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FIRST DIVISION[G.R. No. 147695. September 13, 2007.]

MANUEL C. PAGTALUNAN,petitioner, vs. RUFINA DELA CRUZ VDA. DEMANZANO,respondent.

D E C I S I O NAZCUNA,J pT!"# "# $ pet"t"o% &or re'"e( o% certiorari)%*er R)+e 45 o& t!e R)+e# o& o)rt o& t!e o)rt o& -ppe$+#/- De"#"o% prom)+$te* o% Otober 30, 2000 $%* "t# Re#o+)t"o% *$te* $r! 23, 2001 *e%"%pet"t"o%er# mot"o% &or reo%#"*er$t"o%. T!e De"#"o% o& t!e - $rme* t!e De"#"o% o& t!e Re"o%$+

Tr"$+ o)rt /RT o& $+o+o#, )+$$%, *$te* )%e 25, 1999 *"#m"##"% t!e $#e o& )%+$(&)+ *et$"%er &or+$8 o& mer"t.T!e &$t# $re $# &o++o(# TD$SO% )+ 19, 1974, :$tr""o :$t$+)%$% /:$tr""o, pet"t"o%er# #tep&$t!er $%* pre*ee##or;"%;"%tere#t,e%tere* "%to $ o%tr$t to Se++ ("t! re#po%*e%t, ("&e o& :$tr""o# &ormer me!$%", Teo*oro $%)$re meter#. T!e o%#"*er$t"o% o& :17,?00 ($# $ree* to be p$"* "% t!e &o++o("%m$%%er :1,500 $# *o(%p$me%t )po% e@e)t"o% o& t!e o%tr$t to Se++, $%* t!e b$+$%e to be p$"* "%e>)$+ mo%t!+ "%#t$++me%t# o& :150 o% or be&ore t!e +$#t *$ o& e$! mo%t! )%t"+ &)++ p$"*.It ($# $+#o #t"p)+$te* "% t!e o%tr$t t!$t re#po%*e%t o)+* "mme*"$te+ o)p t!e !o)#e $%* +otA t!$t"% $#e o& *e&$)+t "% t!e p$me%t o& $% o& t!e "%#t$++me%t# &or 90 *$# $&ter "t# *)e *$te, t!e o%tr$t(o)+* be $)tom$t"$++ re#"%*e* ("t!o)t %ee* o& B)*""$+ *e+$r$t"o%, $%* t!$t $++ p$me%t# m$*e $%*

$++ "mpro'eme%t# *o%e o% t!e prem"#e# b re#po%*e%t (o)+* be o%#"*ere* $# re%t$+# &or t!e )#e $%*o)p$t"o% o& t!e propert or p$me%t &or *$m$e# #)Cere*, $%* re#po%*e%t ($# ob+"e* to pe$e&)++'$$te t!e prem"#e# $%* *e+"'er t!e po##e##"o% t!ereo& to t!e 'e%*or. IT$:et"t"o%er +$"me* t!$t re#po%*e%t p$"* o%+ :12,950. S!e $++ee*+ #toppe* p$"% $&ter Deember1979 ("t!o)t $% B)#t"=$t"o% or e@p+$%$t"o%. oreo'er, "% $ Kasunduan1*$te* No'ember 1?, 1979,re#po%*e%t borro(e* :3,000 &rom :$tr""o p$$b+e "% o%e e$r e"t!er "% o%e +)mp #)m p$me%t or b"%#t$++me%t#, &$"+"% (!"! t!e b$+$%e o& t!e +o$% (o)+* be $**e* to t!e pr"%"p$+ #)bBet o& t!emo%t!+ $mort"

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T!e T !e+* t!$t re#po%*e%t# &$"+)re to p$ %ot $ &e( "%#t$++me%t# $)#e* t!e re#o+)t"o% orterm"%$t"o% o& t!e o%tr$t to Se++. T!e +$#t p$me%t m$*e b re#po%*e%t ($# o% $%)$r 9, 19?0 /@!.71. T!ere$&ter, re#po%*e%t# r"!t o& po##e##"o% ipso factoe$#e* to be $ +e$+ r"!t, $%* be$mepo##e##"o% b mere to+er$%e o& :$tr""o $%* !"# #)e##or#;"%;"%tere#t. S$"* to+er$%e e$#e* )po%*em$%* o% re#po%*e%t to '$$te t!e propert.T!e *"#po#"t"'e port"o% o& t!e T De"#"o% re$*# -$IS

