Property Accession

8/13/2019 Property Accession

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ALL FOR JESUS PROPERTYCASES ACCESSION

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Bachrach Motor vs. LedesmaThe Bachrach Motor Co., Inc., vs. Mariano Lacson Ledesma, Talisay-Silay Milling Co., Inc., and the

Philippine National BankG.R. No. 42462, August 31, 1937

Imperial, 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 Ledesmas 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 phrasemerely refers to things analogous to rents, leases, and annuities. Assuming that it is income, still it is


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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.

Digest by: 2S, San Beda Law 2010-2011


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Bernardo v. Bataclan G.R. No. L-44606, November 28, 1938

Facts:

By a contract of sale executed from Pastor Samonte and others ownership of a parcel of land of about90 hectares. To secure possession of the land from the vendors the said plaintiff, on July 20, 1929,

instituted a civil case. The trial court found for the plaintiff in a decision which was affirmed by this

Supreme Court on appeal (G.R. No. 33017). When plaintiff entered upon the premises, however, he

found the defendant herein, Catalino Bataclan, who appears to have been authorized by former

owners, as far back as 1922, to clear the land and make improvements thereon. As Bataclan was not a

party in the civil case, plaintiff, on June 11, 1931, instituted against him a civil case. In this case,

plaintiff was declared owner but the defendant was held to be a possessor in good faith, entitled for

reimbursement in the total sum of P1,642, for work done and improvements made.

The defendant states that he is a possessor in good faith and that the amount of P2,212 to which he isentitled has not yet been paid to him. Therefore, he says, he has a right to retain the land in

accordance with the provisions of article 453 of the Civil Code. In obedience to the decision of this

court in G.R. No. 37319, the plaintiff expressed his desire to require the defendant to pay for the value

of the land. The said defendant could have become owner of both land and improvements and

continued in possession thereof. But he said he could not pay and the land was sold at public auction

to Toribio Teodoro. When he failed to pay for the land, the defendant herein lost his right of retention.

Issue:

Whether or not there is good faith.

Held:

The judgment of the lower court is accordingly modified by eliminating therefrom the reservation

made in favor of the defendant-appellant to recover from the plaintiff the sum of P2,212. In all the

respects, the same is affirmed, without pronouncement regarding costs. So ordered

The sale at public auction having been asked by the plaintiff himself (p. 22, bill of exceptions) and the

purchase price of P8,000 received by him from Toribio Teodoro, we find no reason to justify a rapture

of the situation thus created between them, the defendant-appellant not being entitled, after all, to

recover from the plaintiff the sum of P2,212.


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BERNARDO v BATACLAN (1938; Laurel)

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 formerowners, 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 toreimbursement in the total sum of P1,642, for work done and improvements made. Both partiesappealed the decision.

The court thereafter made some modifications by allowing the defendant to recover compensationamounting 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 perhectare 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 dayswithin 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 justand 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 landin 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 requiringthe latter to pay for the land.

IGNACIO v HILARIO (1946; Moran)

Facts:Elias Hilario and his wife Dionisia Dres filed a complaint against Damian, Francisco and LuisIgnacio 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 thehouses and granaries built by them on the residential portion with the rights of a possessor in goodfaith, in accordance with article 361 of the Civil Code.


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Subsequently, in a motion filed in the same CFI (now handled by respondent Judge Hon. FelipeNatividad), 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 wasfiled 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 determinationof 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 againstHilarion 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 faithmay 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 valuewhich 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 pay

The 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 and454, 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 suchremotion 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 void

The 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 exercised

In 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 areerected as well as the periods of time within which the option may be exercised and payment should


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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 unsettledup to the time the petition is filed in the present case.


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Francisco Depra vs. Agustin Dumlao GR L-57348 16 May 1985

Facts: Depra is the owner of a parcel of land to which Dumlao, living in an adjoining lot, had built a

kitchen that encroached an area of 34 square meters. The encroachment was discovered in arelocation survey of Depras property. Upon discovery, Depras mother wrote a demand letter asking

Dumlao to move back from his encroachment. She then filed a case of Unlawful Detainer againstDumlao.

In the trial court it was proven that Dumlao was a builder in good faith; thus the Municipal Courtrendered it judgment that reads:

Ordering that a forced lease is created between the parties with the plaintiffs, as lessors, and the

defendants as lessees, over the disputed portion with an area of thirty four (34) square meters, therent to be paid is five (P5.00) pesos a month, payable by the lessee to the lessors within the first five

(5) days of the month the rent is due; and the lease shall commence on the day that this decision shallhave become final.

