Javier vs. VeridianoFelicidad Javier vs. Regino Veridiano and Reino RoseteG.R. No. L-48050. October 10, 1994Bellosillo, J.

Doctrine: A judgment in forcible entry or detainer case disposes of no other issue than possession and declares only who has the right of possession, but by no means constitutes a bar to an action for determination of who has the right or title of ownership.

Facts: 

On January 1963, Javier filed a Miscellaneous Sales Application for Lot No. 1641, Ts 308 of Olongapo Townsite Subdivision in Olongapo City. On December 1970, Javier filed Civil Case no. 926 (CC 926) for forcible entry against Ben Babol for entering a portion of the southwestern part of Lot 1641, Ts 308. The case was dismissed since the court considered the portion outside Lot 1461. The case became final and executory on April 1973.

Subsequently, Javier was granted Miscellaneous Sales Patent and an Original Certificate of Title was issued in her favor. Meanwhile, Babol who was the defendant in CC 926 had sold the portion he was occupying to Rosete. 4 years after the finality of CC 926, Javier instituted a Civil Case No. 2203-0 (CC 2203-0) for quieting of title and recovery of possession. Rosete moved to dismiss on the ground of res judicata. The CFI of Zambales dismissed the case.

Issue: Whether res judicata is applicable in the case.

Held: 

No. The following are the requisites of res judicata:

a) there is final judgment or order; b) the court have jurisdiction over the subject matter; c) former judgment is a judgment on merits; and d) identity of parties, of subject matter, and of causes of action.

The first three are present. There is identity of parties in the case. What is required is not absolute but substantial identity of parties. In the case, Rosete is a successor in interest of Babol by title.

Nevertheless, there is no identity of cause of action. CC 926 is a complaint of forcible entry or accion interdictal where the issue is physical or material possession of real property. In this case, Javier merely claimed a better right or prior possession over the land without asserting title.

CC 2203-0 is an action to recover a parcel of land or accion reivindicatori. In this case, Javier expressly alleged ownership (by virtue of the Original Certificate of Title issued) and specifically prayed that she be declared the rightful owner and be given possession of the disputed portion.

A judgment in forcible entry or detainer case disposes of no other issue than possession and declares only who has the right of possession, but by no means constitutes a bar to an action for determination of who has the right or title of ownership.

Caveat: Anyone who claims this digest as his own without proper authority shall be held liable under the law of Karma.

GERMAN MANAGEMENT SERVICES VS CA

177 SCRA 495 – Civil Law – Property – Doctrine of Self-Help

FACTS:

In February 1982, the spouses Manuel and Cynthia Jose contracted with German Management and Services, Inc. for the latter to develop their landholdings into a residential subdivision. The spouses also executed a special power of attorney to that effect.

German Management started the project in February 1983, however, German Management discovered that the land was being possessed by Ernesto Villeza et al who were the farmers tilling the said land at that time. German Management spoke with Villeza et al but the farmers refused to vacate the land as the farmers claimed that they have been occupying the land for twelve years.

Nevertheless, German Management went on to develop the property and demolished the properties of the farmers without acquiring a court order. In turn, Villeza et al filed a case of forcible entry against German Management. In its defense, German Management invoked the Doctrine of Self-help which provides that:

The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property. (Article 429, Civil Code)

ISSUE: Whether or not the doctrine of self-help is applicable in this case.

HELD: 

No. The Doctrine of Self-help is not applicable because at the time when German Management excluded the farmers, there’s no longer an actual or threatened unlawful physical invasion or usurpation. That actual or threatened unlawful physical invasion by the farmers have already lapsed 12 years ago when they began occupying the said land. In fact, they were already peaceably farming the land.What should have been the remedy by German Management?

German Management should have filed either accion publiciana or accion reivindicatoria to lawfully eject the farmers.

But the farmers are not the real owners and in fact, the spouses Jose have a lawful title over the land?

Regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be turned out by a strong hand, violence or terror. Further, there is now a presumption of ownership in favor of the farmers since they are the ones occupying the said property. They can only be ejected either by accion publiciana or accion reivindicatoriathrough which the spouses Jose’s better right may be proven.

Felix Caisip vs. People of the Philippines G.R. No. L-28716, November 18, 1970Concepcion, C.J.

Facts: 

The complainant Gloria Cabalag is the wife of Marcelino Guevarra who cultivated a parcel of land known as Lot 105-A of Hacienda Palico situated in sitio Bote-bote, barrio Tampisao, Nasugbu, Batangas. The said parcel of land used to be tenanted by the deceased father of the complainant.

Hacienda Palico is owned by Roxas y Cia. and administered by Antonio Chuidian. The overseer of the said hacienda is Felix Caisip, one of the accused herein.

On May 17, 1958 Roxas y Cia filed a forcible entry case against Guevarra. The court decided in favour of Roxas y Cia and issued a writ of execution. The return of the writ showed that possession of Lot 105-A was turned over to the owner thru Caisip and that Guevarra and Cabalag were given 20 days from June 6, 1959 to vacate the premises. It also appears in the record that due to the tenacious attitude of Cabalag, Caisip sought the help of policemen Federico Villadelrey and Ignacio Rojales.

On June 17, 1959, Cabalag was seen weeding the portion of Lot 105-A which was a ricefield. Caisip approached her and bade her to leave but Cabalag refused to do so claiming that she and her husband has a right over the property. She having stuck to this attitude, even when he threatened to call the police, Caisip went to his co-defendants, Sgt. Rojales and Cpl. Villadelrey, both of the local police, who were some distance away, and brought them with him. Rojales told Gloria, who was then in a squatting position, to stop weeding.

As Gloria insisted on her right to stay in said lot, Rojales grabbed her right hand and, twisting the same, wrested therefrom the trowel she was holding. Thereupon, Villadelrey held her left hand and, together with Rojales, forcibly dragged her. The appellants maintain that the Court of Appeals erred in not finding that their acts are justified under Article 429 of the Civil Code.

Issue: Whether Article 429 of the Civil Code applies in the present case.

Held: 

Article 429 is inapplicable, Cabalag was given 20 days from June 6, 1959 within which to vacate the premises. Cabalag did not, on June 17, 1959 — or within said period — invade or usurp said lot. She had merely remained in possession thereof, even though the hacienda owner may have become its

co-possessor. Appellants did not “repel or prevent in actual or threatened . . . physical invasion or usurpation.” They expelled Gloria from a property of which she and her husband were in possession.

It is urged, that, by weeding and refusing to leave Lot 105-A, Gloria had committed a crime in the presence of the policemen, despite the aforementioned 20-day period, which, appellants claim, the sheriff had no authority to grant. This contention is manifestly untenable, because:

(1) said period was granted in the presence of the hacienda owner’s representative, appellant Caisip, who, by not objecting thereto, had impliedly consented to or ratified the act performed by the sheriff; (2) Gloria and her husband were thereby allowed to remain, and had, in fact, remained, in possession of the premises, perhaps together with the owner of the hacienda or his representative, Caisip; (3) the act of removing weeds from the ricefield was beneficial to its owner and to whomsoever the crops belonged, and, even if they had not authorized it, does not constitute a criminal offense; and (4) although Gloria and her husband had been sentenced to vacate the land, the judgment against them did not necessarily imply that they, as the parties who had tilled it and planted thereon, had no rights, of any kind whatsoever, in or to the standing crops, inasmuch as “necessary expenses shall be refunded to every possessor,” and the cost of cultivation, production and upkeep has been held to partake of the nature of necessary expenses.

It is, accordingly, clear that appellants herein had, by means of violence, and without legal authority therefor, prevented the complainant from “doing something not prohibited by law,” (weeding and being in Lot 105-A), and compelled her “to do something against” her will (stopping the weeding and leaving said lot), “whether it be right or wrong,” thereby taking the law into their hands, in violation of Art. 286 of the Revised Penal Code.

