PROPERTY Batch-4 PDF

PROPERTY BATCH 4
28 CASES
CASE 1: Pacific Farms, Inc. v Esguerra

CASE 2: Spouses Benitez v CA
CASE 3: Depra v Dumlao
CASE 4: Sulo ng Nayon v Nayong Filipino
CASE 5: Sarmiento v Agana
CASE 6: Pershing Tan Queto v CA
CASE 7: Pleasantville Devt Corp v CA
CASE 8: Baltazar v Caridad
CASE 9: Geminiano v CA
CASE 10: Sps Lacap v Ong Lee
CASE 11: Sps Del Campo v Abesia
CASE 12: Ignao v IAC
CASE 13: Percon v CA
CASE 14: Sarmiento v Agana
CASE 15: Technogas Phil Manufacturing v CA
CASE 16: Quemel v Olaes
CASE 17: San Diego v Montesa
CASE 18: Technogas Phil Manufacturing v CA
CASE 19: PNB v De Jesus
CASE 20: Ballatan v CA
CASE 21: Santos v Mojica
CASE 22: Vda de Nazareno v CA
CASE 23: Republic v CA
CASE 24: Heirs of Emiliano Navarro v IAC
CASE 25: Govt of the P. I. v Colegio de San Jose
CASE 26: Baes v CA
CASE 27: Ronquillo v CA
CASE 28: Jagualing v CA
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Case 5
RETURN
SARMIENTO v. AGANA
FACTS:
Before Ernesto Valentino and Rebecca Lorenzo wed, Rebecca’s mother offered a lot in
Paranaque that they could build their house on. In 1967, they finally built their home
which cost about PhP8,000-10,000, thinking that someday, the lot would be transferred
to them in their name. It turns out, though, that the lot was owned by the Spouses Santos
who, in turn, sold the same to Leonila Sarmiento in 1974. A year later, Sarmiento ordered
the Valentinos to vacate their lot, then eventually filed and Ejection Suit against them.
The lower court ruled in Sarmiento’s favor and ordered her to pay 20,000 as the value of
the house. But the case was then elevated to the CFI of Pasay (w/ Agana as Judge), and
pursuant to Art.448 of the CC (March 1979), the Court ordered Sarmiento to exercise the
option in 60 days to pay Ernesto 40,000 as the value of the house or to let them purchase
the land for 25,000. Sarmiento was not able to exercise this option, and the CFI allowed
Ernesto to deposit the 25,000-purchase price with the Court.
ISSUE:
Whether or not the land owner is compelled to exercise either option: to buy the building
or to sell the land?
HELD:
Ernesto and his wife (BPS) were clearly in good faith as they believed that Rebecca’s
mother has the capacity to eventually transfer the title of the land to them. In line with
this, Sarmiento (LO) was required to exercise only 2 options: To purchase the house or
to sell the land to them, in this case, based on the value decided by the courts. Since
Sarmiento failed to exercise the option within the allotted period, and based on Art. 448,
the LO is compelled by law to exercise either option. Not choosing either is a violation of
the law.
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Case 20
RETURN
BALLATAN v. CA
-Land Owner in Good faith, Builder in Good faith scenario -The right to choose between
appropriating the improvement or selling the land on which the improvement of the
builder, planter or sower stands, is given to the owner.
-If the option chooses is to sell the lot, the price must be fixed at the prevailing market
value at the time of payment.
FACTS:
Eden Ballatan, together with other petitioners, is living in and registered owners of Lot
No. 24. Respondent Winston Go is living in and registered owners of Lot No. 25 and 26.
And Li Ching Yao is living in and the registered owner of Lot. 27. The Lots are adjacent
to each other.
When Ballatan constructed her house in her lot, she noticed that the concrete
fence and side pathway of the adjoining house of respondent Winston Go encroached on
the entire length of the eastern side of her property. She was informed by her contractor
of this discrepancy, who then told respondent Go of the same. Respondent, however,
claims that his house was built within the parameters of his father’s lot; and that this lot
was surveyed by engineer Jose Quedding, the authorized surveyor of Araneta Institute
of Agriculture (AIA). Petitioner called the attention of AIA on the matter and so the latter
authorized another survey of the land by Engineer Quedding. The latter then did the
survey twice which led to the conclusion that Lots Nos 25, 26 (owned by respondent Go)
and 27 (owned by Li Ching Yao) moved westward to the eastern boundary of Lot 24
(owned by petitioner Ballatan.) –(it was later on discovered by the courts that Go
encroached 42 square meters from the property of Ballatan and Yao encroached 37
square meters on Go’s property, all of which were in GOOD FAITH) Ballatan made written
demands to the respondent to dismantle and move their improvements and since the
latter wasn’t answering the petitioner filed accion publiciana in court. Go’s filed their
“Answer with Third-Party Complaint” impleading as third party defendants respondents
Li Ching Yao, the AIA and Engineer Quedding.
ISSUE:
What is the proper remedy in this situation (everyone was in good faith)?
RULING:
Art 448 is the proper remedy (Lower Courts are wrong in awarding the damages). It was
established in the case that the parties had no knowledge of the encroachment until
Ballatan noticed it there all of them were builders in Good faith. In that scenario they
have two options. 1st option is that the land owner will buy the improvements and the
2nd option is to oblige the builders to buy the land given that the value of the land is not
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considerably more than the buildings or tree; otherwise the owner may remove the
improvements thereon.
The builder, planter or sower, however, is not obliged to purchase the land if its
value is considerably more than the building, planting or sowing. In such case, the builder,
planter or sower must pay rent to the owner of the land. If the parties cannot come to
terms over the conditions of the lease, the court must fix the terms thereof. The right to
choose between appropriating the improvement or selling the land on which the
improvement of the builder, planter or sower stands, is given to the owner. If the option
chooses is to sell the lot, the price must be fixed at the prevailing market value at the
time of payment.
CASE NO. 17
RETURN
GIL SAN DIEGO VS HON. JUDGE AUGUSTIN MONTESA

GR NO. L-17985, SEPTEMBER 29, 1962
FACTS:
This is a petition for mandamus to compel respondent judge to issue the writ
applied for.
After trial in Civil Case No. 770 of the CFI of Bulacan, on complaint of Jose, Maria
and Urbano all surnamed “de la Cruz”, to recover a parcel of land and damages from Gil
San Diego and Rufino San Diego, the Court render a decision, which reads as follows:
a. Declaring the deed of sale null and void;

b. Ordering the defendants and third-party plaintiffs to vacate the land in question
upon payment to them by the plaintiffs and third-party defendants, within 30 days
after this decision has become final, of the sum of Three Thousand Five Hundred
Pesos (P3,500.00)
c. Dismissing the counter claim of the third-party defendants; and
d. No pronouncement as to cost.
The Court found that the disputed land belonged to the plaintiffs through hereditary
succession; that the defendants built a house on the land in good faith, by purchase
of P1,000.00. During the proceedings, the defendants filed a third-party complaint
against said vendor (mother of the plaintiffs). When the mother died, the herein
plaintiffs became the third-party defendants in substitution of their deceased mother.
The Court voided the sale on the ground that the vendor had no right to the land, but
upheld the defense of the defendants as builder in good faith.
On appeal by the plaintiffs and third party defendants, the CA affirmed in toto the
decision of the lower court, and the same became final and executor. Over two years
later, the defendants and third party plaintiffs, who were in possession of the parcel of
land in litigation, moved to execute the paragraph B of the dispositive portion of the
decision in order to collect the amount of P3,500.00 and thereafter vacate the premises.
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The motion was denied by the Court (Hon. Montesa) and a motion for reconsideration
was likewise to no avail.
The petitioners assailed that the respondents should pay them first before they
can vacate and not the other way and that they are now to insist payment through writ
of execution.
The respondents contends:

1. The petitioners have no right to the writ of execution. Because as absolute
owners of the land, the respondents have the right under Article 448, to
exercise the option to either pay the value of improvements or demand
reasonable rents of respondents do not choose to appropriate the building.
2. In that fact, the respondents have elected to demand payment of rentals of
land, actually occupied by petitioners’ building at P10.00 a month, and made a
demand thereafter immediately after the finality of the CA decision, because
the amount P3,500.00 is exorbitant, so that the land owners choose to allow
petitioners to remain on the land.
3. That respondents have long suggested to petition that a commissioner be
appointed to assess the present fair market value of the building, taking
depreciation into account;
4. That the denial of the motion for execution is justified because it is premature
and has no legal basis.
ISSUE:
HELD:
The Court find the petition meritorious. The CFI is ordered to issue the writ of
execution in favor of petitioners.
The judgement is affirmed by the Court of Appeals, and now final, explicitly ordains
the payment by the respondents De la Cruz of the amount P3,500.00 within 30 days after
this decision becomes final to petitioners San Diego. If it so orders petitioners to vacate
only upon the payment, it did so in recognition of the right of retention granted to
possessor in good faith (Art. 546 of Civil Code). This provision is expressly made
applicable to builders in good faith (art. 448)
The respondents, since they did not ask for a modification of the judgement, and
allowed it to become final, they can no longer insist on selecting another alternative nor
they can be heard now to uege that the value of indemnity is set at P3,500.00, is
exorbitant for the same reason that the judgment fixing the amount is no longer subject
to alteration.
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CASE 28
RETURN
G.R. No. 94283
MAXIMO JAGUALING, ANUNCITA JAGUALING and MISAMIS ORIENTAL

