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2020 2563145854
substantial import (evident from the records) that
ART. 447
cannot escape notice.
GRN L-21783 NOVEMBER 29, 1969
In the deed of absolute sale, exhibit 1, the
PACIFIC FARMS, INC. VS. SIMPLICIO G.
Insular Farms, Inc. (vendor) was represented in the
ESGUERRA, CARRIED LUMBER COMPANY
contract by its president, J. Antonio Araneta. The
latter was a director of the appellee (Pacific Farms,
FACTS:
Inc.) and was the counsel who signed the complaint
On several occasions, the Company sold
filed by the appellee in the court below. J. Antonio
and delivered lumber and construction materials to
Araneta was, therefore, not only the president of
the Insular Farms, Inc. which the latter used in the
the Insular Farms, Inc. but also a director and
construction of the aforementioned six buildings at its
counsel of Pacific Farms.
compound in Bolinao, Pangasian. Of the total
During the trial of civil case the Insular
procurement price of P15,000, the sum of P4,710.18
Farms, Inc. was represented by Attorney Amado
has not been paid by the Insular Farms, Inc. The
Santiago, Jr. of the law firm of J. Antonio Araneta.
Company instituted a civil case with the CIR of
The latter was one of the counsels of the Pacific
Pangasinan to recover the said unpaid balance from
Farms, Inc. They cannot claim ignorance of the
the Insular Farms, Inc. The trial court rendered
pendency of civil case because the Insular Farms,
judgment in favor of the Company's claim. The
Inc. was defended by the same lawyer from the
corresponding writ of execution was issued because
same law firm that commenced the present
there was no appeal instituted by Insular, Inc.
action.
The Pacific Farms, Inc. filed a third-party
Pacific Farms merely folded its arms in
claim asserting ownership over the levied buildings
disinterest and waited, so to speak. Not until a
which it had acquired from the Insular Farms, Inc. by
decision was rendered therein in favor of the
virtue of a deed of absolute sale executed about
Company, a writ of execution issued, and the six
seven months before the Company filed the civil
buildings levied upon by the sheriff, did it file a third-
action. Shielded by an indemnity bond put up by the
party claim over the levied buildings.
Company and the Cosmopolitan Insurance Company,
Inc., the sheriff proceeded with the announced public
auction and sold the levied buildings to the Company.
ART. 448
ISSUE:
WON the Company is entitled to a materialman’s lien PNB V. DE JESUS
to be paid by Pacific Farms, Inc? 411 SCRA 557
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encroachment already was in existence and to the said property in favor of the petitioners.
remedy the situation, Mayor Ignacio offered to sell the The petitioners sent a letter addressed to
area in question (which then also belonged to Ignacio) private respondent Mary Nicolas demanding that she
to petitioner at P100.00 per square meter which offer vacate the premises and pay the rentals in arrears
the latter claimed to have accepted. The sale, within twenty days from notice.
however, did not materialize when, without the Upon failure of the private respondents to
knowledge and consent of petitioner, Mayor Ignacio heed the demand, the petitioners filed a complaint for
later mortgaged the lot to the Development Bank of unlawful detainer and damages.
the Philippines. He also contends that he is a builder
in good faith. ISSUE: WON Art. 448 is applicable to this case.
Digested and compiled by Chami, Daisy, James, Moneh, and Relie – UST LAW 2B
PROPERTY CASE DIGESTS
Digested and compiled by Chami, Daisy, James, Moneh, and Relie – UST LAW 2B
PROPERTY CASE DIGESTS
the building or trees after proper indemnity. The been reimbursed (by the person who defeated him in
parties shall agree, on case of disagreement, court the case for possession of the property) for those
shall fix.” necessary expenses and useful improvements made
by him on the thing possessed.
