G.R. No. 197743

G.R. No. 197743, October 18, 2022,
♦ Decision, Dimaampao, [J]
♦ Separate Opinion, Caguioa, [J]
♦ Concurring and Dissenting Opinion, Gaerlan, [J]
♦ Separate Opinion, Gesmundo, [CJ]
♦ Concurring and Dissenting Opinion, Lazaro-Javier, [J]
♦ Separate Opinion, Leonen, [J]

HEIRS OF JOSE MARIANO AND HELEN S. MARIANO, REPRESENTED BY DANILO DAVID S. MARIANO, MARY THERESE IRENE S. MARIANO, MA. CATALINA SOPHIA S. MARIANO, JOSE MARIO S. MARIANO, MA. LENOR S. MARIANO, MACARIO S. MARIANO AND HEIRS OF ERLINDA MARIANO VILLANUEVA, REPRESENTED IN THIS ACT BY IRENE LOURDES M. VILLANUEVA THROUGH HER ATTORNEY-IN-FACT EDITHA S. SANTUYO AND BENJAMIN B. SANTUYO, PETITIONERS, VS. CITY OF NAGA, RESPONDENT.

At the maelstrom of the instant Second Motion for Reconsideration1 filed by the City of Naga (respondent) is the niggling controversy of who between respondent and the Heirs of Jose Mariano and Helen Mariano and the Heirs of Erlind Mariano (petitioners) have a better right to possess the disputatious five-hectare parcel of land covered by Transfer Certificate of Title No. 671 of the Registry of Deeds of Naga City.

In the Decision2 dated March 12, 2018 (First Division Decision), the Court's First Division overturned the Amended Decision3 rendered by the Court of Appeals in CA-G.R. SP No. 90547 and reinstated, albeit with modifications, the Decision4 of Regional Trial Court, Naga City, Branch 26 (RTC). The RTC reversed and set aside the Decision5 of Municipal Trial Court, Naga City, Branch I, which dismissed petitioners' Complaint for Unlawful Detainer.

Au fond, the Court poked holes in the validity of the Deed of Donation purportedly executed by the registered owners of the subject realty, Macario Mariano (Mariano) and Jose A. Gimenez (Gimenez), in favor of respondent after discerning that: 1) the Deed contained a defective Acknowledgment as it was made neither by Mariano, Gimenez, their respective spouses, nor respondent through its then mayor, Monico Imperial (Mayor Imperial); and 2) Mayor Imperial's signature was affixed thereon on August 21, 1954, or four days after the Deed was notarized. Consequently, the instrument was stripped of public character and thus, a void contract.6

This Court likewise perceived respondent's pass1v1ty in failing to secure title over the contentious land despite the lapse of more than 50 years since the supposed execution of the Deed. Conversely, laches or prescription cannot be considered to have set in to effectively bar petitioners' claims given that: one, Mariano prodded respondent to act on Mayor Imperial's proposal to purchase the property; two, petitioners were entangled in a legal dispute to establish their right to inherit from Mariano and his spouse, Irene Mariano (Irene); and three, the disputed property was discovered only in 1997, when an administrator over Irene's estate was appointed, thereby prompting petitioners to demand respondent to vacate its premises.7

Respondent was ultimately adjudged to be in bad faith when it introduced improvements on the subject realty notwithstanding the failure to satisfy the condition inextricably attached to the donation, i.e., that the construction of the City Hall be awarded to City Heights Subdivision. Thence, respondent and all government instrumentalities, agencies, and offices claiming right of possession through and under it were directed to peacefully surrender and deliver to petitioners the physical possession of the land covered by Transfer of Certificate Title No. 671, including all improvements and structures erected thereon. Therewithal, it was ordered to pay petitioners half of the monthly rental as determined by the trial court, which shall be reckoned from November 30, 2003 until respondent shall have actually vacated the subject property. Still and all, the award of attorney's fees in favor of petitioners was reduced to P75,000.00.8

Unfazed, respondent filed a motion for reconsideration with motion for new trial based on newly discovered evidence,9 proffering for the first time a certified true copy of the Deed of Donation dated August 16, 1954, which was unearthed only after a certain Alexander M. Cayetano volunteered to scour anew the records of the Office of the City Civil Registrar of Naga. In the same vein, respondent avouched that petitioners' action was barred by laches and insisted that it was not a builder in bad faith.10 A separate Motion for Reconsideration11 was filed by respondent's collaborating counsel.1âшphi1

The Court's First Division denied respondent's Motions ratiocinating that the certified true copy of the Deed of Donation submitted by respondent in support of its motion for new trial only confirmed the conclusion that the donation was void as it did not bear the signatures of Mayor Imperial on the part of respondent-donee, and Gimenez, as donor, as well as that of his spouse. As such, there was neither a valid donation nor acceptance that effectively conveyed the subject property to respondent. Likewise, the certified true copy of the Deed of Donation contained the same defective acknowledgment evinced in the copy of the deed previously submitted by respondent.12

Respondent remained unperturbed and sought13 this Court's leave to file a Second Motion for Reconsideration,14 which, in point of fact, it subsequently filed. Through the present recourse, respondent intransigently maintains that due to the failure of the petitioners, through themselves and their predecessors-in-interest, to timely and vigorously pursue their rights over the land on which its seat of government is located, laches had already set in; they are barred from recovering the disputed property.