Neither party appealed. However, Depra did not accept the payment of rentals so that Dumlaodeposited such rentals with the Municipal Court.

Depra then filed a Complaint for Quieting of Title against Dumlao, the latter admitted theencroachment but alleged, that the present suit us barred by res judicate by virtue of the decision of

the Municipal Court.

DEPRA claims that the Decision of the Municipal Court was null and void ab initio because itsjurisdiction is limited to the sole issue of possession, whereas decisions affecting lease, which is an

encumbrance on real property, may only be rendered by Courts of First Instance.

Issue:

I. Whether or not the Municipal Courts decision was null and void ab initio because it has nojurisdiction over the case?

II. Whether or not the factual situations of DUMLAO and DEPRA conform to the juridical positionsrespectively defined by law, for a "builder in good faith" under Article 448, a "possessor in good faith"under Article 526 and a "landowner in good faith' under Article 448?

Held:

I. Addressing out selves to the issue of validity of the Decision of the


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Municipal Court, we hold the same to be null and void. The judgment in a detainer case is effective in

respect of possession only (Sec. 7, Rule 70, Rules of Court). The Municipal Court over-stepped its

bounds when it imposed upon the parties a situation of "forced lease", which like "forced co-

ownership" is not favored in law. Furthermore, a lease is an interest in real property, jurisdiction over

which belongs to Courts of First Instance (now Regional Trial Courts) (Sec. 44(b), Judiciary Act of

1948; Sec. 19 (2) Batas Pambansa Blg. 129). Since the Municipal Court, acted without jurisdiction, its

Decision was null and void and cannot operate as res judicata to the subject complaint for Queting ofTitle. Besides, even if the Decision were valid, the rule on res judicata would not apply due to

difference in cause of action. In the Municipal Court, the cause of action was the deprivation of

possession, while in the action to quiet title, the cause of action was based on ownership.

Furthermore, Sec. 7, Rule 70 of 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. "

II. 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 theprice 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(Paragraphing supplied)

Pursuant to the foregoing provision, DEPRA has the option either to pay for the encroaching part ofDUMLAO's kitchen, or to sell the encroached 34 square meters of his lot to DUMLAO. He cannot

refuse to pay for the encroaching part of the building, and to sell the encroached part of his land, 5 as

he had manifested before the Municipal Court. But that manifestation is not binding because it wasmade in a void proceeding.

However, the good faith of DUMLAO is part of the Stipulation of Facts in the Court of First Instance.It was thus error for the Trial Court to have ruled that DEPRA is "entitled to possession," without

more, of the disputed portion implying thereby that he is entitled to have the kitchen removed. He is

entitled to such removal only when, after having chosen to sell his encroached land, DUMLAO fails topay for the same. 6 In this case, DUMLAO had expressed his willingness to pay for the land, butDEPRA refused to sell.


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Ortiz 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 latters property, which was formerly a subject of homesteadapplication. In the said application, the wards 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 whereindefendant Comintan was the only bidder.

The plaintiffs 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 Ortizto 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 theproperty 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 conditionthat after the accounting of the tolls collected by plaintiff, there is still and amount due and payable tothe 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 wholeproperty, 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 thedecision 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 amountto 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.


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The issue decisive of the controvery isafter the rendition by the trial court of its judgment in CivilCase No. C-90 on March 22, 1966 confirming the award of one-half of the property to Quirino

Comintanwhether 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 thepossession is legally interrupted. Possession in good faith ceases or is legally interrupted from themoment defects in the title are made known to the possessor, by extraneous evidence or by the filingof an action in court by the true owner for the recovery of the property. Hence, all the fruits that thepossessor 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 theproperty. he principal characteristic of the right of retention is its accessory character. It is accessoryto a principal obligation. Considering that the right of the possessor to receive the fruits terminateswhen his good faith ceases, it is necessary, in order that this right to retain may be useful, to concedeto the creditor the right to secure reimbursement from the fruits of the property by utilizing itsproceeds for the payment of the interest as well as the principal of the debt while he remains inpossession.3. Petitioner cannot appropriate for his own exclusive benefit the tolls which he collected fromthe property retained by him. It was his duty under the law, after deducting the necessary expenses forhis administration, to apply such amount collected to the payment of the interest, and the balance tothe 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, furtherconsidering 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 thefact 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 ofLands and, therefore, petitioner is entitled to remain in possession thereof. This is not disputed byrespondent Eleuterio Zamora. After public sale is had and in the event that Ortiz is not declared thesuccessful bidder, then he should be reimbursed by respondent Zamora in the corresponding amountfor 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 waivedtheir rights over the controverted land.

