Pleasantville Development Corporation vs.

Court of Appeals
G.R. No. 79688. February 1, 1996
PANGANIBAN, J./ sucram

SUBJECT MATTER: BPS builds, plants, sows on another land with materials owned by 3rd person

CASE SUMMARY: Lot 9 was bought by Robillo whose rights over the lot were bought by Jardinco. It was discovered
after the transfer of title to Jardinco that Wilson Kee has already introduced improvements and constructions in the Lot. A
compliant for ejectment was filed by Jardinco. It was found out that the employee of CTTEI, the agent of PDC, pointed
Lot 9 to Kee instead of Lot 8. SC held that Kee is a builder in good faith. The controversy was due to CTTEI’s negligence
and that there was failure on the part of petitioner to prove Kee is a builder in bad faith.

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

FACTS:
1. Edith Robillo purchased from Pleasantville(PDC)
a. Phase II, Lot 9, Taculing Road Pleasantville Sudivision Bacolod City
2. Rights to the Lot was bought by Eldred Jardinco in 1975
3. Improvements discovered – Improvements introduced by Wilson Kee on the lot were discovered when Jardinco
secured the transfer of title to his name.
4. Wilson Kee bought Lot 8 but was pointed to Lot 9 – Kee bought lot 8 on installment from same subdivision
from C.T. Torres Enterprises Inc.
a. After providing required payments, Kee’s wife was accompanied by CTTEI’s employee to inspect lot 8
b. BUT WAS POINTED TO LOT 9 (Ka-tanga)
c. Thereafter, Kee constructed his residence, store, and an auto repair shop.
5. PARTIES FAILED to reach an amicable settlement
6. Complaints filed
a. Jardinco filed a complaint for ejectment after refusal of Kee to vacate the Lot
b. Kee filed a 3rd party complaint against PDC and CTTEI
7. MTC held the following:
a. Erroneous delivery to Kee attributable to CTTEI
b. Cannot invoke as defense the failure of Kee to give notice of intention ti begin construction pursuant to
the contract to sell
8. KEE HAS NO RIGHT - PDC had already RESCINDED contract with Kee over Lot 8 due to failure to pay
installments
a. Rescission already effected before complaint
b. Kee must pay reasonable rentals for the use of Lot 9 and vacate premises
c. NO CLAIM OF REIMBURSEMENT
9. RTC affirmed order to vacate
a. CTTEI not negligent there being no preponderant evidence to show they directly participated in the
delivery of Lot 9 to Kee
b. Kee a builder in bad faith
c. Even if it was assumed he is in good faith, he is guilty of unlawfully usurping possessory rights of
Jardinco from the time he was served a notice to vacate
d. Ordered the removal of all structures and improvements at Kee’s expense
10. CA: Kee a builder in good faith – entitled to rights granted by Arts. 448, 546, 548 of CC
a. Unaware of the mix up
b. Erroneous delivery due to negligence of CTTEI
c. Award of rentals has no basis
d. RT decision reversed
e. CTTEI and PDC declared solidarily liable

ISSUES/HELD
 1. Was Kee a builder in good faith? YES
2. What is the liability, if any, of petitioner and its agent, C.T. Torres Enterprises, Inc.?

RATIO:

KEE IS A BUILDER IN GOOD FAITH

1. Controversy can be traced directly to errors by CTTEI
2. Highly improbable Kee would build on the wrong Lot risking his self and family of possible ejectment
3. He relied on CTTEI’s employee’s authoritative declaration that the Land pointed was indeed Lot 8
4. Good faith is presumed and Petitioner failed to prove otherwise
5. The defense that the contract was violated does negate the presumption that Kee was a builder in good faith
6. Prior rescission also does not negate the liability of petitioner due to the negligence of his agent CTTEI

PDC AS CTTEI’S PRINCIPAL IS LIABLE

1. CTTEI was acting within its authority as sole real estate representative of petitioner
2. It was just negligent. Per articles 1909 and 1910 of the civil code, petitioner PDC is liable.

DISPOSITIVE: Petition Granted. CA decision modified

1. Wilson Kee is declared a builder in good faith
2. Petitioner Pleasantville Development Corporation and respondent C.T. Torres Enterprises, Inc. are
declared solidarily liable for damages due to negligence