At the interstice, respondent moved15 to refer the pending incident to the Court En Banc on the basis of the alleged failure of this Court's First Division to apply the case of Department of Education, Division of Albay v. Oñate,16 which, avowedly, is tantamount to a reversal of a doctrine laid down by a division of the Court. Respondent likewise brought to the fore the conceivable 'devastating' consequences of implementing the First Division Decision. The Court, sitting En Banc, accepted the instant case.17

Quite palpably, the problems cast in factual setting in respondent's Second Motion for Reconsideration are: 1) whether the principle of laches has set in so as to preclude petitioners from recovering the material possession of the subject land, and 2) whether or not higher interest of justice would be better served by granting respondent's second bid for reconsideration.

Prefatorily, it bears to accentuate that Section 2,18 Rule 52 of the Rules of Court prohibits a second motion for reconsideration by the same party. This shopworn rule is ingeminated under Section 3, Rule 15 of the Internal Rules of Court, which succinctly provides:

Plain as day, a grant by the Court of a second motion for reconsideration must meet the 'higher interest of justice' threshold, which, in turn, is dependent upon the existence of two conditions: one, that the assailed decision is legally erroneous, and two, that it is patently unjust and potentially capable of causing unwarranted and irremediable injury or damage to parties.

After a perlustration of the hard evidence on record and a juxtaposition of respondent's disputations with prevailing laws and jurisprudence, the Court perceives persuasive reasons to revisit and modify the First Division Decision.

The first prong of the aforementioned threshold, i.e., that the assailed decision is legally erroneous, obtains not because the First Division Decision incorrectly found against the applicability of laches to bar recovery of the disputatious property, but because it failed to consider the doctrinal rulings of the Court as to what constitutes the act of taking in relation to the State's eminent domain powers, as well as the remedies available to the landowner in instances where there is taking by the government of a private property for public purpose without first acquiring title thereto.

To be sure, petitioners' claim to recover possession over the disputed land is not barred by laches. The Court calls to mind the decisional rules laid down in the recent case of Ebancuel v. Acierto,19 where it was enunciated that as a general rule, laches shall not defeat the registered owner's right to recover his/her property. Moreover, the question of laches is not resolved by simply counting the years that passed before an action is instituted. Rather, any alleged delay must be proven to be unreasonable, and must lead to the conclusion that the claimant abandoned his/her right. As early as the case of Supapo v. Spouses De Jesus,20 this Court had pronounced that the defense of laches is evidentiary in nature and cannot be established by mere allegations in the pleadings.21 In the case at bench, apart from the self-serving innuendos of respondent, it failed to adduce compelling evidence to substantiate its claim of laches.

On the other hand, petitioners were able to demonstrate with sufficient proof the historical underpinnings of the instant case — beginning from the staunch efforts employed by their late patriarch, Jose Mariano, to recover the subject land, to respondent's unfulfilled offer to purchase, until finally, to the legal scuffle which retarded petitioners-heirs' discovery of the property and early institution of an appropriate action to recover its material possession of the same.

All the same, the Court finds and so rules that the First Division Decision erringly reinstated the portion of the trial court which essentially directed respondent and all government instrumentalities, agencies, and offices claiming right of possession through and under it to peacefully surrender and deliver the physical possession of the subject realty to petitioners.

Concededly, recovery of possession is an appropriate recourse in case a governmental entity, in the exercise of its eminent domain powers, takes over the possession of a property without the benefit of expropriation proceeding.22 This jurisprudential precept finds its progenitor in the seminal case of Manila Railroad Co. v. Paredes (Manila Railroad),23 which was decided by the Court sitting En Banc, and which enjoys the distinction of being the 'first case in this jurisdiction in which it has been attempted to compel a public service corporation endowed with the power of eminent domain to vacate property occupied by it without first acquiring title thereto by amicable purchase or expropriation proceedings'.24 Manila Railroad annunciated that a public entity stands on an equal footing as other trespassers/intruders if it enters a private property or constructs establishments thereon without the acquiescence or consent of the owner. In such cases, it is considered a trespasser ab initio, and stands vulnerable to the same actions available against any other intruder.25 However, subsequent cases appear to have provided a pivotal caveat to the propriety of the action for recovery of possession in such cases — recovery may only be had if the return of the property is still feasible.26

Considering that the physical return of the subject property on which respondent's seat of government and offices of several other government agencies and instrumentalities are currently erected is no longer feasible, the second prong of the "higher interest of justice" threshold is likewise satisfied as the unwarranted and irremediable injury or damage of forfeiting the established structures in favor of petitioners and directing respondent to vacate the contentious land looms large on the horizon.

In Sec. of the DPWH v. Spouses Tecson (Sec. of DPWH),27 the Court edifyingly elucidated that:

The more recent case of Republic v. Spouses Nocom (Spouses Nocom)29 echoed with approval the foregoing jurisprudential teaching, recognizing that the respondents therein "had no other remedy but to file a suit against petitioner for the recovery of possession of the property and for payment of reasonable compensation."