Justo, Florencios father owned 5/8 of the land. Thereafter, Justo acquired 1/8 share of brother Leonfor 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 Juanand Isidro each has 1/8 share on the land.


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Petitioner brought an action for partition. Before it was promulgated, Florencio sol 134 sqm of hisshare. 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 arebuilders 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-ownershipby 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. Everyco-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 heldin common has been resolved in the affirmative in the case of Spouses del Campo vs.Abesia, wherein

the Court ruled that:

The courta quocorrectly 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 underthe 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 thehome 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 CivilCode 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 rightsof 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 landownerand not upon the builder and the courts.

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


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Filipinas Colleges Inc. vs. Garcia Timbang

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 decisionshall 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 herP8,200 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. Thespouses asked for an order of execution, which was granted by court. Moreover, the levied on thehouse 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 thehighest bidders. Personal properties of Filipinas Colleges were also auctioned in favor of the spouses.

The lower court declared the Sheriffs 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 theFilipinas 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 landautomatically 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 isconsiderably 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 thevalue 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 byappellants is no authority for this conclusion. Although it is true it was declared therein that in the


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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 thatas 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 ofMiranda vs.Fadullon, et al., 97 Phil., 801; 51 Off. Gaz., [12] 6226;Ignacio vs. Hilario, 76 Phil., 605 and the cited

case ofBernardo vs. Bataclan, supra.

a. decide to leave things as they are and assume the relation of lessor and lessee, and shouldthey 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 lessorand lessee, another remedy is suggested in the case ofIgnacio vs. Hilario, supra, wherein the courthas ruled that the owner of the land in entitled to have the improvement removed when after havingchosen 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 ofBernardo vs. Bataclan, supra, where this Courtapproved the sale of the land and the improvement in a public auction applying the proceeds thereoffirst to the payment of the value of the land and the excess, if any, to be delivered to the owner of thehouse in payment thereof.


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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.


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SPOUSES DEL CAMPO VS. ABESIA

Facts: This case involves a parcel of land with an area of only about 45 square meters. An action for

partition was filed by plaintiffs in the CFI of Cebu. Plaintiffs and defendants are co-ownerspro

indivisoof this lot in the proportion of and 1/3 share each, respectively. The trial court appointed a

commissioner in accordance with the agreement of the parties. He submitted a report to the trial court

recommending that the property be divided into two lots: Lot 1161-A with an area of 30 square metersfor plaintiffs and Lot No. 1161-B with an area of 15 square meters for the defendants. The houses of

plaintiffs and defendants were surveyed and shown on the sketch plan. The house of defendants

occupied the portion with an area of 5 square meters of Lot 1161-A of plaintiffs. The parties manifestedtheir conformity to the report and asked the trial court to finally settle and adjudicate who among theparties should take possession of the 5 square meters of the land in question.

ISSUE: Whether or not Art 448 is applicable to a builder in good faith when the property involved is

owned in common

RULING: Affirmative

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 underthe circumstances, and the situation is governed by the rules of co-ownership.

However, when, as in this case, the co-ownership is terminated by the partition and it appears that thehouse 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 thenew 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.


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PECSON VS. COURT OF APPEALS

FACTS: Pecson was the owner of a commercial lot on which he built a four-door storey-apartment

building. For his failure to pay realty taxes, the lot was sold at public auction who in turn sold it to theprivate respondents. Petitioner challenges the validity of the auction sale.

ISSUE: Whether or not Art 448 finds application in the said case

RULING: Negative

By its clear language, Art 448 refers to a land whose ownership is claimed by two or more parties, one

of whom has built some works or sown or planted something. The rule on good faith laid down in Art

526 of the Civil Code shall be applied in determining whether the builder, sower or planter had acted

in good faith.

Art 448 does not apply to a case where the owner of the land is the builder, sower or planter who then

later loses ownership of the land by sale or donation. Where the true owner himself is the builder of

works on his own land, good faith or bad faith is irrelevant. Thus, in strict point of law, Art 448 is notapposite to the case at bar. Nevertheless, the court applied the provision therein on indemnity.