CONCRETE PRODUCTS, INC., petitioners,
vs.
COURT OF APPEALS (FIFTEENTH DIVISION), JANITA F. EDUAVE and
RUDYGONDO EDUAVE, respondents.
FACTS:
This is a case involving a dispute between parties on a claim of ownership of a

certain parcel of land that forms part of an island in a non-navigable river in Misamis
Oriental. The private respondent said she is the sole owner of the property by virtue of a
Deed of Extra Judicial Partition with sale. She also claimed that the land was inherited by
her together her co-heirs from her father and that she had been in possession of it
immediately after the latter’s death in May 5, 1949. She described the property as 16,
452 square meters wide but only 4,937 square meters was indicated in the tax declaration
for a reason that she included the land under the water. The said land had its increase
for about a half hectare due to movement of the river deposits.
In 1973, the petitioners asked her permission to plant corn and bananas on a
condition that they will prevent squatters to come.
One day, private respondents employed a surveyor, paid the taxes of the property,
and mortgaged it to Luzon Surety and Corporation. The land became the subject then of
reconveyance case. The respondents filed a complaint of ownership of property but was
dismissed by lower court on the ground that it was a delta forming part of the river bed
and thus was a part of the public domain. On an appeal, the Court of Appeals reversed
the decision of the trial court in favor of the private respondents on the ground that the
island was formed through the accumulation of alluvial deposits by the branching off of
the River. Hence, this petition for review on a claim of error in the decision of CA.
ISSUE
Whether the Court of Appeals erred in applying the provisions of Articles 463 and
465 of the new Civil Code in favor of the claimed ownership of the respondents
RULING
The decision of the Court of Appeal is sustained. The parcel of land in question is
part of an island that formed in a non-navigable and non-floatable river; from a small
mass of eroded or segregated outcrop of land, it increased to its present size due to the
gradual and successive accumulation of alluvial deposits. In this regard the Court of
Appeals did not err in applying Article 465 of the Civil Code. Under this provision, the
island belongs to the owner of the land along the nearer margin as sole owner thereof;
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or more accurately, because the island is longer than the property of private respondents,
they are deemed ipso jure to be the owners of that portion which corresponds to the
length of their property along the margin of the river.
Case 23
RETURN
Republic of the Philippines vs Court of Appeals

GR NO. L-61647
October 12, 1984
FACTS:
This is a petition for certiorari to set aside the decision of the respondent Court of Appeals
affirming the decision of the Court of First Instance of Bulacan, which found that Lots 1
and 2 are accretion to the land covered by Transfer Certificate of Title No. 89709 and
ordered their registration in the names of the private respondents.
Respondents Benjamin Tancinco, Azucena Tancinco Reyes, Marina (should be "Maria")

Tancinco Imperial and Mario C. Tancinco are registered owners of a parcel of land covered
by Transfer Certificate of Title No. T-89709 situated at Barrio Ubihan, Meycauayan,
Bulacan bordering on the Meycauayan and Bocaue rivers. On June 24, 1973, the private
respondents filed an application for the registration of three lots adjacent to their fishpond
property.
On April 5, 1974, Assistant Provincial Fiscal Amando C. Vicente, in representation of the

Bureau of Lands filed a written opposition to the application for registration.
On March 6, 1975, the private respondents filed a partial withdrawal of the application
for registration with respect to Lot 3 of Plan Psu-131892 in line with the recommendation
of the Commissioner appointed by the Court.
On March 7, 1975, Lot 3 was ordered withdrawn from the application and trial proceeded
only with respect to Lots 1 and 2 covered by Plan Psu-131892.
On June 26, 1976, the lower court rendered a decision granting the application on the
finding that the lands in question are accretions to the private respondents' fishponds
covered by Transfer Certificate of Title No. 89709.
On July 30, 1976, the petitioner Republic appealed to the respondent Court of Appeals.
On August, 19, 1982, the respondent Court rendered a decision affirming in toto the
decision of the lower court.
The petitioner submits that there is no accretion to speak of under Article 457 of the New
Civil Code because what actually happened is that the private respondents simply
transferred their dikes further down the river bed of the Meycauayan River, and thus, if
there is any accretion to speak of, it is man-made and artificial and not the result of the
gradual and imperceptible sedimentation by the waters of the river.
On the other hand, the private respondents rely on the testimony of Mrs. Virginia Acuña
to the effect that: têñ.£îhqwâ£
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xxx xxx xxx
... when witness first saw the land, namely, Lots 1 & 2, they were already dry almost at
the level of the Pilapil of the property of Dr. Tancinco, and that from the boundaries of
the lots, for about two (2) arms length the land was still dry up to the edge of the river;
that sometime in 1951, a new Pilapil was established on the boundaries of Lots 1 & 2 and
soil from the old Pilapil was transferred to the new Pilapil and this was done sometime in
1951; that the new lots were then converted into fishpond, and water in this fishpond
was two (2) meters deep on the side of the Pilapil facing the fishpond .
The private respondents submit that the foregoing evidence establishes the fact of
accretion without human intervention because the transfer of the dike occurred after the
accretion was complete.
ISSUE:
Whether or not the subject land is registrable in accretion.
RULING:
We agree with the petitioner.
Article 457 of the New Civil Code provides:

To the owners of lands adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the waters.
The above-quoted article requires the concurrence of three requisites before an accretion
covered by this particular provision is said to have taken place. They are (1) that the
deposit be gradual and imperceptible; (2) that it be made through the effects of the
current of the water; and (3) that the land where accretion takes place is adjacent to the
banks of rivers.
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. We
agree with the observation of the Solicitor General that it is preposterous to believe that
almost four (4) hectares of land came into being because of the effects 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. The land sought to be registered is not even dry land cast
imperceptibly and gradually by the river's current on the fishpond adjoining it. It is under
two meters of water. The private respondents' own evidence shows that the water in the
fishpond is two meters deep on the side of the pilapil facing the fishpond and only one
meter deep on the side of the pilapil facing the river.
The reason behind the law giving the riparian owner the right to any land or alluvion
deposited by a river is to compensate him for the danger of loss that he suffers because
of the location of his land.
WHEREFORE, the instant petition is GRANTED. 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.
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Case 21
RETURN
LEONARDO SANTOS vs.

HON. ANGEL H. MOJICA et al.
G.R. No. L-25450 January 31, 1969
FACTS:
A case for partition and annulment of certain conveyances of a parcel of land was
filed by brothers and sisters all surnamed Allanigue against their sister, Lorenza Allanigue
and her husband Simeon Santos. The trial court rendered judgment ordering the
partition of the land among the Allanigue siblings including Lorenza. However, due
to failure to pay rents as directed in the decision, the court issued a subsequent order
setting off Lorenza’s share. The court then ordered defendants to vacate the land and
deliver possession to the plaintiffs.
Leonardo Santos, not a party defendant but a son of defendant spouses, owned a
house standing on the lot. He filed with the sheriff a third-party claim, and with the court,
a motion to recall the writ of execution insofar as his house was concerned. The motion
was denied. Leonardo Santos failed to remove his house from the lot within the period
given him, the court ordered the sheriff to demolish said house. Santos filed a petition
for certiorari and prohibition questioning the jurisdiction of the respondent Judge in
issuing the order of demolition of his house.
ISSUE:
Whether the order of demolition is meritorious.
HELD:
Yes, it is meritorious. Pursuant to Article 449 of the Civil Code, he who builds,
plants or sows in bad faith on the land of another, loses what is built, planted or sown
without right to indemnity. Article 450 of the Civil Code also states in part that the owner
of the land on which anything has been built, planted or sown in bad faith may demand
the demolition of the work, or that the planting or sowing be removed, in order to replace
things in their former condition at the expense of the person who built, planted or
sowed....
In the case at bar, Petitioner Leonardo Santos is bound by a judgment since he is
a successor-in-interest of his parents, and his right, if any, is claimed under them. Hence,
the judgment in said civil case binds not only the spouses but also the petitioner.
Leonardo Santos' house having been reconstructed into a bigger one after his
predecessors-in-interest had been summoned in Civil Case No. 217-R, he was deemed a
builder in bad faith. The Allanigue brothers and sisters therefore become owners of the
improvement consisting of the house built in bad faith by Leonardo Santos and since they
chose to demolish the improvement pursuant to Article 450, and the same being
meritorious, the petition filed by Santos was denied.
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Case 25
RETURN
Government of Philippine Islands vs Colegio de San Jose
Facts:
During the months of September, October and November, yearly, the waters of Laguna
de Bay cover a long strip of land along the Eastern border of the two parcel of land in
question.
The claimant, Colegio de San Jose contends that the parcels are part of the Hacienda de
San Pedro Tunasan, belonging to them in which they have in possession since time
immemorial by means of its tenants/lessees and farmers.
The Government of the Phil. Islands 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. That during rainy season, the water of the lake reaches the
highway, and tat when the water recedes , the people of the place occupy and cultivate
the said lads during dry season.
Issue:
Whether the two aforementioned land belong to the public domain as part of the bed.
Ruling:
No. The 2 parcels of land form no part of the Laguna de Bay,and consequently, do not
belong to public domain.
Art. 77 of Law of Water: Lands accidentally inundated by the waters of lakes, or by creeks,
rivers and other streams shall continue to be the property of their respective owner.
SC affirmed.
Article 465.(Not stated in the SC ruling, but for the purpose of our topic). Islands which
through successive accumulation of alluvial deposits are formed in non navigable and non
floatable river, belong to the owners of the margins or banks nearest to each of them, or
to the owner of both margins.
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CASE 18
RETURN
TECNOGAS PHILIPPINES MANUFACTURING CORPORATION, Petitioner,

versus
COURT OF APPEALS and EDUARDO UY, Respondents.
Article 448. The owner of the land on which anything has been built, sown or planted
in good faith, shall have the right to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
FACTS:
The parties in this case are owners of adjoining lots in Parañaque, Metro Manila.
Petitioner Technogas Philippines Manufacturing Corp is the registered owner of Lot 4531-
A with all buildings, walls, and improvements therein, which they bought from Pariz
Industries Inc. The lot that it adjoined, Lot 4531-B, is owned and registered under the
name of Eduardo Uy. It was discovered in a survey, that a portion of a building of
petitioner, which was presumably constructed by its predecessor-in-interest, encroached
on a portion of the lot owned by private respondent. That upon learning of the
encroachment or occupation by its buildings and wall of a portion of defendant's land,
plaintiff offered to buy from defendant that particular portion of defendant's land occupied
by portions of its buildings and wall with an area of 770 square meters, more or less, but
defendant, however, refused the offer.
The parties entered into a private agreement wherein Technogas agreed to

