Property Mrc Digests

MUST READ CASE DIGESTS|PROPERTY 1 2ND YEAR UST CIVIL LAW|2015-2016

LUIS MARCOS P. LAUREL v . HON. ZEUS C. ABROGAR, e t a l . G.R. No. 155076, 27 February 2006, FIRST DIVISION (CALLEJO, SR., J .)

TOPIC INVOLVED: Movable Property FACTS: Philippine Long Distance Telephone Company (PLDT), holder of a legislative franchise to render local and international telecommunication services under Republic Act No. 7082, filed a complaint for network fraud against Baynet Co., Ltd. (Baynet) which sells "Bay Super Orient Card" phone cards to people who call their friends and relatives in the Philippines. PLDT asserts that Baynet conducts its International Simple Resale (ISR) activities by utilizing an International Private Leased Lines (IPL) to course its incoming international long distance calls from Japan. The IPL is linked to switching equipment, which is then connected to PLDT telephone lines/numbers and equipment, with Baynet as subscriber. Through the use of the telephone lines and other auxiliary equipment, Baynet is able to connect an international long distance call from Japan to any part of the Philippines, and make it appear as a call originating from Metro Manila. Consequently, the operator of an ISR is able to evade payment of access, termination or bypass charges and accounting rates, as well as compliance with the regulatory requirements of the NTC. Thus, the ISR operator offers international telecommunication services at a lower rate, to the damage and prejudice of legitimate operators like PLDT. An information charging Baynet for theft was filed. Laurel (member of BOD of Baynet) maintained that business or revenue is not considered personal property, and that the prosecution failed to adduce proof of its existence and the subsequent loss of personal property belonging to another. ISSUE: Can the telecommunication services provided by PLDT and its business of providing said services be considered personal properties? HELD: NO. International telephone calls placed by Bay Super Orient Card holders, the telecommunication services provided by PLDT and its business of providing said services are not personal properties under Article 308 of the Revised Penal Code. The construction by the respondents of Article 308 of the said Code to include, within its coverage, the aforesaid international telephone calls, telecommunication services and business is contrary to the letter and intent of the law. One is apt to conclude that "personal property" standing alone, covers both tangible and intangible properties and are subject of theft under the Revised Penal Code. But the words "personal property" under the Revised Penal Code must be considered in tandem with the word "take" in the law. The statutory definition of "taking" and movable property indicates that, clearly, not all personal properties may be the proper subjects of theft. The general rule is that, only movable properties which have physical or material existence and susceptible of occupation by another are proper objects of theft. According to Cuello Callon, in the context of the Penal Code, only those movable properties which can be taken and carried from the place they are found are proper subjects of theft. Intangible properties such as rights and ideas are not subject of theft because the same cannot be "taken" from the place it is found and is occupied or appropriated. Thus, movable properties under Article 308 of the Revised Penal Code should be distinguished from the rights or interests to which they relate. A naked right existing merely in contemplation of law, although it may be very valuable to the person who is entitled to exercise it, is not the subject of theft or larceny. Such rights or interests are intangible and cannot be "taken" by another.


RUBY L. TSAI VS. CA, EVER TEXTILE MILLS, INC. G.R. No. 120098 OCTOBER 2, 2001

TOPIC INVOLVED: Art. 415, Civil Code (Immovable Property) FACTS: Respondent Ever Textile Mills, Inc. (EVERTEX) obtained two loans from Philippine Bank of Communications (PBCom). As security for the first and second loans, EVERTEX executed in favor of PBCom, a deed of Real and Chattel Mortgage and a Chattel Mortgage over personal properties respectively. Due to business reverses, EVERTEX was judicially declared insolvent. All its assets were taken into the custody of the Insolvency Court, including the collateral, real and personal, securing the two mortgages as mentioned. Two public auctions were held, PBCom emerged as the highest bidder on both auctions. PBCom consolidated its ownership over the lot and all the properties in it. It leased the entire factory premises to petitioner Tsai It also sold the factory, lock, stock and barrel to Tsai including the contested machineries. EVERTEX filed a complaint for annulment of sale, reconveyance and damages with the RTC against PBCom alleging that the extrajudicial foreclosure of subject mortgage was in violation of the Insolvency Law. EVERTEX claimed that no rights have been transmitted to PBCom, therefore, Tsai acquired no rights over such assets sold to her, and should reconvey the assets. RTC ruled in favor of EVERTEX and found that the lease and sale of said personal properties were irregular and illegal because they were not duly foreclosed nor sold since these were not included in the schedules attached to the mortgage contracts. RTCs decision was AFFIRMED by the CA. ISSUE: Whether the questioned properties (machinery and equipment) are real properties. HELD: NO. According to the SC, the intention of the parties must be considered. While it is true that the controverted properties appear to be immobile, a perusal of the contract of Real and Chattel Mortgage executed by the parties reveal their true intention to treat the machinery and equipment as chattels. Hence, the reliance of petitioner to Art. 415 (3) and (5) of the New Civil Code is misplaced. In the case of Navarro vs. Pineda, the Court held that an immovable may be considered a personal property if there is a stipulation as when it is used as security in the payment of an obligation where a chattel mortgage is executed over it, as in the case at bar. In the instant case, the parties: (1) executed a contract styled as Real Estate Mortgage and Chattel Mortgage, instead of just Real Estate Mortgage if indeed their intention is to treat all properties included therein as immovable, and (2) attached to the said contract a separate LIST OF MACHINERIES & EQUIPMENT. These facts, taken together, evince the conclusion that the parties intention is to treat these units of machinery as chattels.


CALTEX (PHILIPPINES) INC., petitioner, vs. CENTRAL BOARD OF ASSESSMENT APPEALS and CITY ASSESSOR OF PASAY,

respondents. May 31, 1982 TOPIC INVOLVED: Kinds of Property: real and personal; distinction FACTS: The case pertains to the realty tax on machinery and equipment installed by Caltex (Philippines) Inc., in its gas stations located on leased land. Caltex loaned machines and equipment to gas station operators under an appropriate lease agreement or receipt. The lease contract stipulated that upon demand, the operators shall return to Caltex the machines and equipment in good condition as when received, ordinary wear and tear excepted. The lessor of the land, where the gas station is located, does not become the owner of the machines and equipment installed therein. Caltex retains the ownership thereof during the term of the lease. The City Assessor of Pasay City characterized the said items of gas station equipment and machinery as taxable realty. However, the City Board of Tax Appeals ruled that they are personalty. The Assessor appealed to the Central Board of Assessment Appeals. The Board held on June 3, 1977 that the said machines are real property within the meaning of Secs. 3(k) & (m) and 38 of the Real Property Tax Code, PD 464, and that the Civil Code definitions of real and personal property in Articles 415 and 416 are not applicable in this case. ISSUE: WON the pieces of gas station equipment and machinery permanently affixed by Caltex to its gas station and pavement should be subject to realty tax. HELD: SC held that the said equipment and machinery, as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station, for without them the gas station would be useless, and which have been attached or affixed permanently to the gas station site or embedded therein, are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code.


MANILA ELECTRIC COMPANY vs. CENTRAL BOARD OF ASSESSMENT APPEALS, BOARD OF ASSESSMENT APPEALS OF BATANGAS AND PROVINCIAL ASSESSOR OF

BATANGAS G.R. No. L-47943 May 31, 1982. Second Division. Aquino, J.

TOPIC INVOLVED: Art. 415 (Immovable Property) FACTS: In 1970, the municipal treasurer of Bauan, Batangas, on the basis of an assessment made by the provincial assessor, required Meralco to pay realty taxes on the two tanks on a lot in San Pascual, Batangas which it leased in 1968 from Caltex (Phil.), Inc.. According to Meralco, the tank is not attached to its foundation. It is not anchored or welded to the concrete circular wall. Its bottom plate is not attached to any part of the foundation by bolts, screws or similar devices. The tank merely sits on its foundation. On the other hand, the Central Board of Assessment Appeals concludes that while the tanks rest or sit on their foundation, the foundation itself and the walls, dikes and steps, which are integral parts of the tanks, are affixed to the land while the pipelines are attached to the tanks. ISSUE: Whether the said oil storage tanks fall within any of the kinds of real property enumerated in Article 415 of the Civil Code. HELD: YES. Section 2 of the Assessment Law provides that the realty tax is due "on real property, including land, buildings, machinery, and other improvements" not specifically exempted in Section 3 thereof. This provision is reproduced with some modification in the Real Property Tax Code which provides: Sec. 38. Incidence of Real Property Tax. They shall be levied, assessed and collected in all provinces, cities and municipalities an annual ad valorem tax on real property, such as land, buildings, machinery and other improvements affixed or attached to real property not hereinafter specifically exempted. The Code contains the following definition in its Section 3: k) Improvements is a valuable addition made to property or an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital and intended to enhance its value, beauty or utility or to adapt it for new or further purposes. While the two storage tanks are not embedded in the land, they may, nevertheless, be considered as improvements on the land, enhancing its utility and rendering it useful to the oil industry. It is undeniable that the two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations. For purposes of taxation, the term "real property" may include things which should generally be regarded as personal property. It is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property (Standard Oil Co. of New York vs. Jaramillo, 44 Phil. 630, 633).