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Nuguid vs CA

171 SCRA 213, G.R. No. 77423

March 13, 1989

FACTS:

The deceased spouses Victorino and Crisanta dela Rosa were the registered owners of a parcel of land

situated in Bataan, and covered by OCT. Victorino dela Rosa (widowed by then) sold one half of the

said property to Juliana Salazar for P 95.00. This sale was not registered. Immediately after the sale,

Juliana Salazar constructed a house on the lot she purchased. Petitioner spouses caused the

registration of a document entitled Kasulatan ng Partihan at Bilihan. In this document, Marciana

dela Rosa, Victoria Buenaventura, Ernesto Buenaventura, Virgilio Buenaventura, and Felicisimo

Buenaventura-all heirs of Victorino and Crisanta dela Rosa- sold to the petitioners the entire area of

the property for the sum of P300.00. Subsequently, the OCT was cancelled by the Register of Deeds,

and TCT was issued in the names of the petitioners.

The private respondents claim that the document is a forged deed. The petitioners assert that the land

subject of this case was offered to them for sale by Nicolas dela Rosa who then claimed that he had

already purchased the shares of the heirs over the subject property as evidenced by a private

document entitled Kasunduan. The RTC dismissed the complaint filed by the private respondents,

but on appeal, this was reversed by the Court of Appeals. Hence, this petition.

ISSUE:

Whether or not the subsequent sale is valid, the petitioner spouses being purchasers in good faith.

HELD:

Yes.The Original Certificate of Title No. 3778 covering the entire property was clean and free from any

annotation of an encumbrance, and there was nothing whatsoever to indicate on its face any vice or

infirmity in the title of the registered owners-the spouses Victorino and Crisanta dela Rosa. Thus, the

petitioners could not have known of the prior sale to Juliana Salazar as, precjsely, it was not

registered. The general rule is that if the property sold is registered land, the purchaser in good faith

has a right to rely on the certificate of title and is under no duty to go behind it to look for flaws. This

notwithstanding, the petitioners did not rely solely upon the certificate of title. They personallyinspected the subject property.

Undeniably, they found the same to be occupied by two houses, one belonging to a certain Doray dela

Rosa and the other to spouses Pedro Guevarra and Pascuala Tolentino, parents of the respondents

Guevarras. Upon being informed of the petitioners desire to purchase the land, Doray dela Rosa

apparently offered to sell her house, which offer was accepted by the petitioners. As regards the

spouses Guevarra, we find no reason to disturb the trial courts finding that they themselves requested

that they be allowed to refrain on the property until such time that the petitioners would need the

entire premises; and in lieu of rentals to the petitioners, they offered to continue paying the real estate

taxes for one-half of the property as this was their arrangement with the previous owners-to which


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request the petitioners acceded. Evidently, neither Doray dela Rosa nor the spouses Guevarra

professed ownership over the portions of land they were occupying; on the contrary, by their

actuations they expressly acknowledged that they were not the real owners of the said property. The

spouses Guevarra, in particular, made no mention of the prior unregistered sale to their predecessor-

in-interest, Juliana Salazar.

Thus, when the petitioners registered the sale in their favor with the Register of Deeds, they did so

without any knowledge about the prior sale in favor of Juliana Salazar. The petitioners, therefore, had

acted in good faith.

SPOUSES NUQUID v CA (2005;)1FACTS:

Pedro Pecson owned a commercial lot in Kamias and built a four-door two-storey apartmentbuilding. He failed to pay realty taxes, so the LOT was sold at public auction to MamertoNepomuceno, and later to the Sps. Juan and Erlinda Nuguid.

Case 1: Pecson challenged the validity of the auction sale.SC: Sps. Nuguid owned the lot, whilePecson still owned the building (May 5, 1993).

Case 2: Nuguids sought delivery of possession of the lot and apartment building, i.e., they want toacquire the building.SC (Nov. 15, 1993):

1. Art. 448, NCC: Case is apposite as when the landowner is the BPS who then later losesownership through sale;

2. Current market value of the building should be the basis of the indemnity;3. Pecson entitled to retain ownership of the building and the income therefrom;4. CA erred in upholding TCs determination of indemnity (P53,000.00 construction cost) and

in also ordering Pecson to account for rent.5. Remanded to TC for determination of CMV.

Case 3 (Case at bar): CMV = P400,000. Pecson already received P300,000 from Sps. Nuguid; balanceof P100,000 paid thereafter. TC directed Sps. Nuguid to also pay P1.34 million for rentals from Nov.1993 to Dec. 1997 (@ P28K/mo.) Thus, petition.

ISSUE: W/N the spouses should pay rent collected during period of Pecsons dispossession of thebuilding? YES.