demolish the wall at the back portion of its land thus giving to Uy possession of a portion
of his land previously enclosed by plaintiff's wall. Consequently, Uy filed a complaint for
encroachment before the office of the Municipal Engineer and the Provincial Fiscal.
However, the complaint did not prosper. This prompted Uy to dig a canal along the wall,
causing it to collapse. Due to the damage, petitioner filed a complaint against Uy for
malicious mischief.
The RTC ruled in favor of Technogas and ordered Uy to sell the encroached land
and pay for damages to the wall. The CA reversed the decision of the RTC and ordered
Technogas to pay rent for the encroachment.
ISSUE: Whether Technogas is a builder in good faith.
HELD:
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Yes. Technogas is a builder in good faith. There is no question that when petitioner
purchased the land from Pariz Industries, the buildings and other structures were already
in existence. The record is not clear as to who actually built those structures, but it may
well be assumed that petitioner's predecessor-in-interest, Pariz Industries, did so.
Article 527 of the Civil Code presumes good faith, and since no proof exists to
show that the encroachment over a narrow, needle-shaped portion of private
respondent’s land was done in bad faith by the builder of the encroaching structures, the
latter should be presumed to have built them in good faith. It is presumed that possession
continues to be enjoyed in the same character in which it was acquired, until the contrary
is proved.
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. Hence, such good faith, by law, passed
on to Pariz’s successor, Technogas in this case. Possession acquired in good faith does
not lose its character except in case and from the moment facts exist which show that
the possessor is not unaware that he possesses the thing improperly or wrongfully. The
good faith ceases from the moment defects in the title are made known to the possessor,
by extraneous evidence or by suit for recovery of the property by the true owner.
Upon delivery of Pariz Industries, as seller, to the petitioner, as buyer, the latter
acquired ownership of the property. Petitioner Technogas is deemed to have stepped into
the shoes of the seller in regard to all rights of ownership over the immovable sold,
including the right to compel the private respondent to exercise either of the two options
provided under Article 448 of the Civil Code. The benefit to the builder under this article
is that, instead of being outrightly ejected from the land, he can compel the landowner
to make a choice between the two options: (1) to appropriate the building by paying the
indemnity required by law, or (2) sell the land to the builder. The landowner cannot
refuse to exercise either option and compel instead the owner of the building
to remove it from the land.
In view of the good faith of both petitioner and private respondent, their rights
and obligations are to be governed by Art. 448. Hence, his options are limited to: (1)
appropriating the encroaching portion of petitioner’s building after payment of proper
indemnity, or (2) obliging the latter to buy the lot occupied by the structure. He cannot
exercise a remedy of his own liking.
Petitioner, however, must also pay the rent for the property occupied by its
building only up to the date private respondent serves notice of its option upon petitioner
and the trial court; that is, if such option is for private respondent to appropriate the
encroaching structure. In such event, petitioner would have a right of retention which
negates the obligation to pay rent. The rent should however continue if the option chosen
is compulsory sale, but only up to the actual transfer of ownership.
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CASE 15
RETURN
G.R. No. 108894
TECNOGAS PHILIPPINES MANUFACTURING CORPORATION, petitioner, vs.

COURT OF APPEALS (FORMER SPECIAL SEVENTEENTH DIVISION) and
EDUARDO UY, respondents.
petitioner the registered owner of a parcel of land together with all the buildings and
improvements including the wall existing thereon; that respondent is the registered owner
of a parcel of land that said land which adjoins plaintiff's land, defendant purchased
another lot also adjoining plaintiffs land and the same was registered in defendant's
name; that portions of the buildings and wall bought by plaintiff together with the land
from Pariz Industries are occupying a portion of defendant's adjoining land; that upon
learning of the encroachment or occupation by its buildings and wall of a portion of
defendant's land, plaintiff offered to buy from defendant that particular portion of
defendant's land occupied by portions of its buildings and wall, but defendant, however,
refused the offer.
the parties entered into a private agreement wherein plaintiff agreed to demolish the wall
at the back portion of its land thus giving to defendant possession of a portion of his land
previously enclosed by plaintiff's wall; that defendant later filed a complaint before the
office of Municipal Engineer of Parañaque, Metro Manila as well as before the Office of
the Provincial Fiscal of Rizal against plaintiff in connection with the encroachment or
occupation by plaintiff's buildings and walls of a portion of its land but said complaint did
not prosper; that defendant dug or caused to be dug a canal along plaintiff's wall, a
portion of which collapsed and led to the filing by plaintiff of the supplemental complaint
in the above-entitled case that while trial of the case was in progress, plaintiff filed in
Court a formal proposal for settlement of the case but said proposal, however, was
ignored by defendant.
ISSUES: Whether or not petitioner is a builder in bad faith because it is 'presumed to

know the metes and bounds of his property ?
RULING: No. The court disagree with respondents court reliance to the two cases it
relied upon do not support its main pronouncement that a registered owner of land has
presumptive knowledge of the metes and bounds of its own land, and is therefore in bad
faith if he mistakenly builds on an adjoining land.
When the petitioner bought the land, the buildings and other structures were already in
existence. The record is not clear as to who actually built those structures, but it may
well be assumed that petitioner's predecessor-in-interest, did so. Article 527 of the Civil
Code presumes good faith, and since no proof exists to show that the encroachment over
a narrow, needle-shaped portion of private respondent's land was done in bad faith by
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the builder of the encroaching structures, the latter should be presumed to have built
them in good faith.
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. Hence, such good faith, by law, passed
on to Pariz's successor, petitioner in this case And possession acquired in good faith does
not lose this character except in case and from the moment facts exist which show that
the possessor is not unaware that he possesses the thing improperly or wrongfully.
In the present case, the encroachment was caused by a very slight deviation of the
erected wall (as fence). there is no sufficient showing that petitioner was aware of the
encroachment at the time it acquired the property from Pariz Industries. The court agree
with the trial court that various factors in evidence adequately show petitioner's lack of
awareness thereof. In fact, private respondent Eduardo Uy himself was unaware of such
intrusion into his property until after 1971 when he hired a surveyor, following his
purchase of another adjoining lot, to survey all his newly acquired lots. Upon being
apprised of the encroachment, petitioner immediately offered to buy the area occupied
by its building — a species of conduct consistent with good faith. In any case, contrary
proof has not overthrown the presumption of good faith under Article 527 of the Civil
Code, as already stated, taken together with the disputable presumptions of the law on
evidence. Consequently, the builder, if sued by the aggrieved landowner for recovery of
possession, could have invoked the provisions of Art. 448 of the Civil Code.
14
Case 2
RETURN
SPS. BENITEZ VS CA
SPOUSES RAFAEL BENITEZ AND AVELINA BENITEZ , petitioners

vs.
COURT OF APPEALS, SPOUSES RENATO MACAPAGAL and ELIZABETH
MACAPAGAL, respondents
G.R. No. 104828. January 16, 1997

Panganiban, J.
TOPIC. Accession Natural – Owner in Good Faith; Builder in Bad Faith – Right of Pre-
Emption; Unlawful detainer, prior physical possession is not required.
FACTS. On July 1989, the spouses Renato and Elizabeth Macapagal purchased a parcel
of land adjoining the lot of spouses Rafael and Avelina Benitez. After they conducted a
survey on said land, the spouses Macapagal discovered that the house of spouses Benitez
was already encroaching their property. Macapagal then demanded in writing for Benitez
to vacate. Eventually, an ejectment suit was filed by Macapagal against Benitez. The trial
court ruled in favor of Macapagal as it found Benitez to be a builder in bad faith. On
appeal, Benitez insists that they are builders in good faith hence he should be given the
option to exercise the right of pre-emption (the right to buy the said portion of land
owned by Macapagal which is being occupied by his [Benitez] house.)
ISSUES.
1) Whether or not the possession of the portion of the private respondents' land
encroached by petitioners' house can be recovered through an action of ejectment, not
accion publiciana.
2) Whether or not the right of pre-emption may be exercised by a builder in good faith.
HOLDING AND RESOLUTION

1) YES. That petitioners occupied the land prior to private respondents' purchase does
not negate the latter's case for ejectment. Prior possession is not always a condition sine
qua non in ejectment. This is one of the distinctions between forcible entry and unlawful
detainer. In forcible entry, the plaintiff is deprived of physical possession of his land or
building by means of force, intimidation, threat, strategy or stealth; thus, he must allege
and prove prior possession. But in unlawful detainer, the defendant unlawfully withholds
possession after the expiration or termination of his right thereto under any contract,
express or implied. In such a case, prior physical possession is not required.
Considering that private respondents are unlawfully deprived of possession of the

encroached land and that the action for the recovery of possession thereof was made
within the one- year reglementary period, ejectment is the proper remedy.
2) NO. In the first place, there is already a factual finding by the trial court that Benitez
was a builder in bad faith. Secondly, even assuming that Benitez was a builder in good
faith, he cannot exercise said right of pre-emption. The right of pre-emption or the right
15
to sell is solely lodged in the owner in good faith as provided for by Article 448 of the Civil
Code. This advantage in Article 448 is accorded the landowner in good faith because “his
right is older, and because, by the principle of accession, he is entitled to the ownership
of the accessory thing.” Otherwise stated, the builder in good faith has no pre-emptive
right to buy even as a compromise, as this prerogative belongs solely to the landowner
in good faith.
What if the builder is in bad faith, like in this case? The right is not shifted in favor of the
builder in bad faith. And this situation is now governed by Article 450 of the Civil Code
which gives the owner in good faith the options either: a) to demand the builder in bad
faith to demolish what he built; or b) to compel the builder in bad faith to pay the price
of the land.
Petition DENIED, assailed Resolution AFFIRMED.
16
Case 27
RETURN
Ernesto Ronquillo vs. CA and Antonio P. So

