G.R. No. 27876. April 22, 1992.

* litem in the case of the minors, the notice may be given to such
counsel or guardian ad litem. In this case, however, only the
ADELAIDA S. MANECLANG, in her capacity as surviving spouse, Severo Maneclang, was notified through his
Administrator of the Intestate Estate of the late Margarita counsel. Two of the heirs, Hector Maneclang and Oscar
Suri Santos, plaintiff-appellee, vs. JUAN T. BAUN and Maneclang, who were then of legal age, were not represented by
AMPARO S. BAUN, ET AL., defendants. CITY OF counsel. The remaining seven (7) children were still minors with
DAGUPAN, defendant-appellant. no guardian ad litem having been appointed to represent them.
Special Proceedings; Settlement of Estates; For purposes of Obviously then, the requirement of notice was not satisfied. The
complying with the requirement of notice under Rule 89 of the requisites set forth in the aforesaid sections of Rule 89 are
Rules of Court, it does not follow that notice to the father is mandatory and essential. Without them, the authority to sell, the
notice to the children.—Article 320 of the present Civil Code, sale itself and the order approving it would be null and void ab
taken from the aforesaid Article 159, incorporates the initio.
amendment that if the property under administration is worth Same; Same; For want of notice to the children, the order of 9
more than two thousand pesos (P2,000.00), the father or the September 1949 granting the application, the sale in question of
mother shall give a bond subject to the approval of the Court of 4 October 1952 and the Order of 15 March 1954 approving the
First Instance. This provision then restores the old rule which sale are all void ab initio as against the children.—Consequently,
made the father or mother, as such, the administrator of the for want of notice to the children, the Order of 9 September 1949
child’s property. Be that as it may, it does not follow that for granting the application, the sale in question of 4 October 1952
purposes of complying with the requirement of notice under and the Order of 15 March 1954 approving the sale are all void
Rule 89 of the Rules of Court, notice to the father is notice to the ab initio as against said children.
children. Sections 2, 4 and 7 of said Rule state explicitly that the
notice, which must be in writing, must be given to the heirs, Same; Same; Civil Law; Estoppel; A decedent’s representative
devisees, and legatees and that the court shall fix a time and is not estopped to question the validity of his own void deed
place for hearing such petition and cause notice to be given to purporting to convey land and if this be true of the administrator
the interested parties. as to his own acts, a fortiori, his successor cannot be estopped to
question the acts of his predecessor are not conformable to
Same; Same; Requirement of notice under Sections 2, 4 and 7 of law.—As to the former, this Court, in Boñaga vs. Soler, supra,
Rule 89, mandatory and essential.—There can be no dispute that reiterated the rule “that a decedent’s representative is not
if the heirs were duly represented by counsel or by a guardian ad estopped to question the validity of his own void deed purporting

Page 1 of 15
to convey land; and if this be true of the administrator as to his even before the effectivity of the new Civil Code.—As to
own acts, a fortiori, his successor can not be estopped to question prescription, this Court ruled in the Boñaga case that “[a]ctions
the acts of his predecessor are not conformable to law.” Not to declare the inexistence of contracts do not prescribe [Art.
being the party who petitioned the court for authority to sell and 1410, N.C.C.), a principle applied even before the effectivity of
who executed the sale, she cannot be held liable for any act or the new Civil Code.
omission which could give rise to estoppel. Under Article 1431
of the Civil Code, through estoppel an admission or Same; Same; Same; Laches; The defense of laches applies
representation is rendered conclusive upon the person making it, independently of prescription.—Laches is different from
and cannot be denied or disproved as against the person relying prescription. As this Court held in Nielson & Co., Inc. vs.
thereon. Lepanto Consolidated Mining Co., the defense of laches applies
independently of prescription. While prescription is concerned
Same; Same; Same; Same; Requisites for estoppel by pais and with the fact of delay, laches is concerned with the effect of
estoppel by conduct.—In estoppel by pais, as related to the party delay. Prescription is a matter of time; laches is principally a
sought to be estopped, it is necessary that there be a concurrence question of inequity of permitting a claim to be enforced, this
of the following requisites: (a) conduct amounting to false inequity being founded on some change in the condition of the
representation or concealment of material facts or at least property or the relation of the parties. Prescription is statutory;
calculated to convey the impression that the facts are otherwise laches is not. Laches applies in equity, whereas prescription
than, and inconsistent with, those which the party subsequently applies at law. Prescription is based on fixed time, laches is not.
attempts to assert; (b) intent, or at least expectation that this
conduct shall be acted upon, or at least influenced by the other Same; Same; Same; Same; Essential elements of laches.—The
party; and (c) knowledge, actual or constructive of the actual essential elements of laches are the following: (1) conduct on the
facts. In estoppel by conduct, on the other hand, (a) there must part of the defendant, or of one under whom he claims, giving
have been a representation or concealment of material facts; (b) rise to the situation of which complaint is made and for which
the representation must have been with knowledge of the facts; the complaint seeks a remedy; (2) delay in asserting the
(c) the party to whom it was made must have been ignorant of complainant’s rights, the complainant having had knowledge or
the truth of the matter; and (d) it must have been made with the notice of the defendant’s conduct and having been afforded an
intention that the other party would act upon it. opportunity to institute a suit; (3)lack of knowledge or notice on
the part of the defendant that the complainant would assert the
Same; Same; Same; Prescription; Actions to declare the right on which he bases his suit; and (4) injury or prejudice to
inexistence of contracts do not prescribe, a principle applied