Given the circumstances of the instant case
G.R. NO. 151815. FEBRUARY 23, 2005 where the builder in good faith has been clearly
SPOUSES JUAN NUGUID AND ERLINDA T. denied his right of retention for almost half a decade,
NUGUID VS. HON. COURT OF APPEALS AND we find that the increased award of rentals by the
PEDRO P. PECSON RTC was reasonable and equitable. The petitioners
had reaped all the benefits from the improvement
FACTS: introduced by the respondent during said period,
Pedro P. Pecson owned a commercial lot on without paying any amount to the latter as
which he built a four-door two-storey apartment reimbursement for his construction costs and
building. For failure to pay realty taxes, the lot was expenses. They should account and pay for such
sold at public auction by the City Treasurer to benefits.
Mamerto Nepomuceno, who in turn sold it for
P103,000 to the spouses Juan and Erlinda Nuguid. G.R. NO. 157605. DECEMBER 13, 2005
Pecson challenged the validity of the auction SPS. RASDAS, ET. AL. VS. ESTENOR, ET. AL.
sale before the RTC of Quezon City, the RTC upheld
the spouses’ title but declared that the four-door two- FACTS:
storey apartment building was not included in the The dispute centers on a parcel of land with
auction sale. This was affirmed by the CA and by the an situated in Ilagan, Isabela. Respondent filed a
SC. Complaint For Recovery Of Ownership And
The Nuguids became the uncontested Possession With Damages against. The complaint
owners of commercial lot. The Nuguid spouses was docketed and tried by the RTC of Ilagan. In the
moved for delivery of possession of the lot and the same complaint, respondent asserted that he was the
apartment building. owner of the subject property, which was then in the
possession of petitioners. The RTC decided in favor
ISSUE: of petitioners. The CA reversed the judgment of the
WON the Nuguids should reimburse Pecson for the RTC and declared respondent as the owner of the
benefits derived from the apartment building. subject property. Thereafter, a Writ of Execution and
Writ of Demolition was issued against petitioners, who
HELD: YES. were ordered to demolish their houses, structures,
Since petitioners opted to appropriate the and improvements on the property.
improvement for themselves as early as June 1993, Petitioners alleged that they were entitled to
when they applied for a writ of execution despite just compensation relating to the value of the houses
knowledge that the auction sale did not include the they had built on the property, owing to their
apartment building, they could not benefit from the purported status as builders in good faith. They
lot’s improvement, until they reimbursed the improver claimed that the CA decision did not declare them as
in full, based on the current market value of the builders in bad faith, and thus, they were entitled to be
property. reimbursed of the value of their houses before these
Under Article 448, the landowner is given the could be demolished. They posited that without such
option, either to appropriate the improvement as his reimbursement, they could not be ejected from their
own upon payment of the proper amount of indemnity houses.
or to sell the land to the possessor in good faith.
Relatedly, Article 546 provides that a builder in good ISSUE:
faith is entitled to full reimbursement for all the WON petitioners are in good faith.
necessary and useful expenses incurred; it also gives
him right of retention until full reimbursement is made. HELD: NO.
The right of retention is considered as one of The father of the petitioners (and their
the measures devised by the law for the protection of predecessor-in-interest) had already known that he
builders in good faith. Its object is to guarantee full did not own the property, and that his stay therein was
and prompt reimbursement as it permits the actual merely out of tolerance. Such conclusion in fact
possessor to remain in possession while he has not bolstered the eventual conclusion that respondents
Digested and compiled by Chami, Daisy, James, Moneh, and Relie – UST LAW 2B
PROPERTY CASE DIGESTS
were the owners of the land and that petitioners builder in good faith.
should vacate the same. Should El Dorado then opt to appropriate the
These premises remaining as they are, it is improvements made by PLDT on the 1,000 hectare
clear that petitioners are not entitled to the just portion of the property, it should only be made to pay
compensation they seek through the present for those improvements at the time good faith existed
complaint. Under Article 448 of the Civil Code, the on the part of PLDT or until March 15, 1977, to be
builder in bad faith on the land of another loses what pegged at its current fair market value.
is built without right to indemnity. Petitioners were in The commencement of PLDT’s payment of
bad faith when they built the structures as they had reasonable rent should start on March 15, 1977 as
known that the subject property did not belong to well, to be paid until such time that the possession of
them. the 1,000 hectare portion is delivered to El Dorado,
subject to the reimbursement of expenses as
G.R. NO. 123672. DECEMBER 14, 2005 aforestated, that is, if El Dorado opts to appropriate
FERNANDO CARRASCOSO, JR. VS. COURT OF the improvements.