HELD:

Pecson is a builder in good faith. Nuguid is the landowner. Art. 448, NCC entitles landowner (Nuguid) to either appropriate the building upon payment of

indemnity or sell the land. Nuguid sought appropriation.

Art. 546, NCC entitles the BPS to full reimbursement for all the necessary and useful expenses,and the right of retention until full reimbursement is made.

However, until the payment of indemnity is full, the BPS (Pecson) has a RIGHT of RETENTION(which includes the right to the expenses and the right to the fruits) as a builder in good faith.Thus, he cannot be compelled to pay rentals during the period of retention nor be disturbed in hispossession by ordering him to vacate. The landowner is prohibited from offsetting orcompensating the necessary and useful expenses with the fruits received by the BPS in good faith.

DISPOSITIVE: TC decision reinstated.

2) Natural

a. Alluvium1Rory Lambino


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J.M. TUASON and CO., INC., petitioner,-versus-

ESTRELLA VDA. DE LUMANLAN and the COURT OF APPEALS (FIFTH DIVISION), respondents.

Tuason and Sison for petitioner.Jose Chuico and Wilfredo E. Dizon for respondents.

REYES, J.B.L.,Actg. C.J.:

J. M. Tuason & Co., Inc. petitioned for a review by certiorariof the decision issued by the Court ofAppeals (Fifth Division) in its case CA-G.R. No. 27259-R, reversing the judgment rendered by theCourt of First Instance of Rizal (Civil Case No. Q-4243) that ordered defendant (now respondent)Estrella Vda. de Lumanlan to vacate the lot occupied by her in Sta. Mesa Heights Subdivision, barrioTatalon, Quezon City, and to remove therefrom the house and other structures constructed thereon,paying P240.00 a month until restoration of the premises to plaintiff.

The facts are stated in the decision of the Court of Appeals (accepted by both parties) in this wise:

. . . That in the complaint filed in this case by plaintiff, J. M. Tuason & Co., Inc., hereinaftercalled Tuason, on 30 April, 1969, the basis is that it being the registered owner of the propertyknown as Santa Mesa Heights Subdivision, situated at Barrio North Tatalon, Quezon City,herein defendant sometime in April, 1949 unlawfully entered into possession of 800 squaremeters, and therein constructed his house so that plaintiff prayed for ejectment and damagesfor the occupancy; and defendant in her answer set forth affirmative defensethat on 12March, 1949, she had bought the property she was occupying from one Pedro Deudor, andthat in a compromise agreement between Pedro and Tuason on 16 March 1953, approved bythe Court of First Instance of Quezon City, she was one of the buyers therein recognized, sothat she asked that her rights be recognized and the complaint dismissed; but on the basis ofthe evidence presented by both parties in the trial, Lower Court sustained plaintiff, holding

that Tuason being the registered owner, and the question being purely one of possession,therefore, defendant's said evidence was "completely immaterial". . . . (Page 2 of Decision,Annex "A" of Petition.)

Upon the facts thus stated, the Fifth Division of the Court of Appeals held that, pursuant to thisSupreme Court's ruling inEvangelista vs. Deudor, L-12826, September 10, 1959, the CompromiseAgreement (Exh. 2) between the petitioner Tuason & Co. and the Deudors constituted a valid defenseagainst the possessory action filed by Tuason & Co.; that under paragraph 7 of said CompromiseAgreement, petitioner bound and committed itself to sell to respondent Lumanlan the lot occupied byher at a reasonable price; that said respondent had a right to compel petitioner to accept payment forthe lot in question; and that the compromise agreement legalized the possession of respondent.

These pronouncements are assailed by the petitioner in this appeal as legally incorrect and contrary tothe decisions of this Court.

The terms of the compromise agreement between the heirs of Telesforo Deudor and J. M. Tuason &Co. have been taken cognizance of in many decisions of this Court (Evangelista vs. Deudor,jam. cit;Deudor vs. J. M. Tuason & Co., L-18768, May 30, 1961, and L-20105, Oct. 31, 1963; J. M. Tuason vs.Jaramillo, et al., L-18932-34, Sept. 30, 1963; J. M. Tuason vs. Macalindong, L-15398, Dec. 29, 1962and others). The Deudors had therein recognized the registered title of Tuason & Co. over the landsclaimed by them, and received payment of certain sums of money; but as the Deudors had, prior to thecompromise, sold their possessory rights to various persons, paragraph seventhof the compromiseagreement (case Q-135 of the court of origin) provided:

That the sales of the possessory rights claimed by the DEUDORS, are described in the lists

submitted by them to the OWNERS which are attached hereto marked Annexes "B" and "C"and made part hereof. Whatever amounts may have been collected by the DEUDORS onaccount thereof, shall be deducted from the total sum of P1,201,063.00 to be paid to them. It


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shall be the joint and solidary obligation of the DEUDORS to make the buyer of the lotspurportedly sold by them to recognize the title of the OWNERS over the property purportedlybought by them, and to make them sign, whenever possible, new contracts of purchase forsaid property at the current paces and terms specified by the OWNERS in their sales of lots intheir subdivision known at "Sta. Mesa Heights Subdivision." The DEUDORS HEREBY advisedthe OWNERS that the buyer listed in Annex "B" herein with the annotation "continue" shall

buy the lots respectively occupied by them and shall sign contracts, but the sums already paidby them to the DEUDORS amounting to P134,922.84 (subject to verification by the Court)shall be credited to the buyers and shall be deducted from the sums to be paid to theDEUDORS by the OWNERS. The DEUDORS also advise the OWNERS that, the buyers listedin Annex "C" herein with the annotation "Refund" have decided not to continue with theirformer contracts or purchases with the DEUDORS and the sums already paid by them to theDEUDORS TOTALLING P101,182.42 (subject to verification by the Court) shall be refundedto them by the OWNERS and deducted from the sums that may be due to the DEUDORS fromthe OWNERS (J.M. Tuason & Co., Inc. vs. Jaramillo, L-18932, Sept. 30, 1963);

Careful analysis of this paragraph of the compromise agreement will show that while the same created"a sort of contractual relation" between the J. M. Tuason & Co., Inc., and the Deudor vendees (as ruledby this Court in Evangelista vs. Deudor, ante), the same in no way obligated Tuason & Co. to sell to

those buyers the lots occupied by them at the price stipulated with the Deudors, but at "the currentprices and terms specified by the OWNERS (Tuason) in their sales of lots in their subdivision knownas 'Sta. Mesa Heights Subdivision'". This is what is expressly provided. Further, the paragraph plainlyimports that these buyers of the Deudors must "recognize the title of the OWNERS (Tuason) over thepropertypurportedlybought by them" from the Deudors, and "sign, whenever possible, new contractsof purchase for said property"; and, if and when they do so, "the sums paid by them to the Deudors . . .shall be credited to the buyers." All that Tuason & Co. agreed to, therefore, was to grant the Deudorbuyers preferential right to purchase "at current prices and terms" the lots occupied by them, upontheir recognizing the title of Tuason & Co., Inc., and signing newcontracts therefor; and to credit themfor the amounts they had paid to the Deudors.

Nowhere in her answer did the respondent Estrella Vda. de Lumanlan claim that she had signed a newcontract with J. M. Tuason & Co., Inc. for the purchase of the lot occupied. What is worse, instead of

recognizing the title of the owners (Tuason & Co.) as required by the aforementioned compromiseagreement, she charged in paragraph 6 of her special defense (Rec. on Appeal, p. 10) that "PedroDeudor and his co-owners and the plaintiff herein . . . conspired together and helped each other. ..by entering into a supposed Compromise" whereby "Pedro Deudor and his co-owners renounced,ceded, waived and quitclaimed all their rights, title and interest in the property including the land soldto herein defendant, in favor of the plaintiff J. M. Tuason & Co., Inc., in consideration of the sum ofP1,201,063.00, without the knowledge and consent, and much less the intervention of the hereindefendant." In other words, the respondent Lumanlan in her answer repudiated and assailed thecompromise between the Deudors and J. M. Tuason & Co. How then can she now claim to takeadvantage and derive rights from that compromise?

Without the compromise agreement, Lumanlan must justify her possession on the basis of apretended superiority of the Deudors' old Spanish informacion posesoria over Tuason's Certificate of

Title No. 1267, traceable back to the original Certificate of Title No. 735 of Rizal, issued under theRegistration Act No. 496. But, as ruled by this Court in previous cases, Lumanlan is by now barredfrom assailing the decree of registration in favor of Tuason & Co., Inc.'s predecessors twenty yearsafter its issuance (Tiburcio vs. PHHC, L-13429, Oct. 31, 1959; Tuason & Co. vs. Bolaos, 95 Phil. 107;Tuason & Co. vs. Santiago, 99 Phil. 622-623; Tuason & Co. vs. Macalindong, supra; Tuason & Co. vs.Jaramillo, L-16827, Jan. 31, 1963).

