ALCARAZ V. TANGGA-AN (REMEDIAL)

Section 16 of Rule 70 the Rules of Civil Procedure provides that:

Sec. 16. Resolving defense of ownership - When the defendant raises the DEFENSE OF OWNERSHIP in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession.

The issue of ownership is precisely what the petitioner spouses raised to justify their non-payment of rent and to resist eviction from the house they leased from respondents. Being indispensable to the resolution of the issue of possession, we herein render a provisional ruling on ownership.

Although TAX DECLARATIONS OR REALTY TAX PAYMENTS are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind would be paying taxes for a property that is not in his actual or at least constructive possession. They constitute at least a proof that the holder has a claim of title over the property. The voluntary declaration of a piece of property for taxation purposes manifests not only one's sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed revenues to the Government. such an act strengthens one's bona fide claim of acquisition of ownership.

Sec. 2, Rule 131 of the Rules of Court provides as a CONCLUSIVE PRESUMPTION that:
(a) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act, or omission, be permitted to falsify it.

After recognizing the validity of the lease contract for 2 years, the petitioner spouses are barred from alleging the automatic cancellation of the contract on the ground that the respondents lost ownership of the house after Virgilio acquired title over the lot.

We also note that the petitioner spouses rescinded the contract of lease without judicial approval. Due to the change in ownership of the land, the petitioner spouses decided to unilaterally cancel the contract because Virgilio supposedly became the new owner of the house after acquiring title to the lot.

They alleged that there was no reason anymore to perform their obligations as lessees because the lessor had ceased to be the owner of the house. But there is nothing in their lease contract that allows the parties to extrajudicially rescind the same in case of violation of the terms thereof.

Extrajudicial rescission of a contract is not possible without an express stipulation to that effect. What the petitioner spouses should have done was to file a special civil action for interpleader for the claimants to litigate their claims and to deposit the rentals in court.