APPEALS, LAURO LEVISTE If El Dorado opts for compulsory sale,
however, the payment of rent should continue up to
FACTS: the actual transfer of ownership.
El Dorado Plantation, Inc. (El Dorado) was
the registered owner of a land situated in Sablayan,
Occidental Mindoro. At a special meeting of El G.R. NO. 144635 JUNE 26, 2006
Dorado’s Board of Directors, a Resolution was PROGRAMME INCORPORATED, V. PROVINCE OF
passed authorizing Feliciano Leviste, then President BATAAN
of El Dorado, to negotiate the sale of the property and
sign all documents and contracts bearing thereof. FACTS:
Through a Deed of Sale of Real Property, El Dorado, BASECO is the owner of Piazza Hotel and
through Feliciano Leviste, sold the property to Mariveles Lodge, both located in Mariveles, Bataan.
Carrascoso, Jr. In 1986, BASECO granted petitioner a
PLDT commenced construction of contract of lease over Piazza Hotel at a monthly rental
improvements on the 1,000 hectare portion of the of P6,500 for three years, subject to renewal by
property immediately after the execution of mutual agreement of the parties. After the expiration
Agreement to Buy and Sell. of the three-year lease period, petitioner was allowed
Lauro Leviste (Lauro), a stockholder and to continue operating the hotel on monthly extensions
member of the Board of Directors of El Dorado, of the lease.
through his counsel, Atty. Benjamin Aquino, called the In 1989, however, the Presidential
attention of the Board to Carrascoso’s failure to pay Commission on Good Government (PCGG) issued a
the balance of the purchase price of the property. He sequestration order against BASECO pursuant to
wants a rescission of the sale made by the El Dorado Executive Order No. 1 of former President Corazon C.
Plantation, Inc. to Mr. Carrascoso. Aquino. Among the properties provisionally seized
and taken over was the lot on which Piazza Hotel
ISSUE: WON PLDT is in good faith when it built its stood.
improvements on the subject land. On July, 1989, however, Piazza Hotel was
sold at a public auction for non-payment of taxes to
HELD: respondent Province of Bataan. The title of the
In the case at bar, it is undisputed that PLDT property was transferred to respondent. BASECO’s
commenced construction of improvements on the Transfer Certificate of Title was cancelled and a new
1,000 hectare portion of the property immediately one, was issued to the Province of Bataan.
after the execution of the July 11, 1975 Agreement to The trial court rendered judgment in favor of
Buy and Sell with the full consent of Carrascoso. respondent.
Thus, until March 15, 1977 when the Notice of Lis CA affirmed the trial court’s ruling.
Pendens was annotated on Carrascoso’s TCT No. T-
6055, PLDT is deemed to have been in good faith in ISSUE:
introducing improvements on the 1,000 hectare WON the petitioner is a possessor in good
portion of the property. After March 15, 1977, faith of the Piazza Hotel and Mariveles Lodge
however, PLDT could no longer invoke the rights of a
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alternative, Villegas proposed to pay the purchase the principle of accession, he is entitled to the
price of petitioners’ lot with legal interest. Both ownership of the accessory thing.
