Case Digest: Bogo-Medellin Milling vs. CA, G.R. No. 124699. July 31, 2003.

Easement

CASE TITLE: Bogo-Medellin Milling vs. CA
GR No/ Date: G.R. No. 124699. July 31, 2003.
PONENTE: Corona, J.
CASE WITH THE SC: Petition for Review on Certiorari under Rule 45
PROCEDURAL ANTECEDENTS: RTC - Complaint for payment of compensation and/or recovery of possession of real property and damages with application for restraining order or preliminary injunction; CA - Appeal
FACTS: On December 9, 1935, Magdaleno Valdez, Sr. bought a parcel of unregistered land from Feliciana Santillan in Barrio Dayhagon, Medellin, Cebu. He took possession of the property and declared it for tax purposes in his name. Prior to the sale, Bogo-Medellin Milling Company, Inc.'s railroad tracks already traversed the land from north to south for hauling sugar cane. In 1948, Magdaleno Valdez, Sr. died. His heirs (Sergio Valdez, Angelina Valdez-Novabos, Teresita Argawanon-Mangubat, and Daylinda Argawanon-Melendres) inherited the land. In 1965, Bomedco registered the disputed middle lot (Cadastral Lot No. 954) where the tracks lay in its name, while Lot Nos. 953 and 955 remained with the heirs. In 1989, the heirs discovered Bomedco's claim and demanded an explanation and compensation, which Bomedco ignored. The heirs filed a complaint for payment of compensation and/or recovery of possession of the property and damages against Bomedco. RTC: Held that Bomedco acquired ownership of Lot No. 954 through acquisitive prescription, having possessed it in good faith for over 10 years. Rejected Bomedco's defense of ownership due to the inadmissibility of the 1929 deed of sale (xerox copy). CA: Reversed the trial court. Found that Bomedco did not acquire ownership but only an easement of right of way by unopposed and continuous use. Held that Bomedco's possession was in bad faith, requiring a 30-year prescriptive period to claim ownership. Ruled that Bomedco's adverse possession started in 1965 and had not yet ripened into ownership by 1989. Awarded compensation to the heirs for the use of the land, calculated from the time of discovery of Bomedco's adverse acts.
ISSUE: Whether the Bomedco acquired the easement of right of way by prescription under Article 620 of the Civil Code NO
ARGUMENTS/LEGAL BASES
PETITIONER	RESPONDENTS
Claimed ownership and possession of Cadastral Lot No. 954, allegedly purchased from Santillan in 1929. Contended that the heirs' claim was barred by prescription and laches due to its open and continuous possession for over 50 years. Submitted a 1929 deed of sale, tax receipts, survey plans, and testimonies in defense.	Asserted that Santillan granted Bomedco a 30-year railroad right of way in 1929, which expired in 1959. Claimed that Valdez, Sr. respected the right of way, and they allowed Bomedco to continue using the land due to familial employment. Presented the 1935 deed of sale, tax receipts, and testimonies to support their claim..
PREVAILING PARTY: Respondent
DECISION/DOCTRINE: Extraordinary Acquisitive Prescription Under Art. 1137 of the Civil Code Petitioners claim of ownership through extraordinary acquisitive prescription under Article 1137 of the Civil Code cannot be sustained. There is no dispute that the controversial strip of land has been in the continuous possession of petitioner since 1929. But possession, to constitute the foundation of a prescriptive right, must be possession under a claim of title, that is, it must be adverse. Unless coupled with the element of hostility towards the true owner, possession, however long, will not confer title by prescription. After a careful review of the records, we are inclined to believe the version of respondent heirs that an easement of right of way was actually granted to petitioner for which reason the latter was able to occupy Cadastral Lot No. 954. We cannot disregard the fact that, for the years 1930, 1937, 1949, 1962 and 1963, petitioner unequivocally declared the property to be a central railroad right of way or sugar central railroad right of way in its real estate tax receipts when it could have declared it to be industrial land as it did for the years 1975 and 1985. Instead of indicating ownership of the lot, these receipts showed that all petitioner had was possession by virtue of the right of way granted to it. Were it not so and petitioner really owned the land, petitioner would not have consistently used the phrases central railroad right of way and sugar central railroad right of way in its tax declarations until 1963. Certainly an owner would have found no need for these phrases. A person cannot have an easement on his own land, since all the uses of an easement are fully comprehended in his general right of ownership. While it is true that, together with a persons actual and adverse possession of the land, tax declarations constitute strong evidence of ownership of the land occupied by him, this legal precept does not apply in cases where the property is declared to be a mere easement of right of way. An easement or servitude is a real right, constituted on the corporeal immovable property of another, by virtue of which the owner has to refrain from doing, or must allow someone to do, something on his property, for the benefit of another thing or person. It exists only when the servient and dominant estates belong to two different owners. It gives the holder of the easement an incorporeal interest on the land but grants no title thereto. Therefore, an acknowledgment of the easement is an admission that the property belongs to another.  