!ere&ore, $++ t!e &oreo"% o%#"*ere*, B)*me%t "# !ereb re%*ere*, or*er"% t!e*e&e%*$%t$.to '$$te t!e propert o'ere* b Tr$%#&er ert"=$te o& T"t+e No. T;10029 o& t!e

Re"#ter o& Dee*# o& )+$$% /%o( TT No. RT;59929 o& t!e Re"#ter o& Dee*# o&)+$$%, $%* to #)rre%*er po##e##"o% t!ereo& to t!e p+$"%t"CA ST

b.to p$ t!e p+$"%t"C t!e $mo)%t o& :113,500 repre#e%t"% re%t$+# &rom $%)$r 19?0 tot!e pre#e%tA

.to p$ t!e p+$"%t"C #)! $mo)%t o& re%t$+#, $t :500Hmo%t!, t!$t m$ beome *)e$&ter t!e *$te o& B)*me%t, )%t"+ #!e =%$++ '$$te# t!e #)bBet propertA I-TD

*.to p$ to t!e p+$"%t"C t!e $mo)%t o& :25,000 $# $ttor%e# &ee#.SO ORDRD.2$T

O% $ppe$+, t!e RT o& $+o+o#, )+$$%, "% $ De"#"o% *$te* )%e 25, 1999, re'er#e* t!e *e"#"o% o& t!eT $%* *"#m"##e* t!e $#e &or +$8 o& mer"t. -or*"% to t!e RT, t!e $reeme%t o)+* %ot be$)tom$t"$++ re#"%*e* #"%e t!ere ($# *e+"'er to t!e b)er. - B)*""$+ *eterm"%$t"o% o& re#"##"o%m)#t be #e)re* b pet"t"o%er $# $ o%*"t"o% pree*e%t to o%'ert t!e po##e##"o% de factoo&re#po%*e%t &rom +$(&)+ to )%+$(&)+.

T!e *"#po#"t"'e port"o% o& t!e RT De"#"o% #t$te# DI-RFOR, B)*me%t "# !ereb re%*ere* re'er#"% t!e *e"#"o% o& t!e )%""p$+ Tr"$+o)rt o& G)")"%to, )+$$% $%* t!e eBetme%t $#e "%#te$* be *"#m"##e* &or +$8 o&mer"t. 3

T!e mot"o% &or reo%#"*er$t"o% $%* mot"o% &or e@e)t"o% =+e* b pet"t"o%er (ere *e%"e* b t!e RT &or+$8 o& mer"t "% $% Or*er *$te* -))#t 10, 1999. $ST-IT!ere$&ter, pet"t"o%er =+e* $ pet"t"o% &or re'"e( ("t! t!e -.I% $ De"#"o% prom)+$te* o% Otober 30, 2000, t!e - *e%"e* t!e pet"t"o% $%* $rme* t!e De"#"o% o&t!e RT. T!e *"#po#"t"'e port"o% o& t!e De"#"o% re$*# $I-S

RFOR, t!e pet"t"o% &or re'"e( o% certiorari"# De%"e*. T!e $##$"+e* De"#"o% o&t!e Re"o%$+ Tr"$+ o)rt o& $+o+o#, )+$$% *$te* 25 )%e 1999 $%* "t# Or*er *$te* 10-))#t 1999 $re !ereb -FFIRD.SO ORDRD.4-IT$

T!e - &o)%* t!$t t!e p$rt"e#, $# (e++ $# t!e T $%* RT &$"+e* to $*'ert to $%* to $pp+ Rep)b+" -t/R.-. No. 6552, more ommo%+ re&erre* to $# t!e $e*$ E$(, (!"! "# $ #pe"$+ +$( e%$te* "% 1972to protet b)er# o& re$+ e#t$te o% "%#t$++me%t p$me%t# $$"%#t o%ero)# $%* oppre##"'e o%*"t"o%#.T!e - !e+* t!$t t!e o%tr$t to Se++ ($# %ot '$+"*+ $%e++e* or re#"%*e* )%*er Se. 3 /b o& R.-. No.6552, $%* reo%"

