it had offered an alternative portion of its property where no permanent structure would need to be demolished — although a longer route — which respondents refused.
• Alternative Relief: Alternatively, petitioner asked the Court to require the parties to mediate with a view to settling the dispute, citing its willingness to provide an "alternative outlet" within its property.

• Estoppel on Jurisdiction: Respondents argued that the authority of Judge Formaran III to decide the case had been confirmed by the OCA on November 9, 2008, and that petitioner did not question the OCA's findings but only filed a motion to vacate on February 2, 2009 — after the unfavorable decision was issued — making the challenge a mere afterthought.
• Isolation Not Self-Caused: Respondents countered that the isolation of their property was not of their own doing but resulted from petitioner's closure of Rizal Street, which had existed even before petitioner bought the property and had been used by respondents and area residents for decades.
• No Need to Implead Estela and Dela Cruz: Respondents maintained that it had been established during trial, through the testimonies of their witnesses and even petitioner's own witness Aida Kelly Yubuco, that respondents had never used Estela and Dela Cruz's lots as access to Valentin Street, making their impleading unnecessary.
• No Feasible Alternative: Respondents argued that the evidence and the two ocular inspections established that there was no other feasible alternative location for the right of way other than the court-approved route, which was the shortest to Valentin Street.
• Petitioner's Bad Faith: Respondents asserted that petitioner's improvements on the proposed right of way were built in bad faith during the pendency of the case, knowing the area was the proposed easement and despite having ample space elsewhere on its 1.9-hectare property.

• Pairing Judge's Jurisdiction: Whether the pairing judge of Branch 22 had jurisdiction to render the assailed decision.
• Entitlement to Easement: Whether respondents have the right to demand a right of way over petitioner's property.
• Least Prejudicial Location: Whether the chosen right of way is the least prejudicial to petitioner.
• Application of Article 650: Whether the Court of Appeals erroneously applied Article 650 of the Civil Code to the facts proven in the case.

• Pairing Judge's Jurisdiction: No. Petitioner was estopped from questioning the pairing judge's jurisdiction, having failed to object at multiple opportunities and raising the issue only after receiving an adverse decision.
• Entitlement to Easement: Yes. All four requisites for a compulsory easement of right of way under Articles 649 and 650 of the Civil Code were satisfied.
• Least Prejudicial Location: Yes. The easement on petitioner's 1.9-hectare property was both the shortest route and the least prejudicial, as the adjacent owners' much smaller lots could not accommodate the easement without rendering them useless.
• Application of Article 650: No. The CA correctly applied Article 650, as the conditions of "least damage" and "shortest distance" both concurred in petitioner's property.

• Pairing Judge's Jurisdiction: The Court found no irregularity in Judge Formaran III's assumption of the case, as he decided it after his colleagues recused themselves and with the sanction of the OCA Memorandum dated November 9, 2008, which clarified that OCA Circular No. 90-2004 applies equally to pairing judges. Even assuming arguendo a hint of validity in petitioner's argument, the decision could not be nullified because petitioner was estopped. Petitioner had multiple opportunities to object — when Judge Santos inhibited himself, when the case was remanded, when Judge Formaran III declared he would resolve the case, and when the OCA issued its memorandum — yet remained silent throughout. It was only after the unfavorable December 23, 2008 Decision that petitioner moved to vacate on the ground of lack of authority. Citing the doctrine that a party cannot invoke a court's jurisdiction to secure affirmative relief and later repudiate it, and that active participation coupled with failure to object is tantamount to invocation of jurisdiction, the Court held that petitioner's wait-and-see stance barred it from later impugning the judge's authority.

• Entitlement to Easement: The four requisites for a compulsory easement of right of way were all satisfied. First, respondents' property was surrounded by other immovables and had no adequate outlet to a public highway after petitioner closed Rizal Street — confirmed by two ocular inspections that found no other available passageway. Second, respondents expressed willingness to pay the proper indemnity. Third, the isolation was not due to respondents' own acts; on the contrary, it was petitioner's closure of Rizal Street, which respondents had used since 1965, that caused the isolation. Petitioner's argument that respondents should have demanded a right of way from their seller failed because Rizal Street existed as an adequate outlet when they bought the property. Fourth, the easement was established at the point least prejudicial to the servient estate. The Court also noted that respondents had used Rizal Street for at least 23 years (from 1980 to 2003), and that petitioner, as successor-in-interest, was aware of this longstanding use and could not claim ignorance.