REPUBLIC V CA 32 SCRA 514, October 12, 1984

TOPIC INVOLVED: Art. 420(1) and Art. 502(1); Art. 457 of Civil Code FACTS: The respondents (Tancinos) are registered owners of a parcel of land situated at Bulacan bordering on the Meycauayan and Bocaue rivers. They filed an application for the registration of 3 lots adjacent to their fishpond property but because of the recommendation of the Commissioner, they only pushed for the registration of two. The Bureau of Lands filed a written opposition to the application for registration. They argue that the lands in dispute are not accretions. They assert that what actually happened was that the respondents simply transferred their dikes simply further down the river bed of the Meycauayan River. Thus, if there was any accretion to speak of, it was man-made. RTC granted the petition on the finding that the lands in question are accretion to the respondents fishponds. CA affirmed in toto. ISSUE: WON the subject land is registrable as an accretion. HELD: NO. The requirement that the deposit should be due to the effect of the current of the river is indispensable. This excludes from Art. 457 of the New Civil Code all deposits caused by human intervention. Alluvion must be the exclusive work of nature. In the instant case, there is no evidence whatsoever to prove that the addition to the said property was made gradually through the effects of the current of the Meycauayan and Bocaue rivers; but there is evidence that the alleged alluvial deposits were artificial and man-made and not the exclusive result of the current of the Meycauayan and Bocaue rivers. The alleged alluvial deposits came into being not because of the sole effect of the current of the rivers but as a result of the transfer of the dike towards the river and encroaching upon it. Since these lots were portions of the bed of the Meycauayan River, they are therefore classified as property of the public domain under Article 420 paragraph 1 and Article 502, paragraph 1 of the Civil Code of the Philippines. They are not open to registration under the Land Registration Act. The adjudication of the lands in question as private property in the names of the private respondents is null and void. Properties of public dominion are not susceptible to private appropriation and cannot be acquired by acquisitive prescription and thus they cannot be registered under the Land Registration Law and be the subject of a torrents title. The decision appealed from is hereby REVERSED and SET ASIDE. The private respondents are ordered to move back the dikes of their fishponds to their original location and return the disputed property to the river to which it belongs.


MANILA INTERNATIONAL AIRPORT AUTHORITY VS. COURT OF APPEALS G.R. No 155650, July 20, 2006

TOPIC INVOLVED: Arts. 419 and 420, Civil Code Property of Public Dominion FACTS: Manila International Airport Authority (MIAA) operates the Ninoy Aquino International Airport Complex in Paraaque City. As operator of the international airport, MIAA administers the land, improvements and equipment within the NAIA Complex. The MIAA Charter transferred to MIAA approximately 600 hectares of land, including the runways and buildings (Airport Lands and Buildings) then under the Bureau of Air Transportation. The MIAA Charter further provides that no portion of the land transferred to MIAA shall be disposed of through sale or any other mode unless specifically approved by the President of the Philippines. The Office of the Government Corporate Counsel issued Opinion No. 061, in which it said that the Local Government Code of 1991 withdrew the exemption for real estate tax granted to MIAA under Section 21 of the MIAA charter. Therefore, MIAA was held to be delinquent in paying its taxes. The City of Paraaque levied upon the properties of MIAA, and posted invitations for public biddings of MIAAs properties. The City of Paraaque averred that Section 193 of the Local Government code expressly withdrew tax exemptions from government owned and controlled corporations (GOCCs). ISSUE: Whether properties of the MIAA are subject to real estate taxes. HELD: NO. In the first place, MIAA is not a GOCC, it is an instrumentality of the government. MIAA is a government instrumentality vested with corporate powers to perform efficiently its governmental functions. MIAA is like any other government instrumentality, the only difference is that MIAA is vested with corporate powers. As operator of the international airport, MIAA administers the land, improvements and equipment within the NAIA Complex. Furthermore, the term ports include seaports and airports. The MIAA Airport Lands and Buildings constitute a port constructed by the State. Under Article 420 of the Civil Code, the MIAA Airport Lands and Buildings are properties of public dominion and thus owned by the State or the Republic of the Philippines. Properties of public dominion, being for public use, are not subject to levy, encumbrance or disposition through public or private sale. Any encumbrance, levy on execution or auction sale of any property of public dominion is void for being contrary to public policy.


GERMAN MANAGEMENT & SERVICES, INC. V COURT OF APPEALS 177 SCRA 495 (1989)

TOPIC INVOLVED: Application of Art. 429 (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 can only be exercised at the time of actual or threatened dispossession, and not when possession has already been lost. The doctrine of self-help is not applicable because at the time German Management excluded the farmers, there is 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 reivindicatoria through which the spouses Joses better right may be proven.


EDNA PALERO-TAN vs CIRIACO I. URDANETA, JR., UTILITY WORKER I, RTC, BRANCH 14, BAYBAY, LEYTE,

A.M. No. P-07-2399 June 18, 2008 TOPIC INVOLVED: Art. 719, Civil Code FACTS: Edna Palero-Tan charged Ciriaco I. Urdaneta (court employee) for stealing her ring and bracelet. Complainant claimed that she kept her jewelry in the locked drawer of her table because she fears that they might be lost at the boarding house she is renting. However, she discovered that her ring and bracelet worth fifteen thousand pesos (P15,000.00) were missing. She maintained that the only person who was present and saw her take out the jewelry from her table drawer was respondent (Ciriaco), whose table is adjacent to hers. An officemate, Altone, confided to her that he heard from his landlady, Nable, that respondent and his wife, Milagros, had a quarrel because the latter discovered a ring and a bracelet in respondents coin purse. Milagros suspected that respondent bought the jewelry for his mistress. Respondent denied that he stole complainants jewelry. He claimed that he found a small plastic sachet containing a ring and a bracelet under his table. When nobody claimed the jewelry, he placed them inside his coin purse and took them home. However, he threw the pieces of jewelry when his wife starts nagging. ISSUE: WON respondent is guilty HELD: YES. When a person who finds a thing that has been lost or mislaid by the owner takes the thing into his hands, he acquires physical custody only and does not become vested with legal possession. In assuming such custody, the finder is charged with the obligation of restoring the thing to its owner. It is thus respondents duty to report to his superior or his officemates that he found something. The Civil Code, in Article 719, explicitly requires the finder of a lost property to report it to the proper authorities.

Article 719. Whoever finds a movable, which is not treasure, must return it to its previous possessor. If the latter is unknown, the finder shall immediately deposit it with the mayor of the city or municipality where the finding has taken place. x x x

Contrary to respondents claim, this Court is convinced that respondent had the intention to appropriate the jewelry to himself had these not been discovered by his wife. His claim that the ring and bracelet were worthless fancy jewelry is immaterial because the basis for his liability is his act of taking something which does not belong to him. By admittedly finding complainants ring and bracelet without returning them to the rightful owner, respondent blatantly degraded the judiciary and diminished the respect and regard of the people for the court and its personnel. Every employee of the judiciary should be an example of integrity, morality and honesty. Thus, he is guilty of Grave Misconduct.


