[G.R. NO.

163794 : November 28, 2008]

REPUBLIC OF THE PHILIPPINES, represented by Romeo T. Acosta (formerly Jose D.

Malvas), Director of Forest Management Bureau, Department of Environment and Natural
Resources, Petitioners,

Versus

HON. NORMELITO J. BALLOCANAG, Presiding Judge, Branch 41, Regional Trial Court,
Pinamalayan, Oriental Mindoro and DANILO REYES, Respondents.

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure
seeking the reversal of the Court of Appeals (CA) Decision2 dated June 4, 2004, in CA-G.R. SP No.
52261, which affirmed the Joint Order3 of the Regional Trial Court (RTC) of Pinamalayan, Oriental
Mindoro, Branch 41, dated December 28, 1998.

FACTS:

in 1970, [private respondent Danilo] Reyes bought the 182,941-square-meter land at Bgy. Banus,
Pinamalayan, Oriental Mindoro from Regina Castillo in whose name it was titled. Right after his purchase,
Reyes made some improvements and planted the land with fruit trees, including mangoes, citrus and
guyabanos. He also had the title transferred in his name and was issued TCT No. 45232. Since he was
able to transfer it in his name, Reyes really thought that he bought this subject land in good faith.
Unfortunately, it turned out that about 162,500 square meters of this land is part of the timberland of
Oriental Mindoro and, therefore, cannot be subject to any disposition or acquisition under any existing
law, and is not registrable.

Thus, there was a Complaint for "Cancellation of Title and/or Reversion" filed by the Office of the
Solicitor General (or OSG) in behalf of the Republic [petitioner], as represented by the Bureau of Forest
Development it was explained that the Original Transfer Certificate of Title of Castillo, is spurious,
fictitious and irregularly issued.

In view thereof, it appears that the preponderance of evidence is in favor of the plaintiff and
against the defendants and therefore it declared that Free Patent No. and OCT No. of Regina Castillo and
the TCT No. in the name of Danilo Reyes is declared null and void;

Danilo Reyes is hereby ordered to surrender the owner's duplicate copy of TCT and to vacate the
land and it also directed the defendant Register of Deeds of Calapan, Oriental Mindoro, to cancel the title
as null and void ab initio;

Then declared the reversion of the land to the government subject to the Agro-Forestry Farm
Lease Agreement No. 175, to form part of the public domain in the province of Oriental Mindoro.

Reyes appealed the RTC Decision to the CA but His motion for reconsideration was denied.
Thus, Reyes again filed a Petition for Review on Certiorari. But his petition was again denied for
insufficiently showing the error committed by the CA in the questioned judgment. Hence, this Court
denied with finality Reyes' motion for reconsideration.

Because of that, Reyes filed a Motion to Remove Improvements on the Property (which is the
Subject of Execution in Accordance with Rule 39, Section 10, paragraph (d) of the 1997 Rules of Civil
Procedure (motion).)
 There he averred that: he occupied in good faith in the subject land for around 30 years, and he
already spent millions of pesos in planting fruit-bearing trees and he employed many workers who
regularly took care of the trees and other plants.

Reyes prayed that he a be given at least one (1) year from the issuance of the corresponding
order to remove his mango, citrus and guyabano trees, and that they be allowed to stay in the premises
within that period to work on the cutting and removal of the said trees. He also asked the RTC that in the
meantime that these trees are not yet removed, all the unharvested fruits be appropriated by him, and
eclude all other persons who may take advantage of the situation and harvest said fruits.

Petitioner opposed the motion, and argued that the subject land, being timber land, is outside the
commerce of man and cannot be leased, donated, sold, or be the object of any contract. This being the
case, there are no improvements to speak of, because the land in question never ceased to be a property
of the Republic, even if Reyes claimed that he was a purchaser for value and in good faith and was in
possession for more than thirty (30) years.