Having held the property by virtue of an easement, petitioner cannot now assert that its occupancy since 1929 was in the concept of an owner. Neither can it declare that the 30-year period of extraordinary acquisitive prescription started from that year. Petitioner, however, maintains that even if a servitude was merely imposed on the property in its favor, its possession immediately became adverse to the owner in the late 1950s when the grant was alleged by respondent heirs to have expired. It stresses that, counting from the late 1950s (1959 as found by the trial court), the 30-year extraordinary acquisitive prescription had already set in by the time respondent heirs made a claim against it in their letters dated March 1 and April 6, 1989. We do not think so. The mere expiration of the period of easement in 1959 did not convert petitioners possession into an adverse one. Mere material possession of land is not adverse possession as against the owner and is insufficient to vest title, unless such possession is accompanied by the intent to possess as an owner. There should be a hostile use of such a nature and exercised under such circumstances as to manifest and give notice that the possession is under a claim of right. In the absence of an express grant by the owner, or conduct by petitioner sugar mill from which an adverse claim can be implied, its possession of the lot can only be presumed to have continued in the same character as when it was acquired (that is, it possessed the land only by virtue of the original grant of the easement of right of way), or was by mere license or tolerance of the owners (respondent heirs). It is a fundamental principle of law in this jurisdiction that acts of possessory character executed by virtue of license or tolerance of the owner, no matter how long, do not start the running of the period of prescription.[ After the grant of easement expired in 1959, petitioner never performed any act incompatible with the ownership of respondent heirs over Cadastral Lot No. 954. On the contrary, until 1963, petitioner continued to declare the sugar central railroad right of way in its realty tax receipts, thereby doubtlessly conceding the ownership of respondent heirs. Respondents themselves were emphatic that they simply tolerated petitioners continued use of Cadastral Lot No. 954 so as not to jeopardize the employment of one of their co-heirs in the sugar mill of petitioner. The only time petitioner assumed a legal position adverse to respondents was when it filed a claim over the property in 1965 during the cadastral survey of Medellin. Since then (1965) and until the filing of the complaint for the recovery of the subject land before the RTC of Cebu in 1989, only 24 years had lapsed. Since the required 30-year extraordinary prescriptive period had not yet been complied with in 1989, petitioner never acquired ownership of the subject land. Laches Neither can petitioner find refuge in the principle of laches. It is not just the lapse of time or delay that constitutes laches. The essence of laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, through due diligence, could or should have been done earlier, thus giving rise to a presumption that the party entitled to assert it had either abandoned or declined to assert it. Its essential elements are: conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation complained of;  delay in asserting complainants rights after he had knowledge of defendants acts and after he has had the opportunity to sue;  lack of knowledge or notice by defendant that the complainant will assert the right on which he bases his suit; and  injury or prejudice to the defendant in the event the relief is accorded to the complainant. The second element (which in turn has three aspects) is lacking in the case at bar. These aspects are: knowledge of defendant's action,  opportunity to sue defendant after obtaining such knowledge and  delay in the filing of such suit. Records show that respondent heirs only learned about petitioners claim on their property when they discovered the inscription for the cadastral survey in the records of the Bureau of Lands in 1989. Respondents lost no time in demanding an explanation for said claim in their letters to the petitioner dated March 1, 1989 and April 6, 1989. When petitioner ignored them, they instituted their complaint before the Regional Trial Court of Cebu City on June 8, 1989. Petitioners reliance on Caro vs. Court of Appeals and Vda. de Alberto vs. Court of Appeals is misplaced. There, laches was applied to bar petitioners from questioning the ownership of the disputed properties precisely because they had knowledge of the adverse claims on their properties yet tarried for an extraordinary period of time before taking steps to protect their rights. Further, there is no absolute rule on what constitutes laches. It is a rule of equity and applied not to penalize neglect or sleeping on ones rights but rather to avoid recognizing a right when to do so would result in a clearly unfair situation. The question of laches is addressed to the sound discretion of the court and each case must be decided according to its particular circumstances.[37 It is the better rule that courts, under the principle of equity, should not be guided or bound strictly by the statute of limitations or the doctrine of laches if wrong or injustice will result. It is clear that petitioner never acquired ownership over Cadastral Lot No. 954 whether by extraordinary acquisitive prescription or by laches. Acquisition of Easement of Right of Way By Prescription Under Art. 620 of the Civil Code Petitioner contends that, even if it failed to acquire ownership of the subject land, it nevertheless became legally entitled to the easement of right of way over said land by virtue of prescription under Article 620 of the Civil Code: Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years. The trial court and the Court of Appeals both upheld this view for the reason that the railroad right of way was, according to them, continuous and apparent in nature. The more or less permanent railroad tracks were visually apparent and they continuously occupied the subject strip of land from 1959 (the year the easement granted by Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-year prescriptive period in 1969, petitioner supposedly acquired the easement of right of way over the subject land. Following the logic of the courts a quo, if a road for the use of vehicles or the passage of persons is permanently cemented or asphalted, then the right of way over it becomes continuous in nature. The reasoning is erroneous. Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements. Thus, an easement is continuous if its use is, or may be, incessant without the intervention of any act of man, like the easement of drainage; and it is discontinuous if it is used at intervals and depends on the act of man, like the easement of right of way. The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets foot on somebody elses land. Like a road for the passage of vehicles or persons, an easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes over another's property. In other words, the very exercise of the servitude depends upon the act or intervention of man which is the very essence of discontinuous easements. The presence of more or less permanent railroad tracks does not in any way convert the nature of an easement of right of way to one that is continuous. It is not the presence of apparent signs or physical indications showing the existence of an easement, but rather the manner of exercise thereof, that categorizes such easement into continuous or discontinuous. The presence of physical or visual signs only classifies an easement into apparent or non-apparent. Thus, a road (which reveals a right of way) and a window (which evidences a right to light and view) are apparent easements, while an easement of not building beyond a certain height is non-apparent. In Cuba, it has been held that the existence of a permanent railway does not make the right of way a continuous one; it is only apparent. Therefore, it cannot be acquired by prescription. In Louisiana, it has also been held that a right of passage over another's land cannot be claimed by prescription because this easement is discontinuous and can be established only by title. In this case, the presence of railroad tracks for the passage of petitioners trains denotes the existence of an apparent but discontinuous easement of right of way. And under Article 622 of the Civil Code, discontinuous easements, whether apparent or not, may be acquired only by title. Unfortunately, petitioner Bomedco never acquired any title over the use of the railroad right of way whether by law, donation, testamentary succession or contract. Its use of the right of way, however long, never resulted in its acquisition of the easement because, under Article 622, the discontinuous easement of a railroad right of way can only be acquired by title and not by prescription. To be sure, beginning 1959 when the original 30-year grant of right of way given to petitioner Bomedco expired, its occupation and use of Cadastral Lot No. 954 came to be by mere tolerance of the respondent heirs. Thus, upon demand by said heirs in 1989 for the return of the subject land and the removal of the railroad tracks, or, in the alternative, payment of compensation for the use thereof, petitioner Bomedco which had no title to the land should have returned the possession thereof or should have begun paying compensation for its use. But when is a party deemed to acquire title over the use of such land (that is, title over the easement of right of way)? In at least two cases, we held that if:  it had subsequently entered into a contractual right of way with the heirs for the continued use of the land under the principles of voluntary easements or it had filed a case against the heirs for conferment on it of a legal easement of right of way under Article 629 of the Civil Code, then title over the use of the land is deemed to exist.  The conferment of a legal easement of right of way under Article 629 is subject to proof of the following: it is surrounded by other immovables and has no adequate outlet to a public highway; payment of proper indemnity; the isolation is not the result of its own acts; and the right of way claimed is at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, the distance from the dominant estate to the highway is the shortest. None of the above options to acquire title over the railroad right of way was ever pursued by petitioner despite the fact that simple resourcefulness demanded such initiative, considering the importance of the railway tracks to its business. No doubt, it is unlawfully occupying and using the subject strip of land as a railroad right of way without valid title yet it refuses to vacate it even after demand of the heirs. Furthermore, it tenaciously insists on ownership thereof despite a clear showing to the contrary. We thus uphold the grant by the Court of Appeals of attorneys fees in the amount of P10,000 considering the evident bad faith of petitioner in refusing respondents just and lawful claims, compelling the latter to litigate.  WHEREFORE, the petition is DENIED. The appealed decision dated November 17, 1995 and resolution dated March 2, 1996 of the Court of Appeals are AFFIRMED with MODIFICATION. Petitioner Bogo-Medellin Milling Company, Inc. is hereby ordered to vacate the subject strip of land denominated as Cadastral Lot No. 954, remove its railway tracks thereon and return its possession to the private respondents, the heirs of Magdaleno Valdez, Sr. It is also hereby ordered to pay private respondents attorney's fees in the amount of P10,000. SO ORDERED. Puno, (Chairman), Panganiban, and Carpio-Morales, JJ., concur.