Perez vs. Mendoza

Possession of real property in the concept of an owner raises a disputable presumption of ownership, and the true owner must resort to judicial process for the recovery of the property. Where conflicting claims of possession exist, the present possessor shall be preferred pursuant to Article 538 of the Civil Code, and the presumption of ownership in favor of the possessor stands unless successfully rebutted by evidence.

The litigated parcel of land was originally part of a bigger tract owned by Estanislao Montalbo, who died in 1918, leaving his properties to his children Petra, Felisa, and Pedro, all surnamed Montalbo. After Pedro died single, Petra and Felisa remained as the only heirs and divided their father's lands between themselves by mutual agreement, with the parcel of which the litigated land was a part assigned to Felisa. The dispute arose from the subsequent transfer of the property from Felisa to Andrea Montalbo, a sister of Estanislao, through an exchange of lands, and the eventual donation of the property by Andrea to her daughter Margarita Macalalad upon the latter's marriage to Nicolas Mendoza.

The litigated parcel of land, approximately 4,765 square meters, was originally part of a bigger tract owned by Estanislao Montalbo. When Estanislao died in 1918, his properties passed to his children Petra, Felisa, and Pedro, all surnamed Montalbo; because Pedro died single, the two women remained as the only heirs. By mutual agreement, Petra and Felisa divided between themselves the lands of their father, and the parcel of which the litigated land was a part was assigned to Felisa. Sometime in 1922, Felisa exchanged the above-mentioned parcel with a land belonging to her aunt, Andrea Montalbo, a sister of her father. The reason for the exchange was that Andrea wanted to donate a piece of land to the municipality for use as a school site, and the land of Felisa was what the municipality preferred as it was adjacent to other properties of the municipality. Upon her acquisition of Felisa's land, Andrea donated to the municipality the northern portion thereof, which constituted almost one-half of the entire parcel, and since then that portion was declared for taxation purposes by the municipality together with its adjoining properties.

In 1927, the remainder of the lot was given by Andrea Montalbo to her daughter Margarita Macalalad on the occasion of her marriage to Nicolas Mendoza, and from the time of their marriage the couple possessed the said property. That donation was confirmed subsequently in a public instrument dated August 15, 1951. Nicolas Mendoza sought to transfer the tax declaration of the property to his name and of his wife, and for that purpose he submitted a deed of exchange of property dated January 14, 1922, allegedly executed by Felisa Montalbo and Andrea Montalbo in the presence of the municipal secretary Rafael Manahan. When Basilio Perez came to know about the supposed deed of exchange, he had it investigated and, upon discovering that the signature of Rafael Manahan appearing on the document was forged, he filed a criminal complaint before the Fiscal's office which led to an accusation for falsification of private document against Andrea Montalbo and Nicolas Mendoza. Only Nicolas Mendoza was arraigned and tried and was convicted by the Court of First Instance of Batangas, but on appeal he was acquitted by the Court of Appeals for insufficiency of evidence to show that he participated in affixing the signature of Rafael Manahan or that he was aware of the falsity of the document in question when he presented it to the tax assessor's office.

Notwithstanding the forged signature of Rafael Manahan on the document, the Court found sufficient evidence to prove that an exchange of property did in fact occur in 1922 between Andrea and Felisa Montalbo, and that Felisa's land passed on to Andrea who in turn gave part of it to the municipality and part to her daughter, Margarita. On the other hand, petitioners contended that the disputed property was inherited by Petra and Felisa Montalbo from their father Estanislao who died in 1918, and since that date the two sisters were in possession of said land. In 1934, a deed of partition of the various properties of Estanislao was executed between Petra and the heirs of Felisa, and the land in question was divided equally between them; among those who signed as witnesses to that agreement was Andrea Montalbo. In 1952, Felisa's husband, Jose Ortega, and children sold their one-half share to spouses Petra Montalbo and Basilio Perez, but the deed of sale was lost a year after. Sometime in 1946, petitioners leased the property to the Mendozas, and when the lease expired in 1951 they demanded the return of the land but the Mendozas refused, so petitioners had to file an ejectment suit before the justice of the peace court of Taysan which was still pending at the time of the trial of the civil case in 1960.

The trial court and the Court of Appeals found that the Mendozas had been in continuous possession of the land since 1927 to the present time, and they built a house on the land in 1928 where they resided and lived to the present. The courts found no documentary evidence to support the petitioners' claim that the Mendozas' possession since 1946 was that of a mere lessee, noting the absence of receipts of payment of rentals. The courts also found that the deed of partition dated May 27, 1934, did not overcome the evidence on record that Andrea Montalbo became the owner of the land, and that since 1927 the Mendozas had been in continuous possession of the land, openly, adversely, and in the concept of owners, thereby acquiring ownership through acquisitive prescription.

