G.R. No. L-13343. December 29, 1962.
EULOGIO RODRIGUEZ, SR., plaintiff-appellant, vs. SOFRONIO FRANCISCO as Administrator of the Estate of MAXIMO FRANCISCO, defendant-appellee.

FACTS

Exequiel Ampil, the registered owner of a parcel of land, sold it to Maximo Francisco in 1924. Francisco took possession and paid the land taxes, but the sale was never registered, leaving the Torrens title in Ampil’s name. In 1933, Ampil, indebted to creditors guaranteed by Eulogio Rodriguez, Sr., executed a “Venta Condicional” (conditional sale) of the same and other lands to Rodriguez as security. In 1936, Rodriguez consolidated ownership via affidavit after Ampil failed to meet the conditions, and a new certificate of title was issued to him in 1937 after a court proceeding where the lost owner’s duplicate was replaced.
Rodriguez filed an action for declaration of ownership and recovery of possession. The trial court declared Rodriguez the rightful owner, ordering Francisco to deliver possession, but found Francisco to be a possessor in good faith, absolving him from liability for damages. Rodriguez appealed solely on the issue of Francisco’s good faith, arguing that certain circumstances indicated bad faith.

ISSUE

Whether Maximo Francisco (and subsequently his estate administrator) was a possessor in good faith, thereby exempt from liability for damages (fruits) received from the land prior to the legal interruption of his possession.

RULING

The Supreme Court affirmed that Maximo Francisco was a possessor in good faith. The legal logic centers on the definition and legal effects of possession in good faith under the Civil Code. Good faith consists in the possessor’s belief that the person from whom he received the thing was the owner and could transmit ownership. Francisco purchased the land from the registered owner in 1924 via a valid deed, took possession, and paid taxes, establishing a possession founded on a just title and without knowledge of any flaw. The circumstances cited by Rodriguez—a minor discrepancy in the land description in the deed, non-registration of the sale, and Francisco’s non-appearance in the 1936 court proceeding for the issuance of a new duplicate certificate—did not constitute proof of bad faith. Non-registration does not invalidate the sale between parties nor imply bad faith. There was no evidence Francisco was notified of the consolidation proceeding.
However, the Court modified the damages award. A possessor in good faith is entitled to the fruits received before possession is legally interrupted. Legal interruption occurs upon judicial summons in an action to recover possession. From that moment, the possessor is aware his right is disputed and he may lose it; good faith ceases, and he must account for fruits from that point forward. As the action was filed during Francisco’s lifetime, his estate is liable for damages (the owner’s share of fruits) accruing from the year following his death in 1950, as damages before death are claims against the estate. The estate was ordered to pay P200 yearly from 1951 until possession is restored.