G.R. No. 166458; February 14, 2008
MR. SERGIO VILLADAR, JR. & MRS. CARLOTA A. VILLADAR, petitioners, vs. ELDON ZABALA and SAMUEL ZABALA, SR., respondents.

FACTS

Respondent Samuel Zabala, Sr. owned Lot No. 5095. On January 13, 1995, he and his wife sold one-half of the lot to Estelita Villadar (petitioners’ mother) for P75,000 on an installment basis, evidenced only by a note for a partial payment of P6,500. No formal contract was executed, and the terms of payment were not fixed. Estelita later made an additional payment, leaving a balance of P36,500. Meanwhile, Samuel, Sr. sold the other half of the lot to his co-respondent, Eldon Zabala. The lot was subdivided, and separate titles were issued to Eldon (Lot 5095-A) and Samuel, Sr. (Lot 5095-B). Samuel, Sr. later decided to cancel the sale to Estelita.
Respondents filed an unlawful detainer complaint against petitioners before the Municipal Trial Court in Cities (MTCC), alleging they merely allowed petitioners to occupy a store on the lot out of pity, subject to the condition they would vacate upon demand. Petitioners refused to leave after a demand in 1998. Petitioners, in their defense, claimed possession rights derived from the sale to Estelita, asserting they were buyers in good faith or, alternatively, builders in good faith of a house straddling both subdivided lots.

ISSUE

The core issue is whether petitioners are unlawfully withholding possession of the subject properties from the titled owners, respondents Eldon Zabala and Samuel Zabala, Sr.

RULING

The Supreme Court ruled in favor of the respondents, ordering petitioners to vacate the premises. The Court affirmed the Court of Appeals’ reversal of the lower courts. The legal logic proceeds as follows: First, in an unlawful detainer case, the principal issue is physical or material possession (possession de facto), independent of claims of ownership. The only question is who has a better right of possession. Respondents, as registered owners under Transfer Certificates of Title, have a clear and superior right to possess the properties. The Torrens system confers this right upon them.
Second, petitioners’ claim of a right to possess, derived from the unperfected installment sale to Estelita, does not prevail over respondents’ registered titles. While the oral contract of sale between Samuel, Sr. and Estelita was valid and perfected, ownership had not transferred to Estelita because the sale was on installment and the full price was not paid. Samuel, Sr. validly reserved title. Consequently, Estelita—and by extension, petitioners—acquired no ownership or superior right of possession that could defeat the titles of the respondents. Petitioners’ claim of being builders in good faith was also irrelevant in the summary action for ejectment, which is concerned solely with possession. Thus, respondents, as titled owners, are entitled to possession.