G.R. No. 116151 July 2, 1999
ESTER JANE VIRGINIA F. ALMORA and ALBERT F. ALMORA, petitioners, vs. HON. COURT OF APPEALS, ORLANDO PERALTA and RUDY PERALTA, respondents.

FACTS

Petitioners Ester Jane Virginia F. Almora and Albert F. Almora filed a complaint for accion publiciana with damages against private respondents Orlando Peralta and Rudy Peralta to recover possession of a parcel of land in Abatan, Buguias, Benguet. The disputed property is public land, part of the Mount Data National Reservation Park, over which Ben Almora, petitioners’ late father, was granted an occupancy permit by the Bureau of Forestry. Ben Almora and petitioners consistently paid real property taxes on the land from 1945 to 1987. On May 30, 1958, Ben Almora leased the property and a building thereon to Federico Peralta, father of private respondents, under a Contract of Lease where Ben Almora represented himself as the “true and lawful owner.” The lease stipulated that if the lessee faithfully paid monthly rentals for three years, he would become the lawful owner of the building, but not the lot. Federico Peralta failed to pay rentals, prompting Ben Almora to file an unlawful detainer case, which was decided in Almora’s favor by the Municipal Trial Court, affirmed by the Court of First Instance on December 29, 1972, with the decision becoming final and executory. Despite this, the Peraltas refused to vacate. After Federico Peralta’s death, his children, including private respondents, built houses on the lot. Ben Almora sold the land to petitioners via a Deed of Sale of Unregistered Lands dated August 1, 1981. Private respondents contended that their father stopped paying rentals upon learning Ben Almora only had an occupancy permit, which restricted alienation or subletting. Federico Peralta filed a Miscellaneous Sales Application for the portion he occupied on August 12, 1959. The conflicting claims reached the Secretary of Agriculture and Natural Resources and the Office of the President, which, in Decision No. 1039 dated July 18, 1974, favored Federico Peralta and other lessees-applicants, allowing them to file applications for occupancy permits and directing that Almora and all occupants be allowed to continue occupation upon issuance of permits by the Bureau of Forest Development. The Regional Trial Court (RTC) ruled in favor of petitioners on April 30, 1990, ordering private respondents to vacate, based on petitioners’ and Ben Almora’s prior physical possession since 1945, which antedated private respondents’ possession by about 13 years, and noting that private respondents’ entry was by virtue of a lease, not adverse possession. The RTC emphasized its decision was limited to the issue of prior possession and did not interfere with the Bureau of Lands’ jurisdiction over public lands. The Court of Appeals reversed the RTC decision, dismissing the complaint, holding that Ben Almora’s occupancy permit did not confer ownership or alienation rights, making the Contract of Lease and subsequent Deed of Sale null and void regarding the land. It also ruled that the prior unlawful detainer decision barred the accion publiciana by res judicata, as Ben Almora failed to execute the judgment within the prescribed period, and that the issue of lawful possession was resolved by the Office of the President’s decision.

ISSUE

The primary issue is whether the Court of Appeals erred in reversing the RTC decision and dismissing the petitioners’ accion publiciana complaint, based on the nullity of the lease and sale due to Ben Almora’s lack of ownership, the application of res judicata from the prior unlawful detainer case, and the preclusive effect of the Office of the President’s decision.

RULING

The Supreme Court granted the petition, reversed the Court of Appeals decision, and reinstated the RTC decision. The Court held that the RTC had jurisdiction over the accion publiciana to determine prior physical possession, independent of the issue of ownership, as the action was for recovery of possession based on prior possession. The fact that the land is public and under the jurisdiction of the Bureau of Lands does not deprive regular courts of jurisdiction to adjudicate possession claims to prevent breaches of peace. The Court found that petitioners and their predecessor Ben Almora had prior possession since 1945, while private respondents’ possession began only in 1958 under a lease, which acknowledges the lessor’s ownership and cannot be considered adverse at inception. The Contract of Lease, though Ben Almora was not the owner, was not necessarily void ab initio as it could be considered a lease of usufruct or right to use. The unlawful detainer judgment did not bar the accion publiciana by res judicata, as the causes of action and reliefs sought were different: unlawful detainer is a summary action for ejectment based on expiration of lease, while accion publiciana is for recovery of possession after expiration of the one-year period for forcible entry or unlawful detainer. Failure to execute the unlawful detainer judgment does not extinguish the right to possess. The Office of the President’s decision did not settle the issue of prior possession for purposes of the accion publiciana, as it primarily addressed the right to file public land applications, not physical possession. Thus, petitioners, as successors-in-interest of Ben Almora, were entitled to recover possession based on prior physical possession.