Caveat: Anyone who claims this digest as his own without proper authority shall be held liable under the law of Karma.

Custodio vs Court of Appeals, 253 SCRA 483

Facts:

Respondents owned a parcel of land wherein a two-door apartment was erected. Said property was surrounded by other immovables owned by petitioners, spouses Custodio and spouses Santos. As an access to P. Burgos Street from the subject property, there are two possible passageways. The first passageway is approximately one meter wide and is about 20 meters distant from Mabasa’s residence to P. Burgos Street. Such path is passing in between the previously mentioned row of houses. The second passageway is about 3 meters in width and length from plaintiff Mabasa’s residence to P. Burgos Street; it is about 26 meters. In passing thru said passageway, a less than a meter wide path through the septic tank and with 5-6 meters in length, has to be traversed.

Petitioners constructed an adobe fence in the first passageway making it narrower in width. Said adobe fence was first constructed by defendants Santoses along their property which is also along the first passageway. Defendant Morato constructed her adobe fence and even extended said fence in such a way that the entire passageway was enclosed.

As a result, the tenants left the apartment because there was no longer a permanent access to the public street. Respondents then filed an action for the grant of an easement of right of way. The trial court ordered the petitioner to give respondents a permanent access to the public street and that in turn, the respondent will pay a sum of Php 8,000.00 to the petitioner as an indemnity for the permanent use of the passageway.

On appeal by the respondent to the CA, the decision of the trial court was affirmed, such that a right of way and an award of actual, moral and exemplary damages were given to the respondents. Hence, this petition.

Issue:Whether or not the award of damages is proper?

Held:No. To warrant the recovery of damages, there must be both a right of action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy allowed for the injury caused by a breach or wrong.

There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or harm which

results from the injury, and damages are the recompense or compensation awarded for the damage suffered.

Thus, there can be damage without injury in those instances in which the loss or harm was not the result of a violation of a legal duty. These situations are often called damnum absque injuria. In order that a plaintiff may maintain an action for the injuries of which he complains, he must establish that such injuries resulted from a breach of duty which the defendant owed to the plaintiff. There must be a concurrence of injury to the plaintiff and legal responsibility by the person causing it.

In the instant case, although there was damage, there was no legal injury. Contrary to the claim of respondents, petitioners could not be said to have violated the principle of abuse of right. In order that the principle of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that the following requisites concur:

(1) The defendant should have acted in a manner that is contrary to morals, good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury to the plaintiff. The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners, hence not contrary to morals, good customs or public policy.

The law recognizes in the owner the right to enjoy and dispose of a thing, without other limitations than those established by law. It is within the right of petitioners, as owners, to enclose and fence their property. Article 430 of the Civil Code provides that “(e)very owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon.”

At the time of the construction of the fence, the lot was not subject to any servitudes. There was no easement of way existing in favor of private respondents, either by law or by contract. The fact that respondents had no existing right over the said passageway is confirmed by the very decision of the trial court granting a compulsory right of way in their favor after payment of just compensation.

It was only that decision which gave private respondents the right to use the said passageway after payment of the compensation and imposed a corresponding duty on petitioners not to interfere in the exercise of said right. The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie, although the act may result in damage to another, for no legal right has been invaded.

One may use any lawful means to accomplish a lawful purpose and though the means adopted may cause damage to another, no cause of action arises in the latter’s favor. An injury or damage occasioned thereby is damnum absque injuria. The courts can give no redress for hardship to an individual resulting from action reasonably calculated to achieve a lawful means.

Andamo vs. Intermediate Appellate CourtG.R. No. 74761 November 6, 1990Fernan, C.J.

Doctrine: It must be stressed that the use of one’s property is not without limitations. Article 431 of the Civil Code provides that “the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person.” SIC UTERE TUO UT ALIENUM NON LAEDAS.

Facts: Petitioner spouses Andamo owned a parcel of land situated in Biga Silang, Cavite which is adjacent to that of private respondent corporation, Missionaries of Our lady of La Salette, Inc. Within the land of the latter, water paths and contrivances, including an artificial lake, were constructed, which allegedly inundated and eroded petitioner’s land, caused a young man to drown, damaged petitioner’s crops and plants, washed away costly fences, endangered the lives of the petitioners and their laborers and some other destructions.

This prompted petitioner spouses to file a criminal action for destruction by means of inundation under Article 324 of the RPC and a civil action for damages.

Issue: WON petitioner spouses Andamo can claim damages for destruction caused by respondent’s waterpaths and contrivances on the basis of Articles 2176 and 2177 of the Civil Code on quasi-delicts.

Held: Yes. A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit:

(a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, or some other person for whose acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the defendant and the damages incurred by the plaintiff.

Clearly, from petitioner’s complaint, the water paths and contrivances built by respondent corporation are alleged to have inundated the land of petitioners. There is therefore, an assertion of a causal connection between the act of building these waterpaths and the damage sustained by petitioners. Such action if proven constitutes fault or negligence which may be the basis for the recovery of damages.

It must be stressed that the use of one’s property is not without limitations. Article 431 of the Civil Code provides that “the owner of a thing cannot make use thereof in such a manner as to injure the rights of a third person.” SIC UTERE TUO UT ALIENUM NON LAEDAS.

Moreover, adjoining landowners have mutual and reciprocal duties which require that each must use his own land in a reasonable manner so as not to infringe upon the rights and interests of others.

Although we recognize the right of an owner to build structures on his land, such structures must be so constructed and maintained using all reasonable care so that they cannot be dangerous to adjoining landowners and can withstand the usual and expected forces of nature. If the structures cause injury or damage to an adjoining landowner or a third person, the latter can claim indemnification for the injury or damage suffered.

Caveat: Anyone who claims this digest as his own without proper authority shall be held liable under the law of Karma.

NATIONAL POWER CORPORATION VS IBRAHIM

FACTS:

Lucman G. Ibrahim instituted an action against the National Power Corporation (NPC) for recovery of possession of land and damages before the Regional Trial Court of Lanao del Sur on November 23, 1994. The complaint stated that in 1978 NPC used stealth and without permission took possession of the sub-terrain area of the questioned lands and therein constructed underground tunnels.

However, it was only discovered in 1992, when Omar G. Maruhom’s request to install a motorized deep well was rejected by the Marawi City Water District. However, NPC refused to vacate and / or pay damages considering that the area was prone to volcanic and tectonic activities. Instead, NPC filed an answer stating that the respondents were never in possession the sub-terrain portion because they failed to present proof of ownership and the tunnels were government projects for the benefit of all.

On August 7, 1996, The RTC denied the petition to vacate but ordered the NPC to pay the fair market value plus damages. On June 8, 2005, the Court of Appeals affirmed the original decision of the RTC.

ISSUE:Whether or not Ibrahim owns the sub-terrain properties?

HELD:

YES. The Court sustains the finding of the lower courts that the sub-terrain portion of the property similarly belongs to Ibrahim. This conclusion is drawn from Article 437 of the Civil Code, which provides:

ART. 437. The owner of a parcel of land is the owner of its surface and of everything under it, and he can construct thereon any works or make any plantations and excavations which he may deem proper, without detriment to servitudes and subject to special laws and ordinances. He cannot complain of the reasonable requirements of aerial navigation.

Thus, the ownership of land extends to the surface as well as to the subsoil under it. In Republic of the Philippines v. Court of Appeals, this principle was applied to show that rights over lands are indivisible and, consequently, require a definitive and categorical classification, thus: The Court of Appeals justified this by saying there is “no conflict of interest” between the owners of the surface rights and the owners of the sub-surface rights. This is rather strange doctrine, for it is a well-known principle that the

owner of a piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height. Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difficult to understand, especially in its practical application. Under the theory of the respondent court, the surface owner will be planting on the land while the mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may interfere with the mining operations below and the miner cannot blast a tunnel lest he destroy the crops above.