Page 2 of 15
the defendant in the event relief is accorded to the complainant, does not appear in the record, that of the filing of the answer
or the suit is not held barred. would control.

Same; Same; Same; Property; Possession; Since good faith is Same; Same; Same; Same; Same; Same; As a possessor in good
always presumed and upon him who alleges bad faith on the part faith, the City of Dagupan was entitled to all the fruits of the
of the possessor rests the burden of proof.—We find no property and was under no obligation to pay any rental to the
circumstance in this case to have alerted the vendee, the City of intestate estate of Margarita for the use thereof.—The date of
Dagupan, to a possible flaw or defect in the authority of the service of summons to the City of Dagupan in Civil Case No. D-
judicial administrator to sell the property. Since good faith is 1785 is not clear from the record. Its Answer, however, was filed
always presumed, and upon him who alleges bad faith on the on 5 November 1965. Accordingly, its possession in good faith
part of the possessor rests the burden of proof, it was incumbent must be considered to have lasted up to that date. As a possessor
upon the administrator to establish such proof, which We find to in good faith, it was entitled to all the fruits of the property and
be wanting. However, Article 528 of the Civil Code provides was under no obligation to pay any rental to the intestate estate
that: “Possession acquired in good faith does not lose this of Margarita for the use thereof. Under Article 544 of the Civil
character except in the case and from the moment facts exist Code, a possessor in good faith is entitled to the fruits received
which show that the possessor is not unaware that he possesses before the possession is legally interrupted.
the thing improperly or wrongfully.” The filing of a case
alleging bad faith on the part of a vendee gives cause for APPEAL from the decision of the then Court of First Instance
cessation of good faith. of Pangasinan (Dagupan City).

Same; Same; Same; Same; Same; Same; If there are no other

facts from which the interruption of good faith may be The facts are stated in the opinion of the Court.
determined, and an action is filed to recover possession, good
faith ceases from the date of receipt of the summons to appear at Emerito M. Salva & Associates for plaintiff-appellee.
the trial and if such date does not appear in the record, that of
The Law Firm of Volfango and Sales for defendant-
the filing of the answer would control.—In Tacas vs. Tobon, this
appellant.
Court held that if there are no other facts from which the
interruption of good faith may be determined, and an action is DAVIDE, JR., J.:
filed to recover possession, good faith ceases from the date of
receipt of the summons to appear at the trial and if such date

Page 3 of 15
The issue presented in this case is the validity of a sale of a parcel No guardian ad litem was appointed by the court for the minor
of land by the administrator of an intestate estate made pursuant children.
to a petition for authority to sell and an order granting it which
were filed and entered, respectively, without notice to the heirs Margarita left several parcels of land, among which is Lot No.
of the decedent. 203 of the Cadastral Survey of Dagupan City containing an area
of 7,401 square meters, more or less, and covered by Transfer
The records disclose that on 12 June 1947, Margarita Suri Santos Certificate of Title No. 1393.
died intestate. She was survived by her husband Severo
Maneclang and nine (9) children. On 30 July 1947, a petition for On 2 September 1949, Pedro M. Feliciano, the administrator of
the settlement of her estate was filed by Hector S. Maneclang, the intestate estate of Margarita, filed a petition in SP Proc. No.
one of her legitimate children, with the Court of First Instance at 3028 asking the court to give him “the authority to dispose of so
Dagupan City, Pangasinan; the case was docketed as Special much of the estate that is necessary to meet the debts
Proc. No. 3028. At the time of the filing of the petition, the ages enumerated” in the petition. While notice thereof was given to
of her children were as follows: the surviving spouse, Severo Maneclang, through his counsel,
Atty. Teofilo Guadiz, no such notice was sent to the heirs of
Hector Maneclang—21 years old Margarita.

