Eden Ballatan and Sps. Betty Martinez and Chong Chy Ling v.

CA

G.R. No. 125683, 02 March 1999, SECOND DIVISION (Puno, J.)

Facts:

In 1985, Eden Ballatan constructed her house on Lot No. 24 in Araneta University Village,
Malabon. During the construction, she noticed that the concrete fence & side pathway of the adjoining
house of Winston Go encroached upon the entire length of the eastern side of her property. Her
building contractor informed her that the area of her lot was actually less than that described in the
title.

Ballatan informed Go about the discrepancy and encroachment, but Go claimed that his house
(including its fence and pathway) were built within the parameters of his father’s lot.

The owner-developer of the subdivision, Araneta Insitute of Agriculture (AIA) authorized a

survey of the land by Engr. Jose N. Quedding. Quedding found that the lot area of Ballatan was less by a
few meters & that of Li Ching Yao (3 lots away), increased by 2 meters. He declared that he made a
verification survey of the lots belonging to Go in 1983, and found the boundaries to be in order.
However he could not explain the reduction in Ballatan’s area.

Engr. Quedding made another relocation survey upon request of the parties. He found that Lot
24 lost approx.. 25sqm. on its eastern boundary; that Lot 25 did not lose nor gain any area; that Lot 26
lost around 3 sqm which were however gained by Lot 27.

On the basis of this survey, Ballatan made a written demand on Go to remove & dismantle their
improvements on Lot No. 24. Go refused, thus Ballatan brought the issue before the barangay. Go did
not appear.

Ballatan filed a case for recovery of possession before the RTC of Malabon. The Go’s filed an
answer with third-party complaint, impleading Li Ching Yao, AIA & Engr. Quedding.

The RTC decided in favor of Ballatan, ordering Go to vacate Lot No. 24 and demolish their
improvements and to pay Ballatan actual damages. It also dismissed the third-party complaint against
AIA, Quedding & Li Ching Yao.

On appeal, the CA modified the decision of the RTC. It ordered Li Ching Yao & Engr. Quedding to
pay Ballatan; and Li Ching Yao to pay Go, a reasonable amount for that portion of the lot which they
encroached – the value to be fixed at the time of taking.

Issues:

1) Is the award of damages proper, despite Go’s failure to specify the amount prayer for & failure
to pay the corresponding additional filing fees thereon?
2) Given the fact of encroachment on Ballatan’s property, what are her rights?
Ruling:

1.

YES, the award of damages is proper.

The third-party complaint in the instant case arose from the complaint of accion publiciana of
Ballatan against Go, which is a real action. In real actions, the docket & filing fees are based on the value
of property & the amount of damages claimed.

Where the fees prescribed for the real action have been paid, but the fees of certain related
damages are not, the court, although having jurisdiction over the real action, may not have acquired
jurisdiction over the accompanying claim for damages. Accordingly, the court may expunge those claims
for damages, or allow (on motion) a reasonable time for amendment of the complaint so as to allege the
precise amount of damages & accept payment of the requisite legal fees.

In the instant case, the third-party complaint sought the same remedy as the principal
complaint, but added a prayer for attorney’s fees & costs without specifying their amounts. The
additional filing fee on this claim is deemed to constitute a lien on the judgment award.

2.

The erroneous survey by Engr. Quedding triggered the discrepancies. It was upon said erroneous
survey that Go relied upon in constructing his house on his father’s land. Otherwise stated, Go had no
knowledge that they encroached on Ballatan’s lot. They are deemed builders in good faith.

Li Ching Yao built his house on his lot before any of the other parties did. There is no evidence,
much less, any allegation that Li Ching Yao was aware that when he built his house he knew that a
portion thereof encroached on Go’s adjoining land. Good faith is always presumed, & upon him who
alleges bad faith on the part of a possessor rests the burden of proof.

Thus, Ballatan as owner of Lot No. 24, may choose to purchase the improvement made by Go on
their land, or sell to Go the subject portion.

If buying the improvement is impractical as it may render Go’s house useless, then Ballatan may
sell to Go that portion of Lot No. 24 on which their improvement stands. If the Go’s are unwilling or
unable to buy the lot, then they must vacate the land and, until they vacate, they must pay rent to
Ballatan.

In the event that Ballatan elects to sell to Go the subject portion of their lot, the price must be
fixed at the prevailaing market value at the time of payment. The time of taking is determinative of just
compensation in expropriation proceedings; clearly the instant case is not one for expropriation.

Ballatan was ordered to decide within 30 days whether to buy the portion of Go’s improvement
on Lot 24, or to sell to Go the portion of their land on which the improvement stands. Engr. Quedding
was ordered to pay attorney’s fees of P5,000 to Go.