MERCADO V. CA G.R. No. L-44001 June 10, 1988

TOPIC INVOLVED: Builder in good faith Art. 526 NCC FACTS: Bulaong group (private respondents) had been individual lessees of stalls in the public market of Baliuag, Bulacan. The market was then destroyed by fire and the members of Bulaong group constructed new stalls therein at their own expense and thereafter paid rentals to the Municipality of Baliuag. Bulaong Group then sub-leased their individual stalls to Mercado Group (complainants). The municipal officials of Baliuag begun to cancel the long standing leases of Bulaong Group and declared the persons comprising Mercado Group as the rightful lessees of stalls in question. Private respondents filed complaints with CFI seeking recovery of their stalls plus damages; claiming that the ownership of stalls constructed by them at their own expense, thus their resulting right, as such owners, is to sub-lease the stalls. ISSUE: WON private respondents are considered builders in good faith HELD: YES. Bulaong Group were admittedly lessees of space in the public market; they therefore could not, and in truth never did make the claim, that they were owners of any part of the land occupied by the market so that in respect of any new structure put up by them, they could be deemed builders in good faith. To be deemed a builder in good faith, it is essential that a person asserts title to the land on which he builds, i.e., it is essential that he be a possessor in concept of owner and that he be unaware that there exists in his title or mode of acquisition any flaw which invalidates it. It is such a builder in good faith who is given the right to retain the thing, even as against the real owner, until he has been reimbursed in full not only for the necessary expenses but also for useful expenses.


NUGUID V. COURT OF APPEALS AND PECSON GR NO. 151815 (2005)

TOPIC INVOLVED: Right of Retention Art. 546, Civil Code FACTS: Pecson owned a commercial lot located at Quezon City on which he built a four-door two-storey apartment building. For failure to pay realty taxes, the lot was sold at public auction by the City to Nepomuceno, who in turn sold it to spouses Nuguid. Pecson challenged the validity of the auction sale. The RTC upheld the spouses title but declared that the four-door two-storey apartment building was not included in the auction sale. This was affirmed by the CA and thereafter by the SC. However, spouses Naguid was ordered to reimburse Pecson the current market value of the improvements should. Pending said reimbursement, Pecson was entitled to retain ownership of the building and the incomes therefrom. Spouses Naguid objected to the order of reimbursement of the buildings income to Pecson.

ISSUE: Is Pecson entitled to income derived from the two-storey apartment building pending payment of the current market value of the said improvements to him? HELD: YES. The right of retention is considered as one of the measures devised by the law for the protection of builders in good faith. Its object is to guarantee full and prompt reimbursement as it permits the actual possessor to remain in possession while he has not been reimbursed (by the person who defeated him in the case for possession of the property) for those necessary expenses and useful improvements made by him on the things possessed. The right of retention, which entitles the builder in good faith to the possession as well as the income derived therefrom, is provided for under Article 546 of the Civil Code. Accordingly, a builder in good faith cannot be compelled to pay rentals during the period of retention nor be disturbed in his possession by ordering him to vacate. However, despite the Courts recognition of Pecsons right of ownership over the apartment building, the petitioners still insisted on dispossessing Pecson by filing for a Writ of Possession to cover both the lot and the building. Clearly, this resulted in a violation of respondents right of retention. Worse, petitioners took advantage of the situation to benefit from the highly valued, income-yielding, four-unit apartment building by collecting rentals thereon, before they paid for the cost of the apartment building. It was only four years later that they finally paid its full value to the respondent. Thus, Pecson being a builder in good faith is entitled to incomes of the apartment building for 4 years.


BPI V SANCHEZ G.R. No. 179518

TOPIC INVOLVED: Buyers in good faith and bad faith in relation to sale of real property, and the rights and obligations of the landowner and the builder (Articles 449-450, NCC) FACTS: Vicente Victor C. Sanchez (Vicente), Kenneth Nereo Sanchez and Imelda C. Vda. De Sanchez owned a parcel of land 900 square meters. The property was registered under Transfer Certificate of Title No. (TCT) 156254 of the Registry of Deeds. October 1988, Felisa Yap (Yap), the widow of Kenneth Nereo Sanchez, and Garcia had a meeting wherein the parties agreed to the sale of the subject property with the condition (among others) that Garcia shall take care of all documentation necessary for the transfer of the title in his favor, including the reconstitution of the original title and the extrajudicial settlement of the property, considering that, as stated, the title is still registered in the names of plaintiff Sanchez, the late Kenneth Nereo Sanchez and the late Imelda C. Vda. De Sanchez. For this purpose, the original owners copy of Transfer Certificate of Title, the copy of the application for the reconstitution of title of the property, and copies of receipts of real estate taxes were to be entrusted to defendant Garcia. Yap turned over to Garcia the original owners copy of TCT 156254, the copy of the filed Application for Restitution of Title to the property, and copies of all receipts for the payment of real estate taxes on the property. Garcia, without Yaps knowledge and consent, took possession of the lot and installed his own caretaker. Yap later learned that Garcia had also demolished the house on the property and advertised the construction and sale of TransAmerican Townhouse V thereon. Garcia however defaulted in the payment of agreed installments so Yap sought to rescind their contract of sale. February 27, 1989, Yap and her counsel wrote the Housing and Land Use Regulatory Board (HLURB) informing the latter of the existing public advertisement of TSEI offering for sale townhouses illegally constructed on the subject property and urging the HLURB to cancel any existing permit or license to sell the said townhouse units or to deny any application therefor. Meanwhile, Garcia managed to cause the cancellation of TCT 156254 and its replacement with TCT 383697 in the name of TSEI. Garcia apparently used TCT 383697 to entice several buyers to buy the townhouse units being constructed by TSEI on the subject lot. Claiming to have bought townhouse units from Garcia sometime in early 1989, the following intervened in the instant case: the spouses Jose and Visitacion Caminas (Caminas), Reynaldo V. Maniwang (Maniwang), Generoso C. Tulagan. All of the intervenors contracts conveying townhouses in their favor identified their purchased lots as covered by TCT 156254 (the title of the Sanchezes). Intervenors asserted that they were all shown TCT 383697 in the name of TSEI but nevertheless signed their respective contracts with TSEI indicating the subject property as covered by TCT 156254. Finally, Far East Bank and Trust Company (FEBTC) entered into a Loan Agreement dated May 22, 1989 with TSEI secured by a Real Estate Mortgage over TCT 156254. FEBTC later merged with the Bank of the Philippine Islands (BPI) with the latter as the surviving bank. Garcia purportedly explained to FEBTC that the parties were still in the process of transferring the title. Afterwards, Garcia submitted a copy of TCT 383697 in TSEIs name. Upon default, FEBTC (now BPI) foreclosed the subject lot and had the Foreclosure Certificate of Sale annotated on TCT 383697. ISSUES: 1. Whether the Sanchezes are sellers in bad faith. 2. Whether Garcia/TSEI acted in bad faith. 3. Whether intervenors are buyers in good faith. 4. Whether BPI is a mortgagee in good faith or not HELD:


1. The Sanchezes cannot be considered to be in bad faith for failing to file an action for injunction against the construction of the townhouses on the subject property. It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part. The fact of the matter is that the Sanchezes did take action to oppose the construction on their property by writing the HLURB and the City Building Official of Quezon City. As a result, the HLURB issued two (2) Cease and Desist Orders and several directives against Garcia/TSEI which, however, were left unheeded. 2. Garcia and/or TSEI are builders in bad faith. They knew for a fact that the property still belonged to the Sanchezes and yet proceeded to build the townhouses not just without the authority of the landowners, but also against their will. 3. The intervenors (buyers of townhouses) acted in bad faith. Firstly, they admitted that they executed either contracts of sale or contracts to sell indicating that the lot is covered by TCT No. 156254 registered under the name of the respondent Sanchezes. Secondly, the intervenors know, based on the contract of sale or contract to sell, that the property is registered under TCT No. 156254 in the name of the Sanchezes. Thirdly, the intervenors should have been suspicious of the explanation of Garcia that TCT No. 383697, reflecting TSEI as the owner of the property, has been burned and that he is in the process of reconstituting the title.

4. BPI cannot be considered a mortgagee in good faith considering the glaring anomalies in the loan transaction between TSEI and FEBTC. This can be gleaned from several undisputed factual circumstances:

Firstly, when Garcia gave TCT 156254 to FEBTC for the processing of a loan secured by a mortgage, it indubitably showed that Garcia/TSEI did not yet own the subject property as said title was in the name of the Sanchezes. Secondly, considering further that Garcia presented the Agreement between the Sanchezes and Garcia/TSEI as basis for ownership of the subject property covered by TCT 156254, FEBTC was remiss in neither ascertaining whether the full payment of the 1.8 million (agreed price between Garcia and Yap) nor requiring the presentment of the EXTRA-JUDICIAL SETTLEMENT OF ESTATE WITH SALE from the Sanchezes in favor of Garcia/TSEI. Verily, given the foregoing anomalies, the general rule that a mortgagee need not look beyond the title does not apply to banks and other financial institutions as greater care and due diligence are required of them, and FEBTC (BPI) should have exercised the appropriate due diligence review and made the requisite inquiries about the subject property which was offered to secure the loan applied for by Garcia/TSEI under a real estate mortgage. FEBTC (now BPI) was negligent and cannot be considered as a mortgagee in good faith.

