G.R. No. 80638. April 26, 1989.
GABRIEL ELANE, petitioner, vs. COURT OF APPEALS and INOCENCIO V. CHUA, respondents.

FACTS

Private respondent Inocencio Chua filed a forcible entry case against petitioner Gabriel Elane before the Olongapo City Court. Chua alleged he was granted a permit by the Bureau of Forestry over a parcel of land in 1961, on which he constructed a warehouse and gasoline station, declared it for taxation, and later filed a Miscellaneous Sales Application in 1977. He discovered on February 15, 1980, that Elane was constructing a building on a portion of this land without his consent. Despite a demand letter dated March 1, 1980, Elane refused to desist, prompting the ejectment suit filed on March 6, 1980. Elane defended his possession, claiming a separate permit from the Bureau of Forest Development for a 360-square-meter area since 1970, on which he built a hut later replaced by a bungalow, and paid real property taxes.
The Municipal Trial Court dismissed Chua’s complaint, a decision affirmed by the Regional Trial Court. However, the Court of Appeals reversed these rulings, ordering Elane to vacate the land, demolish his structure, and pay attorney’s fees. Elane then elevated the case to the Supreme Court via petition for review.

ISSUE

The primary issues are: (1) whether the Court of Appeals gravely abused its discretion in giving due course to Chua’s petition despite the alleged finality of the RTC decision; and (2) whether the appellate court correctly resolved the case based on priority of physical possession rather than legal possession.

RULING

The Supreme Court affirmed the Court of Appeals’ decision. On the first issue, the Court found no abuse of discretion. Petitioner’s claim that the RTC decision had become final due to the private respondent’s counsel’s failure to claim a mailed copy was unsubstantiated. The presumption of service under the Rules of Court requires proof that the first notice of the registered letter was sent and delivered, which petitioner failed to provide. Furthermore, this objection was not raised in the Court of Appeals and was thus barred by estoppel by laches.
On the substantive issue, the Court upheld the appellate court’s focus on priority of physical possession as the central element in forcible entry cases. The evidence established that private respondent Chua was in prior possession of the contested lot since at least 1961, as evidenced by his permit, constructions, tax declarations, and earlier sales application. Petitioner Elane’s entry and construction in 1980 constituted a clandestine intrusion. Applying Article 538 of the Civil Code, which prefers the possessor longer in possession where two claimants exist, Chua’s prior continuous possession made him the preferred possessor. The one-year prescriptive period for filing the ejectment suit was correctly counted from February 15, 1980, when Chua discovered the intrusion and made a demand, making the complaint filed on March 6, 1980, timely. Therefore, the Court of Appeals did not err in ordering Elane’s eviction.