The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. Registered landowners may even be ousted of ownership and possession of their properties in the event the latter are reclassified as mineral lands because real properties are characteristically indivisible. For the loss sustained by such owners, they are entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings. In this regard, the trial court found that respondents could have dug upon their property motorized deep wells but were prevented from doing so by the authorities precisely because of the construction and existence of the tunnels underneath the surface of their property.

Respondents, therefore, still had a legal interest in the sub-terrain portion insofar as they could have excavated the same for the construction of the deep well. The fact that they could not was appreciated by the RTC as proof that the tunnels interfered with respondents’ enjoyment of their property and deprived them of its full use and enjoyment.

Petitioner contends that the underground tunnels in this case constitute an easement upon the property of respondents which does not involve any loss of title or possession. The manner in which the easement was created by petitioner, however, violates the due process rights of respondents as it was without notice and indemnity to them and did not go through proper expropriation proceedings.

Petitioner could have, at any time, validly exercised the power of eminent domain to acquire the easement over respondents’ property as this power encompasses not only the taking or appropriation of title to and possession of the expropriated property but likewise covers even the imposition of a mere burden upon the owner of the condemned property. Significantly, though, landowners cannot be deprived of their right over their land until

expropriation proceedings are instituted in court. The court must then see to it that the taking is for public use, that there is payment of just compensation and that there is due process of law.

In disregarding this procedure and failing to recognize respondents’ ownership of the sub-terrain portion, petitioner took a risk and exposed itself to greater liability with the passage of time. It must be emphasized that the acquisition of the easement is not without expense. The underground tunnels impose limitations on respondents’ use of the property for an indefinite period and deprive them of its ordinary use.

Based upon the foregoing, respondents are clearly entitled to the payment of just compensation. Notwithstanding the fact that petitioner only occupies the sub-terrain portion, it is liable to pay not merely an easement fee but rather the full compensation for land.

This is so because in this case, the nature of the easement practically deprives the owners of its normal beneficial use. Respondents, as the owners of the property thus expropriated, are entitled to a just compensation which should be neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property.

Republic of the Philippines, Benguet & Atok vs. Court of Appeals & De La RosaG.R. No. L-43938, April 15, 1988Cruz, J.:

Doctrine: The owner of a piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height. The rights over the land are indivisible and the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural.

Facts:

These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964.

The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines, through the Bureau of Forestry Development, as to lots 1-9.

In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the Liberation.

Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had been in actual, continuous and exclusive possession of the land in concept of owner, as evidenced by its construction of adits, its affidavits of annual assessment, its geological mappings, geological samplings and trench side cuts, and its payment of taxes on the land.

For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of the said lots as evidenced by

its annual assessment work on the claims, such as the boring of tunnels, and its payment of annual taxes thereon.

The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the Constitutions of 1935 and 1973.

The trial court denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the land sought to be registered.

The applicants appealed to the respondent court, which reversed the trial court and recognized the claims of the applicant, but subject to the rights of Benguet and Atok respecting their mining claims. In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims. Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership.

Issue: Whether respondent court’s decision, i.e. “the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claim,” is correct.

Held: 

No. Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of their respective mining claims which they validly acquired before the Constitution of 1935 prohibited the alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at the time of its adoption.

The land was not and could not have been transferred to the private respondents by virtue of acquisitive prescription, nor could its use be shared simultaneously by them and the mining companies for agricultural and mineral purposes. It is true that the subject property was considered forest land and included in the Central Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time.

Such rights were not affected either by the stricture in the Commonwealth Constitution against the alienation of all lands of the public domain except those agricultural in nature for this was made subject to existing rights. The perfection of the mining claim converted the property to mineral land and under the laws then in force removed it from the public domain.

By such act, the locators acquired exclusive rights over the land, against even the government, without need of any further act such as the purchase of the land or the obtention of a patent over it. As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok.

The Court of Appeals justified this by saying there is “no conflict of interest” between the owners of the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything underneath and the airspace above it up to a reasonable height.

Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difficult to understand, especially in its practical application.

The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally classified as forest land ceased to be so and became mineral — and completely mineral — once the mining claims were perfected.

As long as mining operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the surface.

This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the State, not of private persons. The rule simply reserves to the State all minerals that may be found in public and even private land devoted to “agricultural, industrial, commercial, residential or (for) any purpose other than mining.” Thus, if a person is the owner of agricultural land in which minerals are discovered, his ownership of such land does not give him the right to extract or utilize the said minerals without the permission of the State to which such minerals belong.

The flaw in the reasoning of the respondent court is in supposing that the rights over the land could be used for both mining and non-mining purposes simultaneously. The correct interpretation is that once minerals are discovered in the land, whatever the use to which it is being devoted at the time, such use may be discontinued by the State to enable it to extract the minerals therein in the exercise of its sovereign prerogative.

The land is thus converted to mineral land and may not be used by any private party, including the registered owner thereof, for any other purpose

that will impede the mining operations to be undertaken therein, For the loss sustained by such owner, he is of course entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings.

Caveat: Anyone who claims this digest as his own without proper authority shall be held liable under the law of Karma.

Bachrach Motors v. Talisay-Silay Milling[G.R. No. 35223. September 17, 1931.]

En Banc, Romualdez (J): 7 concurring

Facts: 

On 22 December 1923, the Talisay-Silay Milling Co., Inc., was indebted to the PNB. To secure the payment of its debt, it succeeded in inducing its planters, among whom was Mariano Lacson Ledesma, to mortgage their land to the bank. And in order to compensate those planters for the risk they were running with their property under that mortgage, the aforesaid central, by a resolution passed on the same date, and amended on 23 March 1928, undertook to credit the owners of the plantation thus mortgaged every year with a sum equal to 2% of the debt secured according to the yearly balance, the payment of the bonus being made at once, or in part from time to time, as soon as the central became free of its obligations to the bank, and of those contracted by virtue of the contract of supervision, and had funds which might be so used, or as soon as it obtained from said bank authority to make such payment.

<It seems Mariano Lacson Ledesma is indebted from Bachrach Motor; the circumstance of which is not found in the case facts.>

Bachrach Motor Co., Inc. filed a complaint against the Talisay-Silay Milling Co., Inc., for the delivery of the amount of P13,850 or promissory notes or other instruments of credit for that sum payable on 30 June 1930, as bonus in favor of Mariano Lacson Ledesma.

The complaint further prays that the sugar central be ordered to render an accounting of the amounts it owes Mariano Lacson Ledesma by way of bonus, dividends, or otherwise, and to pay Bachrach Motors a sum sufficient to satisfy the judgment mentioned in the complaint, and that the sale made by said Mariano Lacson Ledesma be declared null and void.

The PNB filed a third party claim alleging a preferential right to receive any amount which Mariano Lacson Ledesma might be entitled from Talisay-Silay Milling as bonus. Talisay-Silay answered the complaint that Mariano Lacson Ledesma’s credit (P7,500) belonged to Cesar Ledesma because he had purchase it. Cesar Ledesma claimed to be an owner by purchase in good faith.

At the trial all the parties agreed to recognize and respect the sale made in favor of Cesar Ledesma of the P7,500 part of the credit in question, for which reason the trial court dismissed the complaint and cross-complaint against Cesar Ledesma authorizing the central to deliver to him the sum of P7,500.

And upon conclusion of the hearing, the court held that the Bachrach Motor Co., Inc., had a preferred right to receive the amount of P11,076.02 which was Mariano Lacson Ledesma’s bonus, and it ordered the central to deliver said sum to Bachrach Motors. PNB appealed.

The Supreme Court affirmed the judgment appealed from, as it found no merit in the appeal;, without express finding as to costs.

1. Civil Fruits under Article 355 of the Civil CodeArticle 355 of the Civil Code considers three things as civil fruits: First, the rents of buildings; second, the proceeds from leases of lands; and, third, the income from perpetual or life annuities, or other similar sources of revenue.