Joint/ Solidary Obligation
Facts:
Ronquillo was one of the four defendants of the Civil case filed by Antonio So (private
respondent) for collection of money amounting to P117,498.98
The amount sought to be collected represented the value of the checks issued by
defendants in payment for foodstuffs delivered to and received by them.
They entered into a compromise agreement. In said agreement both parties agree that
failure of either party to comply with the terms and conditions stipulated, the innocent
party will be entitled to an execution of the decision based on the compromise agreement
and the defaulting party agrees and hold themselves to reimburse the innocent party for
attorneys fees and other fees .Because of failure of the other two defendants to pay their
obligation, private respondent filed for the issuance of writ of execution.
A writ of execution was issued for the satisfaction for the claim against the properties of
the defendants including petitioner, single and jointly liable
The decision of RTC based on the compromise agreement provides that “defendants
individually and agree to pay” within a periods of six months from January 1980 or before
June 30, 1980
Issue:
W/N Ronquillo is solidarily liable with the other defendants in the civil case.
Ruling:
Yes. The term individually has the same meaning as collectively, separately, distinctively,
respectively or severally.
An agreement to be individually liable undoubtedly creates a several obligation and a
several obligation is one which binds himself to perform the whole obligation,
Clearly then, by the express term of the compromise agreement and the decision based
upon it, the defendants obligated themselves to pay their obligation "individually and
jointly". Therefore it is enforceable against one of the numerous obligors.
17
CASE 12
RETURN
FLORENCIO IGNAO vs. HON. INTERMEDIATE APPELLATE COURT, JUAN

IGNAO, substituted by his Legal Heirs, and ISIDRO IGNAO
G.R. No. 72876 January 18, 1991
FACTS:
Petitioner Florencio Ignao and his uncles private respondents Juan Ignao and Isidro Ignao
were co-owners of a parcel of land with an area of 534 square meters situated in Barrio
Tabon, Kawit, Cavite. Pursuant to an action for partition, the then CFI of Cavite directed
the partition of the aforesaid land, allotting 133.5 square meters to private respondents
Juan and Isidro, and giving the remaining portion with a total area of 266.5 square meters
to petitioner Florencio. However, no actual partition was ever effected.
Petitioner instituted a complaint for recovery of possession of real property against private
respondents alleging that the area occupied by the two (2) houses built by private
respondents exceeded the 133.5 square meters previously allotted to them.
The lower court found that the houses of Juan and Isidro actually encroached upon a
portion of the land belonging to Florencio.
The CFI ruled that although private respondents occupied a portion of Florencio’s
property, they should be considered builders in good faith and pursuant to Article 448 of
the Civil Code, the owner of the land (Florencio) should have the choice to either
appropriate that part of the house standing on his land after payment of indemnity or
oblige the builders in good faith (Juan and Isidro) to pay the price of the land.
However, the trial court observed that based on the facts of the case, it would be
useless and unsuitable for Florencio to exercise the first option since this would
render the entire houses of Juan and Isidro worthless. It ordered the plaintiff
Florencio Ignao to sell to the defendants Juan and Isidro Ignao that portion of his property
with an area of 101 square meters at P40.00 per square meter, on which part the
defendants had built their houses. On appeal, the IAC affirmed the CFI’s decision.
ISSUES:
Should the provisions of Article 448 apply to a builder in good faith on a property held in
common?
May the court adopt a workable solution for the petitioner?
DOCTRINES:
YES. When the co-ownership is terminated by a partition and it appears that the house
of an erstwhile co-owner has encroached upon a portion pertaining to another co-owner
which was however made in good faith, then the provisions of Article 448 should apply
to determine the respective rights of the parties. (Before Partition?)
NO. In Quemuel vs. Olaes, the Court categorically ruled that the right to appropriate the
works or improvements or to oblige the builder to pay the price of the land belongs to
the landowner.
18
Case 11
RETURN
SPOUSES DEL CAMPO VS. ABESIA

