GR L 11093; (January, 1958) (Digest)
G.R. No. L-11093; January 27, 1958
LEONARDO ENAGE LABAJO, ET AL., plaintiffs-appellants, vs. CIRIACO ENRIQUEZ, defendant-appellant.
FACTS
Plaintiffs, co-owners of Lot No. 676 (Tacloban cadastre), filed an action alleging that from May 1945 to June 1950, during their absence, defendant Enriquez, without their knowledge or consent, administered the lot by leasing it to tenants and collecting rentals totaling P2,552, thereby unjustly enriching himself. They demanded reimbursement. Defendant answered that he bought the adjacent Lot No. 2059 and, believing in good faith that Lot No. 676 was included in his purchase, occupied and rented it out, paying its real estate taxes. He claimed to be a possessor in good faith entitled to the fruits under the Civil Code. By counterclaim, he sought damages for humiliation and attorney’s fees due to plaintiffs filing estafa charges against him, which the municipal court dismissed as civil in nature. Plaintiffs had no objection to judgment on the pleadings, provided defendant admitted their material allegations. The trial court granted judgment on the pleadings, dismissing both the complaint and counterclaim. Both parties appealed.
ISSUE
1. Whether the trial court erred in dismissing plaintiffs’ complaint based on defendant being a possessor in good faith entitled to the fruits.
2. Whether the trial court erred in dismissing defendant’s counterclaim for damages.
RULING
The Supreme Court affirmed the trial court’s judgment.
1. The trial court correctly dismissed the complaint. Under the law, a person occupying another’s property is presumed a possessor in good faith, and the burden to prove bad faith lies on the claimant. Defendant claimed good faith, believing the adjacent lot was part of his purchase. Plaintiffs failed to disprove this claim or submit evidence of bad faith. As a possessor in good faith, defendant was entitled to the fruits (rentals) received until June 1950, when plaintiffs notified him of their ownership.
2. The trial court correctly dismissed the counterclaim. Defendant failed to prove plaintiffs acted in bad faith or with ulterior motives in filing the criminal charges. It may be presumed plaintiffs believed in good faith that defendant’s refusal constituted estafa until the municipal court held it civil. Moreover, as defendant retained the rentals in good faith, justice and equity dictate he forego his claim for damages.
DISSENTING OPINION (Padilla, J.):
Defendant cannot be a possessor in good faith. As a purchaser of land registered under the Torrens system, he is presumed to know the area and boundaries of his acquired parcel. He should have verified information that the adjoining registered lot was included in his purchase before leasing it. He is not allowed to unjustly enrich himself. The case should be remanded to determine the collected rentals and taxes paid, offset them, and order defendant to pay the balance to plaintiffs.