Cesar Maneclang—19 On 9 September 1949, despite the absence of notice to the heirs,
the intestate court issued an Order “authorizing the administrator
Oscar Maneclang—17 to mortgage or sell so much of the properties of the estate for the
Amanda Maneclang—16 purposes (sic) of paying off the obligations” referred to in the
petition.
Adelaida Maneclang—13
Pursuant to this Order, Oscar Maneclang, the new administrator
Linda Maneclang—7 of the intestate estate, executed on 4 October 1952 a deed of
sale1 in favor of the City of Dagupan, represented by its mayor,
Priscila Maneclang—6
Angel B. Fernandez, of a portion consisting of 4,515 square
Natividad Maneclang—3 meters of the aforementioned Lot No. 203 for and in
consideration of P11,687.50. This sale was approved by the
Teresita Maneclang—2 intestate court on 15 March 1954.

Page 4 of 15
The City of Dagupan immediately took possession of the land plaintiff is barred by estoppel and by laches; (d) it is a buyer in
and constructed thereon a public market, known as the Perez good faith, and (e) it has introduced necessary and useful
Boulevard Public Market, at a cost of P100,000.00, more or less. improvements and constructed a supermarket worth
It has been in continuous and uninterrupted possession of the P200,000.00; hence, assuming arguendo that the sale was illegal,
property since the construction of the market.2 it has the right to retain the land and the improvements until it is
reimbursed for the said improvements.
Some other parcels of land belonging to the intestate estate were
sold by the administrator pursuant to the same authority granted On March 30 March 1966, plaintiff and the City of Dagupan
by the 9 September 1949 Order.3 On 28 September 1965, the entered into a Stipulation of Facts wherein they agreed on the
new judicial administratrix of the intestate estate, Adelaida S. facts earlier adverted to. They, however, agreed: (a) to adduce
Maneclang, daughter of the late Margarita Suri Santos, filed evidence concerning the reasonable rental of the property in
with the Court of First Instance of Pangasinan an action for the question and other facts not embodied therein but which are
annulment of the sales made by the previous administrator material and vital to the final determination of the case, and (b)
pursuant to the Order of 9 September 1949, cancellation of titles, to request the court to take judicial notice of SP Proc. No. 3028.
recovery of possession and damages against the vendees Juan T.
Baun and Amparo Baun, Marcelo Operaña and Aurora The evidence adduced by plaintiff discloses that Oscar
Pagurayan, Crispino Tan-doc and Brigida Tandoc, Jose Infante Maneclang was induced by its then incumbent Mayor, Atty.
and Mercedes Uy Santos, Roberto Cabugao, Basilisa Callanta Angel B. Fernandez, to sell the property to the City of Dagupan
and Fe Callanta, Ricardo Bravo and Francisca Estrada, the City and that the said City has been leasing the premises out to
of Dagupan, and Constantino Daroya and Marciana Caramat.4 numerous tenants at the rate of P0.83 per square meter per
The complaint was docketed as Civil Case No. D-1785. The month, or a total monthly rental of P3,747.45, since 4 October
cause of action against the City of Dagupan centers around the 1952.6
deed of sale executed in its favor on 4 October 1952 by former On 9 November 1966, the trial court rendered a partial decision
judicial administrator Oscar S. Maneclang. In its Answer filed in Civil Case No. D-1785 against the City of Dagupan, the
on 5 November 1965,5 the City of Dagupan interposed the dispositive portion of which reads as follows:
following affirmative defenses: (a) the sale in its favor is valid,
legal and above board; (b) plaintiff has no cause of action against “IN VIEW OF THE FOREGOING CONSIDERATIONS, the
it, or that the same, if any, had prescribed since the complaint Court hereby renders judgment:
was filed thirteen (13) years after the execution of the sale; (c)

