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MWSS vs CA

G.R. No. L-54526 August 25, 1986

Petitioner: METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM


Respondents: THE COURT OF APPEALS and THE CITY OF DAGUPAN

Counsel: Miguel T. Caguioa, Ireneo B. Orlino and Manuel D. Victorio for respondent City of
Dagupan.

Facts: In a civil case of possession by the City of Dagupan against the MWSS for recovery of
possession and ownership of the Dagupan Waterworks System, the trial court rendered a
decision in favour of the City of Dagupan. However, the trial court also held that MWSS was in
bad faith, and was therefore not entitled to their claim of Php255,000.00 for necessary and useful
improvements upon the disputed waterworks system.

Issue: Whether the MWSS can claim for necessary and useful improvements upon the disputed
waterworks system.

Held: No. The useful expenses were made in utter bad faith for they were instituted after the
complaint was filed.
Under Art. 526. He is deemed a possessor in good faith who is not aware that there exists
in his title or mode of acquisition any flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in any case contrary to the
foregoing.
Mistake upon a doubtful or difficult question of law may be the basis of good faith.

Since the MWSS made the expenses knowing a case for recovery of possession is instituted
against it he know that there exista flaw in his title.

WHEREFORE, the decision of the appellate court is affirmed with costs against petitioner.