The Supreme Court affirmed that a landowner’s right to recover possession of their property is not barred by laches when the occupancy is based on tolerance. Even with prolonged use, if the initial entry was permitted out of neighborliness or courtesy, the landowner retains the right to reclaim their property. This ruling emphasizes that mere tolerance does not create a vested right for the occupant, ensuring landowners can assert their ownership rights despite long-term permissive use of their land.

From Courtesy to Conflict: Can Decades of School Use Trump Land Ownership?

This case revolves around a parcel of land in Solana, Cagayan, originally owned by Juan Cepeda. In 1965, Cepeda allowed the local government, upon the request of the then Mayor Justo Cesar Caronan, to construct a school on a portion of his land, which became the Solana North Central School, under the Department of Education’s (DepEd) supervision. Cepeda passed away in 1983, but his descendants, the respondents in this case, continued to tolerate the school’s presence on the land. However, in the early 2000s, the respondents sought to either receive rent for the land, have the DepEd purchase it, or have the school vacate the premises. The DepEd refused, leading the respondents to file an action for recovery of possession and/or sum of money.

The DepEd argued that it owned the property because civic-minded residents had purchased it from Cepeda. They further claimed that their occupation was not merely tolerated but was adverse, peaceful, continuous, and in the concept of an owner for nearly forty years. The Regional Trial Court (RTC) ruled in favor of the respondents, declaring them the rightful owners and ordering the DepEd to pay for the property. The Court of Appeals (CA) affirmed this decision. The central legal question before the Supreme Court was whether the respondents’ right to recover possession was barred by prescription and/or laches, given the DepEd’s long-term occupation of the land.

The Supreme Court addressed the issue of laches, which is defined as the failure or neglect to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it has either abandoned it or declined to assert it. The Court emphasized that laches is evidentiary and must be proven, not merely alleged. To establish laches, the following elements must be present: (1) conduct by the defendant giving rise to the situation complained of; (2) delay in asserting the complainant’s rights, with knowledge or notice of the defendant’s conduct; (3) lack of knowledge by the defendant that the complainant would assert their rights; and (4) injury or prejudice to the defendant if relief is granted to the complainant.

In this case, the DepEd argued that the respondents’ inaction for over thirty years constituted laches, barring their claim. However, the Supreme Court found this argument unconvincing. The Court pointed out that the DepEd failed to present sufficient evidence to prove its ownership of the property. While the DepEd claimed that civic-minded residents purchased the land, it did not provide a deed of sale or a registered certificate of title. Instead, the DepEd relied on the argument that the then-Mayor convinced Cepeda to allow the school to occupy the property, leading them to believe the ownership had been transferred.

On the other hand, the respondents presented compelling evidence of their ownership, including the Original Certificate of Title (OCT) registered under Juan Cepeda’s name, tax declarations, tax receipts showing payments since 1965, a technical description of the land by the Department of Environment and Natural Resources, and a certification from the Municipal Trial Court declaring that the lot was adjudicated to Cepeda. The Supreme Court held that this evidence was sufficient to establish the respondents’ right of possession. As the registered owners, the respondents have the right to eject any person illegally occupying their property, a right that is imprescriptible.

The Court also discussed the concept of tolerated acts, citing Professor Arturo M. Tolentino’s definition:

acts merely tolerated are “those which by reason of neighborliness or familiarity, the owner of property allows his neighbor or another person to do on the property; they are generally those particular services or benefits which one’s property can give to another without material injury or prejudice to the owner, who permits them out of friendship or courtesy.” x x x. and, Tolentino continues, even though “this is continued for a long time, no right will be acquired by prescription.” x x x

The Court found that Cepeda’s initial permission for the school to use his land stemmed from respect and courtesy to the then-Mayor, a distant relative. This constituted a tolerated act, which does not create any right of possession for the occupant, no matter how long it continues.

The Supreme Court distinguished this case from others where laches was successfully invoked against registered owners. In those cases, there was clear evidence of adverse possession or knowledge of the adverse claim by the landowner. Here, the DepEd’s possession was by mere tolerance, and the respondents filed their action for recovery of possession after the DepEd refused to pay rent, purchase the land, or vacate the premises, following an unsuccessful forcible entry case against the respondents.

Despite finding that the DepEd’s possession was by mere tolerance, the Court recognized the DepEd as a builder in good faith, as Cepeda permitted the construction of buildings and improvements for the school. The Court then invoked Article 448 of the Civil Code, which provides options for the landowner when improvements have been built on their land in good faith. Article 448 states:

The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing, or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

Given that appropriating the school buildings was no longer practical, the respondents were left with the option of obliging the DepEd to pay the price of the land or to require the DepEd to pay reasonable rent if the value of the land was considerably more than the value of the buildings and improvements. The Court remanded the case to the trial court to determine the value of the property. The basis for the computation of the value of the subject property should be its present or current fair market value, as the Court held that the time of taking is determinative of just compensation in expropriation proceedings but not in a case where a landowner has been deprived of the use of a portion of this land for years due to the encroachment of another.

Therefore, the Supreme Court denied the DepEd’s petition, affirming the lower courts’ decisions declaring the respondents as the owners of the property. The case was remanded to determine the property’s value and the appropriate compensation or rental terms.

FAQs

What was the key issue in this case?	The central issue was whether the respondents’ right to recover possession of their property was barred by prescription or laches, considering the DepEd’s long-term occupancy based on initial tolerance. The Supreme Court ruled that it was not barred.
What is laches?	Laches is the failure or neglect to assert a right within a reasonable time, implying abandonment or decline to assert it. It requires proof of unreasonable delay, knowledge of the rights, and prejudice to the defendant.
What is the significance of “tolerance” in this case?	The Court emphasized that the DepEd’s initial entry and continued use of the land were based on the owner’s tolerance, which is an act of neighborliness or courtesy. Tolerated acts, no matter how long they continue, do not create any right of possession.
What evidence did the respondents present to prove ownership?	The respondents presented the Original Certificate of Title (OCT), tax declarations, tax receipts since 1965, a technical description from the DENR, and a certification from the Municipal Trial Court, all indicating ownership by Juan Cepeda.
Why was the DepEd considered a builder in good faith?	Even though their possession was based on tolerance, the DepEd was considered a builder in good faith because the original landowner permitted the construction of school buildings and improvements on the property.
What options do the landowners have under Article 448 of the Civil Code?	The landowners can choose to appropriate the improvements after paying indemnity or oblige the DepEd to pay the price of the land. If the land’s value is considerably higher, the DepEd will pay reasonable rent.
How will the value of the property be determined?	The Supreme Court ordered the trial court to determine the property’s present or current fair market value to calculate the appropriate compensation or rental terms.
What is the main takeaway from this case?	The main takeaway is that a landowner’s right to recover possession is not easily barred by laches when the initial occupancy was based on tolerance, even if that occupancy has been for a long time.

This case reinforces the importance of clear agreements and documentation when allowing others to use one’s property. While acts of neighborliness are commendable, landowners should ensure their rights are protected and that permissive use does not inadvertently lead to a loss of ownership. If you are involved in a property dispute or have questions about your rights as a landowner, seeking legal advice is crucial.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: DEPARTMENT OF EDUCATION vs. DELFINA C. CASIBANG, G.R. No. 192268, January 27, 2016