• Res Judicata: Petitioners contended that respondent court erred in considering the criminal case for falsification as res judicata on the matter of ownership of the land in litigation when the question of ownership was not actually and directly in issue in the criminal case, and the latter was not the proper vehicle for the determination of the ownership of the land.
• Falsified Document: Petitioners contended that respondent court should not have given weight to the evidence of respondent Mendoza because the latter's Exhibit 5, the alleged deed of exchange or barter of lands between Andrea and Felisa Montalbo dated January 14, 1922, was proven to be a falsified document.
• Deed of Partition: Petitioners contended that the appellate court erred in not giving effect to the deed of partition, Exhibit D, notwithstanding the fact that the name of Andrea Montalbo appears in the document as one of the witnesses thereto.
• Entitlement to Decision: Petitioners claimed that the appellate court should have rendered a decision in their favor.

• Possession Since 1927: Respondents maintained that they had been in continuous possession of the property since 1927, having built a house on the land in 1928 where they resided continuously, and that the provincial authorities dealt with them, not the petitioners, for the widening of the provincial road traversing the land.
• Exchange of Lands: Respondents argued that the exchange of lands between Andrea and Felisa Montalbo did in fact take place in 1922, notwithstanding the forged signature of the municipal secretary on the deed, and that the land was subsequently donated propter nuptias by Andrea to her daughter Margarita upon her marriage to Nicolas Mendoza in 1927.

• Res Judicata Effect of Criminal Case: Whether the findings of fact made by the Court of Appeals in the criminal case for falsification constitute res judicata or may be adopted as a basis for deciding the question of ownership in the civil case for quieting of title.
• Weight of Falsified Document: Whether the respondent court should have disregarded the evidence of respondent Mendoza because his Exhibit 5 was proven to be a falsified document.
• Effect of Deed of Partition: Whether the appellate court erred in not giving effect to the deed of partition, Exhibit D, notwithstanding the appearance of Andrea Montalbo's name as one of the witnesses thereto.
• Entitlement to Favorable Decision: Whether the appellate court should have rendered a decision in favor of the petitioners.

• Res Judicata Effect of Criminal Case: No. The pronouncements or findings of fact made by the Court of Appeals in the criminal case concerning the possession and ownership of the land do not constitute the law on the matter and cannot be taken or adopted as a basis for deciding the question of ownership in the civil case, there being no identity of parties and the object or subject matter in the criminal prosecution being different. However, this error was not sufficient to nullify the appealed decision because the respondent court made its own appraisal and evaluation of the evidence.
• Weight of Falsified Document: No. The falsification of Exhibit 5 did not require the respondent court to disregard the evidence of respondent Mendoza, because what was found to be false was only the signature of the witnessing official, Rafael Manahan, and there was no finding that the barter or exchange of lands between Andrea and Felisa Montalbo did not in effect take place.
• Effect of Deed of Partition: No. The deed of partition binds only the parties thereto but does not affect third persons such as Andrea Montalbo or the Mendozas in the absence of proof that they participated in one way or another in the preparation and execution of the document, pursuant to the principle of res inter alios acta alteri nocere non debet.
• Entitlement to Favorable Decision: No. Both the trial court and respondent appellate court correctly evaluated the evidence, and the Court found no reversible error in the decision under review.