Page 5 of 15
(a) Annulling (sic) the Deed of Sale executed by the to be deducted from the amount due the plaintiff from said
Administrator on October 4, 1952 (Exh. F) being null and void defendant.
ab initio;
Defendant shall also pay the costs.
(b) Ordering the cancellation of the Certificate of Title issued in
favor of the defendant City of Dagupan by virtue of said Deed SO ORDERED.”7
of Sale, and directing the Register of Deeds of said City to issue In arriving at the said disposition, the trial court held that:
a new Certificate of Title in favor of the plaintiff as
Administratrix covering the property in question; (a) Under Rule 90 of the Rules of Court,8 which is similar to the
provisions of Section 722 of the Code of Civil Procedure, it is
(c) Ordering the defendant City of Dagupan to restore the essential and mandatory that the interested parties be given
possession to the plaintiff in her capacity as Judicial notices of the application for authority to sell the estate or any
Administratrix of the Intestate Estate of Margarita Suri Santos portion thereof which is pending settlement in a probate court.
of the parcel of land in question, together with all the As held in the early case of Estate of Gamboa vs. Floranza ,9 an
improvements thereon existing; order issued by a probate court for the sale of real property
(d) Ordering the defendant City of Dagupan to pay the plaintiff belonging to the estate of a deceased person would be void if no
the sum of P584,602.20 as accumulated rentals or reasonable notice for the hearing of the petition for such sale is given as
value of the use of the property in question from October 4, 1952 required by said Section 722. Under this section, when such a
up to the filing of the complaint in 1965, plus interest thereon at petition is made, the court shall designate a time and place for
the rate of 6% per annum from the later date; the hearing and shall require notice of the petition and of the time
and place of such hearing to be given in a newspaper of general
(e) Ordering the defendant City of Dagupan to pay a monthly circulation; moreover, the court may require the giving of such
rental or reasonable value of its occupation of the premises in further notice as it deems proper.
the amount of P3,747.45 from October 9, 1965 up to the date the
possession of the premises is delivered (sic) the plaintiff by said In the instant case, no notice of the application was given to the
defendant, and heirs; hence, both the order granting authority to sell and the
deed of sale executed in favor of the City of Dagupan pursuant
(f) Ordering the plaintiff to reimburse the defendant City of thereto, are null and void.
Dagupan the sums of P100,000.00 and P11,687.50 both amounts

Page 6 of 15
(b) Estoppel does not lie against plaintiff as no estoppel can be In its Brief, the City of Dagupan submits the following assigned
predicated on an illegal act and estoppel is founded on errors:
ignorance. In the instant case, the nullity is by reason of the non-
observance of the requirements of law regarding notice; this “FIRST ERROR
legal defect or deficiency deprived the probate court of its
jurisdiction to dispose of the property of the estate. Besides, the
City of Dagupan was represented in the transaction by lawyers THE LOWER COURT ERRED IN HOLDING THAT THE
who are presumed to know the law. This being the case, they SALE EXECUTED BY THE JUDICIAL ADMINISTRATOR
should not be allowed to plead estoppel; finally, estoppel cannot TO THE CITY OF DAGUPAN IS NULL AND VOID AB
give validity to an act which is prohibited by law or is against INITIO.
public policy.10
SECOND ERROR
(c) Laches and prescription do not apply. The deed of sale being
void ab initio, it is in contemplation of law inexistent and
therefore the right of the plaintiff to bring the action for the THE LOWER COURT ERRED IN HOLDING THAT
declaration of inexistence of such contract does not prescribe. PLAINTIFF IS NOT IN ESTOPPEL FROM ASSAILING THE
LEGALITY OF THE SALE.
(d) The City of Dagupan is not a purchaser in good faith and for
value as the former judicial administrator, Oscar Maneclang, THIRD ERROR
testified that he was induced by then incumbent Mayor of the
City Atty. Angel B. Fernandez, and by then City Councilor Atty.
Teofilo Guadiz, Sr. to sell the property; moreover, the City
THE LOWER COURT ERRED IN HOLDING THAT THE
Fiscal signed as witness to the deed of sale. These lawyers are
INSTANT ACTION IS NOT BARRED BY LACHES AND
presumed to know the law.
PRESCRIPTION.
Not satisfied with the decision, the City of Dagupan appealed to
FOURTH ERROR
this Court12 alleging that said decision is contrary to law, the
facts and the evidence on record, and that the amount involved
exceeds P500,000.00.