CONCLUSION: Bad faith on the part of TSEI, Garcia and the intervenors leads to the application of Articles 449-450 of the New Civil Code. Consequently, the Sanchezes have the following options: (1) acquire the property with the townhouses and other buildings and improvements that may be thereon without indemnifying TSEI or the intervenors (2) demand from TSEI or the intervenors to demolish what has been built on the property at the expense of TSEI or the intervenors (3) ask the intervenors to pay the price of the land. As such, the Sanchezes must choose from among these options within thirty (30) days from finality of this Decision. Should the Sanchezes opt to ask from the intervenors the value of the land, the case shall be remanded to the RTC for the sole purpose of determining the fair market value of the lot at the time the same were taken from the Sanchezes in 1988.


PECSON v COURT OF APPEALS G.R. No. 115814 May 26, 1995

TOPIC INVOLVED: Application by analogy of Art. 448 and Art. 546 of the NCC. FACTS: Petitioner Pedro P. Pecson was the owner of a commercial lot located in Quezon City on which he built a four-door two-storey apartment building. For his failure to pay realty taxes, the lot was sold at public auction to Mamerto Nepomuceno who in turn sold it to the private respondents, the spouses Juan Nuguid and Erlinda Tan-Nuguid, for P103,000.00. The petitioner challenged the validity of the auction sale. RTC dismissed the complaint, but as to the private respondents' claim that the sale included the apartment building, it held that the issue concerning it was "not a subject of the litigation." 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 building citing Art. 546 of the NCC. The RTC issued an order declaring the Sps. Nuguid as owners and to pay the construction cost of the apartment before a writ of possession would be issued and to pay rent to the spouses. RTC denied Pecsons motion for reconsideration and instead 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 P53,000 and the right to retain the improvement until full indemnity is paid. The parties agree that the petitioner was a builder in good faith of the apartment building on the theory that he constructed it at the time when he was still the owner of the lot, and that the key issue in this case is the application of Articles 448 and 456 of the Civil Code. ISSUE: Whether or not Art. 448 and 546 apply in the case at bar. HELD: YES. Article 448 is not apposite to the case at bar. Nevertheless, SC believes that the provision therein on indemnity may be applied by analogy considering that the primary intent of Article 448 is to avoid a state of forced co-ownership and that the parties, including the two courts below, in the main agree that Articles 448 and 546 of the Civil Code are applicable and indemnity for the improvements may be paid although they differ as to the basis of the indemnity. Article 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 building, sowing or planting may have been made in good faith or in bad faith. Article 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, the issue of good faith or bad faith is entirely irrelevant. Article 546 does not specifically state how the value of the useful improvements should be determined. As held in Rivera vs. Roman Catholic Archbishop of Manila, it is the current market value of the improvements which should be made the basis of reimbursement. The parties should therefore be allowed to adduce evidence on the present market value of the apartment building upon which the trial court should base its finding as to the amount of reimbursement to be paid by the landowner


VDA. DE NAZARENO v COURT OF APPEALS G.R. No. 98045 June 26, 1996

TOPIC INVOLVED: Art. 457, NCC; man-made accretion is part of the properties of public domain. FACTS: A parcel of land in Cagayan de Oro City was formed as a result of sawdust dumped into the dried up Balacanas Creek and along the banks of Cagayan River. Before Antonio Nazareno died, he caused the approval by the Bureau of Lands of the survey plans claiming title over the accretion area but such was protested by private respondents which caused for its cancellation. A motion for reconsideration was filed by Antonio which was also denied as it does not fall within the exception to the doctrine of exhaustion of administrative remedies. There was no showing of oppressiveness in the manner in which the orders were issued and exhausted. Petitioners claim that it is a private land applying Art. 457 of the Civil Code. ISSUE: Whether or not the subject land is a public land. HELD: As held in Meneses vs. CA, accretion, as a mode of acquiring property under Art. 457, requires the concurrence of these requisites: (1) That the deposition of soil or sediment be gradual and imperceptible; (2) That it be the result of the action of the waters of the river; (3) That the land where accretion takes place is adjacent to the banks or rivers. Petitioners cannot claim that the accumulation of boulders, soil and other filling materials on their land was gradual and imperceptible, resulting from the action of the waters of the current of the Balacanas Creek and the Cagayan River. Petitioners are estopped from denying the public character as Nazareno filed his Miscellaneous Sales Application. The mere filing of said application constituted the admission that the land being applied for was a public land. Accretion was man-made or artificial. In Republic vs. CA, this Court ruled that the requisite that the deposit should be due to the effect of the current is indispensable. As held in Tiongco vs. Director of Lands, it was held that where the land was not formed solely by the natural effect of the water current of the river boarding said land but it is also the consequence of the direct and deliberate intention of man, it was man-made accretion and as such is part of the public domain. Since the subject land was the direct result of the dumping of sawdust by the Sun Valley Lumber Co., the accretion was man-made; hence, Art. 457 does not apply. Ergo, the subject land is part of the public domain.


LEONIDA CUREG, ROMEO, PEPITO, HERNANDO, MANUEL, ANTONIO AND ELPIDIO (all surnamed Carniyan) petitioner, vs. INTERMEDIATE APPELLATE COURT, (4th Civil Cases

Division), DOMINGO APOSTOL, SOLEDAD GERARDO, ROSA GERARDO, NIEVES GERARDO, FLORDELIZA GERARDO, AND LILIA MAQUINAD, respondent.

G.R. No. 73465 September 7, 1989

TOPIC INVOLVED: Art. 457 of the New Civil Code: To the owners of land adjoining the banks of river belong the accretion which they gradually receive from the effects of the current of the waters. FACTS: Private respondents (Domingo Apostol - only issue of Francisco Gerardo; Soledad Gerardo; Rosa, Nieves, Flordeliza Gerardo - heir of Primo Gerardo and Lilia Maquinad - heir of Salud Gerardo) are the legal and/or the forced heirs of the late Domingo Gerardo, who died in February 1944, the latter being the only issue of the late Francisco Gerardo, who died before the outbreak of WWII; that since time immemorial and/or before 26 July 1894, the late Francisco Gerardo, together with his predecessors-in-interest have been in actual, open, peaceful and continuous possession, under a bona fide claim of ownership and adverse to all other claimants, of a parcel of land, situated in Casibarag-Cajel, Cabagan, Isabela, containing an area of 2.5 hectares [N: Cagayan River; E: Domingo Guingab (formerly Rosa Cureg); S: Antonio Carniyan; and W: Sabina Mola]. About the time of execution of judicial partition of land, such land manifested signs of accretion of about 3 hectares on the north caused by northward movement of the Cagayan River and that Domingo Apostol declared the land and its accretion for tax purposes. After a month, the private respondents was about to cultivate their land with its accretion but they were threatened by Carniyan (Leonida Cureg and Romeo, Pepito, Hernando, Manuel, Antonio and Elpidio: surviving spouse and children of Antonio Carniyan). They alleged that the land claimed by the Gerardos and Apostol is non-existent; that Antonio Carniyan was the owner of a piece of land bounded on the north by Cagayan River and not by the land of Francisco Gerardo; that the "subject land" is an accretion to their registered land and that they have been in possession and cultivation of the "accretion" for many years. Thus the private respondent filed an application for issuance writ of preliminary injuction was filed in RTC-Isabela but such was denied on the ground that the Carniyan (Cureg) were in actual possession of the land in litigation. However, in a decision rendered later, the trial court rendered judgment declaring Domingo Apostol the absolute owner of parcel of land, such was appealed in IAC but the decision of RTC was affirmed. Hence, petition for review under rule 45 of the Rule of Court. ISSUE: Whether or not the Curegs have better claim than the Gerardos, et.al as to the accretion in the northern boundary due to the Cagayan River. HELD: Gerardos have a better claim. Accretion belongs to riparian owners, the land in question is an alluvial deposit left by the northward movement of the Cagayan River. Accretion does not automatically become registered land. (The area covered by OCT P-19093 is only 4,584 sq. ms) The accretion attached to said land is approximately five and a half (5.5) hectares. The increase in the area of petitioners' land, being an accretion left by the change of course or the northward movement of the Cagayan River does not automatically become registered land just because the lot which receives such accretion is covered by a Torrens title. As such, it must also be placed under the operation of the Torrens System. The tax declarations of the late Antonio Carniyan (Cureg) subsequent to the issuance of OCT P-19093 already states that its northern boundary is Cagayan River. In effect, he has repudiated any previous acknowledgment by him, granting that he caused the accomplishment of the tax declarations in his name before the issuance of OCT P-19093, of the existence of Francisco Gerardo's land. The accretion to registered land does not preclude acquisition of the additional area by another person through prescription.