G.R. No. L-49219 April 15, 1988
GANCAYCO, J.
DOCTRINE: When land is co-owned by two parties, but the co-ownership is terminated,
Article 448 governs in case real property (like a house) encroaches the land of another.
This is provided that good faith exists.
FACTS: This case involves a parcel of land of only about 45 square meters, situated IN
Cebu City. An action for partition was filed by plaintiffs in the CFI of Cebu. Plaintiffs and
defendants are co-owners pro indiviso of this lot in the proportion of and 1/3 share each,
respectively. The trial court appointed a commissioner in accordance with the agreement
of the parties. The commissioner conducted a survey, prepared a sketch plan and
submitted a report to the trial court, recommending that the property be divided into two
lots: Lot 1161-A with an area of 30 square meters for plaintiffs and Lot No. 1161-B with
an area of 15 square meters for the defendants. The houses of plaintiffs and defendants
were surveyed and shown on the sketch plan. The house of defendants occupied the
portion with an area of 5 square meters of Lot 1161-A of plaintiffs. The parties manifested
their conformity to the report and asked the trial court to finally settle and adjudicate
who among the parties should take possession of the 5 square meters of the land in
question.
ISSUE: Whether or Not Article 448 of the Civil Code is applicable to a builder in good
faith when the property involved is owned in common?
HELD: When the co-ownership is terminated by the partition and it appears that the
house of defendants overlaps or occupies a portion of 5 square meters of the land
pertaining to plaintiffs, which the defendants obviously built in good faith, then the
provisions of Article 448 of the new Civil Code should apply.
Applying the aforesaid provision of the Civil Code, the plaintiffs have the right to
appropriate said portion of the house of defendants upon payment of indemnity to
defendants as provided for in Article 546 of the Civil Code.
19
Case 22
RETURN
[DESAMPARADO VDA. DE NAZARENO vs. C.A]
Facts:
Sometimes in 1979, PR Salasalan and Rabaya leased the subject lots on which
their houses stood from one Antonio Nazareno, petitioners’ predecessor-in-interest. In
the latter part of 1982, PR allegedly stopped paying rentals. As a result, petitioners filed
a case for ejectment with the MTC of CDO. A decision was rendered against PR, which
decision was affirmed by the RTC of Misamis Oriental, before he died, Antonio Nazareno
caused the approval by the Bureau of Lands of the Survey plan with a view of perfecting
his title over the accretion are being claimed by him. Before the approved survey plan
could be released to the applicant, however it was protested by PR before the Bureau of
Land.
Upon investigating of the RD of Bureau of Land, it was recommended that Survey
Plan in the name of Antonio Nazareno who denied the motion, Respondent Director of
Land then ordered him to vacate the portion adjudicated to private respondent be placed
in possession thereof.
Upon the denial of the late Antonio Nazareno's motion for reconsideration,
petitioners Desamparado Vda. de Nazareno and Leticia Tapia Nazareno, filed a case
before the RTC, Branch 22 for annulment of the following: order of investigation by
respondent Gillera, report and recommendation by respondent Labis, decision by
respondent Hilario, order by respondent Ignacio affirming the decision of respondent
Hilario and order of execution by respondent Palad. The RTC dismissed the complaint for
failure to exhaust administrative remedies which resulted in the finality of the
administrative decision of the
Bureau of Lands, On Appeal, the CA affirmed the decision of the RTC dismissing the
complain.
Issue: W/N the subject land is public land.
Ruling:
Petitioners claim that the subject land is private land being an accretion to his titled
property, applying Art. 457 of the Civil Code which provides:
• To the owner of lands adjoining the banks of river belong the accretion which they
gradually receive from the effect of the current of the water.
In the case of Meneses v. CA, 2 this Court held that accretion, as a mode of acquiring
property under Art. 457 of the Civil Code, requires the concurrence of these requisites.
a. That the deposition of soil or sediment be gradual and imperceptible;
b. That it be the result of the action of the waters of the river (or sea).
c. That the land where takes place is adjacent to the bank of river (or the sea cost).
These are called the rules on alluvion which if present in a case, give to the owner of
lands adjoining the bank of rivers or stream any accretion gradually received from the
effect of the current of waters.
Furthermore, the Bureau of Lands, classified the subject land as an accretion are which
was formed by deposits of sawdust in Balacanas Creek and the Cagayan river, in
accordance with the ocular inspection conducted by the Bureau of Land
20
CASE NO. 3
RETURN
DEPRA VS DUMLAO
136 SCRA 475
FACTS:
Francisco Depra, is the owner of a parcel of land registered, situated in the
municipality of Dumangas, Iloilo. Agustin Dumlao owns an adjoining lot. When Dumlao
constructed his house on where the kitchen thereof had encroached on an area of 34
square meters of Depra’s property. After the encroachment was discovered in a relocation
survey of Depra’s lot, his mother, Beatriz wrote a demand letter asking Dumlao to move
back from his encroachment and filed an action for Unlawful Detainer. Said complaint
was later amended to include Depra as a party plaintiff.
After trial, the lower court found that Dumlao was a builder in good faith, and
ordered him to pay rent (PhP5.00/month) – forced lease between the parties. Depra
refused to accept the rentals so Dumlao deposited this with the MTC. Neither party
appealed judgment so this became final and executory. 1 year later, though, Depra filed
a complaint for Quieting of Title. Dumlao contested this, stating that the suit is barred by
res judicata. But Depra averred that the lower court did not have jurisdiction to rule on
encumbrances of real property – only the CFI has jurisdiction.
ISSUE:
Whether or not the decision of the Municipal Court was null and void ab initio?
HELD:
The judgment in a detainer case is effective in respect of possession only (Sec. 7, Rule
70, Rules of Court). The Municipal Court overstepped its bounds when it imposed upon
the parties a situation of “forced lease”, which like “forced co-ownership” is not favored
in law. Furthermore, a lease is an interest in real property, jurisdiction over which belongs
to CFI (now RTC) (Sec. 44(b), Judiciary Act of 1948; 2 Sec. 19 (2) BP 129). Since the
Municipal Court, acted without jurisdiction, its Decision was null and void and cannot
operate as res judicata to the subject complaint for Queting of Title.
Even if the Decision of the Municipal Court were valid, the rule on res judicata would not
apply due to difference in cause of action. In the Municipal Court, the cause of action was
the deprivation of possession, while in the action to quiet title, the cause of action was
based on ownership. Furthermore, Sec. 7, Rule 70 of the Rules of Court explicitly provides
that judgment in a detainer case “shall not bar an action between the same parties
respecting title to the land.”
The owner of the land on which improvement was built by another in good faith is entitled
to removal of improvement only after landowner has opted to sell the land and the builder
refused to pay for the same. Res judicata doesn’t apply wherein the first case was for
ejectment and the other was for quieting of title.
21
ART. 448. The owner of the land on which anything has been built sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who sowed, the proper
rent.
However, the builder or planter cannot be obliged to buy the land if its value is
Case 26
RETURN
BAES v CA
FACTS:
In 1962, the Government dug up a canal on a private estate in order to streamline the
Tripa de Gallina creek (in other words, there was a mand-made change of river course).
Said private estate was acquired by petitioner Baes, and was subdivided in to three lots.
It was lot 2958-C which was totally occupied by the canal so the Government in exchange
granted him a lot near but not contiguous to C. The old river bed was filled up by soil
from Lot C. Petitioner now claims ownership over the old river bed on the basis of Article
461 which says that abandoned river beds belong to the riparian owners whose land is
occupied by the new course of water.
ISSUE:
Whether or not Baes claim of ownership over the old river is tenable.
HELD:
NO. Petitioner is no longer entitled to claim the subject land for he was already
compensated. Felix Baes was given Lot 3271-A in exchange for the affected Lot 2958-B
through the Deed of Exchange of Real Property dated June 20,1970. This was a fair
exchange because the two lots were of the same area and the value and the agreement
was freely entered into by both parties. There is no question that Article 461 applies. The
riparian owner is entitled to compensation for the damage to or loss of his property due
to natural causes, there is all the more reason to compensate him when the change in
the course of the river is effected through artificial means. The loss to the petitioners of
the land covered by the canal was the result of a deliberate act on the part of the
government when it sought to improve the flow of the Tripa de Gallina creek. It was
therefore obligated to compensate the Baeses for their loss which the government did
not fail to do.
22
Case 10
RETURN
Sps. Dario Lacap and Matilde Lacap vs. Jouvet Ong Lee
Facts:
Before 1981, a certain Victor Facundo mortgaged two parcels of land and the
improvements thereon to Monte de Piedad Savings Bank (the bank, for brevity). In 1981,
herein petitioner spouses Dario and Matilde Lacap assumed to pay Facundo's mortgage
obligation to the bank. Due... to their failure to pay their obligation to the bank, however,
the latter foreclosed on the mortgage. During the auction sale, the bank emerged as the
highest bidder and title passed on to it.
The bank allowed the petitioner spouses to stay in the premises as lessees
The petitioner spouses introduced improvements thereon allegedly amounting to some
P500,000 after relying on the bank's assurance that the property would be sold back...
to them.
However, the bank refused to accept the rentals inasmuch as, according to the bank, the
property had already been sold to another person.
On June 20, 1996, the petitioner spouses received a letter demanding that they vacate
the premises because it was already owned by herein respondent, Jouvet Ong Lee.
The petitioner spouses instituted a civil case against the respondent for cancellation of
sale and damages with an application for preliminary injunction
Meanwhile, on October 30, 1996, the respondent filed a complaint for unlawful detainer
against the petitioners.
Municipal Trial Court... hereby rendered in favor of the plaintiff and against the
defendants
RTC... affirmed the assailed decision of the municipal trial court,... with the modification
that respondent should reimburse the petitioner spouses for the improvements the latter
introduced to the premises.
The appellate court held... that the petitioner spouses could not be... builders in good
faith inasmuch as their payment of rentals to the bank was an indication that they were
lessees.
Issues:
WHETHER OR NOT THE COURT OF APPEALS CORRECTLY APPLIED ARTICLE 1678
INSTEAD OF ARTICLE 448 OF THE CIVIL CODE WITH REGARD TO INDEMNITY FOR THE
IMPROVEMENTS INTRODUCED BY THE PETITIONERS ON THE SUBJECT PROPERTY.
Ruling:
The petitioner spouses are questioning the respondent's ownership by raising as an issue
the alleged failure of the bank to first offer to them the subject property, thereby making
respondent's title defective. This, according to the petitioner spouses, is a defense of...
ownership that should have been resolved by the courts a quo.
The defense of ownership contemplated by the said rule refers to a situation where the
defendants either claim ownership of the subject property or attributes said ownership to
23
another person other than the plaintiff. It does... not apply where the defendants merely
question the validity of the title of the plaintiff.
In the instant case, however, the petitioners admit that they do not own the subject
parcels of land. As third persons to the contract of sale between the bank and the
respondent, they are only questioning the validity of the transfer of title to respondent.
The same cannot... qualify as a defense of ownership as they will not derive title as a
consequence but will, at best, only be given their disputed priority option to buy the
subject premises.
Thus, the ruling of the MTCC that petitioner spouses' defense does not qualify as a
defense of ownership is correct.
The petitioner spouses are therefore entitled to be paid only one-half of the value of the
useful improvements at the time of the termination of the lease or to have the said
improvements removed if the respondent refuses to reimburse them.
WHEREFORE, the petition for review is hereby DENIED. The decision dated February 28,
2000 of the Court of Appeals is hereby AFFIRMED. Costs against the petitioners.
CASE 13
RETURN
PECSON v. CA
FACTS:
Petitioner Pedro P. Pecson was the owner of a commercial lot 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 by the city Treasurer of Quezon City to Mamerto Nepomuceno who in
turn sold it on 12 October 1983 to the private respondents, spouses Nuguid.
The petitioner challenged the validity of the auction sale. RTC dismissed the complaint,
and affirmed in toto by CA. The case was elevated to SC but denied and an Entry of
judgment was made on 23 June 1993.
Afterwhich, the respondent spouses filed with the trial court a motion for delivery of
possession of the lot and the apartment building.
Spouses claim among others that since the decision having become final as per Entry of
Judgment dated June 23, 1993 and from this date on, being the uncontested owner of
the property, the rents collected by petitioner from the tenants should be paid to him,
and should be offset against the cost of apartment constructed by the petitioner which
the spouses opted to pay considering that plaintiff is a builder in good faith. It was further
claim that the petitioner should pay rent due to the lot. RTC granted the prayer of the
respondent spouses.
On appeal, CA affirmed with modification the decision of RTC citing Art 448 of the civil
code. CA agree with the petitioner that respondent judge erred in ordering that "the
movant (spouses) having been declared as the uncontested owner of the lot in question
as per Entry of Judgment of the Supreme Court dated June 23, 1993, the plaintiff should
pay rent to the movant of no less than P21,000 per month from said date as this is the
very same amount paid monthly by the tenants occupying the lot.
Unsatisfied with the ruling, the petitioner elevated the case to SC. Hence, this petition.
ISSUE:
Does Art 448 of Civil Code apply on this case?
24
RULING:
YES. 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.
However, in strict point of law, Article 448 is not apposite to the case at bar.
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. The rule on good faith laid
down in Article 526 of the Civil Code shall be applied in determining whether a builder,
sower or planter had acted in good faith. 12
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.
25
CASE 4
RETURN
Sulo ng Nayon v. Nayong Filipino