Page 7 of 15
THE LOWER COURT ERRED IN DECLARING THAT 1. In support of the first, appellant maintains that notice of the
DEFENDANT CITY OF DAGUPAN IS NOT A PURCHASER application for authority to sell was given to Severo Maneclang,
IN GOOD FAITH AND FOR VALUE. surviving spouse of Margarita. As the designated legal
representative of the minor children in accordance with Article
FIFTH ERROR 320 of the Civil Code, notice to him is deemed sufficient notice
to the latter; moreover, after Oscar Maneclang signed the deed
of sale13 in his capacity as judicial administrator, he “sent
THE LOWER COURT ERRED IN ORDERING copies of his annual report and the deed of sale to Severo
DEFENDANT CITY OF DAGUPAN TO PAY THE Maneclang, and his brothers Hector Maneclang and Oscar
PLAINTIFF THE SUM OF P584,602.20 AS Maneclang and sister Amanda Maneclang, all of legal ages (sic),
ACCUMULATED RENTALS OR REASONABLE VALUE while the other minor heirs received theirs through his
OF (sic) THE USE OF THE PROPERTY IN QUESTION lawyer.”14 Besides, per Flores vs. Ang Bansing,15 the sale of
FROM OCTOBER 4, 1952 UP TO THE FILING OF THE property by the judicial administrator cannot be set aside on the
COMPLAINT IN 1965, PLUS INTEREST THEREON AT sole ground of lack of notice.
THE RATE OF 6% PER ANNUM FROM THE LATER DATE.
These contentions are without merit.
SIXTH ERROR
Article 320 of the Civil Code does not apply. While the petition
for authority to sell was filed on 2 September 1949, the Civil
Code took effect only on 30 August 1950.16 Thus, the governing
THE LOWER COURT ERRED IN ORDERING THE
law at the time of the filing of the petition was Article 159 of the
DEFENDANT CITY OF DAGUPAN TO PAY A MONTHLY
Civil Code of Spain which provides as follows:
RENTAL OR REASONABLE VALUE OF (sic) ITS
OCCUPATION OF THE PREMISES IN THE AMOUNT OF “The father, or in his default, the mother, shall be the legal
P3,747.45 FROM OCTOBER 9, 1965 UP TO THE DATE THE administrator of the property of the children who are subject to
POSSESSION OF THE PREMISES IS DELIVERED TO THE parental authority.”
PLAINTIFF BY SAID DEFENDANT.”
However, the provisions of the Code of Civil Procedure on
We shall consider these assigned errors sequentially. guardianship impliedly repealed those of the Civil Code relating
to that portion of the patria potestad (parental authority) which
gave to the parents the administration and usufruct of their minor
Page 8 of 15
children’s property; said parents were however entitled, under the authority to sell, the sale itself and the order approving it
normal conditions, to the custody and care of the persons of their would be null and void ab initio.19 The reason behind this
minor children.17 requirement is that the heirs, as the presumptive owners20 since
they succeed to all the rights and obligations of the deceased
Article 320 of the present Civil Code, taken from the aforesaid from the moment of the latter’s death,21 are the persons directly
Article 159, incorporates the amendment that if the property affected by the sale or mortgage and therefore cannot be
under administration is worth more than two thousand pesos deprived of the property except in the manner provided by law.
(P2,000.00), the father or the mother shall give a bond subject to
the approval of the Court of First Instance. This provision then Consequently, for want of notice to the children, the Order of 9
restores the old rule18 which made the father or mother, as such, September 1949 granting the application, the sale in question of
the administrator of the child’s property. Be that as it may, it 4 October 1952 and the Order of 15 March 1954 approving the
does not follow that for purposes of complying with the sale are all void ab initio as against said children. Severo
requirement of notice under Rule 89 of the Rules of Court, notice Maneclang, however, stands on different ground altogether.
to the father is notice to the children. Sections 2, 4 and 7 of said Having been duly notified of the application, he was bound by
Rule state explicitly that the notice, which must be in writing, the said order, sale and approval of the latter. However, the only
must be given to the heirs, devisees, and legatees and that the interest which Severo Maneclang would have over the property
court shall fix a time and place for hearing such petition and is his right of usufruct which is equal to that corresponding by
cause notice to be given to the interested parties. way of legitime pertaining to each of the surviving children
pursuant to Article 834 of the Civil Code of Spain, the governing
There can be no dispute that if the heirs were duly represented law at that time since Margarita Suri Santos died before the
by counsel or by a guardian ad litem in the case of the minors, effectivity of the Civil Code of the Philippines.
the notice may be given to such counsel or guardian adlitem. In
this case, however, only the surviving spouse, Severo 2. Estoppel is unavailable as an argument against the
Maneclang, was notified through his counsel. Two of the heirs, administratrix of the estate and against the children.
Hector Maneclang and Oscar Maneclang, who were then of legal
age, were not represented by counsel. The remaining seven (7) ______________
children were still minors with no guardian ad litem having been
appointed to represent them. Obviously then, the requirement of
notice was not satisfied. The requisites set forth in the aforesaid 19 Boñaga vs. Soler, supra., citing Arcilla vs. David, 77 Phil.
sections of Rule 89 are mandatory and essential. Without them, 718 [1946] and Gabriel vs. Encarnacion, L-6736, 4 May 1954.