It is thus apparent that no legal basis exists for the pronouncement in the appealed decision thatTuason & Co. had committed itself to sell to Lumanlan the lot occupied by her at a reasonable price, orthat the compromise agreement legalized the possession of the respondent, since the latter does notrely on the compromise but, on the contrary, she assails it.

The Court of Appeals ruled that the price to be paid by Lumanlan to Tuason & Co., Inc., is governed byArticle 1474 of the new Civil Code of the Philippines, which provides that:


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Where the price cannot be determined in accordance with the preceding articles, or in anyother manner, the contract is inefficacious. However, if the thing or any part thereof has beendelivered to and appropriated by the buyer, he must pay a reasonable price therefor. What is areasonable price is a question of fact dependent on the circumstances of each particular case.

Since there has been no contract between petitioner Tuason & Co. and respondent Lumanlan for the

sale of the lot occupied by the latter, and by paragraph 7 of the Compromise Agreement (assumingthat respondent-appellee still has the right to invoke the same, and seek refuge thereunder), Tuason &Co. did not consider itself bound by the sales made by the Deudors, but demanded that the Deudorbuyers should sign new contracts with it at current prices specified for the sales of lots in "Sta. MesaHeights Subdivision" (ante) the aforequoted Article 1474 can have no bearing on the case, Lumanlannot being a buyer from Tuason & Co.

As to Lumanlan's allegation in her counterclaim that she should be deemed a builder in good faith, asimilar contention has been rejected in Tuason & Co. vs. Macalindong, L-15398, December 29, 1962,where we ruled that there being a presumptive knowledge of the Torrens titles issued to Tuason & Co.and its predecessors-in-interest since 1914, the buyer from the Deudors (or from their transferees) cannot, in good conscience, say now that she believed her vendor had rights of ownership over the lotpurchased. The reason given by the Court is that

Had he investigated before buying and before building his house on the questioned lot, hewould have been informed that the land is registered under the Torrens system in the name ofJ. M. Tuason & Co., Inc., If he failed to make the necessary inquiry, appellant is now boundconclusively by appellee's Torrens title (Sec. 51, Act 496; Emas vs. Zuzuarregui, 35 Phil. 144)(Tuason & Co., Inc. vs. Macalindong, ante).

Lumanlan had chosen to ignore the Torrens title of Tuason & Co., Inc. and relied instead upon theDeudors' claim of ownership, perhaps because such course appeared to her as more advantageous;hence, she has only herself to blame for the consequences now that the Deudors' claim has beenabandoned by the Deudors themselves, and can not pretend good faith. The Court of First Instance,therefore, did not err in holding that she was not a rightful possessor and sentencing her to vacate.

Respondent could have asked that she recover or be credited with the amounts paid by her to theDeudors, but as no claim to such credit was ever advanced by her in the trial Court, nopronouncement can be made thereon in this appeal. Equity demands, however, that her right to claimsuch return, or to have the amount offset against the sums she was sentenced to pay, should be, as itis, reserved.

WHEREFORE, the decision of the Court of Appeals is reversed and that of the Court of First Instancereinstated. Costs against respondent, Estrella Vda. de Lumanlan.

Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro and Fernando, JJ., concur.Angeles, J., took no part.Concepcion, C.J., is on leave.


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TECHNOGAS PHIL. V. CA

268 SCRA 5

FACTS:Technogas owned property with buildings and walls. Uy bought anadjacent property. There was an agreement for Technogas to demolish the

wall. Uy filed a complained but the case was dismissed. This prompted

him to dig a hole along the wall, which led to the partial collapse of the wall. A case for

malicious mischief was filed against Uy.

HELD:

1. Unless one is versed in the science of surveying, no one can determine the precise extent or

location of the property by merely examining his proper title.

2. The supervening awareness of the encroachment by petitioner

doesn't militate against its right to claim the status of builder in good faith.

3. Bad faith isnt imputable to a registered owner of a land when a part of his building encroaches

upon a builders land


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PLEASANTVILLE DEVT CORP v CA()2FACTS

Edith Robillo purchased a parcel of land, Lot 9, from Pleasantville Devt Corporation inPleasantville Subdivision, Bacolod City. Eldred Jardinico bought the rights to the lot fromRobillo. At that time, Lot 9 was vacant.

Upon completing all payments and securing a TCT in his name, Jardinico discovered thatimprovements had been introduced on Lot 9 by Wilson Kee, who had taken possessionthereof.

