Possession in good faith ceases once defects in title are made known to the possessor by extraneous evidence or by suit for recovery by the owner; interruption takes place upon service of summons.


Mr. Giger sold to Plaintiff Mr. Mercado a piece of property for the price of P3,500 under the terms of a pacto de retro.

Mr.Mercado paid land taxes and planted coconut trees but failed to erect signs of occupancy, nor did he establish a hut. He spent much of his time away at his place of business where he ran a store. He visited the land occasionally only to make copra. Other than this, the place resembled a ghost town.
Mr Wong happened to chance upon the land, and finding no one occupying the same, purchased the property from Mr. Giger. Thereupon, he obtained a TCT, established a hut, populated the place with laborers and fenced the property.

Mr. Mercado returned to the property and was dismayed to find his land occupied. He had the incident blottered and filed for forcible entry against Mr. Wong. He also demanded rentals. Unfortunately, the MTC ruled in favor of Mr. Wong, stating that the latter was in open, actual, prior and continuous possession. On appeal, the CFI reversed and ruled for Mr. Mercado stating that he had taken possession of the property much earlier and that Mr. Wong is the actual intruder. Mr. Wong took the case to the CA which ruled against him.
(interesting note: Wong says Mercado was a mere laborer who was tolerated to gather fruits. How thick faced is that?)


Whether or not Mercado was the real owner


Art. 135 provides that “possession is acquired by the material occupation of a thing or the exercise of a right, or by the fact that it is subject to the action of our will, or by the proper acts and legal formalities for acquiring such right."

The law and jurisprudence indicate that the execution of a sale thru a public instrument shall be equivalent to the delivery of the thing, unless there is stipulation to the contrary . But there’s a catch. Even if there exists the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the purchased thing when such tenancy and enjoyment is opposed by another. In this case, delivery has not been effected.

It is crystal clear that possession passed from William Giger to Mercado by virtue of the first sale. This being the case, , the later sale in favor of thick-faced Wong failed to pass the possession of the property because there is an impediment — the possession exercised by respondent Mercado.
Possession cannot be recognized at the same time in two different personalities except in the cases of co-possession.

Should a question arise regarding the fact of possession, the present possessor shall be preferred; if there are two possessions, the one longer in possession, if the dates of possession are the same, the one who presents a title; and if these conditions are equal, the thing shall be placed in judicial deposit pending determination of its possession or ownership through proper proceedings (Art. 538, Civil Code).
Furthermore, Wong cannot claim good faith to deny Mercado due rentals. The moment he received the complaint of forcible entry and summons, he should have been aware of defects in his title. He owes rentals from that point onwards.