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o%+ pro'"*e# t!$t $t)$+ $%e++$t"o% #!$++ t$8e p+$e $&ter 30 *$# &rom ree"pt o& t!e %ot"e o&$%e++$t"o% or *em$%* &or re#"##"o% $%* )po% &)++ p$me%t o& t!e $#! #)rre%*er '$+)e to t!e b)er.:et"t"o%er o%te%*# t!$t !"# *em$%* +etter *$te* Febr)$r 24, 1997 #!o)+* be o%#"*ere* t!e %ot"e o&$%e++$t"o% #"%e t!e *em$%* +etter "%&orme* re#po%*e%t t!$t #!e !$* +o% e$#e* to !$'e $% r"!tto po##e## t!e prem"#e# "% >)e#t"o% *)e to [!er] &$"+)re to p$ ("t!o)t B)#t"=$b+e $)#e. I% #)pport o&!"# o%te%t"o%, !e "te* Layug v. Intermediate !ppeate Court8(!"! !e+* t!$t t!e $**"t"o%$+&orm$+"t o& $ *em$%* o% [t!e #e++er#] p$rt &or re#"##"o% b %ot$r"$+ $t (o)+* $ppe$r, "% t!e prem"#e#,to be mere+ "r)"to)# $%* o%#e>)e%t+ #)perJ)o)#. e #t$te* t!$t "% Layug, t!e #e++er $+re$* m$*e$ (r"tte% *em$%* )po% t!e b)er. -SD

I% $**"t"o%, pet"t"o%er $##ert# t!$t (!$te'er $#! #)rre%*er '$+)e re#po%*e%t "# e%t"t+e* to !$'e bee%$pp+"e* $%* m)#t be $pp+"e* to re%t$+# &or !er )#e o& t!e !o)#e $%* +ot $&ter Deember, 1979 or $&ter#!e #toppe* p$me%t o& !er "%#t$++me%t#.:et"t"o%er $r)e# t!$t $##)m"% :$tr""o $epte* re#po%*e%t# *e+$e* "%#t$++me%t# "% 19?1, #)! $t$%%ot pre'e%t t!e $%e++$t"o% o& t!e o%tr$t to Se++. I%#t$++me%t# $&ter 19?1 (ere #t"++ )%p$"* $%* t!e$pp+"$b+e r$e per"o*# )%*er t!e $e*$ E$( o% t!e )%p$"* "%#t$++me%t# !$'e +o% +$p#e*.Re#po%*e%t $%%ot be $++o(e* to !"*e be!"%* t!e $e*$ E$(. S!e $te* ("t! b$* &$"t! $%* m)#t be$rt!e o%#e>)e%e# o& !er *e+"ber$te ("t!!o+*"% o& $%* re&)#$+ to m$8e t!e mo%t!+ p$me%t#. -D$S:et"t"o%er $+#o o%te%*# t!$t t!e $pp+"$b"+"t o& t!e $e*$ E$( ($# %e'er r$"#e* "% t!e proee*"%#be+o(A !e%e, "t #!o)+* %ot !$'e bee% $pp+"e* b t!e - "% re#o+'"% t!e $#e.T!e o)rt "# %ot per#)$*e*. T$SDT!e - orret+ r)+e* t!$t R.- No. 6552, (!"! o'er%# #$+e# o& re$+ e#t$te o% "%#t$++me%t, "#$pp+"$b+e "% t!e re#o+)t"o% o& t!"# $#e.

T!"# $#e or""%$te* $# $% $t"o% &or )%+$(&)+ *et$"%er. Re#po%*e%t "# $++ee* to be "++e$++ ("t!!o+*"%po##e##"o% o& t!e #)bBet propert $&ter t!e term"%$t"o% o& t!e o%tr$t to Se++ bet(ee% :$tr""o $%*re#po%*e%t. It "#, t!ere&ore, "%)mbe%t )po% pet"t"o%er to pro'e t!$t t!e o%tr$t to Se++ !$* bee%$%e++e* "% $or*$%e ("t! R.-. No. 6552. T$ST!e pert"%e%t pro'"#"o% o& R.-. No. 6552 re$*#