AGNE vs. DIRECTOR OF LANDS G.R. No. 40399. February 6, 1990

TOPIC INVOLVED: Art. 370 of the Spanish Civil Code- Accession and Accretion FACTS: Presentacion Gascon and her spouse filed a civil case in CFI Pangasinan for recovery of possession and damages against Agne, etal. Their complaint states that they are the registered owners of the parcel of land by free patent which is now in the possession of Agne, et.al. Agne, et.al. alleged that the land in question was formerly a part of the river bed of the Agno-Chico River; that in the year 1920, a big flood occurred which caused the said river to change its course and abandon its original bed; that by virtue of the provisions of Article 370 of the Spanish Civil Code which was then the law in force, Agne, et.al., by operation of law, became the owners by accession or accretion of the respective aliquot parts of said river bed. While the above case was still pending, Agne, et.al. filed a complaint against Director of Lands and spouses Agpoon with CFI Pangasinan for annulment of title, reconveyance of and/or action to clear title to a parcel of land. They alleged in their said complaint that the said land was granted by the Government under a free patent, which must be declared null and void since the said land, an abandoned river bed, is of private ownership and, therefore, cannot be the subject of a public land grant. On 21 June 1974, the trial court rendered a decision in favor of respondents Gascon. Appellate Court affirmed in toto the said decision of the court. ISSUE: Who has a better right over the said parcel of lands? HELD: The SC ruled in favor of the petitioners (Agne). The Old Civil Code, the law then in force, provides that the beds of rivers which remain abandoned because the course of the water has naturally changed belong to the owners of the riparian lands throughout their respective lengths. If the abandoned bed divided estates belonging to different owners, the new dividing line shall run at equal distance therefrom. Thus, once the river bed has been abandoned, the riparian owners become the owners of the abandoned bed to the extent provided by this article. The acquisition of ownership is automatic. There need be no act on the part of the riparian owners to subject the accession to their ownership, as it is subject thereto ipso jure from the moment the mode of acquisition becomes evident, without the need of any formal act of acquisition. Such abandoned river bed had fallen to the private ownership of the owner of the riparian land even without any formal act of his will and any unauthorized occupant thereof will be considered as a trespasser. In the present case, Agne, et.al. became owners of aliquot portions of said abandoned river bed as early as 1920, when the Agno River changed its course, without the necessity of any action or exercise of possession on their part, it being an admitted fact that the land in dispute, prior to its registration, was an abandoned bed of the Agno River and that Agne, et. al. are the riparian owners of the lands adjoining the said bed.


BAHAIS vs. PASCUAL, G.R. 169272,JULY 11, 2012

TOPIC INVOLVED: Quieting of title - Articles 476 and 477, Civil Code FACTS: The petitioner alleged that it is the lawful and absolute owner of two (2) parcels of land. On Dec. 22, 2000 petitioner Bahais filed a complaint for quieting of title before the RTC to remove cloud to their title due to an adverse decision of the Bureau of Lands 1985 decision which in effect rejected the miscellaneous sales applications of the petitioners predecessors-in-interest for the lots, and ordered all those in privity with them (specifically including the petitioner) to vacate the lots and to remove their improvements thereon. However, it is worth noting that prior to the present petition the DENR and the Office of the President already affirmed the decision of the Bureau of Lands in a final and executory decision. ISSUE/S:

1. Whether the petitioner has a cause of action and consequently; 2. Whether the action to quieting of title would prosper?

HELD:

1. None. When they filed the present action they are no longer entitled either in a legal or equitable title pursuant to the final 1985 decision.

2. No, the petitioners status as possessor and owner of the lots had been settled in the final and executory December 4, 1985 decision of the Bureau of Lands that the DENR Secretary and the OP affirmed on appeal. Thus, the petitioner is not entitled to the possession and ownership of the lots. Under Articles 476 and 477 of the Civil Code, the two (2) indispensable requisites in an action to quiet title are: (1) that the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) that a deed, claim, encumbrance or proceeding is claimed to be casting cloud on his title. In this case, an action to quiet title is not the proper remedy because petitioner no longer had any legal or equitable title to or interest in the lots. The petitioners status as possessor and owner of the lots had been settled in the final and executory December 4, 1985 decision of the Bureau of Lands that the DENR Secretary and the OP affirmed on appeal. Thus, the petitioner is not entitled to the possession and ownership of the lots.

Jurisprudence teaches us that the decisions and orders of administrative agencies, such as the Bureau of Lands, rendered pursuant to their quasi-judicial authority, upon finality, have the force and binding effect of a final judgment within the purview of the doctrine of res judicata.


LILIA SANCHEZ V. COURT OF APPEALS G.R. No. 152766, JUNE 20, 2003, 404 SCRA 540

TOPIC INVOLVED: Article 493 of Civil Code

FACTS: Lilia Sanchez, constructed a house on a 76-square meter lot owned by her parents-in-law. The lot was registered with other six co-owners. On February 1995, the lot was registered in the name of Virginia Teria by virtue of a Deed of Absolute Sale. Lilia Sanchez claimed that she did not affix her signature on the document and subsequently refused to vacate the lot, thus compelling Teria to file an action for recovery of possession of the lot with the MeTC.

MeTC decided in favor of Teria, declaring that the sale was valid only to the extent of 5/6 of the lot and the other 1/6 remaining as the property of petitioner, on account of her signature in the Deed of Absolute Sale having been established as a forgery.

ISSUE: WON the sale is valid given that one of the co-owners did not consent thereto.

HELD: Co-ownership is a form of trust and every co-owner is a trustee for the others, hence, the relationship of such co-owner to the other co-owners is fiduciary in character and attribute. Whether established by law or by agreement of the co-owners, the property or thing held pro-indiviso is impressed with a fiducial nature so that each co-owner becomes a trustee for the benefit of his co-owners and he may not do any act prejudicial to the interest of his co-owners.

Article 493 of the Civil Code gives the owner of an undivided interest in the property the right to freely sell and dispose of it, i.e., his undivided interest. He may validly lease his undivided interest to a third party independently of the other co-owners. But he has no right to sell or alienate a concrete, specific or determinate part of the thing owned in common because his right over the thing is represented by a quota or ideal portion without any physical adjudication.

Although assigned an aliquot but abstract part of the property, the metes and bounds of petitioners lot has not been designated. As she was not a party to the Deed of Absolute Sale voluntarily entered into by the other co-owners, her right to 1/6 of the property must be respected. Partition needs to be effected to protect her right to her definite share and determine the boundaries of her property. Such partition must be done without prejudice to the rights of private respondent Virginia Teria as buyer of the 5/6 portion of the lot under dispute.


SPOUSES SOFRONIO SANTOS and NATIVIDAD, FROILAN SANTOS, CECILIA M. MACASPAC, and R TRANSPORT CORPORATION, vs HEIRS OF DOMINGA LUSTRE