G.R. No. 170923
DOCTRINE: Article 448 does not apply to a lessee-BPS. The basis of the application of
Article 448 is the BPS‘s (good faith) belief of a claim of title.
FACTS:
Respondent Nayong Pilipino Foundation, a government-owned and controlled
corporation, is the owner of a parcel of land in Pasay City, known as the Nayong Pilipino
Complex. Petitioner Philippine Village Hotel, Inc. (PVHI), formerly called Sulo sa Nayon,
Inc., is a domestic corporation duly organized and existing under Philippine laws.
On June 1, 1975, respondent leased a portion of the Nayong Pilipino Complex, consisting
of 36,289 square meters, to petitioner Sulo sa Nayon, Inc. for the construction and
operation of a hotel building, to be known as the Philippine Village Hotel. The lease was
for an initial period of 21 years, or until May 1996. The contract was renewed for another
25 years or until 2021.
Beginning January 2001, petitioners defaulted in the payment of their monthly rental.
Respondent repeatedly demanded petitioners to pay the arrears and vacate the premises.
Hence, respondent filed a complaint for unlawful detainer before the MeTC of Pasay City.
ISSUE:
Should the rules on accession, as found in Articles 448 and 546 of the Civil Code, apply
to the improvements made by the lessee? -- NO. Article 1678 applies.
HELD:
The late Senator Arturo M. Tolentino, a leading expert in Civil Law, explains: This article
[Article 448] is manifestly intended to apply only to a case where one builds, plants, or
sows on land in which he believes himself to have a claim of title, and not to lands where
the only interest of the builder, planter or sower is that of a holder, such as a tenant.
In the case at bar, petitioners have no adverse claim or title to the land. In fact, as
lessees, they recognize that the respondent is the owner of the land. What petitioners
insist is that because of the improvements, which are of substantial value that they have
introduced on the leased premises with the permission of respondent they should be
considered builders in good faith who have the right to retain possession of the property
until reimbursement by respondent.
We affirm the ruling of the CA that introduction of valuable improvements on the leased
premises does not give the petitioners the right of retention and reimbursement which
rightfully belongs to a builder in good faith. Otherwise, such a situation would allow the
lessee to easily "improve" the lessor out of its property. We reiterate the doctrine that a
lessee is neither a builder in good faith nor in bad faith that would call for the application
of Articles 448 and 546 of the Civil Code. His rights are governed by Article 1678 of the
Civil Code, which reads:
Art. 1678. If the lessee makes, in good faith, useful improvements which are suitable to
the use for which the lease is intended, without altering the form or substance of the
property leased, the lessor upon the termination of the lease shall pay the lessee one-
26
half of the value of the improvements at that time. Should the lessor refuse to reimburse
said amount, the lessee may remove the improvements, even though the principal thing
may suffer damage thereby. He shall not, however, cause any more impairment upon the
property leased than is necessary.
With regard to ornamental expenses, the lessee shall not be entitled to any
reimbursement, but he may remove the ornamental objects, provided no damage is
caused to the principal thing, and the lessor does not choose to retain them by paying
their value at the time the lease is extinguished.
Under Article 1678, the lessor has the option of paying one-half of the value of the
improvements which the lessee made in good faith, which are suitable for the use for
which the lease is intended, and which have not altered the form and substance of the
land. On the other hand, the lessee may remove the improvements should the lessor
refuse to reimburse.
Petitioners argue that to apply Article 1678 to their case would result to sheer injustice,
as it would amount to giving away the hotel and its other structures at virtually bargain
prices. They allege that the value of the hotel and its appurtenant facilities amounts to
more than two billion pesos, while the monetary claim of respondent against them only
amounts to a little more than twenty six-million pesos. Thus, they contend that it is the
lease contract that governs the relationship of the parties, and consequently, the parties
may be considered to have impliedly waived the application of Article 1678.
We cannot sustain this line of argument by petitioners. Basic is the doctrine that laws are
deemed incorporated in each and every contract. Existing laws always form part of any
contract. Further, the lease contract in the case at bar shows no special kind of agreement
between the parties as to how to proceed in cases of default or breach of the contract.
CASE 14
RETURN
G.R. No. L-57288 April 30, 1984

SARMINETO vs. AGANA
FACTS:
While Ernesto was still courting his wife, the mother of the latter told him to build a
residential house on the Land, thus de did with the presumption that the wife’s mother
was the owner of the Land.
Subsequently, it turned out that the Land had been titled in the name of Spouses Santos,
Jr who sold the same to petitioner Sarmiento. In order to vacate the land, Sarmiento filed
an Ejectment suit with the MTC against Ernesto and wife. In the hearing, Sarmiento
submitted the deed of sale of the Land and on the other hand, Ernesto testified the cost
of the residential house.
The MTC found that private respondents Ernesto had build the Residential House in good
faith and ordered Ernesto and wife to vacate the Land after Sarmiento has paid them.
The Ejectment suit was elevated to the Court of First Instance of Pasay where, said Court
rendered a modifying Decision under Article 448 of the Civil Code. SARMIENTO was
27
required, within 60 days, to exercise the option to reimburse ERNESTO and wife the value
of the RESIDENTIAL HOUSE, or the option to allow them to purchase the LAND.
SARMIENTO did not exercise any of the two options within the indicated period, and
ERNESTO was then allowed to deposit with the Court the purchase price for the LAND.
SARMIENTO then instituted the instant certiorari proceedings.
ISSUE:
W/N respondents Ernesto and wife are builders in good faith.
RULING:
Yes. Builders in good faith, Article 448 of the Code provides:
The owner of the land on which anything has been built, sown or planted in good faith,
shall have the right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548, or to oblige the one who
built or planted to pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its value is
In the present case, the respondents were builders in good faith, as far as they knew,
the Land was owned by Ernesto’s mother-in-law who, having stated they could build on
the property, and expected the Land to be given to them afterwards. Here, Ernesto, being
the owner of the building erected in good faith on a land of Sarmiento, is entitled to retain
the possession of the land until he is paid the value of his building, under article 453 (now
Article 546). The owner of the land, on the other hand, has the option, under article 361
(now Article 448), either to pay for the building or to sell his land to the owner of the
building, the option given to petitioner SARMIENTO of either to indemnify private
respondents or to allow private respondents to purchase the LAND was a correct decision.
In contrary, respondents here did, refuse both to pay for the building and to sell the
land and compel the owner of the building to remove it from the land where it is erected.
He is entitled to such remotion only when, after having chosen to sell his land, the other
party fails to pay for the same.
28
CASE 6
RETURN
PERSHING TAN CUETO vs CA
FACTS:
Restituta received the questioned lot (no. 304-B), of the Cadastre Survey of Centro,
Mizamis Occidental, either as a purported donation or by way of purchase on (February
1927) (with P50.00) as the alleged consideration thereof. The transaction took place
during her mother's lifetime, her father having predeceased the mother and the donation
or sale was consummated while she was already married to Juan. On January 1935, Juan
filed an application for a Torrens Title over the land with Restituta as his co-owner. A
decision was promulgated on November 1938 pronouncing Juan as the owner of the lot.
On September 1949, a contract of lease over the lot was entered between petitioner
Pershing and Restituta (with Juan’s consent) for a period of 10 years.
The lease contract having expired, Restituta sued petitioner on December 1960 for
unlawful detainer and as a consequence, an Original Certificate of Title was issued in
Juan’s name on April 1962. The case was won by the spouses in the Municipal Court but
was dismissed by the Court of First Instance duet to an understanding (barter) where
petitioner became the owner of the lot and that spouses in turn became the owners of a
parcel of land (with the house constructed thereon) previously owned (before the barter)
by petitioner.
After the barter agreement on October 1962, petitioner constructed on the disputed land
a concrete building without Restituta’s objection. Later, Restituta sued both Juan and
petitioner for reconveyance of the title over the registered land but disputed lot, for
annulment of the barter and for recovery of land with damages.
ISSUES:
Whether or not in having constructed the building on the lot, should petitioner be
regarded as a builder in good faith or a builder in bad faith?
RULING:
Neither. Petitioner is a builder possessor jus possidendi. Even assuming that despite
registration of the lot as conjugal, petitioner nursed the belief that the lot was actually
Restituta's (making him in bad faith), still Restituta's failure to prohibit him from building
despite her knowledge that construction was actually being done, makes her also in bad
faith. The net resultant of mutual bad faith would entitle petitioner to the rights
of a builder in good faith (Art. 448, Civil Code), ergo, reimbursement should be
given him if Restituta decides to appropriate the building for herself (Art. 448, Civil
Code). Bad faith of one neutralizes the bad faith of the other.
Petitioner having bartered his own lot and small house with the questioned lot with Juan
(conjugal owner) may be said to be the OWNER-POSSESSOR of the lot. Certainly he is
not merely a possessor or builder in good faith (this phrase presupposes ownership
in another); much less is he a builder in bad faith. He is a builder-possessor jus possidendi
because he is the OWNER himself. Please note that the Chapter on Possession (jus
possesionis, not jus possidendi) in the Civil Code refers to a
29
possessor other than the owner. Please note further that the difference
between a builder (or possessor) in good faith and one in bad faith is that the
former is NOT AWARE of the defect or flaw in his title or mode of acquisition
while the latter is AWARE of such defect or flaw (Art. 526, Civil Code). But
in either case there is a flaw or defect. In the case of petitioner, there is no such
flaw or defect because it is he himself (not somebody else) who is the owner
of the property.
The Supreme Court declared the questioned lot together with the building thereon, as
petitioner’s exclusive property.
CASE 8
RETURN
NATY BALTAZAR vs. SILVINA CARIDAD
Builders in bad faith; Rights of registered owner cannot be defeated by an unsuccessful

opponent through the subterfuge of replacing his old house with a new one from time to
time.
FACTS:
In the cadastral proceeding, the trial court rendered decision awarding Lot No. 8864
to the spouses Julio Baltazar and Constancia Valencia as their conjugal partnership
property. Said decision having become final, the corresponding decree was issued on
1941, and was registered in the names of applicant spouses under Original Certificate
Title. In the meanwhile, Julio Baltazar died. His surviving wife and children filed a motion,
in the cadastral case, praying for writ of possession against Silvina Caridad and her
daughter, Eduarda Caridad, who had been in possession of the southern portion of the
Lot No. 8864 since 1939, while the cadastral case involving said lot was pending before
the trial court, and before the decision was rendered and the corresponding decree issued
in 1941.
No writ having been issued theretofore in Baltazar's favor, the trial court issued an
order, on 1961, granting Baltazar's motion, and overruled Caridad's opposition but
directed the sheriff not to remove or destroy the permanent improvements on the lot
without an express command. On 1962, the order having become final, the sheriff
enforced the writ and placed Baltazar in possession of the southern portion of the lot. On
that same year, Baltazar presented a motion to compel Eduarda and Silvina to remove
their respective houses which they built in 1958 and 1959, respectively, and in the event
of their failure to do so, to order the sheriff to demolish the same.
The trial court, after due hearing, granted Baltazar's motion, ordering the Caridads
to remove their respective houses within 30 days from receipt of said order. Not satisfied,
the Caridads appealed.
Respondents question the power or jurisdiction of the trial court, sitting as a cadastral
court, to order the removal of their houses which were built in the disputed lot long after
the issuance of the final decree of registration. They also insist that they are builders in
good faith, and as such, they are accorded rights under Article 448 of the Civil Code which
right cause a conflict to arise between petitioners, as registered owners, and respondents,
as builders in good faith; that this conflict is a new matter which the cadastral court could
30
not have possibly passed upon in 1941 when it rendered its decision awarding the lot to
Julio Baltazar, to predecessors-in-interest of petitioners.
ISSUE: Whether or not the respondents were builders in good faith.
RULING:
No. Respondents cannot be regarded as builders in good faith because they are
bound by the 1941 decree of registration that obligated their parents and predecessors-
in-interest. Good faith must rest on colorable right in the builder, beyond a mere stubborn
belief in one's title despite judicial adjudication. The fact that in 1959 respondents
demolished and replaced their old house with new and bigger ones can not enervate the
rights of the registered owners. Otherwise, the rights of the latter to enjoy full possession
of their registered property could be indefinitely defeated by an unsuccessful opponent
through the simple subterfuge of replacing his old house with a new one from time to
time.
The order compelling Caridads to remove their respective houses from the disputed
lot is valid and enforceable against respondent based on the circumstances that the
Caridads do not dispute that during the pendency of the cadastral proceeding, the
respondent were in possession of the southern portion of the lot. Also, the Caridads do
not dispute the propriety and validity of the order of the cadastral court, granting the writ
of possession in favor of Baltazar as well as its enforcement.
In Marcelo vs. Mencias et al, this Court has already upheld the jurisdiction or
authority of the court of first instance, sitting as a land registration court, to order, as a
consequence of the writ of possession issued by it, the demolition of improvements
introduced by the successors-in-interest of a defeated oppositor in the land registration
case.
If the writ of possession issued in a land registration proceeding implies the delivery
of possession of the land to the successful litigant therein, a writ of demolition must,
likewise, issue, especially considering that the latter writ is but a complement of the
former which without said writ of demolition would be ineffective.
CASE 19
RETURN
[G.R. No. 149295. September 23, 2003]