Page 9 of 15
See also The Estate of Luis Gamboa Carpizo vs. Floranza, 12 the truth of the matter; and (d) it must have been made with the
Phil. 191 [1908], applying and interpreting a similar provision intention that the other party would act upon it.25
of the Code of Civil Procedure.
As to the latter, considering that, except as to Oscar Maneclang
As to the former, this Court, in Boñaga vs. Soler, supra, who executed the deed of sale in his capacity as judicial
reiterated the rule “that a decedent’s representative is not administrator, the rest of the heirs did not participate in such sale,
estopped to question the validity of his own void deed purporting and considering further that the action was filed solely by the
to convey land;22 and if this be true of the administrator as to administratrix without the children being impleaded as parties
his own acts, a fortiori, his successor can not be estopped to plaintiffs or intervenors, there is neither rhyme nor reason to
question the acts of his predecessor are not conformable to hold these heirs in estoppel. For having executed the deed of
law.”23 Not being the party who petitioned the court for sale, Oscar Maneclang is deemed to have assented to both the
authority to sell and who executed the sale, she cannot be held motion for and the actual order granting the authority to sell.
liable for any act or omission which could give rise to estoppel. Estoppel operates solely against him.
Under Article 1431 of the Civil Code, through estoppel an
admission or representation is rendered conclusive upon the 3. As to prescription, this Court ruled in the Boñaga case that
person making it, and cannot be denied or disproved as against “[a]ctions to declare the inexistence of contracts do not prescribe
the person relying thereon. In estoppel by pais, as related to the [Art. 1410, N.C.C.), a principle applied even before the
party sought to be estopped, it is necessary that there be a effectivity of the new Civil Code. (Eugenio, et al. vs. Perdido, et
concurrence of the following requisites: (a) conduct amounting al., supra., citing Tipton vs. Velasco, 6 Phil. 67, and Sabas vs.
to false representation or concealment of material facts or at least Germa, 66 Phil. 471).”
calculated to convey the impression that the facts are otherwise 4. Laches is different from prescription. As this Court held in
than, and inconsistent with, those which the party subsequently Nielson & Co., Inc. vs. Lepanto Consolidated Mining Co.,26 the
attempts to assert; (b) intent, or at least expectation that this defense of laches applies independently of prescription. While
conduct shall be acted upon, or at least influenced by the other prescription is concerned with the fact of delay, laches is
party; and (c) knowledge, actual or constructive of the actual concerned with the effect of delay. Prescription is a matter of
facts.24 In estoppel by conduct, on the other hand, (a) there must time; laches is principally a question of inequity of permitting a
have been a representation or concealment of material facts; (b) claim to be enforced, this inequity being founded on some
the representation must have been with knowledge of the facts; change in the condition of the property or the relation of the
(c) the party to whom it was made must have been ignorant of parties. Prescription is statutory; laches is not. Laches applies in