G.R. No. 151016, August 6, 2008

TOPIC INVOLVED: Bringing an action involving a co-owned property FACTS: On May 16, 1976, Dominga Lustre sold the property to Natividad M. Santos for P15,000.00 through a Deed of Absolute Sale. Subsequently, Spouses Santos executed a Deed of Sale transferring the property to their son, Froilan M. Santos. On April 14, 1994, Cecilia Macaspac and Tarcisio Maniquiz, both heirs of Dominga Lustre, filed with the RTC of Gapan, Nueva Ecija, a Complaint for Declaration of the Inexistence of Contract, Annulment of Title, Reconveyance and Damages against Froilan. That case was docketed as Civil Case No. 1330. They averred that the sale of the property to Natividad Santos was simulated, spurious or fake since spouses Santos simulated the Deed of Sale by forging Dominga Lustres signature. On May 14, 1999, while Civil Case No. 1330 was still pending, Dominga Lustres other heirs, namely, Eusebio Maniquiz, Teresita Burgos, Tarcisio Maniquiz, Florita M. Reyes and Lermie Maniquiz filed a Complaint for Annulment of Transfer Certificate of Title and Deed of Absolute Sale against spouses Sofronio and Natividad Santos, Froilan Santos, Cecilia M. Macaspac, R Transport Corporation, and the Register of Deeds of Cabanatuan City. The case was docketed as Civil Case No. 2115. Cecilia Macaspac, plaintiff in Civil Case No. 1330, was impleaded as defendant because she refused to join the other heirs as plaintiffs. ISSUE: Whether a decision that may be adjudged in Civil Case No. 1330 prejudice the heirs who did not join in said complaint? HELD: NO. Any adverse ruling in the earlier case will not, in any way, prejudice the heirs who did not join, even if such case was actually filed in behalf of all the co-owners. In fact, if an action for recovery of property is dismissed, a subsequent action by a co-heir who did not join the earlier case should not be barred by prior judgment. Any judgment of the court in favor of the co-owner will benefit the others, but if the judgment is adverse, the same cannot prejudice the rights of the unimpleaded co-owners. Without question, a co-owner may bring an action to recover the co-owned property without the necessity of joining all the other co-owners as co-plaintiffs because the suit is deemed to be instituted for the benefit of all. In such case, the other heirs are merely necessary parties. Parenthetically, the inclusion among the defendants of Cecilia Macaspac, who refused to join the other heirs as plaintiffs in Civil Case No. 2115, was not actually necessary. However, if the action is for the benefit of the plaintiff alone, as in Civil Case No. 1330, the action will not prosper unless he impleads the other co-owners who are indispensable parties. The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present. The trial court does not acquire jurisdiction over the indispensable parties who are not impleaded in the case, and judgment thereon cannot be valid and binding against them. A decision that is null and void for want of jurisdiction on the part of the trial court is not a decision in contemplation of law; hence, it can never become final and executory.


CATEDRILLA vs. LAURON G.R. NO. 179011, April 15, 2013

TOPIC INVOLVED: Bringing an action involving a co-owned property FACTS: Rey Catedrilla and the other heirs of Lilia Catedrilla are co-owners of Lot 5. The petitioner filed as a co-owner of lot 5 an ejectment case against Mario and Margie Lauron alleging that through the tolerance of the heirs of Lilia, the respondents constructed a residential building of strong materials on the northwest portion of Lot No. 5; that petitioners made various demands for respondents to vacate the premises and even exerted efforts to compromise with them but was unavailing; and that they reiterated the demand on respondents to vacate but they continued to unlawfully withhold such possession. RTC rendered a decision in favor of the plaintiff. Respondents would like to focus their defense on the ground that Mildred is an indispensable party, because she is the owner of the residential building on the subject lot and that there was already a perfected contract to sell between Mildred and Maximo because of an amicable settlement executed before the Office of the Punong Barangay. ISSUE: WON other heirs should have been impleaded. HELD: NO. A co-owner may bring such an action, without the necessity of joining all the other co-owners as co-plaintiffs, because the suit is deemed to be instituted for the benefit of all. Nevertheless, if the action is for the benefit of the plaintiff alone, such that he claims possession for himself and not for the co-ownership, the action will not prosper. In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to Article 487 of the Civil Code and the relevant jurisprudence, any one of them may bring an action, any kind of action for the recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be afforded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all co-owners. In this case, although petitioner alone filed the complaint for unlawful detainer, he stated in the complaint that he is one of the heirs of the late Lilia Castigador, his mother, who inherited the subject lot, from her parents. Petitioner did not claim exclusive ownership of the subject lot, but he filed the complaint for the purpose of recovering its possession which would redound to the benefit of the co-owners. Since petitioner recognized the existence of a co-ownership, he, as a co-owner, can bring the action without the necessity of joining all the other co-owners as co-plaintiffs.


VIRGINIA Y. GOCHAN, FELIX Y. GOCHAN III, LOUISE Y. GOCHAN, ESTEBAN Y. GOCHAN, JR., and DOMINIC Y. GOCHAN v. CHARLES MANCAO

G.R. No. 182314, November 13, 2013 TOPIC INVOLVED: Legal redemption in co-ownership

FACTS: Gochan, Alo, Cabellon were co-owners of Lot No. 1028 and 1030 in Cebu City. Petitioners are successors-in-interest of Gochan while respondent bought Lot Nos. 1028-D-1, 1028-D-3, 1028-D-4, and 1028-E covered by TCT Nos. 139161-139164 from the children of Angustias Velez and Eduardo Palacios, who, together with Jose, Jesus, Carmen, and Vicente, all surnamed Velez, acquired Lot Nos. 1028-D and 1028-E from Alo. In 1998, petitioners including Mae Gochan, filed a case for legal redemption. The TCTs are registered under the names of Gochan, Alo, and Villalon, who is the successor-in-interest of Cabellon. The case was brought against the spouses Paray who purchased the lots from the heirs of Alo. On November 20, 1998, the parties executed a Compromise Agreement, whereby, for and in consideration of the amount of Php 650,000.00, the Spouses Paray conveyed to petitioners and Mae Gochan all their shares, interests, and participation over the properties. On November 27, 1998, the court approved the agreement and rendered judgment in accordance with its terms and conditions. The decision was annotated on December 29, 1999 in the subject TCTs. Claiming that the legal redemption adversely affected Lot Nos. 1028-D-1, 1028-D-3, 1028-D-4, and 1028-E, the respondent filed a suit before the CA for "Declaration of Nullity of Final Decision and Compromise Agreement and the Registration of the Same Documents with the Register of Deeds." The CA ruled in favor of the respondents. The CA concluded that petitioners committed extrinsic fraud, since they employed schemes which effectively excluded respondent and other co-owners from participating in the trial. ISSUE: Did the CA erred in finding that extrinsic fraud was present when the respondent was not impleaded in the redemption case? HELD: NO. The governing law with respect to redemption by co-owners in case the share of a co-owner is sold to a third person is Article 1620 of the New Civil Code, which provides:

Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common. Article 1620 contemplates of a situation where a co-owner has alienated his pro-indiviso shares to a third party or stranger to the co-ownership. Its purpose is to provide a method for terminating the co-ownership and consolidating the dominion in one sole owner. Only the redeeming co-owner and the buyer are the indispensable parties in an action for legal redemption, to the exclusion of the seller/co-owner. A party who is not the co-owner of a land subject of a compromise agreement cannot claim that he was defrauded when the parties in the compromise agreement entered into the same. As a third party to the agreement, he is not indispensable for the agreement to materialize. Thus, the mere fact that respondent was not impleaded as a party in Civil Case No. CEB-22825 is not in itself indicative of extrinsic fraud. If a seller/co-owner is not treated as an indispensable party, how much more is a third person who merely alleged that his lots are affected thereby? Truly, the exclusion of respondent (or other alleged subdivision lot owners who are equally affected) from the legal redemption case does not entitle him to the right to ask for the annulment of the judgment under Rule 47 of the Rules, because he does not even have any legal standing to participate or intervene therein.


PARILLA VS PILAR G.R. No. 167680, November 30, 2006

TOPIC INVOLVED: When to properly apply Article 1678 and Article 448 in relation to Article 546. FACTS: Petitioner-spouses Parilla et.al, are dealers of Pilipinas Shell. They have been in possession of a parcel of land which was leased to it by respondent Pilar under a 10-year Lease Agreement entered into in 1990. When the lease contract between Pilipinas Shell and respondent expired, petitioners remained in possession of the property on which they built improvements. Despite demands to vacate, petitioners and the other occupants remained in the property. Hence, respondent filed a complaint for ejectment before the MTC with prayer for the issuance of a writ of preliminary injunction with damages, which ordered petitioners to vacate the property and to pay the plaintiff-herein respondent. It also ordered the latter to reimburse defendants P2,000,000.00 representing the value of the improvements introduced on the property. Respondent appealed to the RTC which affirmed the MTCs decision. On respondents petition for review, the CA set aside the questioned order for respondent to reimburse petitioners. Hence, the present petition. ISSUE: Whether or not Article 448, in relation to Article 546 of the NCC, is applicable herein, thus, the petitioners are entitled to reimbursement. HELD: NO. The evidence shows that in 1960, a lease contract over the property was forged between Shell Company of the Philippines Limited and respondents predecessors-in-interest. In 1990, the lease contract was renewed by Pilipinas Shell and respondent. Petitioners, being dealers of Pilipinas Shells petroleum products, were allowed to occupy the property. Petitioners are thus considered agents of Pilipinas Shell. The factual milieu of the instant case calls then for the application of the provisions on lease under the New Civil Code. The right of the lessor upon the termination of a lease contract with respect to useful improvements introduced on the leased property by a lessee is covered by Article 1678. As the law on lease under the New Civil Code has specific rules concerning useful improvements introduced by a lessee on the property leased, it is erroneous on the part of petitioners to urge this Court to apply Article 448, in relation to Article 546, regarding their claim for reimbursement and to invoke the right of retention before reimbursement is made. Jurisprudence is replete with cases which categorically declare that Article 448 covers only cases in which the builders, sowers or planters believe themselves to be owners of the land or, at least, have a claim of title thereto, but not when the interest is merely that of a holder, such as a mere tenant, agent or usufructuary. A tenant cannot be said to be a builder in good faith, as he has no pretension to be owner. At all events, under Article 1678, it is the lessor who is given the option, upon termination of the lease contract, either to appropriate the useful improvements by paying one-half of their value at that time, or to allow the lessee to remove the improvements. This option solely belongs to the lessor as the law is explicit that should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby. In this case, it appears that the lessor has opted not to reimburse.