PHILIPPINE NATIONAL BANK, petitioner, vs. GENEROSO DE JESUS
FACTS:
Respondent filed a complaint against petitioner before the Regional Trial Court of
Occidental Mindoro for recovery of ownership and possession, with damages, over the
questioned property. On 26 March 1993, he had caused a verification survey of the
property and discovered that the northern portion of the lot was being encroached upon
by a building of petitioner to the extent of 124 square meters. Despite two letters of
demand sent by respondent, petitioner failed and refused to vacate the area.
Petitioner asserted that when it acquired the lot and the building sometime in 1981
from then Mayor Bienvenido Ignacio, the encroachment already was in existence and to
remedy the situation, Mayor Ignacio offffered to sell the area in question (which then also
belonged to Ignacio) to petitioner at P100.00 per square meter which offffer the latter
31
claimed to have accepted. The sale, however, did not materialize when, without the
knowledge and consent of petitioner, Mayor Ignacio later mortgaged the lot to the
Development Bank of the Philippines.
The trial court decided the case in favor of respondent declaring him to be the rightful
owner. The Court of Appeals sustained the trial court.
ISSUE: W/N PETITIONER IS A BUILDER IN GOOD FAITH
HELD:
In reference to Article 448, et seq., of the Civil Code, a builder in good faith is one who,
not being the owner of the land, builds on that land believing himself to be its owner and
unaware of any defect in his title or mode of acquisition.
The essence of good faith lies in an honest belief in the validity of ones right, ignorance
of a superior claim, and absence of intention to overreach another. Applied to possession,
one is considered in good faith if he is not aware that there exists in his title or mode of
acquisition any flaw which invalidates it. Evidently, petitioner was quite aware, and indeed
advised, prior to its acquisition of the land and building from Ignacio that a part of the
building sold to it stood on the land not covered by the land conveyed to it.
Equally significant is the fact that the building, constructed on the land by Ignacio, has in
actuality been part of the property transferred to petitioner. Article 448, of the Civil Code
refers to a piece of land whose ownership is claimed by two or more parties, one of whom
has built some works (or sown or planted something) and not 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 otherwise for, elsewise stated, 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.
In fine, petitioner is not in a valid position to invoke the provisions of Article 448 of the
Civil Code. Wherefore, the decision of the Court of Appeals was affirmed.
CASE 9
RETURN
GEMINIANO VS COURT OF APPEALS

259 SCRA 344
Lessor in good faith and Builders in Good faith are not synonymous. Article 1678 may
apply to the former’s case and Art 448 may apply to the latter’s case. If a person knew
that his stay would likely end or that he knew somehow that he is not the owner of the
land then he is not a BPS in good faith.
FACTS:
The lot in question was originally owned by the mother of the petitioner. Petitioner sold
their unfinished bungalow to the respondents for P6,000, with a promise to sell the lot to
the latter. The property was later leased to the respondents for 7 years starting November
1978 for P40 a month as evidenced by their written lease contract. The respondents built
their house and introduced some improvements in the lot. In 1985 petitioner’s mother
refused receiving monthly rentals. It turned out that the lot in question was subject to
litigation which resulted to its acquisition by Maria Lee which was sold to Salcedo, who
further sold to Dionisio spouses. The property eventually came back to the petitioner
32
when the Dinisio spouses executed a Deed of Quitclaim over the said property in favor of
the petitioners. As such, the lot was registered in the latter’s names. (petitioners never
lost possession of the land because Lee and company never issued a writ of possession
against them).
In 1993, petitioners wrote a letter to respondents demanding them to vacate the premises
and when the latter refused, petitioners filed in court. Respondents claim that they should
be entitled to buy the land because of the promise of the petitioners to sell them the land
and because they were builders in Good faith. The courts now are deciding which one to
use: Art. 448 regarding builders and land owners in good faith or Art. 1678 regarding
lessee in good faith who can be reimbursed half of the expenses of the improvements if
the LO chooses to appropriate them and that such lessee have the right to retain in the
premises until fully reimbursed.
ISSUES:
1) Whether or not the respondents were builders in Good faith?
2) Whether Art 448 or 1678 should be applied?
RULING:
1) No, they were not builders in good faith. The respondents knew that their stay would
end after the lease contract expires. They can’t bank on the promise, which was not in
writing, of the petitioners that the latter will sell the land to them. According to 1403, an
agreement for the sale of real property or an interest therein is unenforceable, unless
some note or memorandum thereof be produced. Other than the alleged promise by
petitioner, respondents had no other evidence to prove their claim.
2) They are mere lessees in good faith; therefore Art 1678 may apply if the lessor chooses
to appropriate the improvements. But since the petitioners refused to exercise that
option, the private respondents can’t compel them to reimburse the one-half value of the
house and improvements. Neither can they retain the premises until reimbursement is
made. The private respondents’ sole right then is to remove the improvements without
causing any more impairment upon the property leased than is necessary.
33
CASE 1
RETURN
PACIFIC FARMS, INC., vs. ESGUERRA, and CARRIED LUMBER COMPANY

30 SCRA 684
FACTS: On several occasions from October 1, 1956 to March 2, 1957 the Carried Lumber
Company (CLC) sold and delivered lumber and construction materials to the Insular
Farms, Inc. which the latter used in the construction of the aforementioned six building
located in Bolinao, Pangasinan. Of the total price, the sum of P4,710.18 has not been
paid by Insular Farms, Inc. Consequently, CLC instituted civil case in the Court of First
Instance of Pangasinan to recover the said unpaid balance from the Insular Farms, Inc.
CFI ruled in favor of the CLC. Subsequently, Esguerra (court sheriff) levied upon the six
buildings.
Meanwhile Pacific Farms, Inc. filed a third-party claim asserting ownership over the levied
buildings which it had acquired (before the CLC suit) from the Insular Farms, Inc. and
praying for declaration of levy and judicial sale as null and void. The court rendered in
favor of Pacific Farms Inc.
Hence, the CLC herein appealed the decision imputing errors including:
1. The lower court erred in holding that the credit of the defendant-appellant, Carried
Lumber Company, against the Insular Farms, Inc., consisting of the value of
lumber and construction materials used in the buildings which were later acquired
by the Pacific Farms, Inc., the appellee, was not a statutory lien on those buildings;
.
2. The lower court erred, in declaring that the sale at public auction conducted by
the defendant deputy provincial sheriff of Pangasinan, covering the six buildings
was null and void.
ISSUE: Whether CLC has acted correctly in bringing an action against the Insular Farms,
Inc. and enforcing its right of reimbursement.
RULING: Yes, the action of the CLC against insular farm correct and enforcing its right
of reimbursement.
Article 447 of the Civil Code1 provides:
The owner of the land who makes thereon personally or through another,
plantings, constructions or works with the materials of another, shall pay their
value; and, if he acted in bad faith, he shall also be obliged to the reparation of
damages. The owner of the materials shall have the right to remove them only in
case he can do so without injury to the work constructed, or without the plantings,
constructions or works being destroyed. However, if the landowner acted in bad
faith, the owner of the materials may remove them in any event with a right to be
indemnified for damages.
The above-quoted legal provision contemplates a principal and an accessory, the land
being considered the principal, and the plantings, constructions or works, the accessory.
The owner of the land who in good faith — whether personally or through another —
34
makes constructions or works thereon, using materials belonging to somebody else,
becomes the owner of the said materials with the obligation however of praying for their
value.2 The owner of the materials, on the other hand, is entitled to remove them,
provided no substantial injury is caused to the landowner. Otherwise, he has the right to
reimbursement for the value of his materials.
Although it does not appear from the records of this case that the land upon which the
six buildings were built is owned by the appellee, nevertheless, that the appellee claims
that it owns the six buildings constructed out of the lumber and construction materials
furnished by the appellant, is indubitable. Therefore, applying article 447 by analogy, we
perforce consider the buildings as the principal and the lumber and construction materials
that went into their construction as the accessory. Thus the appellee, if it does own the
six buildings, must bear the obligation to pay for the value of the said materials; the
appellant — which apparently has no desire to remove the materials, and, even if it were
minded to do so, cannot remove them without necessarily damaging the buildings — has
the corresponding right to recover the value of the unpaid lumber and construction
materials.
Case 16
RETURN
ALEJANDRO QUEMUEL and RUPERTA SOLIS v.ANGEL S. OLAES and JULIANA