proposals were, however, rejected by petitioners
whose counsel, by letter of August 24, 1995, directed
Castelltort to stop the construction of and demolish his G.R. NO. 170923 JANUARY 20, 2009
house and any other structure he may have built SULO SA NAYON, INC. VS NAYONG PILIPINO
thereon, and desist from entering the lot. FOUNDATION
Petitioners subsequently filed on September
1, 1995 a complaint for recovery of possession and FACTS:
damages with prayer for the issuance of a restraining In 1975, respondent leased a portion of the
order and preliminary injunction against spouses- Nayong Pilipino Complex, to petitioner Sulo sa
respondents Miguel and Judith Castelltort before the Nayon, Inc. for the construction and operation of a
RTC of Calamba, Laguna, docketed as Civil Case No. hotel building, to be known as the Philippine Village
2229-95-C. Hotel. The lease was for an initial period of 21 years,
or until May 1996. It is renewable for a period of 25
ISSUE: years under the same terms and conditions upon due
Under Art 448, who has the right of option? notice in writing to respondent of the intention to
renew.
HELD: In 1995, petitioners sent respondent a letter
Under the foregoing provision (Art 448), the notifying the latter of their intention to renew the
landowner can choose between appropriating the contract for another. July of the same year, parties
building by paying the proper indemnity or obliging the agreed to the renewal of the contract for another 25
builder to pay the price of the land, unless its value is years, or until 2021. Under the new agreement,
considerably more than that of the structures, in which petitioner PVHI was bound to pay the monthly rentals
case the builder in good faith shall pay reasonable Beginning January 2001, petitioners
rent.[34] If the parties cannot come to terms over the defaulted in the payment of their monthly rental.
conditions of the lease, the court must fix the terms Respondent repeatedly demanded petitioners to pay
thereof. the arrears and vacate the premises.
The choice belongs to the owner of the land, MeTC rendered its decision in favor of
a rule that accords with the principle of accession, i.e., respondent
that the accessory follows the principal and not the RTC which modified the ruling of the MeTC.
other way around. Even as the option lies with the CA which held that the RTC erroneously
landowner, the grant to him, nevertheless, is applied the rules on accession, as found in Articles
preclusive. The landowner cannot refuse to exercise 448 and 546 of the Civil Code
either option and compel instead the owner of the
building to remove it from the land. ISSUE:
The raison d’etre for this provision has been WON Sulo sa Nayon as builders have acted
enunciated thus: in good faith in order for Art. 448 in relation to Art. 546
Where the builder, planter or sower has of the Civil Code may apply with respect to their rights
acted in good faith, a conflict of rights arises over improvements.
between the owners, and it becomes
necessary to protect the owner of the HELD:
improvements without causing injustice to the Article 448 is manifestly intended to apply
owner of the land. In view of the only to a case where one builds, plants, or sows on
impracticability of creating a state of forced land in which he believes himself to have a claim of
co-ownership, the law has provided a just title, and not to lands where the only interest of the
solution by giving the owner of the land the builder, planter or sower is that of a holder, such as a
option to acquire the improvements after tenant.
payment of the proper indemnity, or to oblige In the case at bar, petitioners have no
the builder or planter to pay for the land and adverse claim or title to the land. In fact, as lessees,
the sower the proper rent. He cannot refuse they recognize that the respondent is the owner of the
to exercise either option. It is the owner of the land. What petitioners insist is that because of the
land who is authorized to exercise the option, improvements, which are of substantial value, that
because his right is older, and because, by
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PROPERTY CASE DIGESTS
lawful owners of a 251 square meter lot located at with coconuts, which, together with those already
Sta. Ana, San Mateo, Rizal. Because of their planted by Dominga Usman, numbered about 3,000,
compassion, they allowed petitioner, whose house most of which are now fruit-bearing. In short, Angeles
was a purchaser and a builder in bad faith.
was destroyed by a strong typhoon, to occupy their
lot. They agreed that he could build thereon a ISSUE:
temporary shelter of light materials. But without their Whether or not Angeles is entitled to
consent, what he constructed was a house of reimbursement for the coconuts tree he planted
concrete materials. on the property in litigation.