According to the context of the law, the phrase “u otras analogas” refers only to rents or income, for the adjectives “otras” and “analogas” agree with the noun “rentas,” as do also the other adjectives “perpetuas” and “vitalicias.” The “civil fruits” the Civil Code understands one of three and only three things, to wit: the rent of a building, the rent of land, and certain kinds of income.

2. Bonus not a civil fruit; not an income of the landThe amount of the bonus, according to the resolution of the central granting it, is not based upon the value, importance or any other circumstance of the mortgaged property, but upon the total value of the debt thereby secured, according to the annual balance, which is something quite distinct from and independent of the property referred to. As the bonus is not obtained from the land, it is not civil fruits of that land. It is neither rent of buildings, proceeds from lease of lands, or income under Article 355 of the Civil Code.

The Bachrach Motor Co., Inc., vs. Mariano Lacson Ledesma, Talisay-Silay Milling Co., Inc., and the Philippine National BankG.R. No. 42462, August 31, 1937Imperial, J.

Doctrine: Bonus is not civil fruits as contemplated in Art. 442. It is not one of those meant by the law when it says “other similar income” since the phrase refers merely to things analogous to rents, leases and annuities. Assuming that it is income, still, it is not income obtained or derived from the land itself, but income obtained as compensation for the risk assumed by the owner.

Facts: 

The Talisay- Silay Milling Co., Inc., in order to secure its indebtedness to the Philippine National Bank, induced its planters, among whom was Mariano Ledesma to mortgage their land to the creditor bank. As compensation and bonus to those planters for the risk they were running with their property under the mortgage, the aforesaid central, by a resolution passed on December 22, 1923, granted to herein respondent, Mariano Lacson Ledesma, the sum of P19,911.11, Philippine currency, which sum, however, would not be payable until the month of January, 1930.

Thereafter, or on December 20, 1929, Bachrach Motor Co., Inc., brought an action in the Court of First Instance of Iloilo against the Talisay-Silay Milling Co., Inc., to recover from it the sum of P13,850 against the bonus or dividend which, by virtue of the resolution of December 22, 1923, said Central Talisay-Silay Milling Co., Inc., had declared in favor of the defendant Mariano Lacson Ledesma as one of the owners of the hacienda which had been mortgaged to the Philippine National Bank to secure the obligation of the Talisay-Silay Milling Co., Inc., in favor of said bank.

The Philippine National Bank, on the other hand, on February 13, 1930, filed a complaint in intervention alleging that in had a preferred right to said bonus granted by the central to the defendant Mariano Lacson Ledesma as one of the owners of the haciendas which had been mortgaged to said bank to answer for the obligations of the Central Talisay-Silay Milling Co., Inc., basing such allegation on the fact that, as said properties were mortgaged to it by the debtor Mariano Lacson Ledesma, by virtue of the deed to secure the obligations of the Talisay-Silay Milling Co., Inc., and said bonus being a civil fruit of the mortgaged lands, said bank was entitled to it on the ground that the mortgage of August 9, 1923, had become due.

Issue: Whether the bonus in question is a civil fruit and hence should pertain to PNB on account of the mortgage of Ledesma’s land

Held: No. The bonus is not a civil fruit. The Supreme Court held that the bonus had no immediate relation to the lands in question but merely a remote and accidental one and, therefore, it was not a civil fruit of the real properties mortgaged to the Philippine National Bank to secure the obligation of the Talisay-Silay Milling Co., Inc., being a mere personal right of Mariano Lacson Ledesma.

It is not one of those meant by Art. 442 of the Civil Code when it says “other similar income” since the phrase merely refers to things analogous to rents, leases, and annuities. Assuming that it is income, still it is not income obtained or derived from the land itself, but obtained as compensation for the risk assumed by the owner.

It should, moreover, be remembered that the bonus was not based upon the value or importance of the land but upon the total value of the debt secured. Hence, the PNB does not have a preferred right with regard to the bonus as against herein petitioner.

Caveat: Anyone who claims this digest as his own without proper authority shall be held liable under the law of Karma.

GR L-21783 NOVEMBER 29, 1969PACIFIC FARMS, INC. VS. SIMPLICIO G. ESGUERRA, CARRIED LUMBER

COMPANY

FACTS:On several occasions, the Company sold and delivered lumber and

construction materials to the Insular Farms, Inc. which the latter used in the construction of the aforementioned six buildings at its compound in Bolinao, Pangasian. Of the total procurement price of P15,000, the sum of P4,710.18 has not been paid by the Insular Farms, Inc. The Company instituted a civil case with the CIR of Pangasinan to recover the said unpaid balance from the Insular Farms, Inc. The trial court rendered judgment in favor of the Company's claim. The corresponding writ of execution was issued because there was no appeal instituted by Insular, Inc.

The Pacific Farms, Inc. filed a third-party claim asserting ownership over the levied buildings which it had acquired from the Insular Farms, Inc. by virtue of a deed of absolute sale executed about seven months before the Company filed the civil action. Shielded by an indemnity bond put up by the Company and the Cosmopolitan Insurance Company, Inc., the sheriff proceeded with the announced public auction and sold the levied buildings to the Company.

ISSUE: WON the Company is entitled to a materialman’s lien to be paid by Pacific Farms, Inc?

HELD: YES.Therefore, applying article 447 by analogy, we perforce consider the

buildings as the principal and the lumber and construction materials that went into their construction as the accessory. Thus Pacific Farms, if it does own the six buildings, must bear the obligation to pay for the value of the said materials; the Company- which apparently has no desire to remove the materials, and, even if it were minded to do so, cannot remove them without necessarily damaging the buildings has the corresponding right to recover the value of the unpaid lumber and construction materials.

Of course, the character of a buyer in good faith and for value, if really possessed by the Pacific Farms, could possibly exonerate it from making compensation. But the Pacific Farm's stance that it is an innocent purchaser for value and in good faith is open to grave doubt because of certain facts of substantial import (evident from the records) that cannot escape notice.

In the deed of absolute sale, exhibit 1, the Insular Farms, Inc. (vendor) was represented in the contract by its president, J. Antonio Araneta. The latter was a director of the appellee (Pacific Farms, Inc.) and was the counsel who signed the complaint filed by the appellee in the court below. J. Antonio Araneta was, therefore, not only the president of the Insular Farms, Inc. but also a director and counsel of Pacific Farms.

During the trial of civil case the Insular Farms, Inc. was represented by Attorney Amado Santiago, Jr. of the law firm of J. Antonio Araneta. The latter was one of the counsels of the Pacific Farms, Inc. They cannot claim ignorance of the pendency of civil case because the Insular Farms, Inc. was defended by the same lawyer from the same law firm that commenced the present action.

Pacific Farms merely folded its arms in disinterest and waited, so to speak.

Not until a decision was rendered therein in favor of the Company, a writ of execution issued, and the six buildings levied upon by the sheriff, did it file a third-party claim over the levied buildings.

BERNARDO v BATACLAN

FACTS:

Plaintiff Vicente Bernardo acquired a parcel of land from Pastor Samonte thru a contract of sale. Thereafter, Bernardo instituted a case against said vendor to secure possession of the land. Bernardo was able to obtain a favorable decision from the court.

The plaintiff found the defendant herein, Catalino Bataclan, in the said premises. It appears that he has been authorized by former owners, as far back as 1922, to clear the land and make improvements thereon. Thus, plaintiff instituted a case against Bataclan in the Court of First Instance of Cavite.

In this case, plaintiff was declared the owner of the land but the defendant was held to be a possessor in good faith, entitled to reimbursement in the total sum of P1,642, for work done and improvements made. Both parties appealed the decision.

The court thereafter made some modifications by allowing the defendant to recover compensation amounting to P2,212 and by reducing the price at which the plaintiff could require the defendant to purchase the land in question from P300 down to P200 per hectare.