There can be no quibbling that here, there was "taking" when respondent, endowed with the power of eminent domain, occupied petitioners' land in 1954, which it then used as a government center. Sy. v. Local Gov't. of Quezon City30 ingeminated the jurisprudential precept that there is "taking" when the owner is actually deprived or dispossessed of his or her property; when there is a practical destruction or a material impairment of the value of his or her property or when he or she is deprived of the ordinary use thereof.31

On this score, the Court rules and so holds that the taking of the property took place on August 16, 1954, when respondent admitted having entered, possessed, and started improving the property after the purported execution of the contentious Deed of Donation. Upon this point, the pronouncements of the First Division Decision are illuminating—

According to the City, the City Mayor of Naga, Monico Imperial (Mayor Imperial), and the registered landowners, Macario and Gimenez, executed a Deed of Donation on August 16, 1954, whereby the latter donated five hectares of land (subject property), two hectares of which to be used as the City Hall site, another two hectares for the public plaza, and the remaining hectare for the public market. By virtue of said Deed, the City entered the property and began construction of the government center. It also declared the five-hectare property in its name for tax purposes. Thereafter, the Land Transportation Office (LTO), the National Bureau of Investigation (NBI), the Department of Labor and Employment (DOLE), the Philippine Postal Corporation (PPC), the Fire Department and other government agencies and instrumentalities entered the same property and built their offices thereon.32

Whence, in fealty to Secretary of DPWH,33 the Court rules and so holds that respondent must pay petitioners just compensation as of the time of taking of the contested land on August 16, 1954, computed in accordance with the formula laid down in Spouses Nocom,34 viz.:

Without a nary of doubt, Spouses Nocom provides a more equitable and fair computation of just compensation forasmuch as it factors in various considerations affecting the value, not only of the property at the time of taking, but also of the money which could have accrued to the aggrieved landowner's benefit had the supposed expropriator followed the prescribed procedure therefor.

Withal, in order to scourge respondent's deplorable act of establishing the now-entrenched public offices on petitioners' property despite the irrefragable invalidity of the donation, the Court hereby orders the former to pay the latter P1,000,000.00 by way of exemplary damages. This award finds jurisprudential backing in National Power Corporation vs. Manalastas,36 where this Court adjudicated thusly:

Lastly, in addition to the award for interests, Article 2229 of the Civil Code provides that "[e]xemplary or corrective damages are imposed by way of example or correction for the public good" and Article 2208 of the same code states that attorney's fees may be awarded by the court in cases where such would be just and equitable. As held in the Resolution dated April 21, 2015 in Secretary of the Department of Public Works and Highways, et al. v. Spouses Heracleo and Ramona Tecson, additional compensation in the form of exemplary damages and attorney's fees should likewise be awarded as a consequence of the government agency's illegal occupation of the owner's property for a very long time, resulting in pecuniary loss to the owner. Indeed, government agencies should be admonished and made to realize that its negligence and inaction in failing to commence the proper expropriation proceedings before taking private property, as provided for by law, cannot be countenanced by the Court.37

Meanwhile, the reduction of attorney's fees to P75,000.00 is sustained for the same reasons as embodied in the First Division Decision.

A final cadence. The Court is aware of the jurisdictional conundrum besetting the remand of the instant case to RTC for purposes of determining just compensation considering that the court of origin is, in point of fact, Branch I of the Municipal Trial Court of Naga City. This notwithstanding, compelling considerations of equity behoove this Court to overlook pro hac vice such procedural hurdle.

Very much so, this is not the first time that this Court is wielding its equity jurisdiction where there is a hiatus in the law and in the Rules of Court. Equity jurisdiction aims to do complete justice in cases where a court of law is unable to adapt its judgments to the special circumstances of a case because of the inflexibility of its statutory or legal jurisdiction. Equity is the principle by which substantial justice may be attained in cases where the prescribed or customary forms of ordinary law are inadequate. This is apposite to Article 9 of the Civil Code, which expressly mandates the courts to make a ruling despite the "silence, obscurity or insufficiency of the laws."38

Pertinently, the silence of the Rules of Court anent the determination of feasibility of returning a property in an action to recover possession, such as in this case, is undeniably deafening. In a like manner, the Rules do not provide for a definite and complete procedural framework for inverse condemnation upon which the bench, the bar, and the public may anchor their legal steps when faced with a similar situation. Suffice it to say that the aggrieved landowners, whose properties were taken by the government without any benefit of expropriation, may not be left out to dry in the aperture, which this Court itself carved out.

Thusly, in the higher interest of substantial justice and in the exercise of this Court's equity jurisdiction, as well as for judicial economy, the case must be ordered remanded to the trial court for purposes of determining just compensation in accordance with this Resolution.

Hernando, Inting, M. Lopez, Rosario, J. Lopez, Marquez, and Kho, Jr., JJ., concur.

Gaerlan,** J., with concurring/dissenting opinion. On official business but left vote.