• Res Judicata Effect of Criminal Case: The Court acknowledged merit in the petitioners' contention that the findings of fact made by the Court of Appeals in the criminal case do not constitute the law on the matter and cannot be adopted as a basis for deciding the question of ownership in the civil case. Since there is no identity of parties in the two cases — the petitioners not being parties in the criminal case — and the object or subject matter in the criminal prosecution is different, the latter being concerned with the guilt or innocence of accused Nicolas Mendoza for falsification of private document, the judgment in the criminal action cannot be used as evidence in the civil case where the issue is ownership of a piece of land. The plea of res judicata generally cannot be interposed except where the parties, facts, and questions are the same. However, the Court found that the respondent court made its own independent appraisal and evaluation of the evidence, examining the evidence in the civil case and making its own findings of fact on the basis of which it affirmed the decision of the trial court. The Court noted that findings of fact of the Court of Appeals are as a rule conclusive and binding upon the Supreme Court, and the Court went over the evidence to ensure that the conclusions of respondent court were not grounded on speculation, surmises, or conjectures.
• Weight of Falsified Document: The Court held that the petitioners overlooked the fact that Exhibit 5 was made the basis of a criminal accusation of falsification of private document solely on the allegation that the signature of Rafael Manahan, the person before whom the parties to the document allegedly appeared, was not his. There was no finding in that criminal case that the barter or exchange of lands between Andrea and Felisa Montalbo did not in effect take place. On the contrary, the decision in the criminal case contained findings that the land donated by Andrea Montalbo to her daughter Margarita Macalalad was acquired by the donor by means of a barter with her own parcel of land planted with bamboos and mango trees. The Court distinguished the case of Gonzales vs. Mauricio, 53 Phil. 728, cited by petitioners, because in that case the particular document or receipt referred to was found to be entirely false as to its contents, handwriting, and signature, whereas here all that was found to be false is the signature of a witnessing official.
• Effect of Deed of Partition: The Court observed that Basilio Perez did not at all mention during the course of his testimony that the old woman, Andrea Montalbo, signed the deed of partition as a witness. The Court noted that it was incumbent upon petitioners to identify the signature of Andrea Montalbo on the document if her signature was truly there, and the Court entertained doubts whether the name referred to by petitioners is "Andrea Montalbo," for, as written, it also can read "Maria Montalbo." At any rate, whatever is the import of said deed of partition, the same binds only the parties thereto but does not affect third persons such as Andrea Montalbo or the herein Mendozas in the absence of proof that they participated in one way or another in the preparation and execution of the document. The Court applied the principle of res inter alios acta alteri nocere non debet — a transaction between two parties ought not to operate to the prejudice of a third person or stranger.
• Entitlement to Favorable Decision: The Court found that both the trial court and respondent appellate court correctly evaluated the evidence. The Court identified salient facts supporting the claim of respondents Mendoza over the property: (1) the northern boundary of the land in controversy is undisputably a school site which originally was part of a bigger tract belonging to Estanislao Montalbo, and the documentary evidence showed that the municipality of Taysan declared the donated property in its name as early as July, 1925, supporting the claim that the exchange of properties between Andrea and Felisa Montalbo took place sometime in 1922; (2) the provincial authorities dealt with the Mendozas for the widening of the provincial road which traverses the land in question, and petitioner Perez admitted that the provincial authorities did not deal with him at all during the widening of that particular road; and (3) respondents Mendoza have been in possession of the property since 1927 in concept of owners, having built a house on it and lived there continuously, as corroborated by witness Adriano Gonzales, a retired justice of the peace of Taysan. The Court applied Article 433 of the Civil Code, which provides that actual possession under claim of ownership raises a disputable presumption of ownership, and Article 538, which provides that the present possessor shall be preferred where conflicting claims of possession exist. The Court held that the presumption of ownership in favor of the Mendozas has not been successfully rebutted by evidence that they are mere lessees of the land as claimed by petitioners.

• Res judicata in criminal and civil cases — The plea of res judicata generally cannot be interposed except where the parties, facts, and questions are the same. A judgment in a criminal case cannot be pleaded as res judicata in a civil action where there is no identity of parties and the object or subject matter in the criminal prosecution is different. In this case, the findings of fact made by the Court of Appeals in the criminal case for falsification could not be adopted as a basis for deciding the question of ownership in the civil case for quieting of title, but the error was not fatal because the respondent court made its own independent evaluation of the evidence.
• Possession as indicium of ownership — Possession is an indicium of ownership of the thing possessed, and to the possessor goes the presumption that he holds the thing under a claim of ownership. Article 433 of the Civil Code provides that actual possession under claim of ownership raises a disputable presumption of ownership, and the true owner must resort to judicial process for the recovery of the property. The presumption stands unless successfully rebutted by evidence.
• Preference of present possessor — Under Article 538 of the Civil Code, possession as a fact cannot be recognized at the same time in two different personalities except in cases of co-possession. Should a question arise regarding the fact of possession, the present possessor shall be preferred; if there are two possessors, the one longer in possession; if the dates of the possession are the same, the one who presents a title; and if all these conditions are equal, the thing shall be placed in judicial deposit pending determination of its possession or ownership through proper proceedings.
• Res inter alios acta alteri nocere non debet — A transaction between two parties ought not to operate to the prejudice of a third person or stranger. A deed of partition binds only the parties thereto but does not affect third persons in the absence of proof that they participated in one way or another in the preparation and execution of the document. In this case, Andrea Montalbo was a stranger to the deed of partition, and any recital therein concerning the property under litigation could not be used as evidence to prejudice her and her successors-in-interest or place her in estoppel as to her claims over the property.
• Conclusiveness of findings of fact of the Court of Appeals — Findings of fact of the Court of Appeals are as a rule conclusive and binding upon the Supreme Court, provided they are not grounded on speculation, surmises, or conjectures. The Court may go over the evidence to ensure that the conclusions of the appellate court were not based on speculation, surmises, or conjectures.