Plaintiff was likewise given 30 days from the date when the decision became final to exercise his option, either to sell the land to the defendant or to buy the improvements from him. On January 9, 1934, the plaintiff conveyed to the court his desire "to require the defendant to pay him the value of the land at the rate of P200 per hectare or a total price of P18,000 for the whole tract of land."

The defendant indicated that he was unable to pay the land and, on January 24, 1934, an order was issued giving the plaintiff 30 days within which to pay the defendant the sum of P2,212.

Subsequently, on April 24, 1934, the court below, at the instance of the plaintiff and without objection on the part of the defendant, ordered the sale of the land in question at public auction. The land was sold on April 5, 1935 to Toribio Teodoro for P8,000.

ISSUE: WON DEFENDANT BATACLAN IS STILL ENTITLED TO RECOVER THE COURT MANDATED COMPENSATION ARISING FROM THE SALE OF THE PROPERTY TO TORIBIO

HELD: NO. Manresa, basing on Art 448 of the NCC, where the planter, builder or sower has acted in good faith, a conflict of rights arises between the owners and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land.

The law provided a just and equitable solution by giving the owner of the land the option to acquire the improvements after payment of the proper indemnity or to oblige the builder or planter to pay for the land and the sower to pay the proper rent. In this case, the plaintiff, as owner of the land, chose to require the defendant, as owner of the improvements to pay for the land.

The defendant avers that “he is a possessor in good faith and that the amount of P2,212 to which he is entitled has not yet been paid to him.” Defendant further claims that he has a right to retain the land in accordance with the provisions of article 453 of the Civil Code.

While the said argument is legally tenable, the same must perforce be denied because defendant Bataclan has lost his right of retention as he failed to pay for the land. “The law, as we have already said, requires no more than that the owner of the land should choose between indemnifying the owner of the improvements or requiring the latter to pay for the land.”

G.R. NO.157044. OCTOBER 5, 2005ROSALES VS. CASTELLFORT

FACTS:Spouses-petitioners Rodolfo V. Rosales and Lily Rosqueta-Rosales

(petitioners) are the registered owners of a parcel of land with an area of approximately 315 square meters, covered by Transfer Certificate of Title (TCT) No. 36856[4] and designated as Lot 17, Block 1 of Subdivision Plan LRC Psd-55244 situated in Los Baños, Laguna.

On August 16, 1995, petitioners discovered that a house was being constructed on their lot, without their knowledge and consent, by respondent Miguel Castelltort (Castelltort).

It turned out that respondents Castelltort and his wife Judith had purchased a lot, Lot 16 of the same Subdivision Plan, from respondent Lina Lopez-Villegas (Lina) through her son-attorney-in-fact Rene Villegas (Villegas) but that after a survey thereof by geodetic engineer Augusto Rivera, he pointed to Lot 17 as the Lot 16 the Castelltorts purchased.

Negotiations for the settlement of the case thus began, with Villegas offering a larger lot near petitioners’ lot in the same subdivision as a replacement thereof. In the alternative, Villegas proposed to pay the purchase price of petitioners’ lot with legal interest. Both proposals were, however, rejected by petitioners whose counsel, by letter of August 24, 1995, directed Castelltort to stop the construction of and demolish his house and any other structure he may have built thereon, and desist from entering the lot.

Petitioners subsequently filed on September 1, 1995 a complaint for recovery of possession and damages with prayer for the issuance of a restraining order and preliminary injunction against spouses-respondents Miguel and Judith Castelltort before the RTC of Calamba, Laguna, docketed as Civil Case No. 2229-95-C.

ISSUE: Under Art 448, who has the right of option?

HELD:Under the foregoing provision (Art 448), the landowner can choose between

appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land, unless its value is considerably more than that of the structures, in which case the builder in good faith shall pay reasonable rent.[34] If the parties

cannot come to terms over the conditions of the lease, the court must fix the terms thereof.

The choice belongs to the owner of the land, a rule that accords with the principle of accession, i.e., that the accessory follows the principal and not the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot refuse to exercise either option and compel instead the owner of the building to remove it from the land.

The raison d’etre for this provision has been enunciated thus:

Where the builder, planter or sower has acted in good faith, a conflict of rights arises between the owners, and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. In view of the impracticability of creating a state of forced co-ownership, the law has provided a just solution by giving the owner of the land the option to acquire the improvements after payment of the proper indemnity, or to oblige the builder or planter to pay for the land and the sower the proper rent. He cannot refuse to exercise either option. It is the owner of the land who is authorized to exercise the option, because his right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory thing.

IGNACIO v HILARIO

Facts:

Elias Hilario and his wife Dionisia Dres filed a complaint against Damian, Francisco and Luis Ignacio concerning the ownership of a parcel of land, partly rice-land and partly residential.

After the trial of the case, the lower court under Judge Alfonso Felix, rendered judgment holding Hilario and Dres as the legal owners of the whole property but conceding to the Ignacios the ownership of the houses and granaries built by them on the residential portion with the rights of a possessor in good faith, in accordance with article 361 of the Civil Code.

Subsequently, in a motion filed in the same CFI (now handled by respondent Judge Hon. Felipe Natividad), Hilario and Dres prayed for an order of execution alleging that since they chose neither to pay the Ignacios for the buildings nor to sell to them the residential lot, the Ignacios should be ordered to remove the structure at their own expense and to restore Hilario and Dres in the possession of said lot.

After hearing, the motion was granted by Judge Natividad. Hence, the petition for certiorari was filed by the Ignacios praying for (a) a restraint and annulment of the order of execution issued by Judge Natividad; (b) an order to compel Hilario and Dres to pay them the sum of P2,000 for the buildings, or sell to them the residential lot for P45; or (c) a rehearing of the case for a determination of the rights of the parties upon failure of extra-judicial settlement.

The Supreme Court set aside the writ of execution issued by Judge Natividad and ordered the lower court to hold a hearing in the principal case wherein it must determine the prices of the buildings and of the residential lot where they are erected, as well as the period of time within which Hilario and Dres may exercise their option either to pay for the buildings or to sell their land, and, in the last instance, the period of time within which the Ignacios may pay for the land, all these periods to be counted from the date the judgment becomes executory or unappealable.

After such hearing, the court shall render a final judgment according to the evidence presented by the parties; with costs against Hilarion and Dres.

1. Right of retention of builder in good faithThe owner of the building erected in good faith on a land owned by another, is entitled to retain the possession of the land until he is paid the value of his building, under article 453. Article 453 provides that “Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until such expenses are made good to him. Useful expenses shall be refunded to the possessor in good faith with the same right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or paying the increase in value which the thing may have acquired in consequence thereof."

2. Option of the landowner to pay for the building or sell his land to the owner of the building; Right of remotion only available if he chose the latter and the owner of the building cannot payThe owner of the land, upon the other hand, has the option, under article 361, either to pay for the building or to sell his land to the owner of the building. Article 361 provides that “The owner of land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the work, sowing or planting, after the payment of the indemnity stated in articles 453 and 454, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent.”

He cannot however refuse both to pay for the building and to sell the land and compel the owner of the building to remove it from the land where it is erected. He is entitled to such remotion only when, after having chosen to sell his land, the other party fails to pay for the same.

3. Order amends judgment substantially and thus null and voidThe order of Judge Natividad compelling the Ignacios to remove their buildings from the land belonging to Hilario and Dres only because the latter chose neither to pay for such buildings nor to sell the land, is null and void, for it amends substantially the judgment sought to be executed and is, furthermore, offensive to articles 361 and 453 of the Civil Code.4. Original decision did not become final as it failed to determine the value of the buildings and of the lot; and the time to which the option may be exercisedIn the decision of Judge Felix, the rights of both parties were well defined under articles 361 and 453 of the Civil Code, but it failed to determine the value of the buildings and of the lot where they are erected as well as the periods of time within which the option may be exercised and payment should be made, these particulars having been left for determination apparently after the judgment has become final.