Se. 3.I% $++ tr$%#$t"o%# or o%tr$t# "%'o+'"% t!e #$+e or =%$%"% o& re$+ e#t$te o%"%#t$++me%t p$me%t#, "%+)*"% re#"*e%t"$+ o%*om"%")m $p$rtme%t# b)t e@+)*"%"%*)#tr"$+ +ot#, ommer"$+ b)"+*"%# $%* #$+e# to te%$%t# )%*er Rep)b+" -t N)mbere*T!"rt;e"!t !)%*re* &ort;&o)r $# $me%*e* b Rep)b+" -t N)mbere* S"@t;t!ree!)%*re* e"!t;%"%e, (!ere t!e b)er !$# p$"* $t +e$#t t(o e$r# o& "%#t$++me%t#, t!eb)er "# e%t"t+e* to t!e &o++o("% r"!t# "% $#e !e *e&$)+t# "% t!e p$me%t o)ee*"% "%#t$++me%t#/$To p$, ("t!o)t $**"t"o%$+ "%tere#t, t!e )%p$"* "%#t$++me%t# *)e ("t!"% t!e tot$+ r$e

per"o* e$r%e* b !"m, (!"! "# !ereb =@e* $t t!e r$te o& o%e mo%t! r$eper"o* &or e'er o%e e$r o& "%#t$++me%t p$me%t# m$*e :ro'"*e*, T!$t t!"#r"!t #!$++ be e@er"#e* b t!e b)er o%+ o%e "% e'er ='e e$r# o& t!e +"&e o&t!e o%tr$t $%* "t# e@te%#"o%#, "& $%. -TSI

/bIf th !"#t$%!t &' !%#!(()* th '(($ 'h%(( $f+#) t" th ,+-$ th !%'h'+$$#)$ %(+ "f th /%-0#t' "# th /$"/$t- e>)"'$+e%t to =&tpere%t o& t!e tot$+ p$me%t# m$*e $%*, $&ter ='e e$r# o& "%#t$++me%t#, $%$**"t"o%$+ ='e pere%t e'er e$r b)t %ot to e@ee* %"%et pere%t o& t!e tot$+p$me%t# m$*e Provided,Th%t th %!t+%( !%#!((%t&"# "f th !"#t$%!t'h%(( t% /(%! %ft$ th&$t- )%-' f$"0 $!&/t ,- th ,+-$ "fth #"t&! "f !%#!((%t&"# "$ th )0%#) f"$ $'!&''&"# "f th !"#t$%!t,- % #"t%$&%( %!t %#) +/"# f+(( /%-0#t "f th !%'h '+$$#)$ %(+ t"

th ,+-$.R.-. No. 6552, ot!er("#e 8%o(% $# t!e Re$+t I%#t$++me%t )er :rotet"o% -t, reo%"

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%ot"e o& $%e++$t"o% or *em$%* &or re#"##"o% b %ot$r"$+ $t $%* t!$t t!e $#! #)rre%*er '$+)e o& t!ep$me%t# o% t!e propert !$# bee% $pp+"e* to re%t$+# &or t!e )#e o& t!e !o)#e $%* +ot $&ter re#po%*e%t#toppe* p$me%t $&ter $%)$r 19?0.T!e o)rt, !o(e'er, =%*# t!$t t!e +etter11*$te* Febr)$r 24, 1997, (!"! ($# (r"tte% b pet"t"o%er#o)%#e+, mere+ m$*e &orm$+ *em$%* )po% re#po%*e%t to '$$te t!e prem"#e# "% >)e#t"o% ("t!"% ='e*$# &rom ree"pt t!ereo& #"%e #!e !$* +o% e$#e* to !$'e $% r"!t to po##e## t!e prem"#e# . . . *)eto [!er] &$"+)re to p$ ("t!o)t B)#t"=$b+e $)#e t!e "%#t$++me%t p$me%t# . . . . DST$+e$r+, t!e *em$%* +etter "# %ot t!e #$me $# t!e %ot"e o& $%e++$t"o% or *em$%* &or re#"##"o% ,- %#"t%$&%($t re>)"re* b R.- No. 6552. :et"t"o%er $%%ot re+ o% Layug v. Intermediate !ppeate