PRUDENTEG.R. No. L-11084 April 29, 1961Nature
Appeal from the order of the trial court dismissing the complaint of plaintiffs tocompel r
espondents to reduce the monthly rental and to sell to the former the
portion of the lot where the plaintiffs’ house was erected.
Facts:
The Olaes spouses sued in the CFI of Cavite the Quemel spouses for recovery of posses
ion of a parcel of land. The Quemel spouses admitted plaintiffs’ ownership
but contended that their occupation was gratuitous. In 1954, the trial court orderedthe
Quemelspouses to return the possession of the land to the Olaes spouses and
to pay thelatter Php20 a month from January 1954, until they shall have vacated
the premises. The Quemel, to forestall execution of the judgment, filed a complaint
against
the Olaes spouses seeking to reduce the monthly rental and to compel the
Olaes spouses to sell to them the portion of the lot. But the trial court granted themotio
n to dismiss filed by Olaes spouses, to which the Quemel spouses appealed
from, and as certified by the appellate court the appeal went to the Supreme Court.
Issue
Can the Quemel spouses invoke as their basis of cause of action Article 448 inconnectio
n with Article 546 of the Civil Code?
Held
No. The decision appealed from is affirmed.
Ratio
35
A cursory reading of these provisions, however, will show that they are not
applicable to plaintiffs' case. Under
Article 448, the 1) right to appropriate the works or improvements
or 2) tooblige the one who built or planted to pay the price of the land belong
s to theowner of the land.
The only right given to the builder in good faith is the right toreimbursement for the im
provements; the builder, cannot compel the owner of theland to sell such land to the fo
rmer. This is assuming that the plaintiffs are buildersin good faith.
But the plaintiffs are not builders in good faith. From the pleadings and the
documentary evidence submitted, it is indisputable that the land in questionoriginally be
longed to the government as part of the Friar Lands Estate and the title thereto was in
the name of the government, until it was purchased by Agapita Soliswho applied, thru t
he Bureau of Lands, to purchase the land by installments. Thecorresponding Sale Certifi
cate No. 531, effective July 1, 1909 was executed.
Indefendants'complaint before the CFI, they alleged that they are the owner
s of lot
and that plaintiffs, have been occupying southeastern half portion thereof,
without any right thereto, except the tolerance of defendants, which were
admitted expressly and under oath, in the answer of plaintiffs herein. It would,
therefore, appear that plaintiffs herein were not unaware of the flaw in their title, if any
and that their true relation with the herein defendants was that of tenant
and landlord, and that their rights are governed by Article 1573 in relation to article48
7 of the old Civil Code.*It can clearly be inferred that plaintiffs cannot compel the defen
dants to pay for theimprovements the former made on the property or to sell the latter’
s land.
Plaintiffs' only right, is to remove improvements, if it is possible to do so, wit

houtdamage to the land.
*Art. 1573. A lessee shall have with respect to useful a voluntary improvements, the sa
me right which aregranted the usufructuaries. Art. 487. The usufructuary may make on
the property in usufruct any improvements, useful or recreative,which may deem prope
r, provided he does not change its form or substance, but he shall have no right tobe in
demnified thereof. He may, however, remove such improvements, should it possible to
do so without injury to the property.
36
CASE 7
RETURN
Pleasantville Development Corporation vs. Court of Appeals
[G.R. No. 79688. February 01, 1996] PANGANIBAN, J.:
Builder in good faith
FACTS:
Sometimes in 1975, Eldred Jardinico bought lot rights to Edith Robillo designated as Lot
9, Phase II located in Pleasantville Subdivision, Bacolod City. At that time, the lot was
vacant.
On march 26, 1974, Wilson Kee bought on installment Lot 8 of the same subdivision from
CTTEI, the exclusive real estate agent of herein petitioner. On January 1975, Kee paid
for lot plan to CTTEI. After which, CTTEI and Kee’s wife proceeded in inspecting the Lot
8. Unfortunately, Octaviano, CTTEI’s employee, pointed lot 9 instead of lot 8. Thereafter,
Kee proceeded to construct improvements on the lot.
On January 30, 1981, Jardinico demanded that Kee shall remove all improvements and
vacate lot 9. When Kee refused to vacate Lot 9, Jardinico filed with the MTCC, a complaint
for ejectment with damages against Kee.
Kee, in turn, filed a third-party complaint against petitioner and CTTEI.
The MTCC ruled in favor of Jardinico and ordered for ejectment. Kee thereafter appealed
to RTC but the latter affirmed the MTCC ruling. Following denial, Kee then raised his issue
to CA. CA then granted Kee’s appeal holding that he is a builder in good faith as he was
unaware of the “mix-up” When he began construction of the improvements on Lot 8. It
further ruled that the erroneous delivery was due to the negligence of CTTEI, and that
such wrong delivery was likewise imputable to its principal, the Pleasantville Development
Corporation.
Hence this petition against CA, Kee, Jardinico and CTTEI.
ISSUE:
Whether or not a lot buyer who constructs improvements on the wrong property
erroneously delivered by the owner's agent, a builder in good faith.
RULING:
Yes. A lot buyer who constructs improvements on the wrong property

erroneously delivered by the owner's agent is a builder in good faith.
The roots of the controversy can be traced directly to the errors committed by CTTEI,
when it pointed the wrong property to Wilson Kee and his wife. It is highly improbable
that a purchaser of a lot would knowingly and willingly build his residence on a lot owned
37
by another, deliberately exposing himself and his family to the risk of being ejected from
the land and losing all improvements thereon, not to mention the social humiliation that
would follow.
Under the circumstances, Kee had acted in the manner of a prudent man in ascertaining
the identity of his property. Lot 8 is covered by transfer certificate of Title No. T-69561,
while Lot 9 is identified in transfer certificate of Title No. T-106367. Hence, under the
Torrens system of land registration, Kee is presumed to have knowledge of the metes
and bounds of the property with which he is dealing. But Kee is a layman, therefore he
is not versed of the technical description of his property so he has to ask assistance and
help from CTTEI, with confidence and trust, he believed with the misdelivery of the
Octaviano.
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 9. And as good faith is
presumed, petitioner has the burden of proving bad faith on the part of Kee.
At the time he built improvements on Lot 8, Kee believed that said lot was
what he bought from petitioner. He was not aware that the lot delivered to
him was not Lot 8.
Finally, the Court declared Wilson Kee as a builder in good faith.
38

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CASE 1: Pacific Farms, Inc. v Esguerra

GIL SAN DIEGO VS HON. JUDGE AUGUSTIN MONTESA

a. Declaring the deed of sale null and void;

The respondents contends:

G.R. No. 94283

MAXIMO JAGUALING, ANUNCITA JAGUALING and MISAMIS ORIENTAL

This is a case involving a dispute between parties on a claim of ownership of a

Republic of the Philippines vs Court of Appeals

Respondents Benjamin Tancinco, Azucena Tancinco Reyes, Marina (should be "Maria")

On April 5, 1974, Assistant Provincial Fiscal Amando C. Vicente, in representation of the

We agree with the petitioner.

Article 457 of the New Civil Code provides:

LEONARDO SANTOS vs.

Government of Philippine Islands vs Colegio de San Jose

TECNOGAS PHILIPPINES MANUFACTURING CORPORATION, Petitioner,

The parties entered into a private agreement wherein Technogas agreed to

ISSUE: Whether Technogas is a builder in good faith.

G.R. No. 108894

TECNOGAS PHILIPPINES MANUFACTURING CORPORATION, petitioner, vs.

ISSUES: Whether or not petitioner is a builder in bad faith because it is 'presumed to

SPOUSES RAFAEL BENITEZ AND AVELINA BENITEZ , petitioners

G.R. No. 104828. January 16, 1997

HOLDING AND RESOLUTION

Considering that private respondents are unlawfully deprived of possession of the

Petition DENIED, assailed Resolution AFFIRMED.

Ernesto Ronquillo vs. CA and Antonio P. So

FLORENCIO IGNAO vs. HON. INTERMEDIATE APPELLATE COURT, JUAN

May the court adopt a workable solution for the petitioner?

SPOUSES DEL CAMPO VS. ABESIA

[DESAMPARADO VDA. DE NAZARENO vs. C.A]

Issue: W/N the subject land is public land.

Sulo ng Nayon v. Nayong Filipino

G.R. No. L-57288 April 30, 1984

W/N respondents Ernesto and wife are builders in good faith.

Yes. Builders in good faith, Article 448 of the Code provides:

PERSHING TAN CUETO vs CA

NATY BALTAZAR vs. SILVINA CARIDAD

Builders in bad faith; Rights of registered owner cannot be defeated by an unsuccessful

ISSUE: Whether or not the respondents were builders in good faith.

[G.R. No. 149295. September 23, 2003]

ISSUE: W/N PETITIONER IS A BUILDER IN GOOD FAITH

GEMINIANO VS COURT OF APPEALS

PACIFIC FARMS, INC., vs. ESGUERRA, and CARRIED LUMBER COMPANY

Article 447 of the Civil Code1 provides:

ALEJANDRO QUEMUEL and RUPERTA SOLIS v.ANGEL S. OLAES and JULIANA

Plaintiffs' only right, is to remove improvements, if it is possible to do so, wit

Pleasantville Development Corporation vs. Court of Appeals

[G.R. No. 79688. February 01, 1996] PANGANIBAN, J.:

Builder in good faith

Kee, in turn, filed a third-party complaint against petitioner and CTTEI.

Hence this petition against CA, Kee, Jardinico and CTTEI.

Yes. A lot buyer who constructs improvements on the wrong property

Finally, the Court declared Wilson Kee as a builder in good faith.

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