The procedure is erroneous, for after the judgment has become final, no additions can be made thereto and nothing can be done therewith except its execution. And execution cannot be had, the sheriff being ignorant as to how, for how much, and within what time may the option be exercised, and certainty no authority is vested in him to settle these matters which involve exercise of judicial discretion. Thus, the judgment rendered by Judge Felix has never become final, it having left matters to be settled for its completion in a subsequent proceeding, matters which remained unsettled up to the time the petition is filed in the present case.IGNACIO VS HILARIO

FACTS:

Sometime during the 1940s in Pangasinan, a civil suit arose between Damian Ignacio and Elias Hilario. Hilario was the owner of a parcel of land. He later discovered that Ignacio built some buildings therein (a granary and a house). After trial, Judge Antonio Felix of the Court of First Instance of Pangasinan ruled that both were in good faith (Hilario was the owner in good faith while Ignacio was the builder in good faith).

Judge Felix then spelled out the rights of the parties to wit:

a.) Ignacio can retain possession over the buildings he erected until after he is paid by Hilario for the value of the buildings he erected;b.) Hilario can choose to buy the said buildings or he can choose to sell Ignacio his land since the value of his land was only P45.00 while the value of the buildings erected was P2,000.00.

However, Hilario refused to avail of his options. Instead, he filed a motion in court to have Ignacio be ejected and have them destroy the buildings he erected. Judge Felipe Natividad (he replaced Judge Felix), granted Hilario’s motion.

ISSUE: Whether or not Hilario, the owner in good faith,  may eject a builder in good faith without choosing either to appropriate the building for himself after payment of its value or to sell his land to the builder in good faith.

HELD: No. The owner in good faith has to make a choice. He cannot dispense the options under the law and then eject the builder in good faith. This is because both are in good faith.

But when can the owner in good faith compel the builder in good faith to remove the building he erected?

This is only available if after the owner in good faith chose to sell his land to the builder in good faith and the latter fails to pay the value of the land within the agree period. Only then can the owner in good faith compel the builder in good faith to remove the building he erected.

DEPRA VS DUMLAO

136 SCRA 475 – Civil Law – Property – Accession Industrial – Builder in Good Faith; Owner in Good Faith – Forced LeaseRemedial Law – Res Judicata – Unlawful Detainer will not bar a subsequent action for Quieting of Title

FACTS:

The properties of Francisco Depra and Agustin Dumlao were adjoining owners. In 1972, Dumlao built his house however, he unwittingly built the kitchen portion of his house on Depra’s land. Depra then sued Dumlao for unlawful detainer. During pre-trial, the parties agreed that Dumlao was a builder in good faith.

Eventually, the trial court ruled that both parties were in good faith but then a forced lease was ordered whereby Dumlao retains the kitchen but he shall pay a rental to Depra at P5.00 per month. But Depra refused to receive the rental payments from Dumlao, instead, Depra filed an action for quieting of title against Dumlao.

In his defense, Dumlao raised the defense of res judicata considering that the nature and purpose of the initial unlawful detainer case and that of the subsequent quieting of title case is ejectment.

ISSUES:

1. Whether or not the order of forced lease decreed in the unlawful detainer case is valid.2. Whether or not the subsequent case of res judicata is barred by prescription due to the prior case of unlawful detainer.

HELD:1. No. The judgment of forced lease is improper. A forced lease, just like co-ownership is not favored. It should be considered that the parties themselves stipulated that Dumlao, the builder, was in good faith and it was later found

that Depra, the owner, was also in good faith. Hence, what applies is the provisions of Article 448 of the Civil Code, which provides in sum that:

a. Builder in good faith – entitled to retain the possession of the land on which he built in good faith until he is paid the value of the building he built in good faith;b. Owner in good faith – has the option to either (i) pay for the building OR (ii) sell his land to the builder in good faith but builder cannot be forced to buy said land if the same is considerably more than the value of the building.Forced rent only comes in if the owner exercises his right to sell the land but the builder rejects it by reason of the price thereof being considerably more than the value of the building – in such case, the parties shall agree to the terms of the lease, if they can’t agree then they may bring the issue to court.

2. No. The action for quieting of title is not barred by reason of res judicata. The cause of action in the unlawful detainer case involves possession while the cause of action in the quieting of title case involves ownership. 

Furthermore, the Rules of Court explicitly provides that judgment in a detainer case shall not bar an action between the same parties respecting title to the land.

ORTIZA VS KAYANAN

Facts: Plaintiff used to be the legal guardian of Martin Dolorico II. When his ward died, plaintiff continued to cultivate and possess the latter’s property, which was formerly a subject of homestead application. In the said application, the ward’s uncle was named as his heir and successor in interest.

Thus, the uncle executed an affidavit relinquishing his rights over the property in favor of Comintan and Zamora, his grandson and son-in-law and requested the Director of Lands to cancel the homestead application. The homestead application was cancelled to the protest of Ortiz saying that he should be given preference to purchase the lot inasmuch as he is the actual occupant and has been in continuous possession of the same. Still, the lot in question was sold at a public auction wherein defendant Comintan was the only bidder.

The plaintiff’s protest was investigated upon but his claim was not given due course. On appeal, respondent court rules that half of the portion of land should be given to the defendant, being the successful bidder. The other half should be awarded to Zamora without prejudice to the right of Ortiz to participate in the public bidding of the lot. If Ortiz is to be not declared the successful bidder, defendants should reimburse jointly said plaintiff for the improvements introduced on the land, with him, having the right to retain the property until after he has been paid for.

Plaintiff appealed the judgment. It was later found out that Ortiz collected tolls on a portion of the property wherein he has not introduced any improvement.

The judgment became final and executory. Private respondents filed a motion for its execution requesting that they file a bond in lieu of the amount that should be paid to Ortiz, on the condition that after the accounting of the tolls collected by plaintiff, there is still and amount due and payable to the said plaintiff, the bond shall be held answerable.

Petitioner thus filed the instant petition, contending that in having issued the Order and Writ of Execution, respondent Court "acted without or in excess of

jurisdiction, and/or with grave abuse of discretion, because the said order and writ in effect vary the terms of the judgment they purportedly seek to enforce."

He argued that since said judgment declared the petitioner a possessor in good faith, he is entitled to the payment of the value of the improvements introduced by him on the whole property, with right to retain the land until he has been fully paid such value. He likewise averred that no payment for improvements has been made and, instead, a bond therefor had been filed by defendants (private respondents), which, according to petitioner, is not the payment envisaged in the decision which would entitle private respondents to the possession of the property.

Furthermore, with respect to portion "B", petitioner alleges that, under the decision, he has the right to retain the same until after he has participated and lost in the public bidding of the land to be conducted by the Bureau of Lands. It is claimed that it is only in the event that he loses in the bidding that he can be legally dispossessed thereof.

It is the position of petitioner that all the fruits of the property, including the tolls collected by him from the passing vehicles, which according to the trial court amounts to P25,000.00, belongs to petitioner and not to defendant/private respondent Quirino Comintan, in accordance with the decision itself, which decreed that the fruits of the property shall be in lieu of interest on the amount to be paid to petitioner as reimbursement for improvements.

Any contrary opinion, in his view, would be tantamount to an amendment of a decision which has long become final and executory and, therefore, cannot be lawfully done.

The issue decisive of the controvery is—after the rendition by the trial court of its judgment in Civil Case No. C-90 on March 22, 1966 confirming the award of one-half of the property to Quirino Comintan—whether or not petitioner is still entitled to retain for his own exclusive benefit all the fruits of the property, such as the tolls collected by him from March 1967 to December 1968, and September 1969 to March 31, 1970, amounting to about P25,000.00.