The RTC ratiocinated:

it is but just and fair and equitable that Danilo Reyes be given the opportunity to enjoy the fruits of
his labor on the land which he honestly believes was legally his. He was not aware that his certificate of
title which was derived from OCT No. P-2388 issued in 1957 by the government itself in the name of
Regina Castillo contained legal infirmity, otherwise he would not have taken the risk of being ejected
from the land and losing all improvements thereon. Any way, if the court will grant the motion for the
defendant's Danilo Reyes to remove his improvements on the disputed property, it will not prejudice
Augusto Marte, otherwise, he will immensely benefit from the hardword of Danilo Reyes.

Thus the motion of Reyes to Remove Improvements on the Property is GRANTED pursuant to
the provisions of section 10, paragraph (d) of Rule 39 of the 1997 Rules of Civil Procedure and he is
given a period of one (1) year from the issuance of this ORDER to remove, cut and appropriate the fruit-
bearing trees which he had planted in the property in disputes.

The Petitioner, through the OSG, filed its Motion for Reconsideration which was denied by
the RTC. Aggrieved, petitioner went to the CA via Certiorari under Rule 65 of the Rules of Civil
Procedure ascribing to the RTC grave abuse of discretion and acting without jurisdiction in granting
Reyes' motion to remove improvements.

However, the CA dismissed the petition for certiorari, and affirmed the ruling of the RTC, in
this wise:

ISSUE: W/N Reyes be allowed to remove his improvements on the property.

RULING:

On this issue, the SC agreed with the CA that Reyes was a planter in good faith. Reyes was of the belief
that he was the owner of the subject land; in fact, a TCT over the property was issued in his name. He
tilled the land, planted fruit trees thereon, and invested money from 1970. He received notice of the
Republic's claim only when the reversion case was filed on May 13, 1987. The trees are now full-grown
and fruit-bearing.

Hence, to order Reyes to simply surrender all of these fruit-bearing trees in favor of the State - -
because the decision in the reversion case declaring that the land is part of inalienable forest land and
belongs to the State is already final and immutable - - would inequitably result in unjust enrichment of
the State at the expense of Reyes, a planter in good faith.

Nemo cum alterius detrimento locupletari potest. This basic doctrine on unjust enrichment
simply means that a person shall not be allowed to profit or enrich himself inequitably at another's
expense. There is unjust enrichment when a person unjustly retains a benefit to the loss of another, or
when a person retains money or property of another against the fundamental principles of justice, equity
and good conscience. Article 22 of the Civil Code states the rule in this wise:

ART. 22. Every person who, through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without just or legal
ground, shall return the same to him.

The requisites for the application of this doctrine are present in the instant case. There is
enrichment on the part of the petitioner, as the State would come into possession of - - and may
technically appropriate - - the more than one thousand fruit-bearing trees planted by the private
respondent. There is impoverishment on the part of Reyes, because he stands to lose the
improvements he had painstakingly planted and invested in. There is lack of valid cause for the State to
acquire these improvements, because, as discussed above, Reyes introduced the improvements in good
faith. Thus, the Court of Appeals did not commit any error in ruling that Reyes is entitled to the benefits of
Articles 448 and 546 of the Civil Code.

To allow Reyes to remove the fruit-bearing trees now full-grown on the subject land, even if he is
legally entitled to do so, would be risking substantial damage to the land. Further, it would violate the
implicit mandate of Article 547 of the Civil Code which provides:

ART. 547. If the useful improvements can be removed without damage to the principal thing, the
possessor in good faith may remove them unless the person who recovers the possession exercises the
option under paragraph 2 of the preceding article.

In this light, the options that Reyes may exercise under Articles 448 and 546 of the Civil Code have been
restricted. It is no longer feasible to permit him to remove the trees he planted. The only equitable
alternative would be to order the Republic to pay Reyes the value of the improvements he introduced on
the property.

WHEREFORE, The Decision dated June 4, 2004 of the Court of Appeals is AFFIRMED with
MODIFICATION in that:

1) The Regional Trial Court of Pinamalayan, Oriental Mindoro, Branch 41, is hereby DIRECTED
to determine the actual improvements introduced on the subject land, their current value and
the amount of the expenses actually spent by private respondent Danilo Reyes for the said
improvements and;
2) The Republic through DENR is DIRECTED to pay private respondent Danilo Reyes the
value of such actual improvements he introduced on the subject land as determined by the
Regional Trial Court, .