Page 10 of 15
equity, whereas prescription applies at law. Prescription is based Cesar Maneclang
on fixed time, laches is not.
Oscar Maneclang
The essential elements of laches are the following: (1) conduct
on the part of the defendant, or of one under whom he claims, Amanda Maneclang
giving rise to the situation of which complaint is made and for Adelaida Maneclang
which the complaint seeks a remedy; (2) delay in asserting the
complainant’s rights, the complainant having had knowledge or Linda Maneclang
notice of the defendant’s conduct and having been afforded an
Priscila Maneclang
opportunity to institute a suit; (3) lack of knowledge or notice on
the part of the defendant that the complainant would assert the Natividad Maneclang
right on which he bases his suit; and (4) injury or prejudice to
the defendant in the event relief is accorded to the complainant, Teresita Maneclang
or the suit is not held barred.
It is an undisputed fact that the City of Dagupan immediately
In the instant case, from the time the deed of sale in favor of the took possession of the property and constructed thereon a public
City of Dagupan was executed on 4 October 1952, up to the time market; such possession was open, uninterrupted and
of the filing of the complaint for annulment on 28 September continuous. Obviously, Hector, Cesar, Oscar and Amanda were
1965, twelve (12) years, ten (10) months and twenty-four (24) already of legal age when the deed of sale was executed. As it
days had elapsed. was Oscar who executed the deed of sale, he cannot be expected
to renounce his own act. With respect to Hector, Cesar and
The respective ages of the children of Margarita Suri Santos on Amanda, they should have taken immediate steps to protect their
these two dates were, more or less, as follows: rights. Their failure to do so for thirteen (13) years amounted to
such inaction and delay as to constitute laches. This conclusion,
however, cannot apply to the rest of the children—Adelaida,
Upon execution of the deed of sale Linda, Priscila, Natividad and Teresita—who were then minors
and not represented by any legal representative. They could not
At the filing of the complaint have filed an action to protect their interest; hence, neither delay
Hector Maneclang nor negligence could be attributed to them as a basis for laches.

Page 11 of 15
Accordingly, the estate is entitled to recover 5/9 of the the vendee, the City of Dagupan, to a possible flaw or defect in
questioned property. the authority of the judicial administrator to sell the property.
Since good faith is always presumed, and upon him who alleges
5. In ruling out good faith, the trial court took into account the bad faith on the part of the possessor rests the burden of proof,30
testimony of Oscar Maneclang to the effect that it was Mayor it was incumbent upon the administrator to establish such proof,
Fernandez of Dagupan City and Councilor Teofilo Guadiz, Sr., which We find to be wanting. However, Article 528 of the Civil
both lawyers, who induced him to sell the property and that the Code provides that: “Possession acquired in good faith does not
execution of the sale was witnessed by the City Fiscal. lose this character except in the case and from the moment facts
We are unable to agree. exist which show that the possessor is not unaware that he
possesses the thing improperly or wrongfully.” The filing of a
While the order granting the motion for authority to sell was case alleging bad faith on the part of a vendee gives cause for
actually issued on 9 September 1949, the same was secured cessation of good faith.
during the incumbency of the then judicial administrator Pedro
Feliciano. Even if it is to be assumed that Mayor Fernandez and In Tacas vs. Tobon,31 this Court held that if there are no other
Councilor Guadiz induced Oscar Maneclang to sell the property, facts from which the interruption of good faith may be
the fact remains that there was already the order autho-rizing the determined, and an action is filed to recover possession, good
sale. Having been issued by a judge who was lawfully appointed faith ceases from the date of receipt of the summons to appear at
to his position, he was disputably presumed to have acted in the the trial and if such date does not appear in the record, that of
lawful exercise of jurisdiction and that his official duty was the filing of the answer would control.32
regularly performed.28 It was not incumbent upon them to go The date of service of summons to the City of Dagupan in Civil
beyond the order to find out if indeed there was a valid motion Case No. D-1785 is not clear from the record. Its Answer,
for authority to sell. Otherwise, no order of any court can be however, was filed on 5 November 1965. Accordingly, its
relied upon by the parties. Under Article 526 of the Civil Code, possession in good faith must be considered to have lasted up to
a possessor in good faith is one who is not aware that there exists that date. As a possessor in good faith, it was entitled to all the
in his title or mode of acquisition any flaw which invalidates it; fruits of the property and was under no obligation to pay any
furthermore, mistake upon a doubtful or difficult question of law rental to the intestate estate of Margarita for the use thereof.
may be the basis of good faith. It implies freedom from Under Article 544 of the Civil Code, a possessor in good faith is
knowledge and circumstances which ought to put a person on entitled to the fruits received before the possession is legally
inquiry.29 We find no circumstance in this case to have alerted interrupted. Thus, the trial court committed an error when it

