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Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 111737 October 13, 1999

DEVELOPMENT BANK OF TE P!L!PP!NES,petitioner,vs.TE ONORABLE COURT OF APPEALS AND SPOUSES T!MOTEO "#$ SELF!DAS. P!%EDA, respondents.

GON&AGA'RE(ES,J.:

efore us is a Petition for Revie! on Certiorari of the decision of the "ourt of #ppeals 1

in "#$%.R. "V No. &'()* entitled +SPOS-S TIMOT-O PI-D#, ET. AL. vs.D-V-/OPM-NT #N0 O1 TH- PHI/IPPIN-S+ !hich affir2ed the decision of theRe3ional Trial "ourt 4RT"5, ranch 67 ), Ro8as "it9 in "ivil "ase No. V$)(*:, for

cancellation of certificate of t itle and;or specific perfor2ance, accountin3 and da2a3es!ith a pra9er for the issuance of a !rit of preli2inar9 in

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SO ORD-R-D. 11

DP appealed to the "ourt of #ppeals, !hich affir2ed the decision of the RT". The"ourt of #ppeals stated that since DP !as in evident bad faith !hen it unla!full9 tooBpossession of the propert9 sub

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1inall9, considerin3 that DP la!full9 had 2aterial possession of the propert9 after itconsolidated its title, DP !as entitled to the fruits and inco2e thereof pursuant toSection ?), Rule ?* of the Rules of "ourtF

Sec. ?). ,ents and 'rofits 'endin# ,edemption. -tatement thereofand &redit therefor on redemption. The purchaser, fro2 the ti2eof the sale until a rede2ption, and a rede2ptioner, fro2 the ti2e ofhis rede2ption until another rede2ption, is entitled to receive therents of the propert9 sold or the value of the use or occupationthereof !hen such propert9 is in the possession of a tenant. . . .

TaBin3 all this into consideration, DP cannot be faulted for taBin3 over possession ofthe propert9 in @uestion.

The core issue in this case is !hether DP !as in bad faith !hen it tooB possession ofthe disputed lot.

Ge rule in the ne3ative and find DPCs contentions 2eritorious.

# possessor in 3ood faith is one !ho is not a!are that there e8ists in his title or 2odeof ac@uisition an9 fla!, !hich invalidates it. )3%ood faith is al!a9s presu2ed, andupon hi2 !ho alle3es bad faith on the part of a possessor rests the burden of proof. )*It !as therefore incu2bent on the PI-D#S to prove that DP !as a!are of the fla!in its title i.e. the nullit9 of the foreclosure. This, the9 failed to do.

Respondent PI-D#S ar3ue that DPCs bad faith ste2s fro2 the fact that DPconsolidated title over the disputed propert9 despite the state2ent in the SheriffCs"ertificate of Sale to the effect that said land !as subens for theirho2e and cultivation. )9The ri3ht to repurchase under Section 66* ai2s to preserveand Beep in the fa2il9 of the ho2esteader that portion of public land !hich the Statehad 3ratuitousl9 3iven hi2. 3Such ri3ht is based on the assu2ption that the personunder obli3ation to reconve9 the propert9 has the full title to the propert9 because it!as voluntaril9 conve9ed to hi2 or that he consolidated his title thereto b9 reason of arede2ptionerCs failure to e8ercise his ri3ht of rede2ption. 31It is also settled that +thefive$9ear period of rede2ption fi8ed in Section 66* of the Public /and /a! of

ho2estead sold at e8tra

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1inall9, !e delete the a!ard for attorne9Cs fees. #lthou3h attorne9Cs fees 2a9 bea!arded if the clai2ant is co2pelled to liti3ate !ith third persons or to incur e8pensesto protect his interest b9 reason of an un