• Least Prejudicial Location: The Court found that the conditions of "least damage" and "shortest distance" both concurred in petitioner's property. The adjacent owners' lots were too small to accommodate the easement: Tawagon's 140 sq m, Dela Cruz's 116 sq m, and Estela's 90 sq m, with their homes covering their lots almost entirely. Imposing the easement on those lots would unjustly deprive their owners of optimum use and enjoyment. By contrast, petitioner's 1.9-hectare property could absorb a 40-square-meter easement (2 meters wide by 20 meters long) with negligible impact. The easement was to run alongside the boundary line of petitioner's property, minimizing damage. Petitioner's argument that permanent structures on the designated route necessitated relocation was rejected as an attempt to profit from its own bad faith: the structures were deliberately built during the pendency of the case, knowing the area was the proposed right of way. The Court refused to reward such malice, cunning, and bad faith by relocating the easement.

• Application of Article 650: The CA did not err in applying Article 650. The provision requires that the easement be established at the point least prejudicial to the servient estate and, insofar as consistent with this rule, where the distance to a public highway is shortest. Both conditions were satisfied in petitioner's property, making it the proper servient estate. Citing Almendras vs. Court of Appeals, the Court reiterated that where the two circumstances of least damage and shortest distance do not concur in a single tenement, the way causing the least damage should be chosen even if not the shortest — but here both concurred in petitioner's property.

• Estoppel on Jurisdiction — A party who actively participates in proceedings and fails to timely object to a court's or judge's jurisdiction is estopped from later impugning that jurisdiction after receiving an adverse decision. Active participation coupled with silence is tantamount to invocation of jurisdiction and a willingness to abide by the court's resolution. The doctrine applies not only to plaintiffs who initially invoke jurisdiction but also to defendants, as established in Crisostomo vs. CA and Marquez vs. Secretary of Labor. In this case, petitioner had multiple opportunities to object to Judge Formaran III's authority but remained silent until the adverse decision was issued, exhibiting a "wait-and-see" stance the Court refused to countenance.

• Requisites of Compulsory Easement of Right of Way — Under Articles 649 and 650 of the Civil Code, the owner of an immovable surrounded by other immovables without adequate outlet to a public highway may demand a right of way through neighboring estates upon satisfaction of four requisites: (a) the estate is surrounded by other immovables and is without adequate outlet to a public highway; (b) payment of proper indemnity; (c) the isolation is not due to the proprietor's own acts; and (d) the right of way is established at the point least prejudicial to the servient estate and, insofar as consistent with this rule, where the distance to a public highway is shortest. All four were found present in this case.

• Least Damage and Shortest Distance Rule — Where the easement may be established on any of several surrounding tenements, the one where the way is shortest and will cause the least damage should be chosen. If these two circumstances do not concur in a single tenement, the way which will cause the least damage should be used, even if it will not be the shortest. In this case, both conditions concurred in petitioner's property, making it the proper servient estate.

• Actual Notice as Binding as Registration — A buyer of registered land who has knowledge of a prior existing but unregistered interest is bound by that interest, as actual notice or knowledge is as binding as registration. Petitioner, as successor-in-interest, was aware of respondents' longstanding use of Rizal Street and could not claim ignorance; its deliberate obstruction of that access during the pendency of the case constituted bad faith.

• Bad Faith Acts During Litigation Cannot Manipulate Outcome — A party cannot be allowed to influence and manipulate courts' decisions by performing acts upon disputed property during the pendency of a case to achieve desired objectives. Structures deliberately erected on a proposed right of way while the case is pending cannot serve as a basis for relocating the easement; to allow otherwise would reward malice, cunning, and bad faith.

• "A party cannot be allowed to influence and manipulate the courts' decisions by performing acts upon the disputed property - during the pendency of the case -which would allow it to achieve the objectives it desires." — This is the opening statement of the decision and articulates the controlling principle: a party's deliberate acts on disputed property during litigation cannot be used to alter the outcome of the case.

• "To allow this would be tantamount to rewarding malice, cunning, and bad faith. Quite the contrary, petitioner deserves a lesson in not trifling with the rights of others, the law, and the courts." — This passage explains why the Court refused to relocate the easement to accommodate structures petitioner deliberately built on the proposed right of way during the pendency of the case.