It appears that Kee bought on installment Lot 8 from CT Torres Enterprises Inc (CTTEI), thereal estate agent of Pleasantville.

Under the Contract to Sell, Kee could and did possess the lot even before the completion ofpayments.

Zenaida Octaviano, CTTEIs employee, was the one who mistakenly pointed out Lot 9 (insteadof Lot 8) to Kees wife. Thereafter, Kee built his residence, a store, an auto repair shop, andother improvements on the lot.

Jardinico confronted Kee after discovering that the latter was occupying Lot 9. Kee refused tovacate, hence Jardinico filed an ejectment suit with damages.

RTC: Kee is a builder in bad faith. Assuming arguendo that Kee was acting in good faith, he wasnonetheless guilty of unlawfully usurping the possessory right of Jardinico over Lot 9 from the

time he was served with notice to vacate said lot, and was thus liable for rental.CA: Kee was a builder in good faith, as he was unaware of the mix-up when he beganconstruction of the improvements. The erroneous delivery was due to the fault of CTTEI and thusimputable to Pleasantville, the principal.

ISSUE: W/N Kee is a builder in good faith? YES

HELD/RATIO:

The roots of the controversy can be traced in the errors committed by CTTEI when it pointed thewrong lot to Kee.

Good faith consists in the belief of the builder that the land he is building on is his and he isignorant of any defect or flaw in his title. And as good faith is presumed, Pleasantville has theburden of proving bad faith on the part of Kee.

At the time he built the improvements on Lot 9, Kee believed that the said lot was the one hebought. He was not aware that the lot delivered to him was not Lot 8. Pleasantville failed to proveotherwise.

Violation of the Contract of Sale on Installment may not be the basis to negate the presumption that

Kee was a builder in good faith. Such violations have no bearing whatsoever on whether Kee was a

builder in good faith, that is, on his state of mind at the time he built the improvements on Lot 9.

These alleged violations may give rise to petitioners cause of action against Kee under the said

contract (contractual breach) but may not be bases to negate the presumption that Kee was a builder

in good

2Nessa Abad


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AGUSTIN V. IAC

FACTS:

Private respondents, Maria Melad and Pablo Binuyag are among those who are occupying the western

bank of the Cagayan River while on the eastern bank is owned by petitioner Eulogio Agustin. From

1919 to 1968, the Cagayan river has eroded the lands on the eastern bank including Agustins Lot

depositing alluvium on the land possessed by Pablo Binuyag. In 1968, after a typhoon which caused a

big flood, the Cagayan River changed its course and returned it to its 1919 bed and it cut through the

lands of respondents whose lands were transferred on the eastern side. To cultivate the lands they had

to cross the river. When they were cultivating said lands, (they were planting corn) Agustin

accompanied by the mayor and some policemen claimed the land and drove them away. So Melad and

Binuyag filed separate complaints for recovery of their lots and its accretions. The Trial Court held

ordered Agustin et. al to vacate the lands and return them to respondents. On appeal, the IAC

affirmed in toto the judgment thus the case at bar.

ISSUE:

Whether or not private respondents own the accretion and such ownership is not affected by the

sudden and abrupt change in the course of the Cagayan River when it reverted to its old bed

HELD: YES

Art. 457 states that the owner of the lands adjoining river banks own the accretion which they

gradually receive from the effects of the currents of the waters. Accretion benefits a riparian owner

provided that these elements are present: 1) deposit be gradual and imperceptible 2) it resulted from

the effects of the current of the water and 3) the land is adjacent to the river bank. When the River

moved from 1919 to 1968, there was alluvium deposited and it was gradual and imperceptible.

Accretion benefits the riparian owner because these lands are exposed to floods and other damage due

to the destructive force of the waters, and if by virtue of law they are subject to encumbrances and

various kinds of easements, it is only just that such risks or dangers should in some way becompensated by the right of accretion. Also, respondents ownership over said lots was not removed

when due to the sudden and abrupt change in the course of the river; their accretions were transferred

to the other side. Art. 459 states when the current of a river x x x segregates from an estate on its bank

a known portion of land and transfers it to another estate, the owner of segregated portion retains

ownership provided he removes the same w/in 2 years. And Art. 463 states that whenever the current

of a river divides itself into branches, leaving a piece of land or part thereof isolated, the owner of the

land retains ownership. He also retains it if a portion of land is separated from the estate by the

current.

Documents

Property Accession