RULING: Negative

1. No contention that the possessor in good faith is entitled to the fruits received before the possession is legally interrupted. Possession in good faith ceases or is legally interrupted from the moment defects in the title are made known to the possessor, by extraneous evidence or by the filing of an action in court by the true owner for the recovery

of the property. Hence, all the fruits that the possessor may receive from the time he is summoned in court, or when he answers the complaint, must be delivered and paid by him to the owner or lawful possessor.

2. However, even after his good faith ceases, the possessor can still retain the property (Art 546) until he has been fully reimbursed for all the necessary and useful expenses made by him on the property. he principal characteristic of the right of retention is its accessory character. It is accessory to a principal obligation. Considering that the right of the possessor to receive the fruits terminates when his good faith ceases, it is necessary, in order that this right to retain may be useful, to concede to the creditor the right to secure reimbursement from the fruits of the property by utilizing its proceeds for the payment of the interest as well as the principal of the debt while he remains in possession.

3. Petitioner cannot appropriate for his own exclusive benefit the tolls which he collected from the property retained by him. It was his duty under the law, after deducting the necessary expenses for his administration, to apply such amount collected to the payment of the interest, and the balance to the payment of the obligation.

We hold, therefore, that the disputed tolls, after deducting petitioner's expenses for administration, belong to Quirino Comintan, owner of the land through which the toll road passed, further considering that the same was on portions of the property on which petitioner had not introduced any improvement. The trial court itself clarified this matter when it placed the toll road under receivership. The omission of any mention of the tolls in the decision itself may be attributed to the fact that the tolls appear to have been collected after the rendition of the judgment of the trial court.

4. As to the other lot, it appears that no public sale has yet been conducted by the Bureau of Lands and, therefore, petitioner is entitled to remain in possession thereof. This is not disputed by respondent Eleuterio Zamora. After public sale is had and in the event that Ortiz is not declared the successful bidder, then he should be reimbursed by respondent Zamora in the corresponding amount for the improvements on Lot 5785-B.

IGNAO VS. IAC

FACTS: Florencio Ignao and his uncles (private respondents) were co-owners of a parcel of land. This was originally owned by Baltazar Ignao, who married twice. In his first marriage, he had four children, including the father of the petitioner. In his second marriage, he also had four children who waived their rights over the controverted land.

Justo, Florencio’s father owned 5/8 of the land. Thereafter, Justo acquired 1/8 share of brother Leon for P500, which was later sold to his son Florencio for the same amount. When Justo died, Florencio inherited the 5/8 share of his father, which brought his land share to 6/8. Private respondents Juan and Isidro each has 1/8 share on the land.

Petitioner brought an action for partition. Before it was promulgated, Florencio sol 134 sqm of his share. The decision for partition allotted 2/8 of the land to private respondents. However, no actual partition was effected. Thus, petitioner instituted a complaint for recovery of possession of real property against private respondents, because the area occupied by the two houses built by private respondents exceeded the portion allotted to them. Trial court ruled that the private respondents are builders in good faith.

ISSUE: Whether or not the provisions of Art 448 should apply on a property held in common

RULING: Affirmative

It should be noted that prior to partition, all the co-owners hold the property in common dominion but at the same time each is an owner of a share which is abstract and undetermined until partition is effected. As cited in Eusebio vs. Intermediate Appellate Court, "an undivided estate is co-ownership by the heirs."

As co-owners, the parties may have unequal shares in the common property, quantitatively speaking. But in a qualitative sense, each co-owner has the same right as any one of the other co-owners. Every co-owner is therefore

the owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract, because until division is effected such portion is not concretely determined.

Whether or not the provisions of Article 448 should apply to a builder in good faith on a property held in common has been resolved in the affirmative in the case of Spouses del Campo vs. Abesia, wherein the Court ruled that:

The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-owner builds, plants or sows on the land owned in common for then he did not build, plant or sow upon land that exclusively belongs to another but of which he is a co-owner. The co-owner is not a third person under the circumstances, and the situation is governed by the rules of co-ownership.

However, when, as in this case, the ownership is terminated by the partition and it appears that the home of defendants overlaps or occupies a portion of 5 square meters of the land pertaining to plaintiffs which the defendants obviously built in good faith, then the provisions of Article 448 of the new Civil Code should apply. Manresa and Navarro Amandi agree that the said provision of the Civil Code may apply even when there is a co-ownership if good faith has been established.

In other words, when the co-ownership is terminated by a partition and it appears that the house of an erstwhile co-owner has encroached upon a portion pertaining to another co-owner which was however made in good faith, then the provisions of Article 448 should apply to determine the respective rights of the parties.

Petitioner's second assigned error is however well taken. Both the trial court and the Appellate Court erred when they peremptorily adopted the "workable solution" in the case of Grana vs. Court of appeals, and ordered the owner of the land, petitioner Florencio, to sell to private respondents, Juan and Isidro, the part of the land they intruded upon, thereby depriving petitioner of his right to choose. Such ruling contravened the explicit provisions of Article 448 to the effect that "(t)he owner of the land . . . shall have the right to appropriate . . .or to oblige the one who built . . . to pay the price of the land . . . ." The law is clear and unambiguous when it confers the right of choice upon the landowner and not upon the builder and the courts.

Thus, in Quemuel vs. Olaes, the Court categorically ruled that the right to appropriate the works or improvements or to oblige the builder to pay the price of the land belongs to the landowner.

Filipinas Colleges Inc. vs. Garcia Timbang

FACTS:

Filipinas Colleges was declared to have acquired the rights of the spouses Timbang and in consideration thereof, Filipinas Colleges was ordered to pay the spouses P15,807.90 plus other amounts. Filipinas Colleges was required to deposit this to the court within 90 days after the decision shall have become final.

Meanwhile, Maria Gervacio Blas was declared to be a builder in good faith of the school building constructed on the lot in question and entitled to be paid the amount of P19,000 for it. Filipinas Colleges, purchaser of the said building, was ordered to deliver to Blas stock certificate and pay her P8,200 representing the unpaid balance of the purchase price of the house.

Filipinas Colleges failed to pay the said amounts. Spouses Timbang made known to the court that they had chosen to compel Filipinas Colleges to acquire the land and pay them the value thereof. The spouses asked for an order of execution, which was granted by court. Moreover, the levied on the house of the builder and then sold the same in public auction.

The Sheriff of Manila sold the building in public auction in favor of the spouses Timbang as the highest bidders. Personal properties of Filipinas Colleges were also auctioned in favor of the spouses.

The lower court declared the Sheriff’s certificate of sale covering the school building null and void unless within 15 days from notice of said order, the successful bidders pay Blas P5,750. It also declared Filipinas Colleges as the owner of undivided interest in Lot 2-1 on which the building sold in the auction sale is situated and ordered the sale in public auction of said undivided interest of the Filipinas Colleges in favor of Blas and against Filipinas Colleges.

The appellant spouses posited that because the builder in good faith has failed to pay the price of the land after the owners thereof exercised their option under Art 448, the builder lost his right of retention provided in Art 546 and by operation of Art 445, the appellants as owners of the land automatically became the owners of the building.

ISSUE: Whether or not the contention of the appellants are valid

RULING: Negative.

Under the terms of these article, it is true that the owner of the land has the right to choose between appropriating the building by reimbursing the builder of the value thereof or compelling the builder in good faith to pay for his land. Even this second right cannot be exercised if the value of the land is considerably more than that of the building. In addition to the right of the builder to be paid the value of his improvement, Article 546 gives him the corollary right of retention of the property until he is indemnified by the owner of the land.

There is nothing in the language of these two article, 448 and 546, which would justify the conclusion of appellants that, upon the failure of the builder to pay the value of the land, when such is demanded by the land-owner, the latter becomes automatically the owner of the improvement under Article 445. The case of Bernardo vs. Bataclan, 66 Phil., 590 cited by appellants is no authority for this conclusion.

Although it is true it was declared therein that in the event of the failure of the builder to pay the land after the owner thereof has chosen this alternative, the builder's right of retention provided in Article 546 is lost, nevertheless there was nothing said that as a consequence thereof, the builder loses entirely all rights over his own building.