• "Only the vigilantes [sic] deserve the sympathy of the court." — This statement from the CA, quoted with approval by the Supreme Court, encapsulates the estoppel principle applied against petitioner's belated challenge to the pairing judge's jurisdiction.

• "The conditions of 'least damage' and 'shortest distance' are both established in one estate -the defendant-appellant's property." — This passage summarizes the Court's finding that both requisites of Article 650 concurred in petitioner's property, justifying the designation of the easement thereon.

• Almendras vs. Court of Appeals, 336 Phil. 506 (1997) — Cited for the rule that where the easement may be established on any of several surrounding tenements, the one where the way is shortest and will cause the least damage should be chosen, and that if these two circumstances do not concur in a single tenement, the way causing the least damage should be used even if not the shortest. The Court applied this rule to confirm that petitioner's property, where both conditions concurred, was the proper servient estate.

• Crisostomo vs. CA, G.R. No. L-27166, March 25, 1970, 32 SCRA 54 — Cited for the doctrine of estoppel on jurisdiction: a party cannot adopt a posture of double-dealing by invoking a court's jurisdiction and later repudiating it. Applied to bar petitioner from challenging the pairing judge's authority after failing to object timely.

• Marquez vs. Secretary of Labor, 253 Phil. 329 (1989) — Cited for the principle that active participation by a party against whom an action is brought, coupled with failure to object to jurisdiction, is tantamount to invocation of that jurisdiction and bars the party from later impugning it. Applied to estop petitioner from questioning Judge Formaran III's authority.

• Heirs of the Late Joaquin Limense vs. Rita Vda. De Ramos, 619 Phil. 592 (2009) — Cited for the principle that actual notice or knowledge is as binding as registration, and that a buyer of registered land who knows of a prior unregistered interest is bound by it. Applied to establish that petitioner, as successor-in-interest, was bound by respondents' longstanding use of Rizal Street.

• Reyes vs. Valentin, G.R. No. 194488, February 11, 2015, 750 SCRA 379 — Cited as the source of the four requisites for a compulsory easement of right of way under Articles 649 and 650 of the Civil Code. Applied to confirm that all four requisites were satisfied in this case.

• Carandang vs. Heirs of Quirino A. de Guzman, 538 Phil. 319 (2006) — Cited in petitioner's argument regarding the necessity of impleading indispensable parties. The Court effectively rejected this argument by finding that Estela and Dela Cruz need not be impleaded because respondents had never used their lots as access to Valentin Street.

• Article 649, Civil Code — Provides that the owner of an immovable surrounded by other immovables without adequate outlet to a public highway is entitled to demand a right of way through neighboring estates after payment of proper indemnity. Also provides that the easement is not compulsory if the isolation is due to the proprietor's own acts. Applied to confirm respondents' entitlement to the easement and to reject petitioner's claim that respondents caused their own isolation.

• Article 650, Civil Code — Provides that the easement of right of way shall be established at the point least prejudicial to the servient estate and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. Applied to confirm that petitioner's property was the proper servient estate, as both conditions of least damage and shortest distance concurred thereon.

• Article 19, Civil Code — Provides that every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Applied to characterize petitioner's obstruction of respondents' access as a violation of the duty of good faith.

• Article 26, Civil Code — Provides that every person shall respect the dignity, personality, privacy, and peace of mind of his neighbors. Applied to condemn petitioner's deliberate acts of dumping filling materials and junk on respondents' main gate and converting the access road into a repair shop and parking space.

• Rule 45, 1997 Rules of Civil Procedure — Limits the Supreme Court's jurisdiction in cases brought from the Court of Appeals to reviewing errors of law, the findings of fact of the appellate court being conclusive. Applied to confine the Court's review to questions of law, though the Court also found no error in the lower courts' factual findings.

• OCA Circular No. 90-2004 — Governs the guidelines in the inventory and adjudication of cases assigned to judges who are promoted or transferred to other branches in the same court level. Applied by the OCA to confirm that the circular extends to pairing judges, authorizing Judge Formaran III to decide the case.

Justice Carpio (Chairperson), Justice Brion, Justice Mendoza, and Justice Leonen concurred.