In 1992, respondents asked petitioner to vacate the
lot. This was followed by repeated verbal demands HELD:
No. It should be noted that said trees are
but to no avail, prompting them to bring the matter to
improvements, not "necessary expenses of
the barangay. But the parties failed to reach an preservation," which a builder, planter or sower in bad
amicable settlement. On June 25, 1999, the faith may recover under Arts. 452 and 546, first
barangay chairman issued a Certification to File paragraph, of the Civil Code. The facts and findings
Action. of both the trial court and the Court of Appeals leave
In his answer to the complaint, petitioner no room for doubt that Jose Angeles was a purchaser
claimed that sometime in 1968, respondents allowed and a builder in bad faith. The provision applicable to
this case is, accordingly, Article 449 of the Civil Code,
him to build his house on the lot, provided he would
which provides that, "he who builds, plants or sows in
guard the premises to prevent landgrabbers and bad faith on the land of another, loses what is built,
squatters from occupying the area. In 1995, when planted or sown without right to indemnity."
respondents visited this country, they agreed verbally
to sell the portion on which his house was
constructed. A year later, he made an offer to buy the
60 square meter portion occupied by him and to
spend for its survey. But what respondents wanted to
ART. 453
sell was the whole area containing 251 square MUNICIPALITY OF OAS V. ROA
meters. He then informed them that he would first 7 PHIL. 20
consult his children and they said they will wait.
Instead, they filed the instant complaint. FACTS:
The Municipality brought the action for the
ISSUE: recovery of a tract of land in the pueblo of Oas,
claiming that it was a part of the public square of said
WON petitioner is a builder in good faith.
town, while Roa alleged that he was the owner of the
property. The defendant admitted in writing that he
HELD: NO. knew that the land is owned by the Municipality and
Petitioner is not a builder in good faith. that Jose Castillo, whom he bought the property did
Considering that he occupies the land by mere not own the land. When Roa constructed a substantial
tolerance, he is aware that his occupation of the building on the property in question after he
same may be terminated by respondents any “acquired” the property from Castillo, the Municipality
did not oppose the construction.
time.
ISSUE:
Whether or not the municipality owns the land.
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ART. 458
GOVERNMENT V. COLEGIO DE SAN JOSE
53 PHIL. 423
FACTS:
During the months of September to
November every year, the waters of Laguna de Bay
cover a long strip of land along the eastern border of
the two parcels of land in question. The claimant
Colegio de San Jose contends that the parcels of land
are a part of the Hacienda de San Pedro Tunasan
belonging it, which has been in possession thereof
since time immemorial by means of its tenants or
lessees and farmers. In contrast, the Government
contends that the said two parcels of land belong to
the public domain, and its evidence tends to prove
that they have always been known as the shores of
Laguna de Bay. The CFI rendered a decision in favor
of Colegio de San Jose ordering the registration of the
2 parcels of land in accordance with law. Both
admitted that the strip was formerly covered by water
but since the Bay receded, it was now uncovered.
The government tried to apply Art. 458 which states
the adjoin estate (the College) does not acquire the
land left dry by the natural decrease of the waters.
ISSUES:
Whether or not Art. 458 is applicable.
Whether or not the property in question belongs to the
public domain as a part of the bed of Laguna de Bay.
HELD:
No. Article 367 (now Art.458) provides that “the
owners of estates bordering on ponds or lagoons, do
not acquire the land left dry by the natural decrease of
the waters, nor lose those inundated by them in
extraordinary floods.” The provision refers to ponds
and lagoons, and has therefore no application to the
present case, which refers to a lake, a lagoon being
legally distinct in character from a lake. Instead,
Art.77 of the Spanish Law of Waters should apply,
which provides: “Lands accidentally inundated by the
waters of lakes, or by creeks, rivers or other streams
shall continue to be the property of their respective
owners.” Therefore, they must belong to Colegio de
San Jose as part of Hacienda de San Pedro Tunasan,
which was originally owned by it.
Digested and compiled by Chami, Daisy, James, Moneh, and Relie – UST LAW 2B