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ordered the City of Dagupan to pay accumulated rentals in the monthly. It is the opinion of this Court that the reasonable
amount of P584,602.20 from 4 October 1952 up to the filing of compensation for the use of the property should be fixed at
the complaint. P1,000.00 a month. Taking into account the fact that Severo
Maneclang, insofar as his usufructuary right is concerned, but
6. However, upon the filing of the Answer, the City of Dagupan only until his death, is precluded from assailing the sale, having
already became a possessor in bad faith. This brings Us to the been properly notified of the motion for authority to sell and
issue of reasonable rentals, which the trial court fixed at considering further that the heirs, Hector, Cesar, Oscar and
P3,747.45 a month. The basis therefor is the monthly earnings Amanda, all surnamed Maneclang, are, as discussed above,
of the city from the lessees of the market stalls inside the Perez barred by laches, only those portions of the monthly rentals
Boulevard Supermarket. The lessees were paying rental at the which correspond to the presumptive shares of Adelaida, Linda,
rate of P0.83 per square meter. Appellant maintains that this is Priscila, Natividad and Teresita, all surnamed Maneclang, to the
both unfair and unjust. The property in question is located near extent untouched by the usufructuary right of Severo
the Chinese cemetery and at the time of the questioned sale, it Maneclang, should be paid by the City of Dagupan. There is no
had no access to the national road, was located “in the showing as to when Severo Maneclang died; this date of death
hinterland” and, as admitted by the former judicial is necessary to be able to determine the cessation of his
administrator, Oscar Maneclang, the persons who built houses usufructuary right and the commencement of the full enjoyment
thereon prior to the sale paid only P6.00 to P8.00 as monthly of the fruits of the property by the unaffected heirs. Under the
rentals and the total income from them amounted only to P40.00 circumstances, and for facility of computation, We hereby fix
a month. Appellant contends that it is this income which should the presumptive shares in the rentals of the aforenamed
be made the basis for determining the reasonable rental for the unaffected heirs at P500.00 a month, or at P100.00 each,
use of the property. effective 5 November 1965 until the City of Dagupan shall have
There is merit in this contention since indeed, if the rental value effectively delivered to the intestate estate 5/9 of the property in
of the property had increased, it would be because of the question. The latter, however, shall reimburse the City of
construction by the City of Dagupan of the public market and Dagupan of that portion of the real estate taxes it had paid on the
not as a consequence of any act imputable to the intestate estate. land corresponding to 5/9 of the lot commencing from taxable
It cannot, however, be denied that considering that the property year 1965 until said 5/9 part is effectively delivered to the
is located within the city, its value would never decrease; neither intestate estate.
can it be asserted that its price remained constant. On the
contrary, the land appreciated in value at least annually, if not

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Pursuant to Article 546 of the Civil Code, the City of Dagupan thereof effective taxable year 1965 and until the latter shall have
may retain possession of the property until it shall have been been delivered to said intestate estate.
fully reimbursed the value of the building in the amount of
P100,000.00 and 5/9 of the purchase price amounting to SO ORDERED.
P6,493.05. Gutierrez, Jr., Feliciano, Bidin and Romero, JJ., concur.
WHEREFORE, judgment is hereby rendered AFFIRMING the Decision affirmed with modifications.
decision in all respects, except to the extent as above modified.
As modified, (a) the sale in favor of the City of Dagupan, Note.—A party may not go back on his own acts and
executed on 4 October 1952 (Exhibit “F”), is hereby declared representations to the prejudice of the other party who relied
null and void; however, by reason of estoppel and laches as upon them. (Philippine National Bank vs. Intermediate
abovestated, only 5/9 of the subject property representing the Appellate Court, 189 SCRA 680).
presumptive shares of Adelaida, Linda, Priscila, Natividad and
——o0o—— Maneclang vs. Baun, 208 SCRA 179, G.R. No.
Teresita, all surnamed Maneclang, may be recovered; (b)
27876 April 22, 1992
subject, however, to its right to retain the property until it shall
have been refunded the amounts of P100,000.00 and P6,493.05,
the City of Dagupan is hereby ordered to reconvey to the
intestate estate of Margarita Suri Santos 5/9 of the property in
question, for which purpose said parties shall cause the
appropriate partition thereof, expenses for which shall be borne
by them proportionately; and (c) the City of Dagupan is further
ordered to pay reasonable compensation for the use of 5/ 9 of the
property in question at the rate of P500.00 a month from 5
November 1965 until it shall have effectively delivered the
possession of the property to the intestate estate of Margarita
Suri Santos. Upon the other hand, said intestate estate is hereby
ordered to refund to the City of Dagupan that portion of the real
estate taxes the latter had paid for the lot corresponding to 5/9

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