• "It is the rule that the plea of res judicata generally cannot be interposed except where the parties, facts, and questions are the same, hence, the judgment in a criminal case cannot be pleaded as res judicata in a civil action." — This passage articulates the doctrine that a criminal judgment cannot be used as res judicata in a civil action, which was the first issue raised by the petitioners.
• "Possession is an indicium of ownership of the thing possessed and to the possessor goes the presumption that he holds the thing under a claim of ownership." — This passage states the core principle applied by the Court in affirming the lower courts' decision in favor of the respondents.
• "The pretension of petitioners that the possession of the Mendozas is that of a mere lessee was not believed by the trial judge and the appellate court not only because of the absence of any written or oral evidence on the matter other than the bare testimony of petitioner Basilio Perez, but also due to the circumstances present in the case." — This passage explains why the Court rejected the petitioners' claim that the Mendozas were mere lessees, which was central to the resolution of the case.
• "Res inter alios acta alteri nocere non debet. A transaction between two parties ought not to operate to the prejudice of a third person or stranger." — This passage states the principle applied by the Court in refusing to give effect to the deed of partition against Andrea Montalbo and the Mendozas.

• Santos vs. Gabriel, et al., L-22996, May 31, 1972, 45 SCRA 288 — Cited for the rule that the plea of res judicata generally cannot be interposed except where the parties, facts, and questions are the same.
• Benin vs. Tuason, L-26127, June 28, 1974, 57 SCRA 531 — Cited for the same rule on res judicata requiring identity of parties, facts, and questions.
• Ocampo et al. vs. Jenkins, et al., 14 Phil. 681 — Cited for the rule that a judgment in a criminal case cannot be pleaded as res judicata in a civil action.
• Abellana vs. Dosdos, et al., L-19498, Feb. 26, 1965, 13 SCRA 244 — Cited for the well-entrenched precept that findings of fact of the Court of Appeals are as a rule conclusive and binding upon the Supreme Court.
• Roque vs. Buan, L-22459, Oct. 31, 1967, 21 SCRA 642 — Cited for the same rule on conclusiveness of findings of fact of the Court of Appeals.
• Cui vs. Court of Appeals, L-24072, July 29, 1968, 24 SCRA 189 — Cited for the same rule on conclusiveness of findings of fact of the Court of Appeals.
• Philippine American Life Insurance Company vs. Honorato R. Santamaria, L-26719, February 27, 1970, 31 SCRA 798 — Cited for the same rule on conclusiveness of findings of fact of the Court of Appeals.
• People vs. Boduso, L-30450-51, Sept. 30, 1974, 60 SCRA 60 — Cited for the same rule on conclusiveness of findings of fact of the Court of Appeals.
• Pioneer Ins. & Surety Co. vs. Yap, L-36232, Dec. 19, 1974 — Cited for the rule that findings by appellate court based on speculation, surmises, or conjectures are not binding on the Court.
• Chan vs. Court of Appeals, et al., L-27488, June 30, 1970, 33 SCRA 737 — Cited for the rule that the conclusion that the litigated property belonged to the private respondents based on their possession of the property is in accordance with Articles 433 and 531 of the Civil Code.
• Gonzales vs. Mauricio, 53 Phil. 728 — Distinguished by the Court; in that case, the particular document or receipt referred to was found to be entirely false as to its contents, handwriting, and signature, whereas in the present case all that was found to be false is the signature of a witnessing official.
• Molina vs. De Bacud, et al., 19 SCRA 956 — Cited in connection with Article 538 of the Civil Code on the preference of the present possessor.
• Tansioco et al. vs. Ramoso et al., 59 Phil. 672 — Cited in connection with the principle of res inter alios acta alteri nocere non debet.

• Article 433, Civil Code — Provides that actual possession under claim of ownership raises a disputable presumption of ownership, and the true owner must resort to judicial process for the recovery of the property. Applied to uphold the respondents' claim of ownership based on their continuous possession since 1927.
• Article 531, Civil Code — Provides that possession is acquired by the material occupation of a thing or the exercise of a right, or by the fact that it is subject to the action of our will, or by the proper acts and legal formalities established for acquiring such right. Cited in connection with the respondents' acquisition of possession.
• Article 538, Civil Code — Provides that possession as a fact cannot be recognized at the same time in two different personalities except in cases of co-possession, and that the present possessor shall be preferred. Applied to resolve the conflicting claims of possession between the parties.
• Rule 131, Section 5, paragraph (j), Rules of Court — Provides the disputable presumption that things which a person possesses, or exercises acts of ownership over, are owned by him. Applied to support the presumption of ownership in favor of the respondents.
• Rule 130, Section 25, Rules of Court — Provides that the rights of a party cannot be prejudiced by an act, declaration, or omission of another. Applied to support the principle of res inter alios acta alteri nocere non debet in refusing to give effect to the deed of partition against Andrea Montalbo and the Mendozas.

• Justice Castro (Chairman)
• Justice Makasiar
• Justice Esguerra
• Justice Martin