BUNYI v. FACTOR G.R. No. 172547 June 30, 2009

TOPIC INVOLVED: Meaning of possession of an immovable property FACTS: Fe Factor, the respondent, is a co-owner and the administrator of the Factor compound in Las Pias City, where the co-owned rest house in controversy was constructed. The property originated from his father Enrique. Upon his death, the administration was entrusted to the eldest child, Gloria-Factor Labao. Gloria, with her husband, Ruben Labao and their son, lived in Taguig, Metro Manila but visited and sometimes stayed in the rest house because Gloria collected the rentals of the residential houses and oversaw the Factor compound. When Gloria died on January 15, 2001, the administration and management of the Factor compound including the subject rest house, passed on to respondent Fe S. Factor as co-owner of the property. As an act of goodwill and compassion, considering that Ruben Labao (husband of Gloria) was sickly and had no means of income, respondent allowed him to stay at the rest house for brief, transient and intermittent visits as a guest of the Factor family. On May 31, 2002, Ruben Labao married petitioner Precy Bunyi. On November 10, 2002, Ruben Labao died. At about this time, respondent discovered that petitioners forcibly opened the doors of the rest house and stole all the personal properties owned by the Factor family and then audaciously occupied the premises. Respondent alleged that petitioners unlawfully deprived her and the Factor family of the subject propertys lawful use and possession. She hinges her claim of possession on the fact that her predecessor-in-interest had prior possession of the property as early as 1975. Petitioner claims that she has a better right of possession since she inherited the subject property as the surviving spouse and sole heir of Ruben Labao, who owned the property before his death. Petitioners argue that respondent was never in possession of the subject property since the latter never occupied the same. They claim that they have been in actual possession of the disputed property from the time petitioner Precy married Ruben Labao in 2002. ISSUE: Who is entitled to the possession of the subject property? HELD: The RESPONDENTS. For one to be considered in possession, one need not have actual or physical occupation of every square inch of the property at all times. Possession can be acquired not only by material occupation, but also by the fact that a thing is subject to the action of ones will or by the proper acts and legal formalities established for acquiring such right, possession can be acquired by juridical acts. These are acts to which the law gives the force of acts of possession. Examples of these are donations, succession, execution and registration of public instruments, and the inscription of possessory information titles. While petitioners claim that respondent never physically occupied the subject property, they failed to prove that they had prior possession of the subject property (i.e. the address Ruben in the marriage and death certificates is different from the address of the subject property). The respondent, who traces her possession of the subject property to her predecessors-in-interest, have always been in possession of the subject property. Even assuming that respondent was never a resident of the subject property, she could legally continue possessing the property. Visiting the property on weekends and holidays is evidence of actual or physical possession. The fact of her residence somewhere else, by itself, does not result in loss of possession of the subject property. The law does not require one in possession of a house to reside in the house to maintain his possession. For, again, possession in the eyes of the law does not mean that a man has to have his feet on every square meter of the ground before he is deemed in possession


EDCA PUBLISHING & DISTRIBUTING CORP. vs. THE SPOUSES LEONOR and GERARDO SANTOS, doing business under the name and style of "SANTOS BOOKSTORE," and THE

COURT OF APPEALS G.R. No. 80298, 26 April 1990, FIRST DIVISION, (CRUZ, J .)

TOPIC INVOLVED: Art. 559. The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may recover it from the person in possession of the same. If the possessor of a movable lost or of which the owner has been unlawfully deprived has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor. FACTS: EDCA Publishing sold 406 books to a certain Professor Jose Cruz who placed an order by telephone, which was agreed to be payable on delivery. The books were subsequently delivered to him with the corresponding invoice and were paid with a personal check. Cruz then sold 120 of the books to Leonor Santos who asked for verification, and was then showed the invoice for the books. EDCA became suspicious when Cruz placed a second order even before his first check was cleared. Upon investigation, EDCA found that he was not the person he claimed to be, specifically a dean in the De La Salle College, nor was he an employee of the said college and Cruz had no more account or deposit with the Philippine Amanah Bank, against which he had drawn the payment check. The police set a trap and arrested Cruz. It was revealed that his real name is Tomas de la Pea and that he sold the 120 books to the Spouses Santos. EDCA with the police seized the 120 books from the private respondents without warrant. The private respondents sued for recovery of the books. A writ of preliminary attachment was issued and the petitioner surrendered the books to the private respondents. The petitioner was rebuffed in the three courts below and now hopes to secure relief from the Supreme Court. ISSUE: Whether the petitioner has been unlawfully deprived of the books because the check issued by the impostor in payment therefor was dishonored. HELD: Actual delivery of the books having been made, Cruz acquired ownership over the books which he could then validly transfer to the private respondents. The fact that he had not yet paid for them to EDCA was a matter between him and EDCA and did not impair the title acquired by the private respondents to the books. The private respondents, specifically Leonor Santos, were a good faith buyer after taking steps to verify the identity of the seller. When showed the invoice, she reasonably believed that Cruz was a legitimate seller. It would certainly be unfair to make the private respondents bear the prejudice sustained by EDCA as a result of its own negligence. Hence, EDCA was not unlawfully deprived of the property. There was already a perfected contract of sale. Proof was even substantiated when EDCA gave the invoice as proof of payment upon delivery of the books. This did not amount to unlawful taking, because by the delivery of EDCA to Cruz, ownership of the books already transferred to him.


PILAR DEVELOPMENT CORPORATION vs. RAMON DUMADAG et al. G.R No. 194336 March 11, 2013

TOPIC INVOLVED: Easement/servitude; possessory rights of squatters FACTS: On July 1, 2002, petitioner filed a Complaint for accion publiciana with damages against respondents for allegedly building their shanties, without its knowledge and consent, in its 5,613-square-meter property located at Daisy Road, Phase V, Pilar Village Subdivision, Almanza, Las Pias City. It claims that said parcel of land, which is duly registered in its name under Transfer Certificate of Title No. 481436 of the Register of Deeds for the Province of Rizal, was designated as an open space of Pilar Village Subdivision intended for village recreational facilities and amenities for subdivision residents. In their Answer with Counterclaim, respondents denied the material allegations of the Complaint and briefly asserted that it is the local government, not petitioner, which has jurisdiction and authority over them. Anchoring its pleadings on Article 630 of the Code, petitioner argues that although the portion of the subject property occupied by respondents is within the 3-meter strip reserved for public easement, it still retains ownership thereof since the strip does not form part of the public dominion. As the owner of the subject parcel of land, it is entitled to its lawful possession, hence, the proper party to file an action for recovery of possession against respondents conformably with Articles 428 and 539 of Code. ISSUE: WON the petitioner has right over the subject parcel of land HELD: NO. An easement or servitude is a real right on another's property, corporeal and immovable, whereby the owner of the latter must refrain from doing or allowing somebody else to do or something to be done on his or her property, for the benefit of another person or tenement; it is jus in re aliena, inseparable from the estate to which it actively or passively belongs, indivisible, perpetual, and a continuing property right, unless extinguished by causes provided by law. The Code defines easement as an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner or for the benefit of a community, or of one or more persons to whom the encumbered estate does not belong. There are two kinds of easement according to source: by law or by will of the owners the former are called legal and the latter voluntary easement. A legal easement or compulsory easement, or an easement by necessity constituted by law has for its object either public use or the interest of private persons. While Article 630 of the Code provides for the general rule that "the owner of the servient estate retains the ownership of the portion on which the easement is established, and may use the same in such a manner as not to affect the exercise of the easement," Article 635 thereof is specific in saying that "all matters concerning easements established for public or communal use shall be governed by the special laws and regulations relating thereto, and, in the absence thereof, by the provisions of this Title VII on Easements or Servitudes." Similar to petitioner, respondents have no right or title over it precisely because it is public land. Squatters have no possessory rights over the land intruded upon. The length of time that they may have physically occupied the land is immaterial; they are deemed to have entered the same in bad faith, such that the nature of their possession is presumed to have retained the same character throughout their occupancy.