The question is; what is the recourse or remedy left to the parties in such eventuality where the builder fails to pay the value of the land? While the Code is silent on this Court in the cases of Miranda vs. Fadullon, et al., 97 Phil., 801; 51 Off. Gaz., [12] 6226; Ignacio vs. Hilario, 76 Phil., 605 and the cited case of Bernardo vs. Bataclan, supra.

a. decide to leave things as they are and assume the relation of lessor and lessee, and should they disagree as to the amount of rental then they can go to the court to fix that amount.

b. Should the parties not agree to leave things as they are and to assume the relation of lessor and lessee, another remedy is suggested in the case of Ignacio vs. Hilario, supra, wherein the court has ruled that the owner of the land in entitled to have the improvement removed when after having

chosen to sell his land to the other party, i.e., the builder in good faith fails to pay for the same.

c. A further remedy is indicated in the case of Bernardo vs. Bataclan, supra, where this Court approved the sale of the land and the improvement in a public auction applying the proceeds thereof first to the payment of the value of the land and the excess, if any, to be delivered to the owner of the house in payment thereof.

MANOTOK REALTY INC V. TECSON

FACTS:

In a complaint filed by the petitioner for recovery of possession against defendants, CFI ruled declaring respondent Nilo Madlangawa a builder in good faith. CA affirmed and SC dismissed for lack of merit.

Petitioner filed with the trial court motion for the approval of the petitioner's exercise of option and for satisfaction of judgment(that is final and executory) which was dismissed. Hence this petition for mandamus. However, since there is a pending case (Manotok v. NHA) involving the expropriation of the land in question it is better to suspend the current case til after the outcome of the expropriation proceedings is done.

Moreover, a fire engulfed the Tambunting estate covering the disputed area of the land.The expropriation case was not granted and the law that provided for such was declared unconstitutional.

Due to the fire, petitioner is contending that the execution of the decision must now involve the delivery of possession.

ISSUE:Whether or not there should be a delivery of possession by the respondent to the petitioner

RULING:

When the decision of the trial court became final and executory, it becomes incumbent upon the respondent judge to issue the necessary writ for the execution of the same.

Since the improvements have been gutted by fire, and therefore, the basis for private respondent's right to retain the premises has already been

extinguished without the fault of the petitioner, there is no other recourse for the private respondent but to vacate the premises and deliver the same to the petitioner.

DEL CAMPO V. ABESIA

When land is co-owned by two parties, but the co-ownership is terminated, Article 448 governs in case real property (like a house) encroaches the land of another. This is provided that good faith exists.

FACTS:The case involves two friendly parties who are co-owners of a corner lot at Flores and Cavan Streets in Cebu City. Plaintiff owns 2/3 of the lot and Defendant owns 1/3 of the same. The total size of the lot is 45 square meters (which is about the size of a typical Starbux café)

Later on, the two parties decided to divide the co-owned property into two lots. 30 square meters went to the plaintiffs and 15 square meters went to the defendants. From the sketch plan, both parties discovered that the house of the defendants occupied a portion of the plaintiff’s adjacent lot, eating 5 sqm of it. The parties then requested the trial court to adjudicate who should take possession of the encroached 5 sqm.

The trial court ruled that Art 448 does not apply. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent.

However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

Since art 448 does not apply, the Plaintiff cannot be obliged to pay for the portion of defendant’s house that entered into the 30 sqm lot, AND Defendant cannot be obliged to pay for the price of the 5 sqm their house occupied. Why? The RTC believed the rules of co-ownership should govern, and not that of accession.

RTC then assigned the full 30sqm to Plaintiff and ordered Defendants to demolish the 5sqm part of their house encroaching the 30sqm lot of the Plaintiffs. Defendants where aghast at having to axe the family home, hence they appealed.

CA affirmed the decision. So we have the SC coming to the rescue.

ISSUE:w/n the rules of accession applies (and not coownership) on property that used to be co-owned, but was subdivided.

HELD:The rule of accession applies because co-ownership was terminated upon the partitioning of the lot. Art 448 therefore governs. The house of Defendant overlapped that of Plaintiff, but this was built on good faith. Hence, the plaintiffs have the right to choose one of two options

> Appropriate the 5sqm portion of the house of Defendants after indemnifying the Defendants; or> Obliging the Defendants to pay a portion of the land on which their home rested. ( or they can rent it)

When the co-ownership is terminated by the partition and it appears that the house of defendants overlaps or occupies a portion of 5 square meters of the land pertaining to plaintiffs which the defendants obviously built in good faith, then the provisions of Article 448 of the new Civil Code should apply.

Manresa and Navarro Amandi agree that the said provision of the Civil Code may apply even when there was co-ownership if good faith has been established. 

Applying the aforesaid provision of the Civil Code, the plaintiffs have the right to appropriate said portion of the house of defendants upon payment of indemnity to defendants as provided for in Article 546 of the Civil Code. Otherwise, the plaintiffs may oblige the defendants to pay the price of the land occupied by their house.

However, if the price asked for is considerably much more than the value of the portion of the house of defendants built thereon, then the latter cannot be obliged to buy the land. The defendants shall then pay the reasonable rent to

the plaintiff upon such terms and conditions that they may agree. In case of disagreement, the trial court shall fix the terms thereof. Of course, defendants may demolish or remove the said portion of their house, at their own expense, if they so decide.

Article 448 of the New Civil Code provides as follows:

Art. 448. The owner of the land on which anything has been built, sown, or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

PEDRO P. PECSON V. COURT OF APPEALS, SPS. NUGUID

FACTS:Pedro Pecson was the owner of a commercial lot on which he built a 4-door-2-storey apartment building. He failed to pay realty taxes amounting to P12k so the lot was sold at public auction to Mamerto Nepomuceno who later on sold it to the Sps. Nuguid.

Pecson challenged the validity of the auction before the RTC but was dismissed but the RTC held that the apartment bldg was not subject of the litigation. On appeal, the CA appealed in toto the decision of the RTC that the apartment bldg was not included in the auction sale.

After an entry of judgment was made, the Sps. Nuguid filed a motion with the RTC for a motion for delivery of possession of the lot and the apartment bldg citing Art. 546 of the CC.

The RTC issued an order declaring that the owner of the lot and apartment bldg were the Sps. Nuguid and to pay the construction cost of the apartment before a writ of possession would be issued and to pay rent to the spouses. Pecson moved for reconsideration but the Trial court did not act on it, instead it issued a writ of possession.

The CA affirmed in part the decision declaring the cost of construction can be offset from the amount of rents to be collected and that since Sps. Nuguid opted to appropriate the improvement, Pecson is entitled to be reimbursed the cost of construction at the time it was built in 1965 which is at P53k and the right the retain the improvement until full indemnity is paid.

Thus the case at bar.

ISSUE:Whether or not Art. 448 and 546 applies in the case at bar

HELD: YES

With regard to Art. 448, the provision on indemnity may be applied in analogy. Whoever is the owner of the land may appropriate whatever has been built, planted or sown after paying indemnity. However, it does not apply when the owner of the land is also the builder of the works on his own land who later on loses ownership by sale or donation.

Art. 546 refers to the necessary and useful expenses which shall be refunded to the possessor in good faith with right of retention. However, it does not state how to determine the value of the useful improvement. The respondents [court and private respondents alike] espouses as sufficient reimbursement the cost of construction in 1965, however, this is contrary to previous rulings which declares that the value to the reimbursed should be the present market value of said improvements so as not to unjustly enrich either of the parties.

[The trial court erred in ordering Pecson to pay rent since the Sps. Nuguid has yet to pay the indemnity therefore Pecson has the right to retain the improvements and the income thereof. The case was remanded to the trial court for determination of the current market value of the apartment bldg and ordered the Sps to pay Pecson otherwise it shall be restored to Pecson until payment of indemnity.]