Court12to #)pport !"# o%te%t"o% t!$t t!e *em$%* +etter ($# #)"e%t omp+"$%e. Layug!e+* t!$tt!e $**"t"o%$+ &orm$+"t o& $ *em$%* o% [t!e #e++er#] p$rt &or re#"##"o% b %ot$r"$+ $t (o)+* $ppe$r,"% t!e prem"#e#, to be mere+ "r)"to)# $%* o%#e>)e%t+ #)perJ)o)# #"%e t!e #e++er t!ere"% =+e* $%$t"o% &or%##+(0#t "f !"#t$%!t, (!"! "# $ 8"%*re* o%ept o& re#"##"o% b %ot$r"$+$t. 13'"*e%t+, t!e $#e o& )%+$(&)+ *et$"%er =+e* b pet"t"o%er *oe# %ot e@empt !"m &rom omp+"%("t! t!e #$"* re>)"reme%t.I% $**"t"o%, Se. 3 /b o& R.-. No. 6552 re>)"re# re&)%* o& t!e $#! #)rre%*er '$+)e o& t!e p$me%t# o%t!e propert to t!e b)er be&ore $%e++$t"o% o& t!e o%tr$t. T!e pro'"#"o% *oe# %ot pro'"*e $ *"Cere%tre>)"reme%t &or o%tr$t# to #e++ (!"! $++o( po##e##"o% o& t!e propert b t!e b)er )po% e@e)t"o% o&t!e o%tr$t +"8e t!e "%#t$%t $#e. e%e, pet"t"o%er $%%ot "%#"#t o% omp+"$%e ("t! t!e re>)"reme%tb $##)m"% t!$t t!e $#! #)rre%*er '$+)e p$$b+e to t!e b)er !$* bee% $pp+"e* to re%t$+# o& t!epropert $&ter re#po%*e%t &$"+e* to p$ t!e "%#t$++me%t# *)e. ID-T!ere be"% %o '$+"* $%e++$t"o% o& t!e o%tr$t to Se++, t!e - orret+ reo%")"t$b+e )%*er t!e prem"#e#. e%e, t!e r"!t# o& t!e p$rt"e# o'er t!e #)bBetpropert #!$++ be re#o+'e* to =%$++ *"#po#e o& t!$t "##)e "% t!"# $#e. -$Do%#"*er"% t!$t t!e o%tr$t to Se++ ($# %ot $%e++e* b t!e 'e%*or, :$tr""o, *)r"% !"# +"&et"me or bpet"t"o%er "% $or*$%e ("t! R.-. No. 6552 (!e% pet"t"o%er =+e* t!"# $#e o& )%+$(&)+ *et$"%er $&ter 22e$r# o& o%t"%)o)# po##e##"o% o& t!e propert b re#po%*e%t (!o !$# p$"* t!e #)b#t$%t"$+ $mo)%t o&:12,300 o)t o& t!e p)r!$#e pr"e o& :17,?00, t!e o)rt $ree# ("t! t!e - t!$t "t "# o%+ r"!t $%* B)#tto $++o( re#po%*e%t to p$ !er $rre$r# $%* #ett+e t!e b$+$%e o& t!e p)r!$#e pr"e.For re#po%*e%t# *e+$ "% t!e p$me%t o& t!e "%#t$++me%t#, t!e o)rt, "% "t# *"#ret"o%, $%* $pp+"%-rt"+e 2209 14o& t!e "'"+ o*e, m$ $($r* "%tere#t $t t!e r$te o& 6K per $%%)m 15o% t!e )%p$"*b$+$%e o%#"*er"% t!$t t!ere "# %o #t"p)+$t"o% "% t!e o%tr$t to Se++ &or #)! "%tere#t. For p)rpo#e# o&omp)t"% t!e +e$+ "%tere#t, t!e re8o%"% per"o* #!o)+* be t!e =+"% o& t!e omp+$"%t &or )%+$(&)+*et$"%er o% -pr"+ ?, 1997. D$-S$#e* o% re#po%*e%t# e'"*e%e 16o& p$me%t# m$*e, t!e T &o)%* t!$t re#po%*e%t p$"* $ tot$+ o&:12,300 o)t o& t!e p)r!$#e pr"e o& :17,?00. e%e, re#po%*e%t #t"++ !$# $ b$+$%e o& :5,500, p+)#+e$+ "%tere#t $t t!e r$te o& 6K per $%%)m o% t!e )%p$"* b$+$%e #t$rt"% -pr"+ ?, 1997.T!e t!"r* "##)e "# *"#re$r*e* #"%e pet"t"o%er $##$"+# $% "%e@"#te%t r)+"% o& t!e RT o% t!e +$8 o&B)r"#*"t"o% o& t!e T o'er $ re#"##"o% $#e (!e% t!e "%#t$%t $#e !e =+e* "# &or )%+$(&)+*et$"%er. S-IRFOR, t!e De"#"o% o& t!e o)rt o& -ppe$+# *$te* Otober 30, 2000 #)#t$"%"% t!e *"#m"##$+ o&t!e )%+$(&)+ *et$"%er $#e b t!e RT "# -FFIRD ("t! t!e &o++o("% ODIFI-TIONS

1.Re#po%*e%t R)=%$ De+$ r)< V*$. *e $%