APOLINARDITO C. QUINTANILLA v PEDRO ABANGAN G.R. No. 160613 February 12, 2008

TOPIC INVOLVED: Easement of Right of Way FACTS: Sometime in the 1960s, Perfecta bought Lot No. 3771-B-1-A, with an area of 2,244 sqm. located at Inayawan, Cebu City (the dominant estate) from one Dionisio Abasolo, who formerly owned all the properties therein. Thereafter, Perfecta donated the dominant estate to Apolinardito, who is now the registered owner thereof. Petitioners own QC Rattan Inc., a domestic corporation engaged in the manufacture and export of rattan-made furniture. In the conduct of their business, they use vans to haul and transport raw materials and finished products. As they wanted to expand their business and construct a warehouse on their property (the dominant estate), they asked for a right of way from Pedro sometime in April 1994. However, it appears that Pedro, who was the owner of Lot No. 3771-A-1, containing an area of 1,164 sqm (the servient estate) and a lot near the dominant estate, sold the same to DARYL'S on March 24, 1994, and thereafter, DARYL'S constructed a warehouse over the servient estate, enclosing the same with a concrete fence. Petitioners, thus, sought the imposition of an easement of right of way, six (6) meters in width, or a total area of 244 square meters, over the servient estate. RTC dismissed the case for lack of merit. CA affirmed the RTC Decision, holding that the criterion of least prejudice to the servient estate must prevail over the shortest distance. ISSUE: Whether or not compliance with the preconditions set forth in Articles 649 and 650 of the New Civil Code is superior to the mere convenience rule against the owner of the dominant state. HELD: Apolinardito failed to discharge the burden of proving the existence and concurrence of all the requisites in order to validly claim a compulsory right of way against respondents. It should be remembered that to be entitled to a legal easement of right of way, the following requisites must be satisfied: (1) the dominant estate is surrounded by other immovables and has no adequate outlet to a public highway; (2) proper indemnity has been paid; (3) the isolation was not due to acts of the proprietor of the dominant estate; and (4) the right of way claimed is at the point least prejudicial to the servient estate. The fourth requisite is absent. As provided for under the provisions of Article 650 of the New Civil Code, the easement of right of way shall be established at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest. Where there are several tenements surrounding the dominant estate, and the easement may be established on any of them, the one where the way is shortest and will cause the least damage should be chosen. But if these two circumstances do not concur in a single tenement, as in the instant case, the way which will cause the least damage should be used, even if it will not be the shortest. The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance. The court is not bound to establish what is the shortest; a longer way may be established to avoid injury to the servient tenement, such as when there are constructions or walls which can be avoided by a round-about way, as in the case at bar. As between a right of way that would demolish a fence of strong materials to provide ingress and egress to a public highway and another right of way which although longer will only require a van or vehicle to make a turn, the second alternative should be preferred. Mere convenience for the dominant estate is not what is required by law as the basis for setting up a compulsory easement. Even in the face of necessity, if it can be satisfied without imposing the easement, the same should not be imposed. Finally, worthy of note, is the undisputed fact that there is already a newly opened public road barely fifty (50) meters away from the property of appellants, which only shows that another requirement of the law, that is, there is no adequate outlet, has not been met to establish a compulsory right of way.


ALICIA REYES V. SPOUSES RAMOS G.R. No. 194488, FEBRUARY 11, 2015

TOPIC INVOLVED: Requisites of an easement of right of way and compulsory easement under Articles 649 and 650 of Civil Code FACTS: Alicia Reyes filed a complaint for easement of right of way against respondents, Sps. Ramos. She alleged that her property was surrounded by estates belonging to other persons and that respondents 1500-square-meter property surrounded her property, and that it was the only adequate outlet from her property to the highway. A 113-square-meter of respondents property was also the point least prejudicial to the respondents. The ease sought was the vacant portion near the boundary of respondents other lot. The petitioner also insisted that her property was not isolated because of her own acts. It was given by her mother as part of her inheritance, thus, there was no intention for the property to have an outlet. Respondents contended that the isolation of petitioners property was due to her mothers own act of subdividing the property among her children without regard to the pendency of an agrarian case between her and her tenants. The property chosen by petitioner as easement was also the most burdensome for respondents. They pointed to an open space that connected petitioners property to another public road. RTC denied the petitioners complaint. CA affirmed in toto. ISSUE: WON petitioner has the compulsory easement of right of way over respondents property HELD: NONE. Articles 649 and 650 of the Civil Code provide the requisites of an easement of right of way: (1) An immovable is surrounded by other immovables belonging to other persons, and is without adequate outlet to a public highway; (2) Payment of proper indemnity by the owner to the surrounded immovable; (3) The isolation of the immovable is not due to its owners acts; and (4) The proposed easement of right of way is established at the point least prejudicial to the servient estate, and insofar as consistent with this rule, where the distance of the dominant estate to a public highway may be the shortest. Petitioner failed to establish that there was no adequate outlet to the public highway and that the proposed easement was the least prejudicial to the respondents estate. First, there is an adequate exit to a public highway because based on the Ocular Inspection Report, petitioners property had another outlet to the highway. In between her property and the highway or road, however, is an irrigation canal, which can be traversed by constructing a bridge, similar to what was done by the owners of the nearby properties. Therefore, there is no need to utilize the respondents property to serve the petitioners needs. Mere inconvenience for the dominant estate is not what is required by law as the basis of setting up a compulsory easement. Even in the face of necessity, if it can be satisfied without imposing the easement the same should not be imposed. Second, in determining the existence of an easement of right of way, the requirement of least prejudice to the servient estate trumps distance between the dominant estate and the public highway. Distance is considered only insofar as it is consistent to the requirement of least prejudice. The criterion of least prejudice to the servient estate must prevail over the criterion of shortest distance. Imposing an easement on the part of the respondents property for petitioners benefit would cost the former not only the value of the property but also the value of respondents opportunity to use the property as garage or a garden with a grotto.


HIDALGO ENTERPRISES, INC. V. BALANDAN, et al, G.R. No. L-3422, JUNE 13, 1952

TOPIC INVOLVED: Attractive Nuisance Doctrine FACTS: Petitioner Hidalgo Enterprises, Inc. was the owner of an ice-plant factory in the City of San Pablo, Laguna, in whose premises were installed two tanks full of water, nine feet deep, for cooling purposes of its engine. Plaintiffs son, Mario Balandan, a boy barely 8 years old, while playing with and in company of other boys of his age entered the factory premises through the gate, to take a bath in one of said tanks; and while thus bathing, Mario sank to the bottom of the tank, only to be fished out later, already a cadaver, having been died of "asphyxia secondary to drowning. While the factory compound was surrounded with fence, the tanks themselves were not provided with any kind of fence or top covers. The edges of the tanks were barely a foot high from the surface of the ground. Through the wide gate entrance, which is continually open, motor vehicles hauling ice and persons buying said commodity passed, and anyone could easily enter the said factory, as he pleased. There was no guard assigned on the gate. ISSUE: Whether the body of water (tanks) is an attractive nuisance. HELD: NO. The doctrine of attractive nuisance may be stated, in short, as follows: One who maintains on his premises dangerous instrumentalities or appliances of a character likely to attract children in play, and who fails to exercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a child of tender years who is injured thereby, even if the child is technically a trespasser in the premises. (See 65 C.J.S., p. 455.) The principle reason for the doctrine is that the condition or appliance in question although its danger is apparent to those of age, is so enticing or alluring to children of tender years as to induce them to approach, get on or use it, and this attractiveness is an implied invitation to such children (65 C.J.S., p. 458). The reason why a swimming pool or pond or reservoir of water is not considered an attractive nuisance was lucidly explained by the Indiana Appellate Court as follows: Nature has created streams, lakes and pools which attract children. Lurking in their waters is always the danger of drowning. Against this danger children are early instructed so tha